Standard Life Aberdeen warns of 'turbulent' 2020

Standard Life Aberdeen (SLA) has warned of a "turbulent" year for the markets after posting a 10% drop in annual profits.

The Edinburgh-based group reported underlying pre-tax profit of £584m, down from £650m in 2018.

Fee-based revenues fell by 13%, after two years of fund outflows.

The asset manager saw net outflows last year of £58.4bn, including £41bn lost when Lloyds Banking Group ended a £100bn-plus contract with the group.

SLA said the outflows "continued reflecting investor sentiment towards emerging markets and equity markets more generally".

The results showed the group's assets under management and administration fell by 1% to £544.6bn, but were 6% up with the hit from the Lloyds contract loss stripped out.

Lloyds was forced to pay £140m to SLA last year after a tribunal ruled the banking group did not have the right to end its mammoth contract with the asset manager.

SLA has also retained £35bn of Lloyds assets following its dispute with the bank.

In its latest full-results, SLA warned that the outlook was set to be volatile, given the coronavirus outbreak and equity market turmoil.

Chief executive Keith Skeoch said: "The outlook for the markets and our industry in 2020 is turbulent with the additional complexity of Covid-19.

"Importantly we are focused on what we can control, namely delivering for our clients, customers, colleagues and shareholders; diversifying our revenues; investing for the future and maintaining financial discipline."

SLA shares were up by 4.5% at 11:30 on Tuesday, amid a wider bounce back in the London market after Monday's heavy falls.

John Moore, senior investment manager at wealth management firm Brewin Dolphin, said the foundations of a strong company "are there if you take a long-term view".

He added: "Standard Life Aberdeen has been rigid with its cost-cutting, while new outflows have slowed to a degree and, reflecting the optimism attached to this, the dividend remains in line with guidance.

"Nevertheless, until there is asset growth and better market conditions, investors in Standard Life Aberdeen will have to remain patient."