05 August 2009
2009 Interim Results

Ongoing resilience in volatile market conditions

Cash flow and capital position robust

• Core capital and cash generation after tax of £167m (2008: £143m)
• Financial Groups Directive surplus of £3.1bn (31 December 2008: £3.3bn)¹
• Interim dividend of 4.15p, representing 2.0% growth

Positive net flows

• Positive net flows of £2.1bn across the Group (2008: £3.3bn)
• Life and pension PVNBP sales of £7.5bn (2008: £9.1bn)²

Profits impacted by lower financial market levels

• EEV operating profit before tax of £348m (2008: £534m)
• IFRS loss after tax attributable to equity holders of £20m (2008: profit £161m)

Strong progress made towards second phase efficiency target

• On track to meet £75m annual efficiency savings target by the end of 2010 - £26m achieved to date

Group Chief Executive Sir Sandy Crombie said:

“The recession has had an inevitable impact on our performance in the first half of 2009.  However, today’s results highlight Standard Life’s robust business model and the ongoing resilience of our balance sheet.

“I am particularly pleased with the continued strength of our UK group pensions offering and by Standard Life Investments, where we have achieved good worldwide third party investments net inflows, despite a backdrop of industry slowdown and continuing market volatility. In addition, I am encouraged by the progress that has been made in our Canadian retail product lines following the repositioning of the business.

“We have announced healthy capital and cash generation and have made good progress towards our efficiency target.  We have maintained a strong capital position and this enables us to develop the business by investing in our key growth areas.

“With our strong solvency position, proven capital-lite strategy and diversified business offering, I am confident that Standard Life is well positioned.”

Unless otherwise stated, all comparisons are in Sterling and are with the six months ended 30 June 2008.

EEV operating profit		H1 2009 £m	H1 2008 £m
Covered business by region
UK		178	402
Canada		89	79
Europe		15	27
Asia		(25)	(16)
HWPF TVOG		89	8
Covered business operating profit		346	500
Covered business by source
New business contribution		114	157
Contribution from in-force business
expected return on existing business		189	218
experience variances		93	22
operating assumption changes		-	120
Other covered		(50)	(17)
Covered business operating profit		346	500
Non-covered business
Global investment management		10	31
UK		9	3
Group corporate centre costs		(25)	(25)
Other		8	25
Non-covered business operating profit		2	34
Operating profit before tax		348	534
Tax on operating profit		(105)	(157)
Operating profit after tax		243	377
(Loss)/profit after tax		(48)	7
Diluted EEV operating EPS		11.1p	17.3p

IFRS underlying profit	H1 2009 £m		H1 2008 £m
UK	56		249
Canada	(10)		66
Europe	21		16
Asia	(25)		(16)
Global investment management	21		25
Other	(16)		5
Underlying profit before tax	47		345
Tax on underlying profit	(22)		(45)
Underlying profit after tax	25		300
(Loss)/profit attributable to equity holders after tax	(20)		161
Diluted IFRS underlying EPS	1.1p		13.8p

For more information please refer to the Basis of preparation in Sections 1.9 and 4.1 and the IFRS pro forma reconciliation of Group underlying profit to IFRS profit for the period in Section 4 of the Interim Results 2009. 

Ongoing resilience in volatile market conditions

Standard Life has delivered a resilient performance against a backdrop of continued challenging market conditions. 

Our conservative balance sheet structure and capital-lite approach to writing new business have enabled us to maintain a robust capital surplus and generate strong cash flows during the first half of the year.  Against this, market levels have had an inevitable impact on reported sales levels and profitability measured on EEV and IFRS bases.

Standard Life benefits from a diverse product offering across the Group, which is well-suited to meet customers’ changing needs in both recessionary and recovery market conditions.  This has been reflected in our continued ability to attract net inflows into the Group despite the challenging market backdrop.

Assets under administration

Standard Life is an asset managing business and net flows and assets under administration (AUA) are key drivers of shareholder value.  AUA are gross assets that the Group administers for customers, including both those managed by the Group and those placed with third party managers.  At the end of June 2009 the Group had total AUA of £156.5bn (31 December 2008: £156.8bn). 

