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Aegon ScotEq redress costs hit £100m

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.

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  1. The previous CEO has a lot to answer for. When he took over AEGON UK it was a thriving market leader and was admired by financial advisers as go-ahead. When he left , it had lost any strategic vision, was wasting huge amounts on sport sponsorship which added nothing to the brand and closed down the excellent sales and marketing structure. Like most government depts which have no clue, consultants were in there 24/7 recycling the same rubbish that by cutting everything which was good out , the business would be profitable. Sorry , but you can over-prune and with no vision or market understanding , the spiral of decline will continue. Sad to see !

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