Standard Life takes a swipe at Prudential dividend hike
Standard Life took a swipe at Prudential's decision to curry favour with investors with a 20pc dividend hike this week, saying it preferred to offer a more consistent income stream.
Jackie Hunt, Standard Life's finance director said: 'We are not in the business of announcing 20pc increases after 30pc cuts. We don't believe in that.'
She was referring to a savage 38pc reduction in Prudential's dividend in 2003, which has been followed up by rather pedestrian increases until now.
Not a winning hand: Standard is doing the best with the 'set of cards' it was dealt
Hunt reckons the 6pc increase in Standard Life's payout to 13p for last year was quite enough. Arguably, the group couldn't afford any more anyway and it still yields 6pc.
Investors however, marked Standard Life's shares down by 17.8p to 226.9p, having yet to be persuaded that the future looks bright. The shares have risen 20pc over the last year but are still just below the 230p at which it floated at after demutualising in 2006.
The firm still has 1.4m small shareholders and more than 4m savings customers.
Chief executive David Nish said Standard Life was doing the best with the 'set of cards' it was dealt at demutualisation. He is shifting the focus towards less volatile fee-based income, where the firm receives a percentage of the savings or pension assets that it manages.
This means the group doe not have to hold as much capital as it would do if it was focused on annuities - seen as higher risk because of the difficulty in determining how long policyholders will live for.
The Edinburgh- based firm announced an operating profit of £425m for last year, higher than forecast because of a £59m boost due to a change to some of its staff pensions. Stripping this out, profits were lower than the £399m seen in 2009.
Fee-based revenues rose strongly in the UK, but the performance from the group's overseas businesses were mixed. Despite the weak Irish economy, Standard Life saw strong growth there as consumers put their cash into investments rather than property.
Hong Kong and India were also fast-growing, but Germany saw a decline in sales. China was a disappointment after hopes for a distribution deal with its bank were dashed.
Nish said he has shaken the company up, changing 40 people among the top management team and promoting 'a mixture of grey hairs and young vigorous talent'.
The focus is now on winning new business and improving customer service.
Most watched Money videos
- Iconic Dodge Charger goes electric as company unveils its Daytona
- Blue Whale fund manager on the best of the Magnificent 7
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini unveil an electrified version of their popular Countryman
- How to invest to beat tax raids and make more of your money
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- How to invest for income and growth: SAINTS' James Dow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Shawbrook didn't transfer my cash Isa and paid just 0.1%...
- Why Pret's £4.50 cheddar baguette made me swear never to...
- The Jaguar XJS is reborn as a £225k supercar - but TWR...
- Metro Bank deposits lifted by high-interest savings accounts
- HSBC boss's premature departure does not inspire...
- Anglo American in crisis talks with shareholders over...
- The used electric car timebomb: Tens of thousands of EVs...
- My mum's £201 a week state pension is her only income - ...
- UK pessimists 'in retreat' as business confidence and...
- HSBC shocks market as boss Noel Quinn retires after...
- Royal Mail boss blasts ministers for dithering over...
- Car makers post a slump in profits amid weak demand for...
- Some three in five motorists feel they have been...
- BUSINESS LIVE: FTSE 100 breaks winning streak; HSBC boss...
- Oil firm Deltic Energy slams 'hostile political environment'
- Europe set for June interest rate cut as inflation...
- Hargreaves Lansdown and St James's Place cash-in on Isa...
- The desperate learner drivers waiting SIX MONTHS for a...