In a statement, SLA said it did not believe that it ‘was in material competition in the UK with LBG and that, therefore, SLA does not consider that LBG, Scottish Widows or their respective affiliates has the right to terminate the IMAs [investment management agreements].
‘The parties are engaging with each other within the framework of the dispute resolution process envisaged in the IMAs.’
The group had inherited the capital via the Aberdeen side of the business, which had run the funds for Scottish Widows since its 2014 acquisition of Scottish Widows Investment Partners.
Scottish Widows parent, Lloyds, had earlier said it was reviewing the arrangement following the 2017 merger of Aberdeen and Standard Life, which transformed the former asset manager into a diversified financial service business, with some commercial overlap.
SLA said would offer further comment ‘at an appropriate time’. A spokesperson for the group said that the two businesses were at a preliminary discussion phase.
In a statement, Lloyds said: 'We note and are disappointed by the comments made by Standard Life Aberdeen, particularly in the light of our position as a major customer.
'Standard Life Aberdeen is a clear and material competitor of Scottish Widows and Lloyds Banking Group in the UK and to suggest otherwise is not credible.'
The decision had immediately wiped out 4.4% of SLA group revenue, or £129 million. While the group insisted that the decision was long-coming, the loss added an additional urgency to its announcement just a week later that it would sell its insurance arm to Phoenix for £3 billion.
The terms of the contract make provision for a 12 month notice period. It was not immediately clear how the announcement may affect the search for a replacement manager, which was recently narrowed to a three-way race between Schroders, BlackRock and JP Morgan AM.
In a separate disclosure, this morning SLA added that the Phoenix transaction was ‘actively progressing ‘and was expected to complete before September. The business added that it was ‘considering the potential for a substantial return of capital to shareholders’, once completed.