Keith Skeoch - Chief Executive, Executive Director Luke Savage - Chief Financial Officer, Executive Director Barry O'Dwyer - Chief Executive Office of Pensions and Savings Business

Andy Sinclair - BOA Merrill Lynch Lance Burbidge - Autonomous Greig Paterson - KBW Andy Hughes - Macquarie Ravi Tanna - Goldman Sachs Colm Kelly - UBS Gordon Aitken - RBC Oliver Steel - Deutsche Bank Ashik Musaddi - JP Morgan Ben Bathurst - Societe Generale Abilash BT - HSBC Bank Alan Devlin - Barclays

Good morning and welcome to Standard Life's Interim results presentation. As we come to the end of the latest chapter in Standard Life's long history and look forward to opening the next.

I'm joined on the stage by Luke Savage, our Chief Financial Officer; Barry O'Dwyer, the CEO of Pensions and Savings Business and also in the front row there are number of senior executives from Standard Life including Rod Paris, our CIO and Colin Wilking, COO, as also a particular pleasure to welcome Martin Gilbert, up in the back row from Aberdeen. After this introduction and presentations from Luke and myself the team will be delighted to have an answer any questions you may have.

I assume mobile phones are switched off and you will have time to read those head closed. I've had the pleasure of playing some role in these presentations over the last 11 years and it certainly been an interesting a 11 years to be involved in leading the business and dealing with some significant changes in the operating environment.

The benefits associated with strong strategic execution are most visible really over the course of the last five years as success in our core fee based businesses underpinned by the sale of the bank the healthcare businesses in Canada help deliver a total return of 17.4% compared with just over 9% for the FTSE. In my mind this only serves to reinforce the importance of strategic delivery.

Targeted investments in diversification and growth financial discipline and strengthening our relationship with clients and customers have been right of the heart of our approach to generating shareholder value. Not only over the long run, but also during the first six months of 2017 when I believe we continue to make good progress towards creating a world class investment company.

We increased our AUA grew fee based revenue by 5%, maintained our financial discipline with a stable costing income ratio and delivered a 6% increase in operating profit allowing us to grow cash flow and deliver 7p interim dividends to shareholders representing growth of 8.2%. Now Luke will take us through the detail in a moment, but my perspective was this was a strong performance, as evidenced by the continued growth in profits and dividends.

Gross and net inflows benefited from a record six months for our retail platforms and continued steady inflows into Workplace. Institutional and Wholesale redemptions were impacted by the lagged impact of 2016 investment performance, which actually came back strongly in the first half of the year.

The proposed merger with Aberdeen largely has anticipated also resulted in slower growth flows particularly in the institutional channel. It's the diversification of these flows and the strong relationships we enjoy with customers and clients combined with continued financial discipline that provides the foundations for continued strategic delivery.

After we hear from Luke about the first half, I'll come back and give an update on the merger, which by the way I think is going quite well. Luke?

Thank you, Keith and good morning ladies and gentlemen. So as Keith said, we've delivered good growth in our fee based revenues up 5% on last year and again constituting around 95% of total income.

In contrast, our operating expenses are up by less than 3% and that's 3% is after taking into account the impact of taking on the loss making Elevate platform. The contribution from our India and China associates and joint ventures at £53 million is up over 40% from last year and now represents nearly 15% of operating profit.

And while in combination as Keith said, that has driven our total operating profit up by 6% within that our important fee based operating profit is up by 13%. At the same time non-operating items are down versus 2016.

Key drivers of the £40 million net figure were costs associated both with the merger with Aberdeen. Together with the transfer of our Hong Kong business into our China JV, and those two items have been offset by favorable movements in short term investment returns.

Just on Hong Kong, we're very pleased with the progress we're making on the transfer of our operation to Heng An and Standard Life. Where the combination of Heng An and Standard Life is highly complementary, it enhances the ranges of services that Heng An can provide to its customers and it increases the range of products that our Hong Kong operation can distribute to its customers.

Now, as usual I'm going to be talking to the results following the format of our business model starting first with increasing assets. As Keith said, our business has been resilient in the first half of 2017 with assets up 1% to £362 billion.

Across our growth channels, we saw £19.3 billion of gross inflows down just over £1 billion on last year, while at the same time redemptions picked up to £19.9 billion that's around £3 billion up on last year in large part driven by GARS, and I'll come back to both of those figures on the next slide. Moving across outflows on our mature fee books, which is you'll be aware in natural run-off was stable and in line with expectations at £2.9 billion and then moving across again we've benefited from over £8 billion of investment performance and other market movements.