Positive net flows of £2.1bn across the Group included life and pensions net inflows of £0.7bn³ and third party investment management net inflows of £3.1bn.  Consolidation adjustments⁴ reduced net flows by £0.8bn.  We have continued to manage our mortgage exposure within our banking operation during the ongoing period of difficult credit market conditions, with a reduction in gross mortgages under management to £8.8bn (31 December 2008: £9.7bn) reflected in a net outflow of £0.9bn.

Market and other movements reduced AUA by £2.4bn.  This equates to 2% of opening assets under administration and is in line with the reduction in equity markets over the same period.

Worldwide life and pensions operations

Net inflows across our worldwide life and pensions operations³ were lower at £662m (2008: £1,842m).  This is due to our previously announced decision not to renew UK bulk investment bond deals written in 2008 at relatively lower margins, which generated net inflows of £598m in the first half of 2008 and led to net outflows of £553m during the first half of 2009.  Excluding these bond deals, worldwide net inflows amounted to £1,215m (2008: £1,244m). 

Worldwide life and pension sales were 18% lower at £7.5bn (2008: £9.1bn)². Sales in the second quarter of £3.9bn, while 15% lower than the strong prior year comparator, were at the highest level for four quarters, driven by strong sales in UK group pensions and Canada.

UK financial services

Within our UK life and pensions business we experienced net inflows of £135m (2008: £1,041m) and a 24% reduction in new business sales to £5.2bn (2008: £6.9bn).  These reductions reflect lower incoming transfer values into our pension product lines and our decision not to renew bulk investment bond deals as noted above. In addition, and as previously highlighted in our Q1 2009 Interim Management Statement, activity levels at the start of the year were temporarily impacted by the revaluation of the Pension Sterling Fund. 

We continue to see strong growth in our Individual SIPP customer base, the total number of accounts increasing by 13% to 74,700 during the period (31 December 2008: 65,900).  Lower net inflows of £959m (2008: £1,435m), and a 26% reduction in new business sales to £1,537m (2008: £2,074m) reflect the impact of market movements on average incoming transfer values, which continue to represent the majority of new business. SIPP assets under administration have increased by 12% to £9.7bn⁵ (31 December 2008: £8.7bn). Across our SIPP portfolio the average case size was £130,000 (31 December 2008: £131,000). 

UK group pensions assets under administration have increased by 2% to £14.7bn (31 December 2008: £14.4bn)⁶. Lower net inflows of £671m (2008: £885m) and a 15% reduction in new business sales to £1,527m (2008: £1,803m) reflect lower asset values as well as reduced increment levels.  During the second quarter, regular premium new business benefited from contributions received in respect of the BT scheme (£347m PVNBP), the largest contract based defined contribution scheme to tender in Europe, which was highlighted in our Q4 2008 Interim Management Statement. We expect to receive single premium transfer amounts relating to this scheme later in the year.  Group SIPP volumes increased by 61% and accounted for 54% of total group pensions sales (2008: 28%).  While market conditions remain challenging, the quality and flexibility of our evolving and award winning proposition to the corporate market, combined with the financial strength of the Group, continue to act as key differentiators and enable us to win new business in our chosen markets.  The number of new schemes won during the first half of 2009 was 216 (2008: 248), our pipeline is good and current levels of tender activity remain strong. 

As disclosed in our Q1 2009 Interim Management Statement, our decision not to renew bulk deals with large institutional distributors at lower margins has had a material impact on investment bond sales of £154m (2008: £1,025m) and net outflows of £825m (2008: net inflow £273m).  Excluding these bulk deals, investment bond sales were £417m in the first half of 2008, with adjusted net outflows reducing from £325m in 2008 to £272m in 2009.  Mutual funds sold on our Wrap, Sigma and Fundzone platforms continue to perform well, increasing by 49% to £542m (2008: £364m) with net inflows increasing to £336m (2008: £160m). 

Assets under administration on our Wrap platform increased by 35% to £2.3bn (31 December 2008: £1.7bn)⁷. At 30 June 2009 there were 484 IFA firms using the platform (31 December 2008: 409 firms) and 23,000 customers (31 December 2008: 16,900 customers) with an average fund size of £101,000 (31 December 2008: £101,000).  We continue to see strong momentum in our Wrap offering, with a strong pipeline of IFA firms in the process of adopting the platform.

