Aberdeen Asset Management reports 20% profit growth in build-up to Standard Life merger

International investment management firm Aberdeen Asset Management reported a pre-tax profit of £195.2m ($251m), a 20% increase from last year. The figures were revealed in the half-yearly interim results ending on 31 March 2017.

Revenues increased by 10.6% to £534.9m during the same period.

Ahead of the Standard Life merger, Aberdeen Asset Management increased its retained earnings by 215% to £201.3m compared to March 2016.

The firm also revealed a healthy cash flow with an increase of 24% to £498m on the back of increased cash flow from operating activities.

Aberdeen Asset Management and Standard Life agreed on a merger deal worth £11bn on 6 March to create the UK's largest asset management company. Up to £200m in cost savings is estimated to be reported after the merger. However, concerns over possible job losses have also arisen as a result of the deal.

A report by the Financial Times revealed that the companies are offering up to £35m to retain top talent within the company.

The earnings report also remarked upon the ongoing merger talks with Scotland's largest insurance firm Standard Life, as the firm recognised "headwinds and opportunities" in the investment management sector, as the rationale for the decision. Contributing factors included the increasing popularity of passive investing, lower fee structure, and stricter regulatory requirements.

"These figures reflect improving sentiment towards emerging markets combined with our transition to becoming a full-service asset manager offering a broad range of capabilities via multiple distribution channels globally", remarked Martin Gilbert, chief executive of Aberdeen Asset Management, regarding the earnings report.

Gilbert also said geopolitical uncertainty will dampen investor sentiment despite a global recovery in growth levels.

"Our proposed merger with Standard Life is on track and the combined businesses will form a world-class investment company strengthening further both companies' ability to meet the evolving needs of clients and customers", he further added.