Standard Life Plc Says Focus On Fee Revenue Is Driving Growth

Sstandardlifetandard Life (LSE: SL) issued a positive interim management statement for the third quarter this morning, in which it reported that fee revenue from continuing operations (including acquisitions) has increased by 13% to year to date, reaching £1,032m. However, its share price is currently down  0.7% in trading so far today.

The Edinburgh-based savings and investment business reported that assets under administration (AUA) were up to £290bn, driven by both net inflows of £4.3bn and the acquisition of Ignis Asset Management. The total excludes £30.8bn of assets from its Canadian operations, which are now marked for disposal. Its UK retail and corporate fee business AUA now exceed £100bn.

Standard Life says it added 117,500 new customers through pension auto-enrolment during the quarter, and 290,000 in the year-to-date, bringing the overall total since auto-enrolment began to over 500,000 new customers.

Standard Life says that the proposed sale of its Canadian business, which is expected to complete early in 2015 subject to regulatory approval, will increase its focus on fee-generating business and will enable it to return £1.75bn of capital to shareholders.

Commenting on the statement, CEO David Nish said

“Standard Life has continued to perform well driven by a focus on delivering value for money for our customers and clients. … We are also strongly placed to deal with the far-reaching reforms to the savings and retirement income rules, announced earlier this year by the UK Government, and to support customers through these changes. We have an excellent track record of succeeding in evolving markets.

“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. We have the products, experience and proven investment performance to help our customers and clients in all of our markets to save and invest, so that they can look forward to their financial futures with confidence.”

At 382.7p, Standard Life’s share price is up 3.4% since this time last year, a period during which the FTSE 100 has fallen 5%.  And the company is beating the index over the longer term, too — Standard Life has increased by 66% over the past five years, whilst the FTSE 100 has only managed a 23% gain.

A lot of people will be attracted to Standard Life because of its hefty dividend yield, currently around 4.5%.  

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.