Abrdn announces a pre-tax loss of £320m for the first half of 2022 | Banking


Investment group Abrn plunged into the red in the first half of the year after being hit by market turmoil and the withdrawal of more than £24bn of assets linked to a canceled deal with Lloyds Banking Group.

Stephen Bird, the chief executive who ditched the Standard Life Aberdeen brand for a new name last year, said the pre-tax loss of £320million in the six months to June “largely reflected the economic environment difficult global market and market turmoil”. The group had reported profits of £113million a year earlier.

Clients also withdrew their money from Abrn amid deteriorating market conditions, resulting in total net outflows of almost £36bn. This contributed to a 6% fall in assets under management to £508bn, from £542bn a year earlier.

He also suffered the withdrawal of around £24.4bn of funds he originally secured under a deal that predated Aberdeen’s merger with Standard Life in 2017.

Lloyds Banking Group, owner of insurance and pensions company Scottish Widows, argued the merger posed a potential conflict of interest with its own business.

The drawn-out battle eventually led to a settlement in 2019, with Lloyds agreeing to withdraw its funds in installments. Lloyds withdrew the last part earlier this year, leaving Abrn with £7.5bn of Lloyds funds.

“We can draw a line under the episode where Lloyds walks away from us, but they’re still a big customer,” Bird said.

The Edinburgh-based company also highlighted the performance of investment platform Interactive Investor, which it bought in a £1.5bn deal first announced in December.

“When I became CEO at the end of 2020, I said we would pursue a diversification strategy by refocusing our investment activities on areas of strength, where we have scale… look at global growth trends and expand also considerably our reach in the sectors with the strongest growth. British wealth market,” Bird said.

“That’s exactly what we’re doing and the addition of Interactive Investor transforms our UK retail presence and future revenue streams. The strength of our balance sheet means we can continue to invest and reward shareholders.

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Shares of Abrn fell 5.5% in afternoon trading, after plunging as much as 10% earlier in the day.

Meanwhile, German investment bank Berenberg has reportedly told staff it is cutting around 30 of its 500 staff in London, making it one of the first investment banks to cut jobs amid a gloomy economy. .

It comes after the Bank of England said it expected inflation to top 13%, triggering a recession lasting more than a year.

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