Friends Provident said the worst was over for the savings and investment industry, as it yesterday posted record sales growth for the first six months of the year.
Keith Satchell, the chief executive of the company founded by Quakers in 1832, said that the past six months had been challenging for the industry as consumer appetite for investment products dropped.
Sales at the company, despite this, were up 9 per cent at £198m, boosted by high sales of income protection products. The contribution of new business to profits was up 21 per cent to £35m.
"We are seeing momentum in our new business figures. There are signs that confidence is returning to the independent financial adviser community, and things don't feel that bad out there to us," Mr Satchell said. "We are cautiously optimistic about the future, and are confident we can win market share." The company is exploring the possibility of tying up with a high street bank to expand its distribution capability.
The sentiment from Friends was in marked contrast to that of its rival, Prudential, which had to slash its dividend for the first time since 1914 on Tuesday as its profits fell.
Friends yesterday raised its dividend 2 per cent to 2.5p a share despite a 16 per cent fall in achieved profits, which were hit by a fall in the value of its assets on the stock market. Shares in Friends rose more than 9 per cent during the day, before closing nearly 7 per cent up at 135.75p.
Mr Satchell said the company remained financially strong, and did not use the solvency waivers granted to it from the Financial Services Authority. Across the group, Friends has a 8.4 per cent surplus of assets to its liabilities.
Its with-profits fund is now only 32 per cent invested in equities, down from 45 per cent in December and 65 per cent at the start of 2002. But Mr Satchell said it may start reinvesting in the market.
Friends has raised provisions for settling complaints from customers about mortgage endowment policies to £40m from £30m at the year-end.Reuse content