Private banking profit before tax at Schroders increased by 42 per cent to £15.9 million in the first half, up from £11.2 million last year. The bank notes that the establishment of its private banking service centre in Zurich was completed in April and further efficiency gains are expected as a result, as well as improved client service. Net new business flows in the first half were flat, year-on-year at £0.2 billion and funds under management at the end of June increased to £9.3 billion from £8.6 billion at the end of last year. In asset management, net inflows into higher margin products in 2006, which continued during the period, contributed to an 18 per cent increase in gross profit to £353.3 million and a 27 per cent increase in profit before tax to £123.2 million. Net retail asset management sales were £3.6 billion in the first half, compared with £2.3 billion in the first half of 2006, and were broadly diversified according to the bank. Results were particularly strong in Asia, with £1.7 billion of net sales, and in the UK with £1.3 billion of net sales. By product, significant demand was seen for a wide range of asset classes including emerging market equity and debt, European equities, global equities, property securities and multi-manager funds. Retail funds under management at the end of June were £48.7 billion, up from £42.5 billion at the end of last year.