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Aberdeen Asset Management told to boost its minimum capital requirements

Jessica Morris
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Aberdeen Asset Management Scottish Open - Day Four
Aberdeen Asset Management sponsors the Scottish Open (Source: Getty)

Aberdeen Asset Management said today that it had been asked to up the minimum level of capital it holds for regulatory purposes by Britain's financial watchdog.

The Financial Conducted Authority now wants the asset manager to increase its minimum financial cushion to about £475m, up from £435m previously. Analysts said this will not affect its capital adequacy "which already had plenty of headroom".

Shares in Aberdeen Asset Management fell 3.44 per cent to 314.30p at the open.

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The regulatory capital requirements are designed to protect investors if a fund gets into serious difficulty. They require funds to have enough cash to ensure the timely winding down or restructuring of their operations if necessary.

"Aberdeen Asset Management has been advised by the Financial Conduct Authority, following completion of its periodic review, that it is increasing the required minimum level of capital that should be held by Aberdeen for regulatory purposes," it said in a statement to the London Stock Exchange.

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"The group's available capital remains comfortably above this new minimum requirement."

Keith Baird, director of financials research at broker Cantor Fitzgerald, said: "The forecast dividend of 19.5p should not be at risk," despite the FCA's recommendation.

"The shares have rallied strongly on hope of a recovery in emerging markets. We are cautious on this given the prospect of rates rates from the Fed and the ongoing risks in China. We are reviewing our hold recommendation for a downgrade," he added.

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