SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
29 July 2021
LLOYDS BANKING GROUP
plc
(Translation of registrant's name into
English)
5th Floor
25 Gresham Street
London
EC2V 7HN
United Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F..X.. Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No ..X..
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule
12g3-2(b):
82- ________
Index
to Exhibits
Item
No.
1 Regulatory News Service Announcement, dated 29 July
2021
re: Acquisition
of Embark Group
29 July 2021
LLOYDS BANKING GROUP TO ACQUIRE EMBARK GROUP
Lloyds Banking Group (Lloyds, or the Group) today announces that it
intends to acquire the Embark Group (Embark), a fast growing
investment and retirement platform business. Embark enhances the
Group's capabilities to address the attractive mass market and
self-directed Wealth segment, completing its Wealth proposition.
Embark will also enable the Group to re-platform its pensions and
retirement proposition, delivering a market-leading platform for
intermediaries and significantly strengthening its offering in
Retirement, an important growth market.
As announced within Strategic Review 2021, the Group aims to meet
more of its customers' broader financial needs, whilst retaining
more of the c.£10 billion assets under administration which
customers invest with third parties each year. The acquisition of
Embark will deliver a modern, industry-leading mass market,
direct-to-consumer proposition, complementing the Group's existing
advice offerings through Schroders Personal Wealth and Cazenove
Capital. The acquisition will see the Group acquire c.£35
billion of assets under administration on behalf of c.410,000
consumer clients.
The Group is targeting a top-three position in direct-to-consumer
self-directed and robo-advice business in the medium term. The
Group is also targeting a top-three position in the individual
pensions and retirement drawdown market by 2025. The acquisition of
Embark transforms the Group's ability to achieve these objectives.
As a consequence, the Group is increasing its Strategic Review 2021
net new money target from £25 billion to c.£40 billion by
2023, to reflect its increased growth potential.
Through a combination of the Group's new capabilities and its
multi-brand, multi-channel distribution model across more than 25
million customers, the Group expects this acquisition to deliver
attractive growth and returns over time and create value for
shareholders. A consideration of c.£390 million will be paid
for the entire share capital of Embark upon completion. The
transaction is expected to have a c.30 basis points impact on Group
CET1 capital and deliver a mid-teens return on invested capital in
the medium term, both including all integration and restructuring
costs.
The transaction is being cash funded from Lloyds' strong capital
position. At half year 2021, the Group reported a CET1 ratio of
16.7 per cent, significantly ahead of the ongoing target of c.12.5
per cent, plus a management buffer of c.1 per cent.
The transaction does not include the Rowanmoor SIPP and SASS
administration business, which is being retained by existing
shareholders. This represents c.£5 billion out of over
£40 billion assets under administration. Lloyds looks forward
to continuing to work closely with Embark's existing asset
management partners, BlackRock and Franklin Templeton.
Subject to regulatory approvals, the acquisition is expected to
complete in the fourth quarter of 2021.
Antonio Lorenzo, Chief Executive, Scottish Widows and Group
Director, Insurance & Wealth, Lloyds Banking Group said:
"There's an ever-growing customer demand for clear, simple and
affordable financial planning and retirement products and services.
Our acquisition of Embark will not only help us serve all of a
customer's financial needs in one place, but also sit alongside our
existing partnerships which meet the more complex financial
planning and investment requirements of mass-affluent and high
net-worth customers through Schroders Personal Wealth and Cazenove
Capital.
"Through Embark's technology, we will be able to increase the reach
of our investment offerings for customers who are happy to manage
their own portfolios, through modern, easy to use technology. We
will also be able to enhance our intermediary proposition,
strengthen our offering in Retirement and modernise the way
Scottish Widows works with advisers, recognising the continued
value of advice."
David Barral, Chairman of Embark Group commented: "In eight short
years, Embark has built one of the most respected and fastest
growing digital retirement and savings businesses in the UK. The
combination of Lloyds Banking Group's financial strength and
distribution reach, with the agility, digital capability and
expertise of Embark, will provide the perfect opportunity to create
a market-leading proposition for consumers, intermediaries and
strategic partners."
Notes to editors
●
Embark
Group is a fast growing, diversified, financial services business
and one of the leading retirement solutions providers in the UK.
Embark Group trades under the brands Embark, Advance, Horizon,
Stocktrade, Vested and The Adviser Centre and operates a wide
portfolio of white label services to the wealth management,
direct-to-consumer, robo-advice, retail banking and workplace
sectors. Providing a combination of deep pension expertise and
leading technology integration that covers the areas of investment
wrap/ platform, investment brokerage, SIPP, SSAS, multi-asset
funds, fund research and employee benefit consulting, Embark works
closely with financial advisers and its intermediary distribution
partners to deliver their retail savings and investment
propositions to consumers of all levels of affluence.
●
Embark
Group will become a wholly owned subsidiary of Scottish Widows
Group and will continue to work closely with its existing asset
management partners, BlackRock and Franklin Templeton
Investments.