A number of endowment policies that were written during the early 1980s reached maturity during the first half of the year.  This has led to a net outflow of £761m (2008: net outflow £785m) in respect of pre-demutualisation life products.  While we expect this trend to continue in the short term, the vast majority of these products are conventional with profits contracts, which generate minimal shareholder margin.

Claims levels across our UK life and pensions operations remain broadly in line with assumptions, with reduced claims in respect of individual pensions leading to a reduced net outflow from this product line. 

Savings balances in our banking operations have increased to £5.5bn (31 December 2008: £5.0bn).  This total includes combined SIPP and Wrap balances of £1.8bn (31 December 2008: £1.5bn).  Savings inflows were experienced across the product range, with ISAs and business accounts performing well during the first half of 2009. 

Consistent with our strategy to manage our mortgage exposure during the ongoing period of difficult credit market conditions, gross mortgage lending decreased by 80% to £143m (2008: £728m).  Mortgages under management stood at £8.8bn (31 December 2008: £9.7bn), with an arrears rate of 0.68%, which is approximately a quarter of the Council of Mortgage Lenders industry average of 2.61% reported at 31 March 2009.  The average indexed loan to value ratio increased slightly to 48% (31 December 2008: 46%).

Healthcare sales were 29% lower at £10m (2008: £14m) on an APE basis.

Europe

In Europe, net inflows were 28% lower in constant currency at £388m (2008: £497m)⁸ and sales were 27% lower in constant currency at £557m (2008: £689m)⁸.

In Ireland, total sales of £372m (2008: £427m)⁸ were 18% lower in constant currency.  Domestic sales in Ireland have increased by 8% in constant currency, driven by increased sales of post-retirement products during the second quarter ahead of planned changes to tax legislation.  Offshore bond sales were 36% lower at £173m (2008: £270m) due to the impact of the weak economy.

Sales in Germany of £185m (2008: £262m) were 39% lower than the prior year in constant currency.  This largely reflects weak consumer confidence, coupled with a preference for the more familiar domestic players during the current period of economic uncertainty.

Canada

Canadian net inflows of £139m (2008: £304m) reflect lower inflows across group savings and retirement products.

Canadian sales were 2% higher in constant currency at £1,352m (2008: £1,201m).  Group savings and retirement sales of £750m benefited from a number of mid-sized mandates secured in the first few months of the period but were 11% lower in constant currency than the prior year figure which was distorted by a large defined benefit administration mandate secured in the second quarter.  Within the Group savings and retirement total, defined contribution sales increased by 41% in constant currency to £635m (2008: £408m).

Individual insurance, savings and retirement new business has increased by 21% in constant currency to £240m (2008: £180m) with strong growth achieved in the second quarter in spite of a challenging Canadian retail market, which has been reflected in lower sales of mutual funds. Group insurance new business has also increased by 92% in constant currency to £260m (2008: £123m).  This increase is due to changes to renewal assumptions, which were made as part of the year end process and were reflected in our 2008 Preliminary Results.

Asia

Combined sales across our Indian and Chinese joint ventures and our Hong Kong operation were 6% higher in constant currency at £296m (2008: £240m)⁹.

There are continuing challenges in both India and China life insurance sectors with the economic slowdown and volatility in the equity markets impacting customer activity.

Against this backdrop, sales in constant currency increased by 2% in India.  Standard Life’s share of these sales was £203m (2008: £180m)⁹.  In China, sales volumes decreased by 1% in constant currency.  Standard Life’s share of these sales was £56m (2008: £42m). 

Hong Kong has continued to enjoy strong growth, primarily due to the success of its new unit-linked savings product, with new business sales in constant currency increasing by 56% to £37m (2008: £18m).

Global investment management

Despite volatile markets Standard Life Investments achieved worldwide third party net inflows of £3.1bn (2008: £2.7bn), £2.4bn of which relates to investment products only, representing a 17% increase over the equivalent period last year and an annualised 14% of opening third party assets under management. Nearly 80% of the new net inflows came from outside the UK as Standard Life Investments expands its global presence.  58 new institutional clients have been won in the UK and Europe during the first six months of the year, 10 segregated and 48 pooled, increasing the institutional client base in these markets by 16%.

Within the UK, we have seen a strong recovery in activity levels within both money market and retail mutual funds, with respective net inflows of £434m (2008: net outflow £316m) and £313m (2008: net inflow £4m).

