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Standard may need to sell loan and healthcare arms

Standard Life could be forced to sell off its Standard Life Bank and Standard Life Healthcare if it wants to remain mutual, according to a leading City analyst.

The analyst, who spoke on the condition of anonymity, says the subsidiaries would only be likely to remain within Standard Life if it committed to demutualisation. The analyst says the two subsidiaries would probably be sold by the with-profits fund to the holding company if the company demutualises.

He questions the place of the subsidiaries in a mutual organisation, saying policyholders could take issue over the use of their money to invest in such ventures.

He says if Standard Life is committed to remaining mutual, it will probably have to sell the subsidiaries.

If it did sell the subsidiaries, it might not have to do so at reduced prices.

Commerzbank insurance analyst Roman Cizdyn saya demutualising company can make shareholders pay market value for assets within the group.

It has also been revealed that Standard is postponing the launch of new with-profits savings products until the strategic review is completed.

Legal & General head of press relations John Morgan says: “The ownership of Standard Life Bank might change within Standard Life if it were to demutualise – the shareholders could buy the bank but it would remain in the group. But there is no reason for it to be sold if it is making a profit.”

Standard Life head of media relations Justin Smith says: “The subsidiaries are part of the review and nothing has been ruled out. We want the review to maximise value for our policyholders and we expect value to be maximised best by retaining the businesses in Standard Life.”

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