‘Standard Life deal was right despite £6.3bn share plunge’

THE boss of Standard Life Aberdeen has defended the mega-merger which formed his savings firm – even though shares have since tumbled by more than the value it paid for Aberdeen Asset Management.

City veteran Keith Skeoch said merging Standard Life and Aberdeen (SLA) was still the right decision. SLA has struggled to stem a rush for the exits by savers since the deal in 2017.

The stock has fallen 37pc since the company was formed, wiping £6.3bn off its value – more than the £3.8bn which Aberdeen was worth at the time.

Half-year results yesterday revealed withdrawals from SLA’s funds are continuing, with £15.9bn taken out in the first six months of the year.

Skeoch blamed cheap online funds which seek to track the market and compete with traditional stock pickers, who aim to only buy the best-performing shares and charge a premium for their expertise.

He said: ‘The deal was strategic, the decision was taken with a three-year view. Our strategic transformation is absolutely about positioning us for longterm growth, and I believe it’s the right thing to do.’

Performance has improved, with 65pc of assets under management now in funds which are beating their competitors.

It comes after several years of disappointing returns.

A rise in its funds boosted SLA’s total portfolio size by 5pc to £577.5bn. Even though its shares have fallen since the merger, SLA has still returned just under £3bn to shareholders over the two years through buybacks and dividends.

Skeoch promised to maintain dividends for the foreseeable future, holding the interim payout steady at 7.3p per share.

He also unveiled a £200m share buyback. The company made a £280m profit, down from £11m for the same period in 2018.

But, excluding a one-off boost from selling part of its stake in India’s HDFC Life, profits fell short of expectations. Shares fell 7.5pc, or 21.2p, to 260.6p.