Now here we show on the left hand of the two tables how the reduction in gross flows breaks down by channel, so you can see wholesale is down a little, institution little more markedly, while workplace and retail are both up and retail are particularly strongly. Now to us it demonstrates clearly our channel flows respond differently to given market conditions a clear strength of the diversified investment company model.

And we can see that even more clearly when we exclude GARS, which has seen reduce to those still significant gross inflows of £2.9 billion and you can see you broken that out at the bottom left hand side below the subtotal and excluding the GARS flows you can see that other flows excluding GARS have actually increased by 13%. Then turning to the right hand table, where we're showing net flows by channel, the GARS impact is clearer, again at the bottom of the table net flows ex-GARS were up by significant 32% and that is even after the tempering effect to the merger on short flows that Keith touched on a moment ago, so strong testament to the benefit of our drive to diversify by product and by channel.

Looking more closely at Standard Life Investments with the growth channels you can see on the right hand table on the top that is you had to expect the bulk of the net outflows were driven by GARS and the net flows into other products were positive at £1.2 billion. Now relative to the second half of 2016, we have seen an increase in institutional out flows from GARS with net outflows as state of £3.2 billion given the usual lag in response to the weak investment performance that we saw in 2016.

In contrast, wholesale GARS net outflows which are quicker to response investment performance have slowed as investment performance has continued to improve. In fact, if you look at GARS to the year to 30th of June as we terms actually plus 4.4%.

As I just said other products or net inflows of £1.2 billion which from materially in line with last year, the institutional channel which can be lumpy so modest outflows, but wholesale in contrast so net inflows into other products doubled from £0.9 billion to £1.8 billion reflection of both improving investor sentiment and stronger investor performance. Turning to our Workplace and Retail business, again we see the benefit of diversity coming through.

Net inflows were strong representing an annualized 8% of opening assets under administration with the assets up 36% year-on-year. And that's driven in part by the acquisition of the Elevate business, in part by continued strong net inflows across both channels and in part by positive market movements.

In Workplace were our flows are very steady and predictable, we've grown regular premiums by 7% to £1.6 billion for the period and this average around 75% of total inflows. In Retail, our leading proposition across both the Elevate and the right platforms have driven flows up some 70% to £3.4 billion from £2 billion last year.

And our own Wrap platform business net inflows are up 48% by pensions freedoms and by people undertaking DB to DC pensions switches is in the current low interest rate environment. Net flows into Elevate being particularly pleasing, at the time of agreeing to purchase the Elevate business there are around £10 billion of assets on the platform since when we've seen growth of around 20% such this is now £12 billion on the platform.

And I face a clearly seeing the benefits of Elevate being part of Standard Life and they're committing assets to the platform as a consequence. And the total growth in platform assets has been impressive.

On the points of breaking through £50 billion pounds having nearly tripled in the three and a half years that we show on the chart here. Now this is a market where scale is critical to profitability and a market where through our continued investment in the business we've grown our Wrap platform assets even excluding Elevate at a CAGR of 29% over the past five years.

Its growth has been driven by consistently strong net inflows, which in the first six months of this year were almost as high as the whole of 2016. Turning now to revenue.

You can see that phase from our both channels up 7% in the period while our fee income from our mature books as you can remain stable at £220 million. On the chart to the right hand side revenue yields are marginally down with the slight reduction being larger function of mix, not pricing pressure.

So wholesale has seen margin stable while institutional margins have fallen two basis points as a function of GARS representing little less of the total asset mix. And in Retail the inclusion of Elevate has book down the average by between one and two basis points as per our guidance at the yearend and it's also worth noting that as well as the impact of mix in Workplace one of the year last year relating to the introduction of Solvency II boosted the comparative then by a couple of basis points.

So turning to the 5% of our business that derives from traditional insurance risk, the big move here is the absence of the £22 million one off benefit from Solvency II in last year's figures. Now we're seeing that partially offset by favorable mortality experience in the first half as a result of periodic annuitant verification work that we undertake and we wouldn't expect that to repeat in the second half.

In ALM as well as £10 million of viewed enhancement activity versus our guidance of £15 million for the year, we've also realized a gain of £7 million to closer asset liability matching. Now for the full year, we would go out to a further £5 million of viewed enhancement activity, but as always our caveat that by saying it is very much a function of prevailing market conditions enabling to execute effectively.

