Schroders Plc and Lloyds Banking Group under discussion for Wealth Management Agreement

(Reuters) – Asset Manager Schroders Plc (SDR.L) and Lloyds Banking Group (LLOY.L) said Sunday have discussed a wealth management alliance.

This agreement would be one of the most important asset management reconciliations in recent years and would be part of a context of widespread consolidation of the broader industrial sector.

Schroders spokeswoman Beth Saint confirmed the decision after Sky News announced that Lloyds would merge its $ 13 billion ($ 17 billion) wealth management business into a new joint venture with Schroders.

"Schroders has confirmed that he is in discussion with Lloyds Banking Group plc in order to collaborate closely in some parts of the wealth business," Saint said in an email to Reuters, adding that he's not sure what's going on. There was "no certainty arrangement going on."

The Lloyds banking group issued a similar statement, saying any new announcement "will be made in a timely manner".

According to Sky News, Lloyds would own 50.1% of the joint venture and Schroders the rest, Sky News quoted sources as saying.

Wealth management contributed £ 273.3 million to Schroders' net income in 2017 and is an area of ​​focus for future growth.

Sky News said the new joint venture would be part of a three-pronged agreement between the two companies.

This would imply that Schroders subscribes to a GBP 109 billion portfolio management contract with Scottish Widows, Lloyds' property, which is in dispute with Standard Life Aberdeen (SLA), which previously managed the money.

The mandate was withdrawn from SLA after Lloyds declared that the merger of Standard Life insurers and Aberdeen Asset Management in 2017 made the enlarged company a significant competitor.

The dispute remains in arbitration.

The third stage of the Lloyds-Schroders deal involves wealth manager Cazenove Capital, Sky reported.