US sale provides Insight into Lloyds' big plans for Widows

Published on Wednesday 12 August 2009 21:28

LLOYDS Banking Group promised more jobs in its Scottish fund management business yesterday, after striking its first asset sale since the takeover of HBOS.

The bank revealed it was selling the third-party fund management business of its Insight Investment subsidiary to Bank of New York Mellon for 235 million – with the "in-house" funds of Insight transferring to Scottish Widows Investment Partnership in Edinburgh.

Dean Buckley, the managing director of SWIP, said it would become a "centre of excellence" for Lloyds's asset management business and was "extremely positive news for us".

He added: "Looking ahead, we expect to increase professional resources in Edinburgh to reflect the enlarged scale of the business."

A SWIP spokesman said it was not possible at present to say how many more SWIP jobs would be created over time. It currently employs about 440, the lion's share in Edinburgh.

But the spokesman added: "Our financial sector continues to be an important part of the Scottish economy, and this decision demonstrates the underlying strength and depth of skills we have in this country."

SWIP, which currently has 83 billion of assets under management, will have 125bn after the transfer, including funds sourced from Lloyds' bancassurance businesses, wealth management and its Clerical Medical intermediary franchise, which had been managed by Insight.

It pushes SWIP into the premier league of asset managers in Scotland. It is just behind Aberdeen Asset Management, which handles 130bn of funds, and leapfrogs Standard Life Investments, which controls 122bn.

The move by Lloyds is seen as a further commitment to Scotland and Scottish Widows, amid speculation it may sell more assets. Earlier this year, Lloyds announced that, after extensive market research, Scottish Widows was to be the main brand in its insurance division.

Lloyds said yesterday that, as part of the asset management consolidation, there would be an unspecified number of job losses at Insight in London. The business employs 500 and was acquired by Lloyds as part of the takeover of HBOS this year.

The bank said consultations were under way with unions about the Insight sale and transfer.

Under the deal, Bank of New York Mellon will pay 200m in cash and 35m in equity.

Jo Dawson, Lloyds' wealth and international director, said: "Both SWIP and Insight are strong and well-established asset managers, but we believe Insight is better able to focus on developing its specialist external franchise outside the group."

&#149 Royal Bank of Scotland yesterday confirmed it was selling its business in Pakistan to local giant MCB Bank for about $87m (53m). Last week RBS sold its retail and commercial banking operations in Taiwan, Hong Kong, Singapore and Indonesia to Australia & New Zealand Banking Group for $550m.

RBS wants to exit up to 36 countries to focus on its mainly UK core businesses.