Lloyds dispenses with HBOS fund arm

12th Aug 2009 07:50

Lloyds Banking is to make an unspecified number of job cuts following a decision to fold most of HBOS's Insight fund management division into its Scottish Widows arm.The parts not being transferred have been sold to Bank of New York Mellon for £235m.Under the restructuring, Scottish Widows (SWIP) will take on the investment management of the funds from the Halifax and Bank of Scotland bancassurance businesses, the Bank of Scotland wealth management operation and the Clerical Medical intermediary franchise.Bank of New York Mellon will buy the remainder of HBOS's Insight Investment arm including the external fund management operation, which manages assets of approximately £80bn. The £235m sale price consists of cash of £200m and an equity consideration of £35m.Edinburgh-based, SWIP's funds under management will rise from £83bn currently to approximately £125bn with the £42bn transferred from Insight.Lloyds said it intends to increase its investment management capability in Edinburgh over time to reflect the enlarged scale of SWIP's business, but added there will be some 'role reductions'.It is consulting with the unions about the sale and the transfer and until these consultations are complete, the precise impact on jobs will not be known, it said.Lloyds last week posted an underlying loss of £4bn after a huge jump in bad debts.Impairment charges jumped by nearly £11bn to £13.4bn reflecting huge write-downs of HBOS's commercial property loans, but investors took heart from the bank's comments that this would be the peak of the write-offs and that trading was looking better.