While conditions remain challenging within the UK market for segregated institutional mandates, we have seen strong growth in institutional flows across our international markets, total European net flows rose to £743m (2008: net outflow £4m), with net flows in India of £855m (2008: £235m) reflecting increased traction into higher margin money market funds, and inflows into Canadian institutional business of £251m (2008: £2m) benefiting from a large mandate that transitioned during the second quarter.

Third party assets under management have performed well, increasing by 4% to £47.3bn (31 December 2008: £45.5bn) during a six month period in which the FTSE All-Share Index fell by 2%.  Third party assets under management now represent 39% of total assets under management compared with 37% as at 31 December 2008.  Total assets under management were 2% lower at £121.6bn (31 December 2008: £123.8bn). 

The money-weighted active investment performance over all time periods (1, 3, 5, and 10 years) continues to be comfortably above median for our third party business. The strength of our investment process across a range of OEICS and unit trusts is demonstrated by the proportion of eligible and actively managed funds (21 out of 27) rated ‘A’ or above by Standard & Poor’s.

The pipeline for institutional business remains strong with continued demand for GARS and fixed interest products. Over three quarters of the current pipeline is from clients outside the UK as Standard Life Investments continues to expand its global footprint.  The mutual fund product range continues to grow in response to consumer demand with the Strategic Bond Fund, UK Equity Recovery Fund and European Equity Income Fund introduced during the period.

Operating profits impacted by opening market levels

EEV operating profit before tax was 35% lower at £348m (2008: £534m), delivering a return on embedded value (RoEV) of 8.0% (2008: 11.0%).  In the first half of 2008 we reinsured £6.7bn of our UK immediate annuity liabilities to Canada Life International Re, which generated an EEV operating profit before tax of £119m.  Excluding this transaction, EEV operating profit before tax decreased by 16%.

We report our RoEV under three components: core, efficiency and back book management.

	Breakdown of RoEV		Breakdown of EEV operating profit (£m)
	H1 2009	H1 2008	H1 2009	H1 2008
Core	6.0%	9.2%	259	393
Efficiency	(0.2%)	(0.1%)	(5)	(3)
Back book management	2.2%	1.9%	94	144
Total	8.0%	11.0%	348	534

Core return

Core return comprises new business contribution, expected return, development costs for covered business¹⁰ and IFRS normalised underlying profit for non-covered businesses^{11, 12}.  Our Asian life and pensions operations are included on an IFRS basis.

As an asset managing business our core return will inevitably be influenced by the overall level of financial markets.  Core EEV operating profit before tax was 34% lower at £259m (2008: £393m) delivering a core RoEV of 6.0% (2008: 9.2%).  New business contribution was 27% lower at £114m (2008: £157m), due to reduced sales volumes against challenging markets.  Core return was also impacted by lower non-life profits and a market driven reduction in the value of the in-force book at the end of 2008, which resulted in a lower expected return on existing business.

Our key new business metrics of internal rate of return (IRR) and discounted payback period were 16% (2008: 18%) and eight years (2008: seven years) respectively, the slight decrease in IRR having been driven by reduced asset values in Canada.  The continued strength of these metrics reflects the benefit of our capital-lite approach.

We have continued to invest in our market leading propositions and our growing Asian operations.  This has led to an increase in development expenses and IFRS losses in our Asia life and pensions operations, the impact of which has been partly offset by stronger profitability within our Canadian operations.

Continued drive for efficiency

Efficiency comprises covered business maintenance expense variances and assumption changes.  In 2009 expense variances reduced RoEV by 0.2% (2008: (0.1%)).

Following the completion of the first phase of the Continuous Improvement Programme, during which we achieved £100m of annual efficiency savings one year early, we announced in March a target of achieving a further £75m of annual efficiency savings by the end of 2010. 

In the first half of 2009 we have achieved £26m of annual efficiency savings towards this target, the majority of which relate to reduced acquisition costs which will be reflected in new business contribution going forward.  Other savings relate to covered business maintenance expenses and non-covered business lines.

We have achieved this through a number of initiatives including:

• Alignment of our UK distribution and marketing operating models with our strategic objectives. This has led to a headcount reduction of around 200 and a reduction in accommodation costs and other associated overheads.
• Continued improvement and automation of customer service processes, which has allowed us to maintain our award-winning levels of customer service without needing to replace natural headcount attrition.
• Outsourcing elements of IT development.
• Consolidation of our investment management operations in the Asia Pacific region and transferring administrative responsibilities to the UK. 

