Schroders tries to play down bid rumours

SCHRODERS, one of the few remaining independent UK investment banks, yesterday tried to play down the takeover speculation that has swirled around the stock in recent months.

Speaking at the presentation of the group's annual results, Win Bischoff, Schroders' chairman, said: "This business suits us very well. We think we can go forward under the same independent ownership. We don't believe we need to merge with anyone, either in investment banking or asset management."

Mr Bischoff said the bank had received no formal takeover offers. However, he did hint at informal offers, saying: "People talk to us and tell us how wonderful our business is - which, I suppose, is an implied approach."

The bank also made attempts to counter recent criticism of its fund management arm. David Salisbury, head of asset management, said: "We do not believe we are losing market share." He added Schroders had maintained its position as the leading UK fund manager.

On Tuesday, the Combined Actuarial Performance Services (Caps), which analyses performance in the fund management industry, criticised the big four fund managers - Schroders, Gartmore, PDFM and MAM - for underperformance during 1997. Taken together, the four firms produced returns of 14.9 per cent, compared with the industry average for discretionary funds of 15.6 per cent.

Schroders unveiled pre-tax profits for the year to December of pounds 245m, an increase of just 3 per cent. Before Asian provisions, however, pre- tax profits were pounds 277m, an increase of 16 per cent.

The bank posted Asian provisions of pounds 32m, of which pounds 24m represented provisions against exposure on banking and trading books. Schroders said it had been "very prudent" and hoped that it would not have to make further provisions.

The remaining Asian provisions - totalling pounds 8m - represented the costs incurred when Schroders rescaled its Asian businesses earlier this year, a move which cost 220 employees their jobs.

Peter Sedgwick, deputy chairman and head of investment banking, said he did not anticipate any further restructuring of Asian investment banking. He said: "We felt we should take one look and take one hard hit."

Schroders' shares finished the day down 63p at 2332p.

Investment column, page 26