Aegon has revealed an additional £12m of costs relating to the ongoing redress programme for Scottish Equitable customers, taking the total figure associated with the action to £100m.
In December, ScotEq’s UK life and pension business was fined £2.8m by the FSA and ordered to pay customers £60m following significant administrative failings.
Aegon UK’s Q3 results, published today, show a further £5m associated with the redress programme and £7m in expenses related to the programme. It says further costs may occur in Q4.
The results reveal a 67 per cent fall year-on-year in earnings before tax for the third quarter, from £24m to £8m, mainly driven by lower fee income.
Earnings for life decreased 22 per cent, from £23m to £18m, while pensions recorded a loss of £9m, which the firm says is a result of lower fee income, investment in new propositions and expenses relating to the redress.
Aegon’s distribution arms Origen and Positive Solutions recorded a combined loss of £1m in Q3 with a total loss for the year so far of £4m.
Aegon says it is close to its target of reducing costs by 25 per cent, or £80m, by the end of 2011, with costs savings of £71m achieved so far. It has already cut over 1,000 jobs, disposed of parts of the business and announced staff pension reforms with more restructuring expected in Q4.