Ae­gon gets £150m div­i­dend boost from its UK arm

● First pay­ment to Dutch par­ent in two decades as Bri­tish prof­its leap ahead

The Scotsman - - Business - By MARTIN FLANA­GAN

Ae­gon UK is to pay a £150 mil­lion div­i­dend to its Dutch par­ent group, it emerged yes­ter­day – its first in 20 years – as the life and pen­sions provider re­vealed rock­et­ing prof­its.

Adrian Grace, chief ex­ec­u­tive of the UK arm, which em­ploys about 2,100 in Ed­in­burgh, said: “Pay­ing the div­i­dend shows our fi­nan­cial strength. We have not paid a div­i­dend to Ae­gon in 20 years.

“It’s the first since then and it will stick. We are clearly de­lighted. The long-term in­vest­ment in the busi­ness by Ae­gon is pay­ing off for them.” It came as Ae­gon UK an­nounced a £25m profit for its third trad­ing quar­ter, which after al­low­ing for a €3m loss in the busi­ness in the Re­pub­lic of Ire­land meant an over­all profit con­tri­bu­tion from the re­gion to the Euro­pean di­vi­sion of €25m – up from €5m in the same pe­riod a year ear­lier.

Over­all Euro­pean earn­ings climbed to €177m, up 17 per cent, while Ae­gon’s earn­ings world­wide rose 20 per cent to €556m from €461m in the same quar­ter last year.

Grace said “buoy­ant” fi­nan­cial mar­kets had also helped the lat­est UK per­for­mance, with as­sets on the plat­form hit­ting a record high of £110 bil­lion in the quar­ter. There were net in­flows of £1.4bn.

A key fac­tor in mar­kets’ re­silience, he said, was that although there were con­cerns about a slow­ing UK econ­omy “a lot of large UK com­pa­nies have strong in­ter­na­tional earn­ings which trans­late pos­i­tively back into weak ster­ling”.

He said there was un­cer­tainty on whether the first rise in UK in­ter­est rates last week would squeeze con­sumer spend­ing, but added: “Ours is not to ques­tion why, ours is to deal with the con­se­quences.”

He also said that the UK di­vi­sion was “bang on track” to take £65m of costs out of the busi­ness from the in­te­gra­tion of Black­rock’s UK plat­form and the Co­funds plat­form, both ac­quired last year.

“In Septem­ber the trans­fer of £3bn of an­nu­ities to Le­gal & Gen­eral com­pleted, and this marks an­other mile­stone as we move from a busi­ness fo­cused pri­mar­ily on in­sur­ance con­tracts like an­nu­ities, to one that gen­er­ates rev­enues mainly through fees for ad­min­is­ter­ing pen­sions and in­vest­ments,” the UK chief said.

He added that he was con­fi­dent that “if we stick to our task and fo­cus on pro­vid­ing ad­vis­ers with the tools and ser­vices that help them to man­age their busi­nesses more ef­fi­ciently, both ad­vis­ers and Ae­gon will be suc­cess­ful”.

The group said in its state­ment that the Euro­pean di­vi­sion had seen higher fee rev­enue in the UK due to the favourable eq­uity mar­kets. It also ben­e­fited from bet­ter un­der­writ­ing re­sults in all re­gions, from the Nether­lands to cen­tral and eastern Europe and Spain and Por­tu­gal.

Group boss Alex Wy­naendts said: “I am pleased that our un­der­ly­ing earn­ings are up for the fifth con­sec­u­tive quar­ter, re­flect­ing growth across our busi­nesses, ex­pense sav­ings and man­age­ment ac­tions taken to im­prove re­turns”.

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