Lloyds denies plans to sell Scottish Widows business

LLOYDS Banking Group yesterday dismissed speculation that it was poised to sell its Scottish Widows Investment Partnership (Swip) business after The Scotsman reported it was sacking half of its equity asset management team.

Swip confirmed it would axe 23 jobs in an effort to “reposition” its £54 billion equities business, but a Lloyds spokesman said there was no suggestion of a sale. “We see value in Widows being part of the group,” he said.

The move was made in order to focus more on passive rather than active investment strategies.

Swip said it would cut the jobs from 38 UK-based equities fund managers, most of them in Edinburgh.

The bank declined to comment on reports that it had rejected a potential management buyout of the unit.

Speculation that Lloyds plans to sell Swip has dogged the business for years. However, the bank last year hired Toby Strauss, a former senior executive at Aviva, to head Scottish Widows. The bank’s chief executive, Antonio Horta-Osorio, has since told investors that Lloyds remains committed to bancassurance.

Gary Greenwood, an analyst for brokers Shore Capital, said that while ownership of Swip was “not a necessity” for the bank, it was a poor time to flog the asset manager while it struggled to conclude a deal to sell 630 branches to the Co-operative Group.

He said: “At this stage, Widows remains a core business within the Lloyds portfolio. While it is possible that this view could still change, we would suggest that any attempts to sell this business would be difficult while Lloyds is still wrestling with the disposal of the Verde assets.”

Industry insiders were dismayed that the firm had cut jobs. One said: “There are plenty of examples of life company investment operations, not just here in Scotland, where active management, properly supported, can add a valuable contribution to the overall business.

“This feels like short-term tactics by the ultimate parent where they should perhaps be addressing long-term strategy.”

As part of the overhaul, Andrew November, Swip’s director of equities, has appointed a senior team that will drive the new equities strategy.

It is understood that Peter Cockburn, the head of United Kingdom equities, will leave the business.