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Reports 31% jump in HY profit before tax
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Posts 10% fall in its assets under administration
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Shares up 0.7%
(Recasts lede, adds more details on market conditions, CEO
comments, shares move)
By Sinchita Mitra
Feb 15 (Reuters) - British investment platform
Hargreaves Lansdown reported a 31% jump in half-year profit on
Wednesday, citing savers' efforts to boost returns in the face
of a crippling cost of living crisis.
The company benefited from robust growth in its retail unit
Active Savings as clients poured more cash into their accounts,
and its net interest margin rose helped by higher interest
rates.
"There is uncertainty and people want to make sure they are
getting value from how they are managing their cash savings,"
Chief Executive Officer Chris Hill told Reuters.
Hill added people were looking to control their short-term cash as fears over inflation and potential recession erodes consumer and investor confidence.
The Bank of England, which is battling double-digit
inflation that has exacerbated a cost-of-living crisis, raised
interest rates by a combined 325 bps in 2022 alone to their
highest since late 2008.
Hargreaves said its Active Savings unit had 1.7 billion
pounds ($2.05 billion) in cash flows in the six months to Dec.
31, compared with 600 million pounds in the same period last
year.
Shares in the company were up 0.7% by 0838 GMT.
Hargreaves reported profit before tax of 197.6 million
pounds for the half year, compared with 151.2 million pounds a
year ago.
The company however, reported a 10% fall to 127.1 billion
pounds in its assets under administration due to turbulence in
financial markets.
"Challenging external conditions and low investor confidence
impacted asset values and stockbroking volumes in the period,"
Hill said in a statement.
Net new business also fell 30% to 1.6 billion pounds. ($1 = 0.8275 pounds) (Reporting by Sinchita Mitra in Bengaluru; Editing by Rashmi Aich and Emelia Sithole-Matarise)
