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8 October 2018 By Christopher Thompson Follow @CGAThompson

The UK bank is in talks to create a wealth management joint venture with Schroders. Boss Antonio Horta-Osorio needs to boost revenue to comfortably hit his 2020 targets. Flogging more savings products will boost fee income which has halved since 2012, while avoiding costly M&A.

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Schroders said on Oct. 8 it was in talks with Lloyds Banking Group to work together in the wealth sector.

Asset manager Schroders said in a short statement that discussions were ongoing and there was no certainty that they would lead to a deal.

Lloyds issued a similar statement, saying any further announcement “will be made at the appropriate time”.

Sky News reported that Lloyds would merge its 13 billion pound ($17.03 billion) wealth management arm into a new joint venture with Schroders in which the London-based lender would own 50.1 percent.

Schroders would take on a 109 billion pound investment management contract from Lloyds-owned Scottish Widows. In return, Lloyds would also gain a 19.9% stake in Cazenove Capital from Schroders, Sky reported, citing anonymous sources.

Schroders shares were up 0.7 percent at 30.22 pounds by 0900 GMT on Oct. 8. Lloyds shares were down 0.9 percent at 58.36 pounds.

Context News

Schroders said on Oct. 8 it was in talks with Lloyds Banking Group to work together in the wealth sector.

Asset manager Schroders said in a short statement that discussions were ongoing and there was no certainty that they would lead to a deal.

Lloyds issued a similar statement, saying any further announcement “will be made at the appropriate time”.

Sky News reported that Lloyds would merge its 13 billion pound ($17.03 billion) wealth management arm into a new joint venture with Schroders in which the London-based lender would own 50.1 percent.

Schroders shares were up 0.7 percent at 30.22 pounds by 0900 GMT on Oct. 8. Lloyds shares were down 0.9 percent at 58.36 pounds.

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