Active back book management

We remain committed to driving increased value from the management of our back book.  This category includes all non-expense related operating variances and assumption changes for covered business plus those development costs directly related to back book management initiatives and, for non-covered business, specific costs attributed to back book management.  During the year, back book management generated an operating profit before tax of £94m (2008: £144m), delivering a back book management RoEV of 2.2% (2008: 1.9%).

Positive factors within the back book management result include a £89m benefit from modelling improvements and changes to asset allocations and hedging arrangements, which have reduced the time value of options and guarantees (TVOG) associated with the Heritage With Profits Fund (HWPF).  In addition, the result benefited from a £29m (2008: £20m) release of reserves following a review of our deferred annuity data.  In February 2008 we reinsured £6.7bn of our UK immediate annuity liabilities to Canada Life International Re. This generated a benefit to EEV operating profit before tax of £119m which was reflected in the prior period result. 

Non-economic assumptions are reviewed at the end of each year.

Capital and cash generation

Overall, operating capital and cash generation amounted to £188m (2008: £250m). 

Core capital and cash generation was 17% higher at £167m (2008: £143m).  Capital and cash generation from new business and the expected return from existing covered business have strengthened by 32% to £174m (2008: £132m), despite the tough economic environment.  This demonstrates the resilience of our capital-lite approach to writing new business, with capital and cash generated from existing business comfortably covering new business strain by more than three times (2008: two times). 

Efficiency items reduced capital and cash by £8m (2008: £3m reduction).  Capital and cash generated from back book management amounted to £29m. In 2008 back book management activities generated £110m of capital and cash, principally reflecting the reinsurance of UK immediate annuity liabilities in February 2008 and a reserve release in respect of UK deferred annuities.

After allowing for adverse investment variances and other non-operating items in the period, total EEV capital and cash generation was £49m (2008: £181m).

We have proposed an interim dividend of 4.15p per share.  This represents growth of 2.0%.  The Group will continue to apply its existing progressive dividend policy taking account of market conditions and the Group’s financial performance.

IFRS

IFRS normalised underlying profit excluding the impact of market volatility on surplus assets and reserves in Canada was £98m (2008: £216m).  As highlighted in our 2008 preliminary results, our IFRS profitability is affected by the strength and volatility of investment markets and asset values.  The impact of this volatility can be significant within our operations in Canada due to the way Canadian life companies typically structure non-segregated funds, with assets backing both policyholder liabilities and the shareholder surplus.  Mark-to-market value adjustments in respect of surplus assets, coupled with reserve movements have reduced profit in Canada by £52m compared with the prior year.  Under EEV this volatility is treated as a non-operating item.

Including the impact of this volatility, normalised underlying profit was £77m (2008: £247m).  Items impacting the year on year trend in normalised underlying profit include lower management charges due to reduced asset values of £71m, asset impairments of £12m, and increased new business development costs incurred in respect of our growing Asian franchises of £9m.

IFRS underlying profit before tax of £47m (2008: £345m) has also been affected by a number of items which are not included in the normalised underlying profit figure.  In 2008 these included a £105m benefit arising from the reinsurance of UK immediate annuity liabilities.  In 2009 these included charges of £59m arising from mark-to-market movements in asset backed securities related to the restructure of a sub-fund of Standard Life Investments (Global Liquidity Funds) plc. 

Balance sheet

Group embedded value of £5,859m (31 December 2008: £6,245m), represents an embedded value per share of 265p (31 December 2008: 286p).  IFRS equity excluding intangible assets and non-controlling interests was £2,995m (31 December 2008: £3,295m), representing 135p per share (31 December 2008: 151p).  The reduction in Group embedded value and IFRS equity during the period reflects the impact of foreign exchange movements on the carrying value of our overseas operations, the actuarial valuation of the Group’s defined benefit pension schemes and the payment of the final dividend declared in respect of 2008.

The estimated Financial Groups Directive (FGD) surplus as at 30 June 2009 of £3.1bn has been largely insensitive to market movements and remains largely unchanged from the year-end position (31 December 2008: £3.3bn)¹, with a period end solvency cover of 217% (31 December 2008: 219%)¹.  The strength of our FGD surplus has been maintained throughout the recent challenging market conditions without any need to undertake any significant management actions.

