Standard Life has said it can continue to grow profits and dividends, cut its costs without staff cuts, and build its assets despite a crash in short-term investment performance.

The group topped the share leader board with a seven per cent rise despite revealing that its funds have taken a battering this year with fewer than 25 per cent ahead of their benchmark over one year, compared with 85 per cent over three years.

Chief executive Keith Skeoch said: “We are seeing elevated risk which means a lot of volatility in the market (including) weeks when we have had very strongly rising markets and I would expect that to continue through the second half of the year.” He insisted: “We are in a pretty good place with client relationships.We focus on performance over the long-term.... Most of our clients look at the three to five year track record which across the house is very strong.”

The group’s property fund would remain suspended for now, Mr Skeoch said, but on the property market he said: “The combination of a fall in price and a fall in the exchange rate is making that quite attractive for overseas buyers...the market is functioning quite well.”

The chief executive, who earned £3.5m last year and in May bowed to shareholder objections and gave up 20per cent of his maximum bonus entitlement for the current year, said he welcomed the Prime Minister’s promise to crackdown on executive pay. “I feel passionately about this, that we need to start focusing on wealth at risk rather than income at risk.” Executives in firms where the share price underperforms should forfeit built-up wealth , not just part of annual income, the former SLI chief said.

Standard Life was unveiling first half net inflows of £4.1billion, down from £7.5bn a year ago, pre-tax operating profit up 18 per cent at £341m, and a dividend up 7.5per cent to 6.47p. Assets under administration rose seven per cent to £328bn. The market-leading wrap platform saw a 20per cent year on year increase to £28bn and a three per cent or £2bn rise in the first half.

Fee based revenue was up four per cent to £794m and now accounts for 93per cent of total operating income, with revenue across growth channels up eight per cent to £577m.

Although wholesale business saw outflows of £400m in tune with the depressed market, global institutional clients injected a net £2bn and net inflows from retail and workplace customers were marginally below a year ago at £2.8bn.

Mr Skeoch, who took over from David Nish a year ago, said: “I have spent the last year talking to people inside the organisation and we have a strong track record of commercialising innovation to grow our assets. While for some, uncertainty and change is a threat, there is no shortage of opportunities for Standard Life. Our targeted investment programme which is already in place means we are well placed to take full advantage of those opportunities.”

He went on: “We are well aware that the market and economic background is a bit more challenging in 2016 than it was in 2015 and it’s important that we cut our cloth to suit.” Three efficiency programmes had been put in place earlier in the year, well before the June referendum, including “short-term operational efficiencies over 18 months”.

Asked whether they would affect the group’s Edinburgh headcount, Mr Skeoch said: “Not that we are aware of, we are working through our programmes. If you look at SLI for example, over the past 10 years it has driven down its cost-income ratio substantially and actually grown its headcount by more than 1000 over that period.”

Mr Skeoch said a UK exit from the EU would have “not much impact at all” on its global business, as it already sold funds from Ireland and Luxembourg. He said the previous day’s news of a an agreed merger to create India’s biggest life company would leave Standard Life holding over 24 per cent of HDFC Life, which along with its 40 per cent stake in the country’s biggest asset manager, would in the future be “a source of considerable shareholder value”.

Nicholas Hyett, analyst at Hargreaves Lansdown, said the group should benefit from the pension freedoms adding: “The group continues to actively diversify away from its UK heritage... the increased investment in India looks to replicate some of Prudential’s success in offering financial services to the...emerging world.”