Standard Life Aberdeen assets slip 6% to £545bn

Standard Life Aberdeen said on Friday its first-half adjusted profit before tax fell 30% to £195 million while assets under management and administration slipped 6% to £544.6 billion after much-publicized withdrawals by Lloyds Banking Group.

The £195 million profit was 9% above analysts’ expectations of £179 million.

The asset manager said it would pay an interim dividend of 7.3p per share, unchanged from a year ago.

It also said it plans to complete the existing £400 million share buyback programme — which is 55% complete — during the second half of the year.

Fee based revenue fell 13% to £706 million, “mainly reflecting 2019 outflows, client preferences changing asset mix in this environment, and Lloyds Banking Group (LBG) tranche withdrawals.”

Redemptions were 27% lower at £38.1 billion, excluding the LBG tranche withdrawals, and gross inflows rose 5% to £38.2 billion.

Standard Life Aberdeen said it made an IFRS loss before tax of £498 million in the first half “reflecting impairment charges relating to goodwill and intangible assets partly offset by gains on sales of Indian investments (HDFC Life and HDFC Asset Management).”

Presenting his last set of results before the arrival of new chief executive Stephen Bird, CEO Keith Skeoch said: “Despite exceptional circumstances we have delivered a resilient performance.

“In the first half of 2020 redemptions have slowed and net inflows have improved, excluding expected LBG withdrawals. 

“Investment performance has been robust and we continue to deliver on our synergy commitments.

“There is no question that the impact of COVID-19 has played a role on our results today, and across our industry, particularly in relation to lower revenue. 

“Our foundations are firm, we have a strong balance sheet which enables us to both invest in our business and maintain our interim dividend of 7.3p …

“This is my last set of results as chief executive of Standard Life Aberdeen, following 21 years with the business — a period where I have seen the business evolve from a mutual life and pensions company to a capital-light global investment house.

“I am pleased to hand over a business with strong foundations, an enviable capital position, talented people, enduring relationships and big ambitions.”

Goldman Sachs analysts wrote: “SLA reported 1H20 results with AuM at £512bn on higher-than-expected investment performance and a 9% beat on company-compiled consensus adjusted PBT driven by higher-than-anticipated cost savings of which £10mn was related to COVID-19 related costs …

“£511.8bn of AuM, 1% above consensus mainly driven by better-than-expected investment performance …

“The resulting adjusted PBT of £195mn was 9% above consensus …

“SLA maintained a strong capital position with total excess capital of £1.7bn  …”