STANDARD Life chief executive Keith Skeoch has said the company will only need to move tens of people not thousands to other European countries following Brexit and noted the company is used to dealing with regulatory complexities overseas.
Asked about the potential impact on the life and pensions giant of the UK leaving the European Union, Mr Skeoch said: “Am I going to have to move a lot of people from London or Edinburgh to Dublin or Frankfurt? No. Am I going to have to move some people or hire people? Yes, but we’re talking tens not thousands like some investment banks.”
Mr Skeoch was talking after the company posted a better than expected profit for 2016, for which the value of his pay package fell 20 per cent.
He said Edinburgh-based Standard Life had made good progress during the year and was well placed to deal with the period of elevated political uncertainty that directors believe is in prospect given events on both sides of the Atlantic.
Asked about the possibility of a second independence referendum being held in Scotland next year, Mr Skeoch said Standard Life was “totally apolitical”.
Directors would look for clarity about what is going to happen and how any development might impact the business and its customers before reaching a view.
Mr Skeoch said the group has been a beneficiary of pensions reforms which have given people more freedom to decide how they save for retirement.
He hailed the benefits of the £390 million acquisition of the Glasgow-based Ignis asset management business, which Standard Life has integrated ahead of schedule.
The takeover has provided a boost to profitability and delivered strategic benefits by helping the company win business from firms that run closed pension funds.
Mr Skeoch said Standard Life is continually scanning the horizon for acquisitions that could help it create value shareholders but declined to give any details.
While Standard Life noted opportunities to cut costs through streamlining customer operations and increasing automation, Mr Skeoch said that might not necessarily result in it reducing job numbers in Scotland.
Increases in profitability would help Standard Life invest in growth, with positive implications for employment.
“You don’t cut your way to greatness,” said Mr Skeoch, who noted the Standard Life Investments division he used to run hired around 220 more people last year while reducing its cost-income ratio.
Standard Life has provided £175 million following a review by the Financial Conduct Authority last year into annuity sales. It expects to recover £100m from insurers.
The company increased operating profits nine per cent to £723m, from £665m in 2015. Analysts forecast £684m according to a consensus compiled by the company.
Assets Under Management increased 16 per cent annually, to £357bn from £307.4bn. The company said the increase was driven by market movements, including the benefit of the fall in the pound last year.
Standard Life increased the full year dividend by eight per cent, to 19.82p from 18.36p.
Mr Skeoch noted pensions freedoms have increased demand for products such as Self Invested Personal Pensions.
The company said regular contributions into workplace pensions increased by five per cent to £3.1bn, reflecting its success in winning auto enrolment business.
Mr Skeoch noted that Standard Life has been growing in overseas markets helped by linking up with local players in Asia and Australia. It has operations in Ireland and Germany.
Standard Life Investments’ cost/income ratio fell to 58 per cent last year, from 61 per cent.
The group ratio fell to 62 per cent from 63 per cent.
Mr Skeoch earned £2.75m total remuneration last year, against £3.45m in 2015.
He voluntarily reduced his earnings under the company’s long term incentive plan by up to £700,000 in May.
Standard Life shares closed down 5.7p at 369.4p.
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