LLOY Lloyds Banking Group Plc

--Lloyds Banking Group said it will work with Standard Life Aberdeen after losing a tribunal decision over withdrawing GBP100 billion of assets from the asset manager

--Lloyds said it will press ahead with plans to move the assets to its wealth-management partner Schroders and funds giant BlackRock, meaning it may be forced to pay an exit fee

By Adam Clark

Lloyds Banking Group PLC (LLOY.LN) said Tuesday that it will work with Standard Life Aberdeen PLC (SLA.LN) after losing a tribunal decision over the transfer of 100 billion pounds ($133 billion) in assets to rival fund managers.

Lloyds said in February 2018 that it would pull the assets from Standard Life Aberdeen, with the majority being shifted to Schroders PLC (SDR.LN) to cement a new wealth-management joint venture. BlackRock Inc. (BLK) was also due to receive a GBP30 billion portion of the assets.

The U.K. bank justified ending the agreement before its 2022 deadline by saying the merger of Standard Life and Aberdeen Asset Management left the combined entity in competition with its Scottish Widows business. Standard Life disputed the claim and the two parties entered dispute resolution.

On Tuesday, Standard Life Aberdeen said a tribunal ruled Lloyds didn't have the right to end the agreement between the two parties and that it will continue to manage the assets while considering its next steps.

"We are disappointed with the decision of the arbitration tribunal, and will look to discuss its outcome with Standard Life Aberdeen. Our strategy remains unchanged, which is to do the right thing for customers. We will discuss starting the process of an orderly transfer of assets to our new partners BlackRock and Schroders," a spokesman for Lloyds' Scottish Widows business said.

Analysts at investment platform Hargreaves Lansdown said the decision was a serious setback for Lloyds' wealth-management plans with Schroders.

"Negotiations will now begin between Standard Life and Lloyds to find some sort of resolution. This could involve Standard Life Aberdeen remaining as manager of the assets until 2022, or Lloyds stumping up some cash for breaking the agreement early," Hargreaves Lansdown analyst Laith Khalaf said.

At 0930 GMT, Standard Life Aberdeen shares were up 1.5% while Lloyds shares were up 0.8%.

Write to Adam Clark at adam.clark@dowjones.com; @AdamDowJones

(END) Dow Jones Newswires

March 19, 2019 06:03 ET (10:03 GMT)

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