Rise In Schroders AUM In H1 2022

Amanda Cheesley

29 July 2022

Faced with a war in Ukraine and high inflation rates, has reported a 16 per cent decline in profit before tax – now £312.8 million ($379 million), down from £373.9 million at the same time last year.

Despite the headwinds, the firm’s operating profit increased to £406.9 million, from £399.6 million the previous year, Schroders said in a statement. Its returns from balance sheet activities were impacted with net losses on financial instruments and other income of £35.2 million, compared with net gains of £32.6 million the previous year.

Net operating revenue was also 2 per cent higher than the previous period at £1,178.0 million the firm added. This was driven by higher average AuM of £779.2 billion, reflecting the growth it delivered in the second half of 2021, the benefit of the acquisitions completed in 2022 and higher net banking interest of £12.9 million, the firm explained.

Net operating income meanwhile increased by 3 per cent to £1,240.3 million and operating profit rose by 2 per cent to £406.9 million, Schroders added.

Schroders also generated net new business of £8.4 billion, which helped increase assets under management to £773.4 billion, compared with £766.7 billion in 2021, the firm said. Wealth management generated NNB of £3.8 billion and private assets and alternatives gathered £4.8 billion. The period ended with total AuM in wealth management of £96.0 billion compared with £101.6 billion in 2021. Without the acquisitions of R&M’s solutions business, Greencoat Capital and Cairn Real Estate, AuM would nevertheless have dropped significantly.

Excluding joint ventures and associates, Schroders generated net new business of £4.4 billion and AuM reached £637.5 billion.

The firm’s investment performance also remained strong with 77 per cent of client assets outperforming their relevant comparator over three years and 79 per cent over five years, the firm said. Short-term investment performance was impacted by a rotation of markets with 51 per cent of client assets outperforming over one year.

The board declared an unchanged interim dividend of 37.0 pence per share which will be paid on 25 August 2022 to shareholders on the register on 5 August 2022.

Welcoming the results, Peter Harrison, group chief executive, said: “We have built a diversified and resilient business that has weathered difficult market conditions, can fund growth and has put us in an excellent position to serve our clients.”

“The fact that we can report positive net new business in this period is testament to this. Our investment in sustainability has been a critical contributor to our success. It was particularly evident in our mutual fund business where, despite a stock market sell-off, our equity funds saw positive client inflows,” he added.

"Our private assets, wealth and solutions businesses are growing well, reinforcing the value of our strategic focus. It is this diversification that enables us to continue to meet our clients’ evolving needs,” Harrison said.