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Profits Decline At Schroders Private Banking

Harriet Davies

10 March 2011

Schroders Private Banking reported a fall in pre-tax profits last year, to £10.1 million ($16.3 million) from £20.1 million the year before.

Net revenue at the division was £103.3 million, slightly ahead of the previous year when net revenue was £97.7 million. However, increased costs impacted the profit figure, as the bank raised its headcount and increased its doubtful debt provisions.

Funds under management in private banking ended the year at £16.2 billion, 29 per cent higher than the previous year-end.

Overall, Schroders logged profit before tax of £406.9 million for 2010, up from £137.5 million in 2009. This profit was achieved on net revenues of £1.16 billion, compared to £749.8 million in 2009. Meanwhile, net new business inflows rose by £12.1 billion year-over-year to £27.1 billion. The firm said that last year two-thirds of its revenues originated from clients outside the UK.

Funds under management were £196.7 billion at end-2010, compared to £148.4 billion a year earlier.

At its asset management division, the firm reported that net revenue had increased from £679.2 million in 2009 to £996.2 million in 2010, boosted by £72.6 million of performance fees. Profit before tax at the division was £381 million, up from £174.7 million a year prior. The firm said the division had benefited from good investment performance, and also that it saw net inflows across equities, fixed income, multi-asset and alternatives.