In terms of lowering unit costs you can see in the waterfall chart that our absolute costs excluding 1825 and Elevate were actually down £14 million year-on-year and that is after a line for the headwinds from the impact of the weaker pound on the non-sterling element of our cost base. On the right we've held the overall headline cost income ratio flat 62% but that masks a much stronger position with regard to the underlying ratio.

If we strip out 1825 and Elevate from both years our cost to income ratio this year will be around 60% down one percentage point versus 2016 and demonstrating good progress against the commitment we've made in respect of strong financial discipline. So putting all those components of our business model together we can clearly see that the growth in fee revenue in combination with strong financial discipline has been the driver of our profit in the period.

We've seen a lower contribution from capital management as a function the way we account our pension scheme, but this has been more than offset by strong performance for associates and JVs. So in combination we've driven up profitability from our fee business some 13% period-on-period.

Let's now take a close look at that by business unit. I'll come back to Standard Life Investments, Pension and Savings in India on subsequent slides, so here just a brief comment on Europe.

The period-on-period movement that arises from 2016 is because you remember 2016 also benefited from a one-off on the introduction of Solvency II that hasn't repeated in two 2017. If we adjust for that we would again continue to guide to around £30 million pounds for the European business for 2017.

So now let's dive into a bit more detail on the major business units. If you look at SLI, fee revenue is in line with last year, but strong discipline around the cost basis driven profits up by 8% to £190 million.

Now that in turn has enables us to bring down the cost to income ratio to 57% or to put that in another way we continue to achieve the 45% EBITDA margin that we hit at the end of 2016. Now the other point I'd draw your attention though in this slide is the improved investment performance in the yellow dots across the bottom.

We've significantly improved the one year performance figure up from 20% at the year end to the 85% you see here, and as we've said before this is an important driver of investors sentiment in the Wholesale channel. Our three and five year figures, which themselves important drives the sentiment in the institutional channel have remained very strong at 74% and 84% respectively almost unchanged from the year end.

In Pensions and Savings again excluding 1825 and Elevate, we've seen fee revenues up by £21 million at some 7% was total cost up by just £4 million and that is after a £6 million increase in management fees payable to SLI of the back of higher assets to SLI's managing on behalf of the Pensions and Savings businesses, so costs within the Pensions and Savings business were actually down £2 million despite the very significant increase in assets under administration. Again it's evidenced of our financial discipline together with the leverage we've built into our scalable platforms.

Moving across the operating loss from growing 1825 and Elevate was a very modest £3 million and that's a function of the growth in assets we've driven on to the platform that I touched on earlier, as well as starting to deliver synergies in line with our integration plans. And as I said, we're very pleased with how that business is performing, and how we're well on the way into towards turning it to profits.

But that said for the second half the phasing of our integration activities some which come to its operating expenses means we may see a small uptick in that second half loss. Just on 1825 our advisory business we expect that to reach breakeven by the end of this year very much in line with our original plans.

I've already touched on other significant items on the slide, apart from pointing out that the cost to income ratio in the bottom hand corner which has gone up overall would actually fallen from 60% to 59% again excluding Elevate and 1825, so again maintaining a good underlying trend. Our Indian businesses also continue to do very well and we believe a source of significant value.

Firstly on the left with regards to our Life business, you can see that the business continue to go from strength to strength, half year profits of £27 million pounds are well ahead of last year of the back of strong sales, favorable market movements as well as our increase in stake. Now it's a very exciting market where we have around 16 of HDFC has around 16% market share and we continue to see double digit premium growth.

Now we've recently announced that we will be IPO, HDFC Life with Standard Life offering for sale up to 5.43% out of our total shareholding of 35% a move which we believe will provide transparency into the value of that remaining holding. Then on the right hand side of the charts, you can see our Asset Management business which is reported within our SLI figures has continued to grow strongly as well.

Our share of half year profits has increased to £20 million of the back of assets growing at a compound annual growth rate of over 20% for the past five years. Now, this is a business where we see value not just through the growth in the business itself, but as a domestic Indian investors start to lookout with the global products we are well placed provide that product to HDFC Asset Management and even more so once the merger with Aberdeen completes.

So here we invested in two great businesses both performing very well and both leveraging what is one of India's premier brands. So now that was I was going to say on the operating results.

