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Revenues Bounced Back At Schroders' Wealth Arm In 2013

Tom Burroughes

6 March 2014

, the UK-listed investment and private banking firm, said today that it enjoyed a “rebound” in the performance of its wealth management business last year, boosted by its acquisition of Cazenove Capital.

Net revenue in wealth management rose by 59 per cent to £150.0 million ($250.7 million), up from £94.4 million in 2012; profit before tax and exceptional items rose to £34.3 million (2012: £11.8 million),” the firm said in a statement.

Exceptional items of £30.9 million (2012: nil) included integration costs and the amortisation of client relationships acquired in relation to Cazenove Capital, and a provision of £15.0 million relating to a possible liability arising from an industry-wide review by the US Department of Justice with regard to accounts held in Swiss banks that may not have been US-tax compliant. This provision relates principally to closed accounts.

Net outflows during the year amounted to £1.5 billion (2012: £0.3 billion) as a result of the expected loss of two large mandates in the second half. Assets under management ended the year at £30.1 billion (2012: £16.3 billion).

“The acquisition of Cazenove Capital has significantly strengthened our position in wealth management bringing talent, scale, a complementary client base and a capability in financial planning. The response from clients has been very encouraging as we have brought together two businesses with a similar culture and client proposition. In the UK and the Channel Islands we will use the Cazenove Capital name in our Wealth Management business, while retaining the Schroders name in Switzerland and other international locations,” the firm said.

For the whole of Schroders, covering asset management, private banking and other activities, the firm reported a profit before tax and exceptional items of £507.8 million (2012: £360.0 million).

Schroders logged net inflows £7.9 billion (2012: £9.4 billion); assets under management rose to assets under management stood at £262.9 billion, up from £212.0 billion)

“2013 was a record year for Schroders, with profit before tax and exceptional items up 41 per cent to £507.8 million and assets under management up 24 per cent. to £262.9 billion. The momentum across our business continued through the year with £2.4 billion of net inflows in the fourth quarter,” Michael Dobson, chief executive, said.