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The long fade away of Lloyds Banking Group's private banking and wealth management operations
10/04/2018 , Ian Orton

Private banking and wealth management has often seemed to be little more than an adjunct to the insurance and pensions operations of Lloyds Banking Group, one of the UK’s biggest banking and financial services groups, especially over the past five years or so.

Notwithstanding its heritage Lloyds appears to have walked away from the private banking and wealth management sector, especially at the top end of the market.

During the current decade it has sold-off many of its private banking and wealth management interests, not least its Geneva-based private banking operation and its 60 percent stake in St James’s Place, one of the UK’s biggest providers of wealth management services. 

Now subsumed within its Insurance and Wealth division private banking and wealth management gets little mention in Lloyds Banking Group’s annual report and accounts.

Nonetheless, its wealth management - as opposed to its insurance - operations are still substantial, at least within a UK context.

According to the Insurance and Wealth divisional report on page 31 of Lloyds Banking Group’s 2017 Annual Report and Accounts “wealth customer assets increased by seven percent during 2017 to £25 billion, reflecting positive market movements”.

Whether or not this refers to “client assets under management” or “total client assets”, i.e. assets under management plus customer deposits, is unclear however.

The table on the financial performance of the division, which appears on page 47 states that customer deposits amounted to £13.8 billion at the end of the year. So if the £25 billion does refer to “total assets” this would imply that assets under management amounted to around £11.2 billion at 31 December 2017. 

“Wealth” generated £369 million or 18.65 percent of total Insurance and Wealth divisional income of £1,979 million during 2017. This was £41 million, or 10 percent lower than the £410 million reported for the previous year when “Wealth” accounted for 20.31 percent of total divisional income of £2,019 million.

Information about the profit contribution of “Wealth” is less forthcoming, however. All that the divisional report has to say on this metric is that its “underlying profit” fell by three percent to £939 million “as a result of lower Wealth income.”

In the past the accounts of the legal entity that used to encapsulate the former Lloyds Private Bank provided additional insights into the performance of Lloyds private banking and wealth management operations.

This is no longer the case, however. For on 19 January 2018 LBPB (21 Hill Street Limited), the most recent incarnation of this entity, passed a motion to go into voluntary liquidation and appointed a liquidator to secure this end.  

Perhaps not surprisingly “Wealth” received little mention in the strategic update presented by Antonio Lorenzo, the chief executive of Scottish Widows and the chief executive of Lloyds’ Insurance and Wealth Division, on 21 February.

Here the focus was almost exclusively on the group’s life and pensions business.

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