Friends Provident beats forecasts

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The Independent Online

Friends Provident, the UK life and pensions group, reported a better-than-expected 25 per cent rise in first-half operating profits yesterday, as growth in its protection and investment businesses soared, boosted by a continued increase in consumer confidence.

Overall operating group profits rose to £169m for the half, more than 15 per cent above the average analyst forecasts. Life and pensions premiums rose 7 per cent, mainly driven by strong growth in the company's life and protection divisions. However, overall pensions business fell 3.6 per cent.

Keith Satchell, the chief executive, said he remained optimistic about the outlook for the coming year, as the wave of regulatory change, which has swept the industry over the past three years, begins to come to an end.

"We are seeing some clarity on the regulatory side - a lot of the current initiatives will finally be nailed over the coming year," he said. "By the end of the year, I think there will be quite a stable platform for the industry to progress."

Mr Satchell added that although Friends shares industry concerns that the recently announced raise in the stakeholder pensions charging cap, from 1 to 1.5 per cent, is insufficient, the increased margin would be enough to encourage the group to make a bigger impression in the pensions market next year. The group's results were also boosted by a strong performance from Isis, the quoted fund management group in which it owns a controlling stake.

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