Cost cuts help Aegon return to profit

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Aegon UK returned to profit in the final quarter of 2012 on the back of higher pensions sales and a cost-cutting programme that led to hundreds of job losses at the Edinburgh-based firm.

The Dutch-owned group posted an underlying pre-tax profit of £20 million for the fourth quarter, compared with a £22m loss a year earlier, boosted by a 53 per cent jump in new life sales to £247m.

Operating costs fell 30 per cent to £69m following the “successful implementation of a cost-reduction programme in the UK”. The move has seen hundreds of jobs cut at its Edinburgh headquarters and many roles outsourced to other firms.

For the full year, Aegon UK saw its profits soar to £85m, from just £5m in 2011, with new life sales rising 2.7 per cent to £758m.

Chief executive Adrian Grace said the group was well placed to grab a large share of the pensions market thanks to an industry shake-up that will compel employers to provide pension schemes for their staff.

He added: “I’m more excited about 2013 than any other year in business I can remember.”