M&G hit by £6bn retail outflows in H1
M&G suffered £6.1bn of outflows from its retail business in the first half of 2016 as overall profits and earnings fell.
An update from parent company Prudential showed retail net outflows were almost double those seen in the first half of 2015, where the firm saw £3.4bn leave. However, 2016’s six-month figure does represent an improvement on the £7.4bn seen in the latter half of last year.
Some £4.1bn of the retail outflows came in the first quarter of the year, according to the insurer.
Overall outflows including institutional business in 2016 reached £7bn, Prudential said.
Operating profit before tax for M&G was £225m, down from £251m for the first half of 2015. The insurer pointed to the “impact on revenues of lower assets under management as a result of the net retail business outflows experienced since the second quarter of 2015”.
The results add to to an already difficult period for the asset manager, which has now suffered £13.5bn of net outflows in the 12 months to June 30.
Retail assets under management at the end of June were 14 per cent lower than a year before, at £59.2bn, with Prudential noting this would “continue to put downward pressure on revenue prospects for the remainder of 2016”.
The company added M&G was “coming off an extended period of earnings growth”, but stressed its focus remained on cost management, improving performance, and managing the fallout of the EU referendum vote.
“Although [this half year’s performance] is likely to impact short-term earnings prospects, M&G remains a highly regarded franchise and the skills and capabilities that saw external assets under management double between 2008 and 2015 are very much intact,” Prudential’s statement said.
“Anne Richards, who joined us in June following her appointment as M&G chief executive, is already working closely with the executive team to improve performance and address the operational impacts of the outcome of the UK referendum on EU membership.”
