The mandate, to put money into largely decrease margin passive fairness and stuck revenue belongings, makes up lower than 5 % of SLA’s revenues, however might nonetheless go away a gap of as much as 140 million kilos in SLA’s revenues to be crammed, analysts mentioned.
Scottish Widows and Lloyds mentioned in an announcement they’d given discover to SLA of their plans to terminate the deal, kick-starting a 12-month course of to discover a substitute supplier or suppliers. SLA mentioned it deliberate to take part within the course of.
SLA mentioned it might take a one-off impairment cost of 40 million kilos and its shares have been the weakest performer on the blue-chip FTSE 100 at 1052 GMT, falling four.9 %.
“The true query … would be the extent to which Customary Life Aberdeen can shed prices to offset the seemingly lack of income,” Bernstein analyst Edward Houghton mentioned in a observe.
Exane analyst Arnaud Giblat mentioned the relative underperformance of SLA shares forward of the Lloyds transfer, and the small likelihood it might retain the mandate at a decrease margin, would act to cushion the autumn.
The choice to terminate the deal comes per week earlier than Lloyds updates the market on its subsequent three-year strategic plan on Feb. 21 and SLA’s full-year outcomes on Feb. 23.