In terms of Solvency, the investor view of capital both the quantum of our surplus and the ratio remain stable in fact the margin they've improved to £3.5 billion to 220%. Our peer record which we've shown here as well is also stable and as we've said before these figures remain stable over a wide range of stress scenarios and we've included the usual detail on how that moves as a slide in the appendix.

But as a fee based business regulatory capital is not a constraint on us. What we focus on is cash with a strong long term correlation between income, profit and cash generation.

Cash generation in this period is 1% more muted than operating profit, as a function of certain CapEx expenditure together with our conservative approach the inclusion of our association joint ventures. There we bring in just the dividends which up £4 million in the period while the profits were trapped by £16 million.

As well as our cash generation, we continue to hold over £800 million of liquid resources a plc level and material change from last year. And that £800 million gives us confidence now our ability to maintain a progressive dividend policy including during periods of stress.

It gives us confidence in our ability to fund our existing growth initiatives including the integration of Elevate and the merger with Aberdeen and it gives us confidence in our ability to see its opportunities to accelerate our growth strategy should arise. It's against that backdrop of a strong balance sheet and strong liquid resources though we've announced an interim dividend of 7 pence per share up 8.2% from last year and now in our eleventh year unbroken record of delivering on our progressive dividend policy.

A policy that is something we intend to continue following the proposed merger with Aberdeen. On that note, I'd like to thank you for listening and hand it back to Keith.

Thanks, Luke. Hello the latest chapter in Standard Life's long 192 year old history comes to a close in the next few days, and I believe our high notes, we will of course open a new and exciting chapter with the completion of the merger with Aberdeen.

From the outset, we've made it clear that the rationale for this merger is strategic and it's the complementary nature of what we both do that creates the opportunity to create a world class investment company that delivers for our clients, our people and our shareholders. So the opening of this new chapter will see an acceleration of strategy and Martin and I and our teams have been working hard to ensure that it gets off to a strong start.

Our regulatory and competition approvals are in place, full UK approvals were received a couple of weeks ago and that has facilitated pre-approval by the final batch of 18 regulatory bodies around the world. Detailed planning work across 12 work streams has been completed to ensure that we're Day 1 ready for August 14, our combined leadership teams throughout the business have been identified announced and are working well together so we can hit the ground running.

The new visual identity for asset management and the plc has been created and is ready to be rolled out. As well as Day 1 readiness, a great deal of work and thought has gone into organizational design and structure for the combined business.

This will help ensure that the £200 million per annum of synergies are not just delivered, but that we continue to make progress from Day 1 that will also ensure we continue to focus on delivering our vision of a well-diversified world class investment company. What does that mean?

For us it means that the combine strengths of Standard Life and Aberdeen will generate a business with considerable scale £670 billion of AUA of which nearly 90% or £583 billion will be managed directly by Aberdeen standard investments. A combined business with revenue of £2.8 billion profits in excess of £1.1 billion before any synergies have been delivered.

The sources of asset growth that drive revenues and profits will also be well diversified by geography asset class and by business area, that includes the assets under administration gathered by Standard Life's leading position in the domestic pensions and savings market with strong flows which we've seen in the first half of the year and a track record of long term sustainable growth. Standard Life Aberdeen will operate on truly global scale offices in 50 global locations serving customers in 80 countries around the world.

It will also have a unique portfolio of strategic relationships spread across North America, Japan, China and India. Scale however, is much more than size or bulk it's about having a compelling offering that will help meet clients and customers evolving needs, needs that will continue to change as the savings and investment landscape continues to be buffeted by the big four trends I've talked about in previous presentations.

We together can deliver such a broad and compelling offering against this changing landscape because our investment skills are complementary and the broad philosophies we deploy to generate a return are aligned. We are both long term, we're both research based, and we both believe that the fundamentals drive return.

It's the bringing together of our complementary investment componentry that will provide scale across the product suite. This will help us deliver innovative investment solutions for clients whether they are de-risking pension schemes, who need liability where solutions post retirement solutions, who are seeking income or yield or more traditional clients who need strong but well diversified returns.

Perhaps even more importantly, we both recognize that the day job is about operating as a team to deliver performance and service to our clients. What excites me about this broad and compelling offering is that it's not only visible, but it's already recognized in the marketplace.

We have a very broad range of strategies recommended by consultants or ranked by Morningstar, but only overlap in six. This creates a clear opportunity to leverage the strengths of our existing client relationships particularly because across each company's top 50 clients we only have four in common.

