Abrdn H1 operating profits jump by 52% to £160m

Abrdn has achieved a 52 per cent increase in its H1 adjusted operating profit to £160m, according to its results for the first six months of 2021, after fee-based revenue increased by 7 per cent to £755m.

Adjusted operating profits were higher under each of the business’ vectors, rising by 66 per cent in the adviser segment, 33 per cent higher in administration and the personal segment recorded a small profit for the first time.

Assets under management and administration dropped by 1 per cent to £532bn, with the company, which was formerly known as Standard Life Aberdeen, stating that reductions due to flows and corporate actions were partially offset by positive market movements.

IFRS profit before tax swung to £113m from a loss of £498m in the comparable period in 2020, which Abrdn said reflected higher adjusted operating profit and significantly lower impairments than H1 2020.

Abrdn CEO, Stephen Bird, said: “Our strategy is about focusing on client needs. The improved flows into our strategically-important products and services show that we are answering client demand. The majority of the outflows that we are seeing are lower margin.

“Low interest rates and central bank interventions have created supportive market conditions from which we have benefited. Market volatility is expected to continue due to Covid-19 and its unequal effects in different parts of the world.

“We have made good progress in simplifying and focusing our business. The leadership team is now in place to drive the growth we seek through our strategic priorities. Our capital strength gives us the ability to invest in these priorities.

“We have a clarity of focus under our new brand and are better positioned to have impact at scale as a global business. We are at the beginning of the journey and we are moving at pace to build our new future.”

Commenting on the results, Edison Group managing director, Robert Murphy, said they showed the business was “beginning to stabilize following poor results” following the merger between Standard Life and Aberdeen Asset Management in 2017.

He continued: “Following the rebranding in July as well as the streamlining of the business through asset sales, abrdn is making progress in its turnaround.

"Looking forward, investors will want to see the company return to a net inflow position and deliver on its cost savings targets in order to navigate the global volatility of markets as the world transitions out of the pandemic.”

Additionally, Abrdn confirmed it has concluded a deal to buy Exo Investing from Nucoro for an undisclosed sum, in a deal which is expected to be completed in the fourth quarter of this year.

The firm said the acquisition would allow it to offer 24/7 digital wealth management via an app, adding that the artificial intelligence powered investment technology would enable “every customer to create a unique portfolio built around their individual goals, risk profile and preferences”.

Bird commented: “This is an exciting and significant step forward in building out our Personal vector capabilities. Exo was the first of its kind to offer a fully automated wealth management platform, leveraging machine learning to feed into portfolio decision-making.

“There is a downward pressure on fees, changing customer expectations and increasing regulatory requirements. It’s important to address these issues by providing a highly-scalable, next-generation service to investors.”

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