EDINBURGH-based Aegon UK has posted a 26 per cent increase in first quarter profits as its Dutch owner underlined the strategic value of the investment platform business.

Aegon UK grew operating profits to £43 million in the three months to March 31 from £34m in the same period of last year.

The company provides online platforms which customers can use to manage their investment portfolios.

Aegon UK said the growth in profits was driven by increased fees from higher equity markets compared with the first quarter of last year and positive net deposits on platforms, in addition to cost savings.

Chief executive Mike Holliday-Williams noted the firm made good progress in the key retail and workplace markets.

The company recorded £701m inflows in respect of workplace business net of withdrawals. In the first quarter last year withdrawals exceeded inflows by £295m.

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Aegon UK noted: “The increase was driven by the onboarding of three new, large schemes, strong recurring net deposits, and improved customer retention.”

The company recorded £23m net retail inflows in he first quarter of this year compared with net outflows of £42m in the same period last year.

Regarding the UK business. the parent Aegon Group said: “Enhancements made to the platform’s functionality and investments in the servicing of intermediaries have been driving the gradual improvement in net deposits in recent quarters.”

The group classes the UK business as a strategic asset along with operations in the Americas and the Netherlands. It said: “Strategic Assets are businesses with a greater potential for an attractive return on capital, and where Aegon is well positioned for growth.”

Aegon UK recorded £303m net outflows of institutional business in the first quarter, against inflows of £583m last time. Mr Holliday-Williams noted the institutional business is low margin and tends to be lumpy.

Aegon moved into the UK pensions business through the acquisition of Scottish Equitable in 1994.

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Aegon UK switched its focus from the sale of traditional pensions products to the provision of platforms under the leadership of Adrian Grace. Mr Holliday-Williams succeeded him in 2020.

Aegon said net outflows in respect of traditional products in the UK amounted to £268m, adding: “This was in line with expectations, as a result of the gradual run-off of this book.”

Aegon UK employs around 1,200 in Edinburgh and 800 in bases in England.

Aegon Group increased first quarter operating profits by 7%, to €463m (£390m), from €431m.