Legal & General’s profit before tax was given a large boost from its pensions business in the first half of the year, but its platform Cofunds was hit by outflows of £700m.
The FTSE 100-listed company saw its pre-tax profits hit £826m, up by 23 per cent compared with the same period in 2015 when it stood at £672m.
However, L&G’s platform Cofunds recorded net outflows of £700m in the first six months of the year, a large drop compared the inflows of £1.1bn seen over the same period last year.
According to the company’s results, the outflows were due to customers withdrawing money for income and other purposes.
L&G also saw outflows of £8.8bn related to its disposal of Suffolk Life, which it announced it was selling to Curtis Banks for £45m in January this year.
The company’s retirement arm saw annuity assets rise 18 per cent to £51bn, from 2015’s figure of £43bn.
It also saw a hike in new business for its retirement division, reaching £79m from the £22m reported at the same point last year, helped by significantly higher annuity sales of £3.8bn, from 2015’s figure of £1.3bn.
In May L&G sealed a £3bn deal with Aegon to be its preferred supplier of Aegon’s annuities from October.
The company said it expects this arrangement to increase Legal & General’s individual annuity volumes by a half.
It also stated it remains interested in further consolidation opportunities.
L&G’s investment management arm also saw is assets under management increase by 18 per cent, hitting £842bn against the previous year’s figure of £715bn.
Nigel Wilson, group chief executive, pointed to the jittery financial markets and political uncertainty, and said L&G “cannot be immune” to this difficult environment.
However, he said: “We remain confident we will continue to deliver attractive returns for shareholders, great value to customers and better outcomes for society.
“Our five long-term growth drivers, ageing populations, globalisation of asset markets, creating real assets, welfare reform and digital remain unaffected and will continue to provide many growth opportunities.”
Marvin Evans, principal of Old Bank Wealth Management, said: “Personally, I think it’s premature to be moving funds away from Cofunds, and I have not experienced technical or service issues with the platform.
“Annuity sales have increased by 18 per cent, adding £8bn, whereas assets under management from it’s investment management arm are up £127bn, which I thought would have made a greater contribution to overall profit.”
katherine.denham@ft.com
