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Royal London profits fall 58 per cent

Royal London blamed market turbulence for a 58 per cent fall in European Embedded Value profit which fell from £431m in 2006 to £181m last year.

Royal London says: “This reduction reflects, to a considerable extent, adverse investment market conditions, particularly in the second half of 2007.”

Operating profit before tax was up from £116m in 2006 to £147m last year while new business contribution was up from £47m in 2006 to £61m last year.

Royal London says the group continues to be well capitalised and has an excess over regulatory capital of £1.9bn.

Its new asset management mandates more than doubled to £2.6bn in 2007 and the group completed its axquisition of Fundsdirect and the Ascentric wrap platform.

Royal London group chief executive Mike Yardley says: “The Resolution transaction will strengthen Royal London’s position in the protection market in the UK and also our international operations. This once again demonstrates that, as a well run and financially strong mutual company, we can make strategic acquisitions as and when good opportunities arise, so as to grow value for the benefit of members and other policyholders.

“Looking forward, our strategy remains unchanged.  We will continue to focus on our core markets – pensions, protection, international and asset management – and on writing new business we believe will be profitable. 

“Although there will undoubtedly be challenges to be overcome from turbulent economic conditions, Royal London is well placed to continue to grow profitably.” 

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