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Standard Life revenue rises as it plots India expansion

By Maryam Cockar

Date: Friday 24 Feb 2017

Standard Life revenue rises as it plots India expansion

(ShareCast News) - Standard Life proposed a full year dividend per share of 19.82p, up 8%, as revenue for 2016 grew against a backdrop of volatile investment markets as the insurer aims to increase its exposure to the Indian market.
Fee based revenue rose 5% in 2016 to £1.65bn, which accounts for 95% of Standard Life's total income, compared to the previous year, with growth channels revenue up 10% to £1.2bn and the average revenue yield maintained at 59 basis points.

Operating profit before tax increased 9% to £723m with diluted operating earnings per share up 13% to 29.5p.

The company reduced the cost/income ratio by one percentage point to 62% and is targeting a reduction below 60% over the medium term.

It increased the assets under administration by 16% to £357.1bn with net outflows of £2.6bn, this represents less than 1% of opening assets, which it said was driven largely by its mature business books.

At the end of last year the company had about £900m in cash after it increasing its stake in Indian insurance firm HDFC Life, and which it aims to combine with New Delhi-based insurer Max Life to create a large private life insurance business in India

Growth channels assets under management grew 20% due to gross inflows of £38.6bn, net inflows of £4.1bn, positive market movements and the May 2016 acquisition of Elevate, Axa's portfolio service business.

This included an 11% rise in the asset under management from the institutional and Wholesale division to £137.1bn, and a 33% rise in assets under management from the workplace and retail division to over £100bn, which benefitted from net inflows of £5.4bn and the Elevate acquisition.

Underlying cash generation was up 9% to £502m and the company is investing further in its business, including in its investment capabilities and geographic reach as well as the acquisition of Elevate and ongoing buildout of 1825.

Chief executive Keith Skeoch said that Standard Life has increased the pace of its strategic delivery to create a global insurance business "against a backdrop of volatile investment markets", with growth in assets, profits, cash flows and returns to shareholders.

He said: "Despite industry headwinds, we are benefiting from our strengthening global brand and strong long-term relationships with a well diversified range of clients and customers. The acquisition of Elevate has strengthened our leading position in the advised platform market while the increase in the stake in HDFC Life and the proposed combination with Max Life will increase our exposure to the attractive and fast growing Indian market.

"We are already seeing the benefits of targeted investments to further our diversification agenda, including the success of our newer investment solutions, and the sharpened focus on operational efficiency. This increased pace of strategic delivery will ensure that we continue to meet changing client and customer needs, and generate growing and sustainable returns for our shareholders."

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