Our FGD solvency remains strong under a number of downside market stresses, with the surplus maintained at £2.5bn in the event of a 20% fall in equity markets (to a FTSE 100 Index level 3,400) from the position at the end of June 2009 (FTSE 100 Index level 4,249). In the event of a 30% fall in markets from the position at the end of June (to a FTSE 100 Index level of below 3,000) our FGD surplus would remain strong at £2.2bn.  Under the extreme market stress of a 40% fall (to a FTSE 100 Index level of around 2,500) our FGD surplus would be £1.4bn.  If yields increased a further 100bps from the position at the end of June 2009 our FGD surplus would be £1.4bn.

The Heritage With Profits Fund (HWPF) residual estate amounted to £0.4bn as at 30 June 2009 (31 March 2009: £0.3bn 31 December 2008: £0.5bn).  The impact on the residual estate of falls in equity markets continues to be mitigated by the hedges we have in place.  The impact of most other adverse asset movements would, in the first instance, be met by policyholders, with indirect impacts on shareholders through higher guarantee costs.  Shareholder exposure is also limited by the structure of the capital support mechanism set up at Demutualisation, with shareholder support being obtained by encumbering the furthest out cash transfers from the HWPF to shareholders. 

Shareholders are exposed to debt securities which back annuity liabilities in the UK and Europe and the liability in respect of longevity risk reinsured from the HWPF. These debt securities amount to £1.8bn (31 December 2008: £1.5bn) and comprise £0.8bn (31 December 2008: £0.8bn) of government and government backed bonds and £1.0bn (31 December 2008: £0.7bn) of other corporate bonds. There have been no defaults on the debt securities in this portfolio during 2008 and the first half of 2009. Debt securities in non-segregated funds in Canada amount to £5.2bn (31 December 2008: £5.4bn), including £2.1bn (31 December 2008: £2.2bn) of corporate bonds. There have been no defaults within this portfolio of debt securities during 2008 and the first half of 2009.

Standard Life’s total investment (including third party funds) in the asset backed securities markets across both short-term treasury instruments and long-term fixed interest is approximately £4.4bn or 2.8% (31 December 2008:  £5.3bn or 3.3%) of Group assets under administration, predominantly in UK securities.  Of the total of £4.4bn, £1.2bn (31 December 2008: £1.3bn) relates to shareholder funds, of which £1.0bn (31 December 2008: £1.2bn) is AAA rated.  The overall level of asset backed securities has reduced compared to 31 December 2008 as a result of disposals from non-shareholder funds, a number of securities reaching maturity and due to market movements.  The Group has continued to manage actively its exposure to asset backed securities and the portfolio remains a high quality credit portfolio with no direct exposures to the US mortgage market, no exposure to leveraged structures, no current direct exposure to Monolines and very modest exposure to credit within a Monoline wrapper.  Following the restructure of a sub-fund of Standard Life Investments (Global Liquidity Funds) plc, shareholder funds have a total exposure of £44m (31 December 2008: £83m, including £36m in respect of leveraged structures which have matured in 2009) to assets within a Monoline wrapper, representing 0.2% (31 December 2008: 0.3%) of shareholder financial assets.

Outlook

While financial market levels have shown some recovery from the lows seen earlier in the year, the economic environment continues to be challenging. Accordingly, the outlook for retail savings is likely to remain subdued, although we have seen some early signs of recovery within our mutual fund range and our Canadian retail propositions.

We remain confident in the prospects for our pensions businesses and Wrap proposition, reflecting both their
market-leading positions and the significant proportion of sales that relates to consolidation of existing assets.  Meanwhile, at Standard Life Investments we continue to broaden our global footprint, with a strong international pipeline for fixed income and absolute return investment mandates.

Overall, as an asset managing business our revenues will inevitably be impacted by lower financial market levels.  Nevertheless, our ongoing focus on efficiency will help mitigate the impact on profitability. The Group will benefit from the expense efficiencies achieved to date and will continue to build on the strong initial progress made against our target of achieving £75m of annual efficiency savings by the end of 2010.

Standard Life is committed to a prudent, capital-lite strategy with balance sheet strength and cash generation remaining priorities.  We will nevertheless continue to invest to secure future growth where profitable opportunities arise. This approach underpins the resilience of our business model.

