Lloyds Bank Inch Towards a £400M Embark deal

Lloyds Bank (LLOY.L) is reportedly on the cusp of finalising a £400m ($559m) deal to buy retirement products provider Embark.

First reported by Sky News which cited “City sources”, the deal would mark the bank’s biggest acquisition since it returned to private ownership around four years ago.

The Embark Group is a fast-growing, financial services business and calls itself one of the largest retirement solutions providers in the UK.

Its website says it operates in both the advised and institutional areas of the retirement market through a range of pension, wrap platform, research and consultancy services.

As of February 2021, it had £38.5bn assets under its care and 415,000 individual clients. It also employs around 650 people in the UK.

Founded in 2013 by Phil Smith, Embark has grown through deals such as the acquisition of Zurich’s investment and retail platform last year and provides white-label services for other platforms such as BestInvest, Coutts and Moneyfarm.

This would be one of Lloyd’s biggest deals since it was bailed out to the tune of £20bn during the financial crisis and could close this month.

At the end of April, the bank beat forecasts for quarterly performance thanks to a mortgage boom in the UK.

Lloyds reported a pre-tax profit of £1.9bn on net income of £3.7bn in the first three months of 2021. City analysts had expected Lloyds to turn a profit of £1.1bn on net income £3.5bn.

The outperformance was driven by a boom in mortgage lending. Lloyds lent net £6bn against homes in the quarter, including £4bn handed to first time buyers. Mortgage completions were at the highest level since 2008.

The takeover bid comes just days after long-serving chief executive António Horta-Osório left the bank.