Lloyds Banking Group (LON:LLOY) has inked a deal to buy Zurich Insurance’s UK workplace pensions and savings business, the FTSE 100 company has said. The move comes after the lender, bailed out by the UK government during the financial crisis, completed its acquisition of Bank of America’s MBNA credit card business earlier this year.
Lloyds’ share price has been subdued alongside other London-listed lenders in today’s session, having given up 0.59 percent to 66.11p as of 14:33 BST, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.29 percent higher at 7,555.75 points. The group’s shares have added just under a fifth to their value over the past year, and are up by nearly six percent in the year-to-date.
Scottish Widows boost
Lloyds announced in a statement today that it had entered into an agreement with Zurich to acquire its UK workplace pensions and savings business with assets under administration of £19 billion. The parties, however, did not disclose the financial terms of the deal.
The FTSE 100 lender noted that the transaction enhanced Scottish Widows’ current offering, with the division already managing more than £124 billion of funds of which £35 billion is workplace pensions business.
“Today's announcement is a clear signal of Lloyds Banking Group’s commitment to the financial planning and retirement segment,” Antonio Lorenzo, Director, Insurance & Wealth and Chief Executive, Scottish Widows, commented in the statement.
Standard Life Aberdeen speculation
Reuters noted in its coverage of the news that bankers have also speculated that Scottish Widows and Standard Life Aberdeen (LON:ADN) could form an insurance tie-up, with Lloyds being a major shareholder in the FTSE 100 giant. Lloyds, however, declined to comment on market speculation.
“In line with our stated strategic aims, Lloyds Banking Group would consider opportunities where we are under-represented,” a spokeswoman for the bank told the newswire in an emailed statement.
Lloyds is scheduled to update investors on its third-quarter performance on October 25.