So the opportunity to utilize our client relationships as well as our deeper and broader distribution networks to sell funds and strategies that are already ranked is a big strength for Standard Life Aberdeen. So as we turn the pages and look forward to opening the next chapter for Standard Life Aberdeen, our strategic focus is very firmly in place.

Our teams have worked hard and well together and we're ready to hit the ground running and commence the integration that will help to create a world class investment company that delivers for our clients, our people and our shareholders. The merger delivers for clients because it brings together our complementary investment strengths and will give clients and customers even greater choice and service.

It delivers for our people because together we have the scale to create greater opportunities as we continue to enhance our broad and compelling offering to meet changing client needs. That provides the foundation for generating continued global growth and the ability for deeper and stronger client and customer relations.

It delivers for shareholders because the financial benefits that flow from the strategic logic are equally compelling the complementary nature of our investment skills, our distribution networks, and our clients will deliver increased diversification of revenue and earnings. Our continued financial discipline evidence not just in Standard Life's interim results, but the rigor of the integration planning process, I believe August very well for the delivery of the £200 million of synergies within three years of completion.

A strong balance sheet and cash generation will support continued investment in innovation and growth and our people as well as Luke pointed out the continuation of our progressive dividend policy. I'm very proud of all of Standard Life has delivered since becoming a PLC 11 years ago, but very focused, very excited about what Standard Life Aberdeen will deliver for clients our people and our shareholders as we create a world class investment company.

Finally, on behalf of the team, as we approach the reclassification of Standard Life Aberdeen to the diversified financial sector, I'd like to say but a real pleasure it's been working with everybody in the room over the last 11 years or so whether it's been answering your questions, debating your views, to ensure that shareholders have the clearest possible understanding of our business. This of course we'll continue with Standard Life Aberdeen ticker SLA, and I hope that many of you will continue your coverage, but I wanted to take the opportunity before we move to questions to say thank you on behalf of the Standard Life team.

I'd also like to take the opportunity to thank Luke for all his hard work and support, and say what a real pleasure it's been working with Luke and being on the road with Luke. With that Barry, I and other people in the room would be more than delighted to try and answer your questions.

Thank you.

Thanks, it's Andy Sinclair from BOA Merrill Lynch. Three questions if that's okay.

Firstly, is in India for the joint venture IPO, I just wondering if you give us an update on thoughts for use of any proceeds from that coming from the Indian IPO and well our proceeds be remitted back to the holding company? Secondly was on MyFolio, MyFolio maybe didn't see quite the step up inflows that retail have seen, I just wonder if you give us any updates on MyFolio there?

And thirdly, just on Workplace pensions, just wondered about if you can give us a bit of an update there we've seen flows kind of a little bit up flattish year-on-year just wondered if you give us an update on the environment? Thanks.

If I do MyFolio, pass to Luke on India, and then to Barry on Workplace pensions. MyFolio continues to do very well, it continues to take a long and generate some good strong flows.

We're very excited by the fact that we've launched MyFolio in Germany, and we're starting to get good traction and we're in conversation elsewhere in the world, Kong and China thinking about way in which we could use MyFolio to go on to other platforms. Luke the proceeds?

So on India joint venture, the IPO in the proceeds. Yes, we would endeavor to flow the proceeds up to PLC, and as you know we try to keep all surplus resources of the PLC level, because it gives the kind of the flexibility that I've touched on.

In terms of use of the proceeds, at this point we're not even now to speculate on how big those proceeds might be under the very securities laws that we're constrained to. I guess all I would say is, I think we've got a proven track record of either putting that those cash resources to work or if we don't have use for them to turn them by way of special dividend or the BC share scheme that we did post Canada, so too early to comment on where and how they might be used.

Andy on Workplace rules, as well as the way we think about it is that the regular heartbeat underneath the Workplace those or the regular contributions and you've seen that they are up 7% year-on-year from 1.5% to 1.6%. If we look forward that will be enhanced by the enrollment increases in 18% and so 19% so we should be getting to a run rate next year of full year £3.5 billion or thereabouts year after about £4 billion.

So you will see that sort of heartbeat underlying the workplace flows and then on top of that there's the sort of new business versus scheme losses et cetera, which is a little bit more difficult to predict and it's a little bit more lumpy, but we're very, very happy with the core flows and the growth in the core flows in Workplace.

Thanks.

Next.

