Lloyds TSB Group has decided to exit the custody and unit trust trustee business, recommending its 430 clients transfer their business to State Street Bank.
Officials at Lloyds TSB, with £140 billion ($221 billion) in assets under custody, decided to leave the business because the bank was a relatively small player and could not afford the infrastructure investments required to stay competitive.
Lloyds, one of the largest custodians for U.K. pension funds and one of the largest trustees to the U.K. unit trust industry, is dwarfed by State Streets $5.3 trillion in assets under custody. Terms of the arrangement were not disclosed.
Ken Farquhar, managing director of Lloyds TSBs securities business, said the bank hopes to avoid layoffs of the 1,100-person staff through turnover, early retirement and internal transfers.