Standard Life Aberdeen Plc is set to lose its customer relationship with Lloyds Banking Group Plc unit Scottish Widows Group Ltd., and take a £40 million charge.
Standard Life Aberdeen said Lloyds and Scottish Widows informed it that they intend to review their long-term asset management arrangements, including the management of about £109 billion of assets. They are seeking to terminate the arrangements relating to the AUM to enable the review to take place.
As per terms agreed to at the time of the merger between Standard Life and Aberdeen, the termination of services is subject to a 12-month notice period from the date the notice is served.
Standard Life Aberdeen said the revenues associated with the AUM represent less than 5% of its revenue for its full year 2017 pro forma revenue. It will take an impairment charge of about £40 million on the intangible asset relating to the Lloyds customer relationship recognized at the time of the merger in its full-year 2017 results.
"We are disappointed by this decision in the context of the strong performance and good service we have delivered for [Lloyds], Scottish Widows and their customers. We will be discussing the implications of this with [Lloyds] and Scottish Widows," Standard Life Aberdeen CEOs Keith Skeoch and Martin Gilbert said.