Standard Life sales up but banking arm hurt

Standard Life yesterday reported new annual business up 25% to £5.1bn but said that severe price competition in the mortgage market had resulted in worse than anticipated losses at its banking subsidiary.

Endowment sales have plummeted by 60% amid industry wide concern about some policies. Standard Life, the largest endowment provider in UK, saw sales drop to £21m from £53m.

The figures are the first since the Edinburgh-based mutual successfully fought off a bid by carpetbaggers to turn it into a listed company and pay out windfalls.

Yesterday group managing director Scott Bell re-affirmed Standard Life's opposition to demutualising. He said that the measures introduced last February, including a three-year ban on windfalls for new members, will remain in force for the foreseeable future.

International business, led by strong increases in Canada and Ireland, rose by 33% to £1.6bn while UK new business was up 21% to £3.6bn.

New annual premiums, the bread-and-butter of pension companies, fell slightly to £360m from £363m during 1999.

Bell added that total sales in 2001 were likely to be up by a further 20-25%, boosted in part by policyholders quitting Equitable Life.

"Most of our sales come from independent financial advisers and their share of the market is likely to rise next year because of the exit of Equitable Life."