M&G has targeted £200m in cost savings by the end of 2025 after revealing a £28bn hit to group assets under management and administration (AUMA) for the financial year to the end of 2022.
The 7.6% drop, driven by adverse market movements, left total AUMA at £342bn, down from £370bn in December 2021.
Group chief executive Andrea Rossi (pictured) said: “To meet our £200m cost savings target we will improve client journeys through digitalisation; remove management layers and streamline governance, enhancing our approach to shared services and outsourcing; and optimise our operating model.
“We will focus the business on targeted opportunities where we believe our differentiated propositions and services give us a good starting point. By having this focus, we expect to deliver increased adjusted operating profit from asset management and wealth to more than 50% of the group total by the end of 2025. Our targets are ambitious but achievable.”
M&G’s adjusted operating profit before tax during the year was £529m, falling from 2021’s £721m as losses seeped through in its annuity portfolio and foreign exchange costs.
The firm’s asset management division suffered a £3.5bn hit to AUMA, falling to £154.2bn in spite of a £1.2bn increase in wholesale investment assets. It received a boost from performance fees and investment return, hitting £51m versus £38m the year prior.
On a brighter note, the wholesale arm returned to net inflows for the first time since 2018 by pulling in £500m of investor cash, compared to the £3.8bn net outflows recorded in 2021.
Rossi said: “We are delighted with this achievement, which is a result of the tremendous work by our colleagues over several years. The recovery in our UK business was demonstrated by our wholesale net sales ranking returning to the top 10 in the final quarter of 2022. At the same time, wealth net client flows increased by £1.6bn compared to last year, due to improved flows into Prufund.”
AUMA in the firm’s retail and savings division dipped to £186.4bn from £211.1bn, driven by a £17.7bn fall in its heritage sector.
Last week, rumours emerged of a potential takeover offer for the wealth manager by Australian investment bank Macquarie. At the time, M&G declined to comment when approached by Portfolio Adviser about the speculation.
