The sale of Scottish Widows Investments has been confirmed for a fee of £600 million.
Lloyds Banking Group revealed that it has sold the organisation to fund manager Aberdeen Asset Management.
However, the bank confirmed it is holding on to Scottish Widows, the group's life, pensions and investment business, under the terms of the deal.
In a statement, Lloyds explained that the sale of Scottish Widows Investments to Aberdeen Asset Management will "result in a stronger asset management partner for the group and its customers".
Aberdeen Asset Management chief executive Martin Gilbert described the sale as "significant", adding: "It strengthens our investment capabilities and adds new distribution deals."
The share price of Lloyds Banking Group has risen in the early stages of trading this morning after the deal was confirmed.
By 08:25 GMT, stocks in the bank were already up by more than one per cent on the start of the day's trading on the London Stock Exchange.
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