Lance Burbidge from Autonomous. Just a follow up on the Workplace, the margin was obviously down, I think primarily because of the one-off dropping out.

But where do you see Workplace margins moving to in future? The second one is on Wholesale, Retail and Workplace, which is obviously the strengths in your flows in the first half from Standard Life, I wonder if there's any specific benefit that Aberdeen brings to those lines of business in future?

And then there's a rather quick comment in the results about some elements of revenue do not rise in line with market related AUA growth, I wonder what might mean by that?

Okay, that's an easy one, which is there are places where we charge fees, for example in 1825 where it might be an hourly rate for fees rather than function of AUA, that fee will not move as the assets move. Sorry…

It's tiny, I've seen.

But other examples might be auto enrollment, where we charge £100 a month fee to the corporate times 12 month times thousands of schemes is another example.

So there are some - if you invest in property et cetera, and so we get fees in sterling rather than in bps. On the Workplace margins Luke explains the Solvency II wrinkle that was in last year's numbers, really the Workplace revenue margin is a consequence of how fast each individual scheme is growing, and for the largest highest quality schemes obviously they command the lowest price and those schemes have performed better in the first half than relatively better than the rest of the book.

So you'll see basically that Workplace margin very width I suppose the underlying scheme growth. In terms of your question on the utilization of Aberdeen's specialism if you like our expertise in the Retail and Workplace market, we're particularly excited to come to terms and to understand more about Aberdeen's quanta capability particularly in Workplace, so we do think that what Aberdeen are bringing will be additive to certainly to my part of the business.

Yeah, just to add to that two other things. The Parmenion platform is really interesting aspect that would be additive to Wrap and Elevate it's a very interesting digital offering.

One of the things that Aberdeen brings in terms of wholesale is also diversification in terms of what is I think a pretty broad range of investment trusts something that Standard Life Investments has been less significant in, so you take those two things with this ability to manufacture small beater in particular and it's a really interesting combination.

Go to Greg.

Greig Paterson from KBW. Two questions, one is can you just update the way of Lloyds and your discussion or possible distribution opportunities, so you can point, I wonder if you could just eliminate those who don't want to too carefully what the current status is for Aberdeen in terms of its relative performance versus peers maybe the second quarter update would be interesting?

And the third point in terms of the merger and the Employee Benefit consultant panels, if you can you just give us an update where you have been put on negative watch or any progress you've made to try to bring those sort of ratings back to normal? Thanks.

On the first two, I'm afraid I need to remind you, I'm still bound by the fact that we're bound we're in an awful period now for bound by the takeover codes, so those are very little I can say about Lloyds apart from to repeat what we said in the perspectives that it would be absolutely fantastic to have a much deeper and stronger relationship with a very significant client of the combined group and also have access to a very large book and high quality book retail business, and so you will be working very hard both in deepen and strengthen those relationships as not much I can say about where Aberdeen are in terms of their relative performance because we're still in the offer period, I'm not sure there's been a recent update to the market. On consultants, actually it's pretty much business as usual we are competing and winning some mandates, we're launching some new strategies which have got consultants support, there are a few consultant pitches were we've got to the final and they've either been put on hold or we've been moved away.

So it's pretty much business as usual nothing dramatic, it's tended to be consultants putting us on watch and wait and see and my guess is that will continue for a while yet.

Andy?

Sorry. Andy Hughes from Macquarie.

So couple of questions if I could, and the first one is on the non-GARS net flows in the quarter. So I've got it right, you had like a billion if non-GARS net flows in Q1 and they dropped to 0.2 in Q2 and probably due to the merger, but the surprise to me was when I looked at the asset flows and by type.

And the one I would have thought they would have had to begin the outflows would have been the equities business and that was only down to minus 0.1 and the fixed income came out bit more negative than it has been over the previous periods. And idea you can give us an idea as to what's going on with the kind of non-GARS SLI flows?

The pretty positive the momentum is in place second quarter slightly distorted by one institutional mandate of reasonable size under underpinning is continued I think decent momentum.

Any idea how big that one almost?

I think was about £400 million.

£400 million. And the second question was on the corporate business.

So there obviously you have great Solvency surplus within the local business, and I was wondering the theories highlighted that some people in the corporate space adding life cover to contracts to get around the contract boundaries and boost the Solvency II surplus. So I'm guessing you don't do that, but if you were to do that what would the - any idea roughly how positive it would be for Standard Life and if other people have to stop doing it with that impact the pricing and therefore we see the corporate market pricing go up?

