Asset manager Standard Life Aberdeen (SLA) has posted an adjusted pre-tax profit of £584m for 2019, a 10% decrease from the previous year. The performance in 2019 was hit by £58.4bn in outflows.
Fee based revenue dropped 13% year-on-year to £1.63bn.
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Of the total outflows, £41bn was lost as a result of Lloyds Banking Group’s decision to terminate a £109bn asset management contract with SLA.
Lloyds scrapped the contract citing competition concerns arising from the merger between Standard Life and Aberdeen. Last year, Lloyds agreed to pay £140m to SLA to resolve the issue.
When not factoring in the Lloyds mandate, SLA’s net outflows were £17.4bn in 2019. However, this is lower compared to the previous year’s net outflow figure of £40.9bn.
Adjusted operating expenses of £1.33bn were 4% lower than the prior year, driven by synergies and other efficiencies.
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By GlobalDataAUMA at SLA increased 6% to £544.6bn excluding the loss from the Lloyds contract.
SLA CEO Keith Skeoch said: “We have seen growing momentum in the second half of the year across the business with improved investment performance and flows. We remain on track to deliver targeted synergies and have identified more we can deliver as we continue to reshape the business and sustain resilience.
“Our strong financial position, capital generation potential and focus on operational efficiency enables us to invest in the business to drive profitable revenue growth and shareholder return.”
The firm also warned of a volatile year ahead, in the wake of coronavirus (Covid-19) outbreak.
“The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of COVID-19,” Skeoch noted.
