The first half of 2012 was a mixed bag for asset manager Schroders, with assets under management (AuM) up in the period but profits down year-on-year.
AuM at the end of June stood at £194,6bn, up from £187.3bn at the end of 2011 but down from £204.8bn at the end of June 2011 and down from £199.6bn at the end of the first quarter of 2012.
During the second quarter the group saw a net inflow of funds of £1.1bn, but this was wiped out - and then some - by negative investment performance.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Profit before tax for the six months to the end of June eased to £177.4m from £215.7m, which means profitability in the second quarter slipped to £81.9m from £95.5m in the first quarter. Schroders said the year-on-year fall in profits reflected the lower level of markets and assets under management compared to a year earlier,
The Asset Management division's half-year profit before tax was £175.2m, down from £203.1m the year before. Second quarter pre-tax profit was £86.6m, down a couple of million quid on the first quarter's result.
The division's net revenue was £491.0m, down from £534.6m the year before.
The much smaller Private Banking division saw profit before tax slide to £10.4m from £12.3m the year before. In the first quarter, this division had notched up a pre-tax profit of £6.4m, which means second quarter profits were down quarter-on-quarter at £4.0m.
Net revenues in Private Banking were down by nearly one-tenth at £52.6m from £58.0 million in the first half of 2011, largely due to a reduction in assets under management compared to levels a year ago but also a decline in net revenue margins as clients moved towards more defensive strategies and transaction volumes fell.
Earnings per share tumbled to 50.7p from 60.7p in the first half of 2011. Nevertheless, the interim dividend has been held at 13p.
"Investor demand across our business will be affected by the high level of macro economic and market uncertainty which we expect to persist for the remainder of the year. In this challenging environment our broad product range and global client base is resulting in a resilient performance," the group's statement said.
JH
Average earnings by region – how does your income compare?
St James’s Place confirms new fees – what it means for customers
