Scotland business

Standard Life reports sharp rise in operating profit

Standard Life head quarters in Edinburgh Image copyright Getty Images

Standard Life's share price rose by more than 3% in early trading after the pensions and insurance firm reported a sharp rise in pre-tax operating profit.

A move into asset management helped to drive a 19% rise in profit to £604m last year, offsetting a hit to annuity sales from British pension reforms.

Fee-based revenue during the year grew 14% to £1.43bn, boosted by the firm's acquisition of Ignis Asset Management.

The deal also helped assets under administration grow 38% to £296.6bn.

Edinburgh-based Standard Life more than doubled the number of auto-enrolment pension customers in the UK last year.

The group said it added more than 340,000 auto-enrolment customers in 2014, taking the total to over 560,000 since the process began.

'Well-positioned'

The company also said changes allowing people to unlock pensions savings announced in last year's Budget had caused a "significant reduction" in demand for individual annuities, and were expected to see a "step down in the profitability" in part of the group.

It also pointed to a reduced contribution from annuity new business of £10m-£15m.

But the group said investments made in the UK business in recent years had left it "well-positioned to benefit from evolving customer needs and regulatory changes".

Chief executive David Nish added: "We are also well-positioned to deal with the far-reaching reforms to the savings and retirement income rules in the UK and to support customers through these changes."

During the year, Standard sold its Canadian operations, triggering a £1.75bn windfall for shareholders. It announced a final dividend of 11.43p, making a total of 17.03p for the year - up 7.8% on 2013.

Last year Mr Nish's pay and bonus rose by 23% to almost £5.5m, while Standard Life Investments chief executive Keith Skeoch saw his package rise by 21% to nearly £5.3m.

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