Profits rise at Standard Life

Updated: 11:40 EST, 11 August 2010

Life and pensions group Standard Life has added to signs of recovery in the industry after reporting a 10 per cent rise in operating profits.

Edinburgh-based Standard said it had seen a 71 per cent increase in net inflows - revenues from premiums and deposits offset by withdrawals and policy terminations - to a record £5.3bn in the half year.

This meant group assets under administration improved by five per cent to £179bn at the end of the period. Operating profits were in line with City expectations after improving to £182m from £166m a year earlier.

Upbeat: Chief executive David Nish is positive about the company's future growth

Standard has benefited from a strong performance in international markets, particularly in India where it sees 'great potential'.

In the UK, profits were down five per cent due to lower volumes of annuity business and increased costs relating to investment in new areas of business.

The UK business reported retail outflows of £404m in the half-year period, but this was £703m better than a year ago after continued strong demand for self-invested personal pensions and mutual funds.

Standard is seeing outflows across all pension products mainly due to the change in the minimum age at which customers can take retirement benefits from 50 to 55.

Chief executive David Nish said the company had the products to capitalise on 'very large' individual and employer markets in the UK and Canada.

He added: 'Whilst the economic background remains uncertain we believe that the underlying demographic and regulatory trends in our key markets continue to support our future growth potential.'

The company increased its dividend by nearly five per cent as it joined rivals Aviva and Legal & General in posting upbeat half-year figures. Prudential is expected to follow suit with a higher shareholder pay-out on Thursday.

Standard Life recently slimmed down its operations with the sale of its banking and healthcare operations.