BCS Barclays PLC

By Max Colchester 

Gerry Grimstone wears many hats. The 67-year-old Brit is set to become the chairman of Standard Life PLC and Aberdeen Asset Management PLC after they merge later this year. He is also the deputy chairman another major British financial institution: Barclays PLC.

That could prove awkward. If the merger is completed as planned, Mr. Grimstone will find himself overseeing an asset management behemoth which hopes to funnel business through Barclays' crosstown rival Lloyds Banking Group PLC.

Aberdeen is 9.8% owned by Lloyds. The two businesses have a longstanding deal to sell Aberdeen products through Lloyds' extensive retail and wealth management businesses. That relationship is set to continue after the merger.

"Both myself and the chairman, Gerry Grimstone, have a close relationship with [Lloyds CEO] António Horta-Osório," said Aberdeen Chief Executive Martin Gilbert at an investor presentation Monday outlining the deal. "So it's strategically, this is what they want."

Mr. Gilbert touted the benefits of continuing to use Lloyds' dominant position in the U.K. retail market. "The upside is, if we can get access, if we could get a suite of products that we could put through that retail network, it's upside for us," Mr. Gilbert added.

Aberdeen acquired Lloyds' asset management business in 2014. Lloyds said in a statement Monday that the company "welcomes the opportunity to explore ways to build a successful relationship with the combined Standard Life and Aberdeen Group."

Mr. Grimstone took on his role at Barclays while serving as chairman of Standard Life. The asset manager maintains relationships with a web of different banks and this has never proved a problem, according to one person familiar with the matter. Barclays declined to comment.

At Barclays, Mr. Grimstone is chairman of the board's reputation and nominations committees. Investors and company insiders broadly expect him to take over from Barclays' current chairman, John McFarlane, when he steps down. However, Mr. McFarlane is planning to stay on at Barclays at least until 2018. British regulators are unlikely to let Mr. Grimstone chair both the Aberdeen-Standard Life entity and Barclays at the same time.

(END) Dow Jones Newswires

March 06, 2017 11:38 ET (16:38 GMT)

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