Rathbone to buy fund unit from Lloyds
LLOYDS Banking Group is in advanced talks with private bank Rathbone Brothers over the sale of its Scottish private fund management operations, the bank confirmed yesterday.
The bank said it was selling the Bank of Scotland Portfolio Management Service (PMS), a business with a headcount of around 50 staff that specialises in putting together investment portfolios for private clients.
One source close to Lloyds said that while private banking was a growth area for Lloyds, PMS was no longer considered a core business.
No price for the unit has yet been agreed, the source added, but it is likely to fetch “in the tens of millions”, although “the deal is not guaranteed”.
The source described the sale as a “very small deal”, but the purchase is far more significant for Rathbones, led by chief executive Andy Pomfret, which stands to gain a bolt-on business that fits well with its existing business.
PMS manages around £1bn of funds for around 1,000 clients and is seen by Rathbones as an ideal way of attracting more high net worth individuals from Scotland.
The sale is not linked to the likelihood that Neelie Kroes, the European Commission’s competition commissioner, will tell the bank to shrink its market share of banking by five per cent.
The bank is locked in negotiations with the EC over the disposals it will have to take in order to receive approval for its receipt of state aid.
The Financial Services Authority is also considering a plan by Lloyds to raise sufficient capital to allow it to exit the government’s Asset Protection Scheme.