Standard Life Plc (LON:SL) (LSE:SL.L) has released 2016 results to investors today. It increased assets under administration by 16% to £357.1 billion, with modest net outflows of £2.6 billion. This represents <1% of opening assets, which was driven largely by its mature books of business.
Fee based revenue was 5% higher than in 2015, with Standard Life investing in efficiency in order to drive operational leverage. Growth channels revenue was up 10% to £1205 million, while the average revenue yield was maintained at 59 basis points. It reduced the cost:income ratio by 1 percentage point to 62% and continues to target a figure of below 60% in the medium term.
In my view, Standard Life’s investors should be encouraged by today’s results. I feel it is making progress in becoming an improved investment company. It is doing so at a time when investment markets are volatile and uncertain. Its focus on diversification through the investment in Elevate and the increase in its stake in HDFC Life could also increase its long-term growth prospects in my opinion.
In the last 6 months, an investment in Standard Life has returned 5% in capital gains. That’s below the investment performance of financial shares such as Aviva plc (LON:AV) (LSE:AV.L), Prudential plc (LON:PRU) (LSE:PRU.L), Standard Chartered PLC (LON:STAN) (LSE:STAN.L) and Old Mutual plc (LON:OML) (LSE:OML.L). Aviva is 20% higher, Prudential’s shares have gained 17%, Standard Chartered has returned 19% and Old Mutual is up 11%.
In my view, Standard Life has relative investment appeal. I think its underperformance in the last six months could be reversed due to the strategy which it is adopting. I feel Aviva and Prudential are probably more appealing investments due to their growth potential, while I’m optimistic about the transitioning of Standard Chartered. However, I think Old Mutual and particularly Standard Life could make for good investments in the long run.