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Insurer 'making progress'

Skeoch chief calls for ‘wealth at risk’ test for top earners

Keith SkeochStandard Life chief executive Keith Skeoch said today he supported Prime Minister Theresa May’s proposed crackdown on excess boardroom pay.

He called for a focus on “wealth at risk” rather thn “income at risk” to ensure that performance is directly linked to how companies trade.

He said remuneration packages had become “far too complicated” and there was a need for greater simplicity and transparency.

His comments came after the group’s half-year statement today and yesterday’s report from the High Pay Centre which said Britain’s top bosses continue to enjoy high rewards.

“I am very supportive of Theresa May that this is a problem that has to be faced,” said Mr Skeoch in a conference call. He said that there would be an “active debate” about this issue in the autumn.

There have been a number of shareholder rebellions over pay at a range of blue chip companies.

Mr Skeoch, who forfeited part of his own pay package ahead of this year’s annual meeting, declined to say how he would deal with his own reward this year, saying it was a matter for the remuneration committee.

Today’s half-year statement showed Standard Life is benefiting from diversification across the business to deal with volatile markets.

It has increased its exposure the fast-growing Indian market and expanded into the advisory sector.

Announcing an uplift in profits, assets under management and the interim dividend, Mr Skeoch said: “Standard Life continues to make good progress towards building a world-class investment company, against a backdrop of volatile investment markets, by growing assets, profits, cash flows and returns to shareholders.

“Despite elevated uncertainty we are benefiting from our strong long-term relationships with a broad range of clients and customers who reacted in different ways to the changing market environment.

“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, while the agreement to acquire Elevate will strengthen our leading position in the advised platform market.

“Targeted investments to further our diversification agenda, together with our sharpened focus on operational efficiency will increase our pace of strategic delivery. This will ensure we continue to meet changing client and customer needs and generate sustainable returns for our shareholders.”

Highlights:

• Assets under administration up 7% to £328.0bn (FY 2015: £307.4bn) helped by gross inflows into our growth channels of £20.6bn (H1 2015: £20.5bn) and net inflows of £4.1bn (H1 2015: £7.4bn)

• Global Institutional business AUM up to £78.1bn helped by net inflows of £2.0bn representing an annualised 6% of opening AUM

• Wholesale AUM up to £47.3bn with net outflows of £0.4bn in a challenging environment for mutual funds, representing an annualised outflow of 2% of opening AUM

• Third party investment performance ahead of benchmark over 1 year: 29%; 3 years: 85%; 5 years: 84%

• Workplace and Retail channels continuing to see steady growth with net inflows of £2.8bn (H1 2015: £2.9bn), representing an annualised 7% of opening AUA:

• Assets on adviser Wrap platform up 20% year-on-year to £28.0bn (FY 2015: £25.5bn; H1 2015: £23.3bn) with net inflows in H1 2016 up 3% to £2.1bn

• Regular contributions into workplace pensions up 4% to £1.5bn

• Fee based revenue up 4% to £794m representing 93% of total operating income, with revenue across growth channels up 8% to £577m

• Underlying performance up 14% and operating profit before tax up 18% to £341m with diluted operating EPS up 16% to 13.5p (H1 2015: 11.6p)

• Profit for the period attributable to equity holders of £226m (H1 2015: £69m) and basic EPS of 11.5p (H1 2015: 3.2p)

• Underlying cash generation up 10% to £254m and a strong and stable Solvency II surplus of £2.2bn

• Increased stake in HDFC Life from 26% to 35% for £179m. HDFC Life has agreed terms that, subject to approvals, will see the combination of the life insurance businesses of HDFC Life and Max Life, creating a leading private sector life insurer in India

• The enlarged HDFC Life in which Standard Life would hold a 24.1% stake will, as a result of the combination and subject to approvals, have listings on the Bombay Stock Exchange and the National Stock Exchange of India

• Interim dividend up 7.5% to 6.47p

 

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