Stan Life Aberdeen assets at £544bn, but profit slips

Standard Life Aberdeen CEO Keith Skeoch

Edinburgh-based asset management giant Standard Life Aberdeen said on Tuesday its assets under management and administration were £544.6 billion at December 31, 2019, down slightly from £551.5 billion at the end of 2018.

Standard Life Aberdeen’s adjusted profit before tax fell 10% to £584 million as fee based revenue fell 13% to £1.6 billion reflecting the impact of net outflows in 2018 and 2019.

The fund manager said net outflows reduced to £17.4 billion, an improvement on the £40.9 billion of net outflows of 2018.

However, including outflows from losing a Scottish Widows mandate from Lloyds Banking Group, net outflows were £58.4 billion.

Standard Life Aberdeen rival Schroders said last week its assets under management reached a new high of £500.2 billion as it benefited from the Scottish Widows mandate being transferred to the firm.

Standard Life Aberdeen reported an improvement in investment performance with 74%, 60% and 67% of assets under management above benchmark over one, three and five years, respectively.

More than £1 billion was returned to shareholders in dividends and share buybacks in 2019, and a full year dividend of 21.6p is in line with guidance.

Standard Life Aberdeen shares rose about 5% to around 250p to give the firm a current stock market value of around £5.5 billion.

Standard Life Aberdeen CEO Keith Skeoch said: “We have seen growing momentum in the second half of the year across the business with improved investment performance and flows. 

“We remain on track to deliver targeted synergies and have identified more we can deliver as we continue to reshape the business and sustain resilience.

“Our strong financial position, capital generation potential and focus on operational efficiency enables us to invest in the business to drive profitable revenue growth and shareholder return.

“The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of COVID-19.

“Importantly we are focused on what we can control, namely delivering for our clients, customers, colleagues and shareholders; diversifying our revenues; investing for the future and maintaining financial discipline.”

Commenting on the Standard Life Aberdeen performance, John Moore, senior investment manager at Brewin Dolphin, said: “Net outflows continue for Standard Life Aberdeen and, coming up for three years since the merger, the business remains very much in transition.

“The share price has been hammered since the turn of the year, along with the wider market; but the foundations of a strong company are there if you take a long-term view.

“Standard Life Aberdeen has been rigid with its cost-cutting, while new outflows have slowed to a degree and, reflecting the optimism attached to this, the dividend remains in line with guidance.

“Nevertheless, until there is asset growth and better market conditions, investors in Standard Life Aberdeen will have to remain patient.”