St James's in a good place as it conf irms Lloyds will maintain its commitment

Published on Tuesday 27 July 2010 21:48

ST JAMES'S Place, the wealth manager majority-owned by Lloyds Banking Group, reported "terrific performance" in the first half of the year in a day dominated by updates in the private investment sector.

SJP also said that Lloyds was not looking to sell down its 60 per cent stake in the business, removing a degree of uncertainty which has weighed on the firm's share price.

The wealth manager said it will increase its interim dividend by 10 per cent following a 60 per cent jump in group operating profits to 162 million in the six months to 30 June, beating market expectations. Pre-tax operating profits came in at 36.3m, while funds under management hit 22.4 billion, up 32 per cent year-on-year.

Analysts at Oriel said: "Overall this is an excellent set of figures showing growth and a strong rebound in profitability. Perhaps more importantly, the release contains a statement from Lloyds Banking Group saying they remain supporters of the company and have no intention of selling the 60 per cent stake at this time."

David Bellamy, chief executive of SJP, said he was "pleased we have clarity" on Lloyds' stake in the business as speculation over whether or not the bank would seek to sell was a "distraction".

He said: "They (Lloyds] are admirers of the business and they like the results. We are pleased we have got some clarity because that sort of uncertainty was leading to in some areas to speculation about an overhang. It was a distraction."

Brewin Dolphin also reported "excellent revenue growth" in its latest quarter, posting income of 61.5m, a 19.5 per cent increase on the same period last year. Total funds under management grew slightly since the year-end to 21.6bn, despite being "heavily geared to movements in equity markets", according to analysts.

Jamie Matheson, chairman of Brewin Dolphin, said business was "as steady as she goes".

"Considering how the market has been hit by things like BP, then clearly the funds under management have done not too badly at all," he added.

Brewin Dolphin also announced that Henry Algeo, regional managing director for Scotland and Northern Ireland, had been appointed to the firm's executive board.

Meanwhile, Rathbones, which acquired a portfolio of funds from Lloyds last year, hailed profits before tax of 15.8m in the first half, an increase of 11.3 per cent on the same quarter last year. Funds under management grew slightly, by 1.5 per cent, to 13.3bn.

Rathbones said the results were achieved despite "a difficult and volatile market environment and against the background of continued very low interest rates".

Chairman Mark Powell said low interest rates and higher taxes were causing customers to withdraw capital to meet falls in disposable income - leading to a slight decline in organic growth at 4 per cent rather than 5.9 per cent last year.

The firm now has 40 people in its office in Edinburgh and six in Aberdeen following the deal with Lloyds in October.

Powell said the number of former Lloyds/Bank of Scotland clients who had transferred their business to Rathbones was "extremely satisfactory".

It won close to 3,000 new clients out of about 4,000 and added 665m to funds under management, which grew a further 284m in the half year.