For further information please contact:

Institutional Equity Investors		Retail Equity Investors
Gordon Aitken	0131 245 6799	Capita Registrars	0845 113 0045
Duncan Heath	0131 245 4742
Paul De’Ath	0131 245 9893
Media		Debt Investors
Barry Cameron	0131 245 6165/07712 486 463	Andy Townsend	0131 245 7260
Nicola McGowan	0131 245 4016/07872 191 341	Alan Coutts	0131 245 0201
Paul Keeble	020 7872 4481/07712 486 387
Neil Bennett (Maitland)	020 7379 5151/07900 000 777

Newswires and online publications

A conference call will take place for newswires and online publications from 8.00-9.00am.  Participants should dial +44 (0)207 162 0077 and quote Standard Life Interim Results 2009. The conference ID number is 839173.

Investors and Analysts

A presentation to investors and analysts will take place at 11:00am at UBS Ground Floor Conference Centre, 1 Finsbury Avenue, London. A live webcast of the presentation and the presentation slides will be available on the Group’s website.  In addition a replay will be available on this website later today.

There will also be a live listen only teleconference to the investor and analyst presentation at 11:00am.  Investors and analysts should dial +44 (0)1452 556620.  Callers should quote Standard Life Interim Results.  The conference ID number is 19773170. A replay facility will be available until 18 August 2009. UK Investors should call 0800 953 1533, and overseas investors should dial +44 1452 55 00 00. The pass code is 19773170#.

Notes to Editors:

1	Financial Groups Directive surplus at 31 December 2008 has been adjusted for the payment of the final dividend.
2	Present value of new business premiums (PVNBP) is calculated as 100% of single premiums plus the expected present value of new regular premiums.
3	Life and pensions net flows represent gross inflows less redemptions.  Gross inflows are premiums and deposits recognised in the period on a regulatory basis (excluding any switches between funds).  Redemptions are claims and annuity payments (excluding any reinsurance transactions and switches between funds). Worldwide life and pensions net flows do not include net flows in respect of our Asia life and pensions joint ventures and our Hong Kong subsidiary.
4	Certain items are included in both life and pensions and investment flows.  Therefore, at Group level, an elimination adjustment is required to remove any duplication.
5	Analysis of Individual SIPP assets under administration.

		30 Jun 2009	31 Dec 2008	Change
		£m	£m	£m	%
Insured Standard Life Funds		2,495	2,559	(64)	(3)
Insured external funds		1,370	1,268	102	8
Collectives – Standard Life Investments		1,201	864	337	39
Collectives – Funds Network		764	656	108	16
Cash		1,092	869	223	26
Non collectives		2,796	2,443	353	14
Total		9,718	8,659	1,059	12
Insured		3,865	3,827	38	1
Non-insured		5,853	4,832	1,021	21
Total		9,718	8,659	1,059	12
Of the £9.7bn assets under administration at 30 June 2009, £1.1bn relate to assets on the Wrap platform.

6	The Group pensions AUA figure as at 31 December 2008 has been restated to align with the methodology used for other product lines.
7	Wrap assets under administration have been restated to exclude amounts that have been secured but are pending investment onto the Wrap platform.  The impact of this restatement has been immaterial, reducing the assets under administration figures as at 31 December 2008 and 30 June 2009 by £0.1bn.
8	Offshore bond inflows of £77m (2008: £265m) and sales of £173m (2008: £270m) are now included within the European results rather than the UK.
9	H1 2008 PVNBP includes a restatement to opening assumptions in India.  The impact is to reduce H1 2008 PVNBP by £53m.
10	Excludes development costs directly related to back book management initiatives.
11	The only difference between IFRS normalised underlying profit and IFRS underlying profit for non-covered business arises within global investment management. Net negative fair value movements in respect of the liability remaining following the restructuring of a sub-fund of Standard Life Investments (Global Liquidity Funds) plc and the 'Contract for Differences' written in September 2008 which limited this liability for Standard Life Investments and fair value movements of the corresponding assets which were brought directly on to the balance sheet, are included within IFRS underlying profit, but are excluded from IFRS normalised underlying profit.
12	Excludes specific costs attributable to back book management.
13	The Interim Results 2009 are available on the Financial Results page of this website.

Download the full Interim results 2009(2.4Mb).

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