Lloyds’ away win piles pressure on Skeoch
A score draw? For Standard Life Aberdeen, that’s probably an overly generous classified check after the final whistle on its £109bn fund management dispute with Lloyds Banking Group.
It’s hard not to look at the result as anything other than a come-from-behind victory for Britain’s biggest high street lender instead.
The £140m cash sum it is paying is less than expected, while SLA retaining stewardship of £35bn of
assets for three years is neither here nor there to Lloyds.
For SLA, keeping one-third of the mandate terminated in 2018 represents a modicum of positive news after two years of post-merger turmoil, but as analysts pointed out yesterday, what it’s retaining for that period will inevitably flow away at the end of it.
Next month’s half-year results are hugely significant for Keith Skeoch, SLA’s chief executive, and his job prospects. Any suggestion that outflows have extended to more of the group’s funds would be terminal.
The logic of the £11bn deal that created the company was loudly trumpeted in both boardrooms, but it
always looked like a better outcome for Martin Gilbert, the Aberdeen Asset Management chief.
Having been shunted to one side as vice-chairman Gilbert now looks likely to leave the SLA board, although the company insisted this week his departure has not been finalised.
The pace of fund outflows at SLA has been further exposed by the sale of its insurance arm to Phoenix.
A strategic review of its wealth division, which I understand has been taking place in recent months, underlines the impression of a company without a clear strategy.
Douglas Flint, the new chairman, isn’t known for kneejerk decision-making, but without a rapid improvement in SLA’s performance, showing Skeoch the door will become an obligation.
Clark’s farewell gift
Theresa May wasn’t the only one scrambling to find a legacy to bequeath to her successor during the final days of her administration. The recent flurry of announcements from the Department for Business, Energy and Industrial Strategy underlined just how busy the departing Greg Clark was while trying to do the same.
In the midst of efforts to find a buyer for British Steel, Clark’s other priority was audit reform, appointing both the chairman and chief executive of the Financial Reporting Council (and its replacement).
The choice of Simon Dingemans, former Goldman Sachs partner and Glaxosmithkline finance chief,
reflects the shift in focus from the conventional grandee traditionally used to populate such roles.
Picking Sir Jonathan Thompson, boss of HM Revenue & Customs, as the FRC’s final chief executive, just a day after Dingemans’ pre-appointment hearing with MPs also made a statement: that this was Clark’s choice.
City insiders tell me the headhunter, Odgers Berndtson, made a concerted effort to encourage senior figures in finance to apply for the top role.
Several were deterred by the £330,000 salary, a figure which fails to heed Sir John Kingman’s recommendation that the new audit regulator should be on a par with the Financial Conduct Authority and Ofcom (whose respective chief executives Andrew Bailey and Sharon White are paid significantly more).
It will now be down to Andrea Leadsom, Clark’s successor, to decide whether proposals such as mandatory joint audits, which have received a withering verdict from all corners of British business and the regulator’s new chairman, should follow Clark into backbench anonymity.
Metro Bank’s dog’s dinner
Vernon Hill’s departure as chairman of Metro Bank was as inevitable as its insistence on describing itself as “the revolution in British banking” is tedious.
The company’s recent travails have made it more challenged than challenger, and this week’s half-year results underline why an independent future for the bank is far from certain.
For that reason, Hill’s determination to remain on the board resembles an unwelcome fudge. Metro Bank’s ability to recruit a heavyweight independent chair may be impaired by the scepticism of candidates about a hands-on founder’s ability to take their hands off the tiller.
This week’s results, the share price’s reaction to the succession plan and the lender’s embattled state all make that unwise.
Main image credit: Getty