(Alliance News) - Standard Life Aberdeen PLC on Friday said it swung to an interim loss, with the asset manager pointing to the shutdowns in economic activity due to Covid-19 causing significant negative growth shocks across the world.
Shares in the company were up 0.1% at 263.70 pence each in London.
For the half-year ended June 30, the company's fee-based revenue fell 13% to GBP706 million from GBP815 million last year, which the fund manager said mainly reflects 2019 outflows, client preferences changing asset mix, and Lloyds Banking Group PLC tranche withdrawals.
In 2018, Lloyds decided to withdraw GBP109 billion of assets that were being managed by Standard Life Aberdeen.
The Scottish company swung to a pretax loss of GBP498 million from a profit of GBP649 million last year, reflecting impairment charges relating to goodwill and intangible assets. Adjusted pretax profit fell 30% year-on-year to GBP195 million, largely reflecting lower revenue.
Impact of the Covid-19 pandemic on the company's first-half results was largely in relation to lower fee based revenue, impairment charges and GBP10 million savings on discretionary costs.
Net inflows for the first half of 2020 amounted to GBP0.1 billion, excluding Lloyds tranche withdrawals of GBP24.9 billion, compared to GBP15.9 billion in net outflows a year ago.
Assets under management and administration as at June 30 stood at GBP511.8 billion, lower than GBP544.6 billion at year-end 2019, largely reflecting the Lloyds tranche withdrawals.
Despite the downturn in earnings and assets, Standard Life maintained its interim dividend payout at 7.3p each.
Outgoing Chief Executive Officer Keith Skroch said: "There is no question that the impact of Covid-19 has played a role on our results today, and across our industry, particularly in relation to lower revenue." Skroch will be succeeded by Stephen Bird, the former boss of Citigroup Inc's global consumer banking division.
Looking forward, Standard Life said revenue outlook remains challenging but the company continues to focus on what it can control.
"We will continue to diversify our revenue and reshape our cost base to ensure it is future fit. Although the future is unpredictable, we believe our mix of customers and channels, continued investment performance, enduring relationships, geographic spread and financial strength will enable us to continue to demonstrate resilience in periods of ongoing uncertainty," the company said.
By Tapan Panchal; tapanpanchal@alliancenews.com
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