Asset management firm M&G today announced it has launched a redundancy scheme to reduce staff costs by 10 per cent this year.
M&G reported a drop in adjusted operating profit before tax from £1.62bn in 2018 to £1.15bn last year.
IFRS profit after tax increased from £811m to £1.06bn.
Assets under management and administration also increased from £321bn to £352bn last year, and savings and asset management net client flows reduced from £1.7bn to £1.3bn.
Total capital generation dived from £2.37bn to £1.5bn.
Why it’s interesting
The asset manager, which delisted from its former parent company Prudential in October, said today that its five-year transformation programme includes a voluntary redundancy scheme to cut staff costs by 10 per cent in 2020.
“Active managers continue to face pressure on profitability because of the popularity of passives and changes in the distribution landscape,” the company said today.
Today the company said outflows of £7.5bn in its asset management business were largely offset by £6.2bn inflows into its UK retail savings arm, including Prufund. M&G was forced to suspend dealing in its property portfolio fund in December following a spike in investor redemptions.
The company said today that it will continue to grow its business in the Asia Pacific region after establishing a team of fund managers in the area last year.
What M&G said
Chief executive John Foley said: “We have made a good start to life as an independent business and we are strongly positioned for growth.
“Our diversified investment capabilities, coupled with our client relationships in 28 markets, mean we are well positioned to meet the growing global demand for savings and investment solutions, supported by favourable long-term economic and social trends that offer growth opportunities for many years to come.
“Global markets continue to be unnerved by a series of factors, including most recently the spread of COVID-19 and its potential economic impact. While there remains significant uncertainty, our balance sheet continues to be resilient.
“As at 6 March 2020, our shareholder Solvency II coverage ratio was estimated at 166%23 , which is firmly within our risk appetite.”