Aberdeen rocked as Lloyds drops £109bn bombshell

NEARLY £800m was wiped off the value of beleaguered investment firm Standard Life Aberdeen after it lost its biggest customer.

In a bruising setback, life insurer Scottish Widows said it was pulling a £109bn pot of cash out of the firm, equal to nearly 17pc of total assets.

Widows, which is owned by Lloyds, gave Aberdeen Asset Management the right to run its money back in 2014. But the contract included a get- out clause if Aberdeen merged with one of Widows’ competitors.

And the £11bn tie-up with rival insurer Standard Life last year sparked a rethink.

The two sides have been talking for six months, with possible solutions, including potential assets sales, considered. But no deal has been reached and Lloyds is to pull out. It sent Standard Life Aberdeen’s shares down 7.7pc, or 29.3p, to 360p.

Its joint-bosses Keith Skeoch and Martin Gilbert said: ‘We are disappointed by this decision in the context of the strong performance and good service we have delivered for Lloyds Banking Group, Scottish Widows and their customers.’

The company said the Widows deal brought in less than 5pc of its revenues. It will take a £40m accounting hit from the end of the partnership.

The loss is a fresh blow for the firm, which has seen clients leave since the merger.

The notice period for terminating the contract is 12 months, so there will be no immediate changes for customers – and Lloyds has left the door open for a possible change of heart. Bosses said Aberdeen had delivered good performance, and if competition issues can be resolved they would consider putting cash back in.

Widows head Antonio Lorenzo said: ‘We will begin an in-depth assessment of the market to identify a long-term strategic partner, or partners, to manage assets.’

Next week, Lloyds chief executive Antonio horta- Osorio is expected to ramp up its insurance and investments to chase higher profits. Lloyds shares rose 0.7pc, or 0.43p, to 67.08p.