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Report: Lloyds boots out Goldman Sachs from race for £109B investment contract

Lloyds Banking Group PLC has removed Goldman Sachs Group Inc. from the race for a £109 billion investment contract, an unnamed source told the Financial Times.

The move comes as Goldman Sachs launched its retail bank Marcus in the U.K., raising competition concerns for Lloyds, the third-largest lender by assets in the U.K., according to the Sept. 5 report. BlackRock Inc. and Schroders PLC are the two remaining bidders in the auction, dubbed "Project Swift," the report added.

In February, Lloyds decided to pull out the mandate from Standard Life Aberdeen, citing similar competition concerns, and SLA has reportedly been trying to retain the contract, which will run until 2022, according to the report. Aberdeen, which was acquired by Standard Life to form Standard Life Aberdeen, had managed the £109 billion pension on behalf of Lloyds unit Scottish Widows Group Ltd.

Lloyds has said there is enormous interest in the contract and it is looking to decide on a new manager by the end of the summer, the FT said, noting that the bank could select a sole manager or split the contract. JPMorgan Asset Management is said to have also participated in the auction.

The source told the FT that the bidding process still has more time to run and no final decision has been made.