Shares in the blue-chip wealth manager Schroders surged to their highest point in two years on Thursday, propelled by a forecast of sharply higher annual profits driven by a significant influx of new client money.
Strong Financial Performance and Market Reaction
The FTSE 100-listed firm told the market it anticipates its full-year operating profit will reach £745 million, a substantial increase from the £603 million reported the previous year. This positive news triggered an immediate market reaction, with Schroders' share price climbing nine per cent to 453.40p.
The company attributed the robust performance to a surge in management fees, which were bolstered by both new business wins and growth in its assets under management. Schroders projected its net income for the year at £2.6 billion, up from £2.4 billion in the prior period.
Cost Control and Strategic Progress
While income rose, the company indicated that costs are expected to remain broadly flat year-on-year, having totalled £1.8 billion last year. This discipline contributed to an improvement in a key efficiency metric: the cost-income ratio fell to 71 per cent from 75 per cent.
Schroders reiterated it "remain[s] committed" to achieving its transformation target of £150 million in annualised net savings by the end of 2027. Analysts at Panmure Liberum, cited in the original report, said the unscheduled trading update showed "clear progress on all fronts, well ahead of the market's expectations."
Assets and Recent Business Moves
The firm's total assets under management, including its joint ventures, grew to £825 billion, following net inflows of nearly £11 billion in new business.
In a notable recent development, banking giant Lloyds acquired the remaining 49.9 per cent stake in Schroders Personal Wealth (SPW), taking full ownership of the venture. Established in 2019 in collaboration with Lloyds, SPW—soon to be rebranded as Lloyds Wealth—manages £17 billion in assets for 60,000 clients.
Oliver Gregson, chief executive of wealth management at Schroders, stated that the announcement "represents a meaningful step in reshaping our business and focusing on our strategic ambition." Schroders has a base in Manchester, while its Cazenove Capital arm has offices in Birmingham, Bristol, Chester, Edinburgh, and Leeds.
