The Edinburgh-headquartered investment company made £1m in profits before tax through its wholly-owned Asian operations, which it said was helped by lower commission payments in Hong Kong.
However, Standard Life said regulatory changes in both Hong Kong and Singapore – which include the ban on indemnity commission and the soon-to-be implemented Balanced Scorecard – have led to “challenging conditions” that “may impact sales and profitability”. This comes after tougher regulations introduced in the United Arab Emirates led to the firm closing its Dubai business last year.
The company’s joint ventures in China and India saw strong growth, with profits standing at £18m before tax, compared to profits of £5m in 2013. Assets under administration in India jumped by 42%, increasing to £1.7bn, while strong investment returns drove profit in China.
Standard Life Investments had a 45% jump in assets under management last year, which it said was largely due to the acquisition of London-based company, Ignis Asset Management, which was completed in July.
“Although investment markets are unsettled and may affect the near-term pace of asset and revenue growth, we are very well placed for the future,” said the firm’s chief executive, David Nish. “Standard Life Investments has continued to perform strongly and expand internationally.”
“Good strategic progress”
The sale of Standard Life’s Canadian business to Manulife was completed at the end of January this year and, due to the weakening Canadian dollar, saw operating profits almost half in a year to £136m from £251m.
Nish said the sale of its Canadian business and the purchase of Ignis helped the firm make “good strategic progress”.
Overall, Standard Life’s profits increased modestly, growing 19% to £604m, from £506m in 2013. Within its European division, profits dipped by £5m throughout the year, totalling £40m.
Although the full year results are mostly positive, the firm said this was offset by the negative impact of foreign exchange as sterling strengthened against other currencies, including the euro.
However, new business sales in UK annuities slumped dramatically by 66%, which Standard Life said was a reflection of the pension reforms being introduced in April. Despite this, Nish said the company is “well positioned to deal with the far-reaching reforms to the savings and retirement income rules in the UK and to support customers through the changes”.
Standard Life also announced its plan to open 10 offices in New York, Los Angeles, Toronto, Munich, Tokyo, Zurich, Stockholm, Brussels, Milan and Madrid, as it looks to expand its footprint around the world.