●
Embark
Group comprises assets under administration of over £40
billion on behalf of c.425,000 consumer clients. Through the
transaction Lloyds will be acquiring c.£35 billion of assets
under administration on behalf of c.410,000 consumer clients. The
remaining assets and clients will be retained by existing
shareholders as part of the Rowanmoor businesses.
●
Embark
Group operates across seven UK locations (London, Bolton, Dundee,
Edinburgh, Leeds, Leicester and Swindon).
●
Embark
Group has been recognised as one of the most innovative wealth tech
companies for the past three years in the WEALTHTECH100 annual
list.
- END -
For further information:
Investor Relations
Douglas
Radcliffe
+44 (0) 20 7356 1571
Group Investor Relations Director
douglas.radcliffe@lloydsbanking.com
Corporate Affairs
Matt
Smith
+44 (0) 20 7356 3522
Head of Media Relations
matt.smith@lloydsbanking.com
FORWARD LOOKING STATEMENTS
This document contains certain forward looking statements with
respect to the business, strategy, plans and/or results of Lloyds
Banking Group plc together with its subsidiaries (the Group) and
its current goals and expectations relating to its future financial
condition and performance. Statements that are not historical or
current facts, including statements about the Group's or its
directors' and/or management's beliefs and expectations, are
forward looking statements. By their nature, forward looking
statements involve risk and uncertainty because they relate to
events and depend upon circumstances that will or may occur in the
future. Factors that could cause actual business, strategy, plans
and/or results (including but not limited to the payment of
dividends) to differ materially from forward looking statements
made by the Group or on its behalf include, but are not limited to:
general economic and business conditions in the UK and
internationally; market related trends and developments;
fluctuations in interest rates, inflation, exchange rates, stock
markets and currencies; any impact of the transition from IBORs to
alternative reference rates; the ability to access sufficient
sources of capital, liquidity and funding when required; changes to
the Group's credit ratings; the ability to derive cost savings and
other benefits including, but without limitation, as a result of
any acquisitions, disposals and other strategic transactions; the
ability to achieve strategic objectives; changing customer
behaviour including consumer spending, saving and borrowing habits;
changes to borrower or counterparty credit quality; concentration
of financial exposure; management and monitoring of conduct risk;
instability in the global financial markets, including Eurozone
instability, instability as a result of uncertainty surrounding the
exit by the UK from the European Union (EU) and the EU-UK Trade and
Cooperation Agreement, instability as a result of the potential for
other countries to exit the EU or the Eurozone, and the impact of
any sovereign credit rating downgrade or other sovereign financial
issues; political instability including as a result of any UK
general election and any further possible referendum on Scottish
independence; technological changes and risks to the security of IT
and operational infrastructure, systems, data and information
resulting from increased threat of cyber and other attacks;
natural, pandemic and other disasters, adverse weather and similar
contingencies outside the Group's control; inadequate or failed
internal or external processes or systems; acts of war, other acts
of hostility, terrorist acts and responses to those acts, or other
such events; risks relating to climate change; changes in laws,
regulations, practices and accounting standards or taxation,
including as a result of the UK's exit from the EU; changes to
regulatory capital or liquidity requirements and similar
contingencies outside the Group's control; the policies, decisions
and actions of governmental or regulatory authorities or courts in
the UK, the EU, the US or elsewhere including the implementation
and interpretation of key laws, legislation and regulation together
with any resulting impact on the future structure of the Group; the
ability to attract and retain senior management and other employees
and meet its diversity objectives; actions or omissions by the
Group's directors, management or employees including industrial
action; changes to the Group's post-retirement defined benefit
scheme obligations; the extent of any future impairment charges or
write-downs caused by, but not limited to, depressed asset
valuations, market disruptions and illiquid markets; the value and
effectiveness of any credit protection purchased by the Group; the
inability to hedge certain risks economically; the adequacy of loss
reserves; the actions of competitors, including non-bank financial
services, lending companies and digital innovators and disruptive
technologies; and exposure to regulatory or competition scrutiny,
legal, regulatory or competition proceedings, investigations or
complaints. Please refer to the latest Annual Report on Form 20-F
filed by Lloyds Banking Group plc with the US Securities and
Exchange Commission (the SEC), which is available on the SEC's
website at www.sec.gov, for a discussion of certain factors and
risks, together with examples of forward looking statements. Except
as required by any applicable law or regulation, the forward
looking statements contained in this document are made as of
today's date, and the Group expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward looking statements contained in this document to reflect
any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based. The information, statements and opinions
contained in this document do not constitute a public offer under
any applicable law or an offer to sell any securities or financial
instruments or any advice or recommendation with respect to such
securities or financial instruments.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LLOYDS
BANKING GROUP plc
(Registrant)
By: Douglas
Radcliffe
Name: Douglas
Radcliffe
Title: Group
Investor Relations Director
Date: 29
July 2021
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