Edinburgh-focused financial giant Standard Life’s (SL.) 2015 results justify its strategy to move away from selling retirement products to focus on asset management.
Shares slipped 1.1% to 334.5p following a 1.2% rise in early trading after pre-tax profits beat expectations with an almost 10% improvement to £665 million in 12 months.
This comes despite volatility hitting the global markets. Management demonstrated their confidence that profit growth will continue despite such choppy conditions by hiking the total dividend by 8% to 18.4p, a 5.5% yield.
Standard Life’s assets under management improved 4% to £307 billion during the year. This helped to drive fee revenue 10% higher to more than £1.5 billion.
Growth has also been a result of the FTSE 100 member’s decision to focus on selling drawdown pensions rather than annuities following the government’s pension revolution.
Standard Life has kept the European regulator happy with a cash surplus of £2.1 billion giving it a Solvency II ratio of 162%. This, while providing adequate protection against economic shocks, is reported to be lower than expected.
A ratio of 100% means it has enough cash to protect against any underwriting and investment risk an insurer carries, avoiding the need for a potential banking-style bailout.