London: Offsetting a hit to annuity sales from British pension reforms, a move into asset management helped to drive a 19 percent rise in operating profit for Standard Life in 2014.
Standard Life is moving more into asset management and away from its traditional business. It sold its Canadian operations last year for USD 3.7 billion and also bought Ignis Asset Management for 390 million pounds ($602 million). Chief Executive David Nish told reporters on a conference call that the deals “transformed the group further towards being a long-term investment savings business”.
In a statement, Standard Life said operating profit before tax from continuing operations rose to 604 million pounds (USD 931.5 million). It said it would pay a total dividend of 17.03 pence per share, again beating forecasts of 16.89 pence per share. Standard Life`s shares rallied 3.4 percent to their highest since Dec 8 at 423 pence.
Nish said, “In terms of our annuity sales, there has been a significant reduction, a direct result of the changes announced in the budget,” adding that the strength of the company`s results reflected the breadth of its business. Pensions and insurance companies were forced back to the drawing board last year by surprise British reforms, to take effect in April, which mean retirees no longer need to use their pensions pots to buy an annuity, which gives an income for life.