Thank you.

Okay. We don't do it off the top of my head, I have no idea what the impact will be, but afterwards we have our actually the Standard Life actually in the room you can perhaps with JP afterwards.

As for what other people do in the impact of having them I don't know, and if you know that we are predominantly a fee based business from regulatory perspective we generate capital well than consume capital, which is why we don't focus on is why we focus on cash.

Ravi?

Hi, thanks. It's Ravi Tanna from Goldman Sachs.

Three questions, please. So the first one is on your retail flow performance which was obviously very strong and you've referenced that the benefit you've enjoyed from the DB transfer business.

I was wondering if you could give us a sense of kind of what scale of benefit that's been what your gross flow contribution from DB transfer was and also the advice process you have in place around that business, please. The second questions on the platform markets and there's been discussion around upon two trail commissions, and I suspect Standard Life may be a beneficiary here, but I was wondering if you could just comment on again what proportion of the marketplace is perhaps likely to be displaced by that change?

And then the third one was on the asset management side, clearly again in light of regulatory comments from the FCA around the performance of multi asset funds and also given the outflows that you've experienced. Are there any changes in your thoughts around pricing strategy for other GARS or other product offerings that you have I know you've taken a fairly consistent view on that in the past, but has anything changed in your thinking given regulatory or market headwinds?

Premium price for premium product. Barry?

Yeah. On the retail flows, as you point out, this has been a record H1 for both gross flows and for net flows into retail.

Of the £6.7 billion in gross flows in retail a £0.9 billion is DB to DC transfers. So it's a useful contributor, but it's just that are essentially.

You've asked about the advice process it's important to remember the vast majority of this business is third party advice. So it's advice by IFS and we're essentially just providing a platform.

There is a small amount of DB to DC transfer business in 1825 and as you might have imagine that's a very tightly controlled advice process. On platform, the displacement as a result of the ban or potential ban on trail commission, it's quite difficult to call that actually because if you look at what happened post RDR perhaps wasn't as much displacement as a result of RDR, partially because there's such a large tail if you like of small fund sizes on which trail commission is being paid.

And therefore the ablation of trail if it happened in aggregate might be a large sum of money, but it isn't enough for an IFA to go and revisit thousands of clients on an individual basis. So I think I'd be a little bit circumspect about the disruption to the market caused by the banned trail.

Colm?

Colm Kelly from UBS. One question on the cash flows, so historically there's been very strong growth and the cash generation of the business and that's few of the dividend growth clearly at half year there was 1% year-on-year growth, which seems to track the asset growth more closely down that was the operating profit or the IFRS results.

So when we think of our full year and a bit beyond given the outflows that you're seeing somewhat dragging on the asset growth should we have an expectation for slightly slower cash growth over the next period versus what we've seen in the past?

So there were two real things that have created a muted cash generation compared to its profits. One is, as I said our joint ventures, we are prudent in the way we treat those joint ventures, we don't recognize the profits that they generate we recognize the difference we see that out of them.

So we've had a really strong first half in those JVs up to £53 million up £60 million in the period, where is the dividend increase year-on-year and win £4 million. And if we actually look at the amount of cash flow generated it's about £250 million.

So 1% of that is £2.5 million so the difference from 1% and 6% is it's kind of £12 million in cash. So effectively the JVs on their own arguably make up that in time in muting of the number.

At the same time, it's fair to say that in this particular period the difference between the depreciation which we take out of our P&L and the CapEx, which we're just back in that two relatively big numbers because as you know we continue year-in year-out to invest in future growth part of that is technology part of that is premises. And if you're taking to relatively large numbers, then you can end up in a given period just because of the random and even nature in which CapEx comes through the small net difference can actually be significant in itself.

So the JV impacts if we continue to see strong growing profits with more modest dividend growth then that will continue to ramp in the cash generation. At the same time, the IPO of HDFC Life should help to counter that, the CapEx I think is just an anomaly at this particular period.

Gordon?

It's Gordon Aitken from RBC. Three questions please.

First on India, I mean that's the big driver of the basic and expectations. Just to want to extend is that been driven by demonetization and in the period since demonetization seem to be taking share from LIC, just wondering why?

The second on the Pensions and Savings business and you mentioned the drop in revenue bit from 57 to 54 and there it's obviously too wrinkle you mentioned, but what's the average bps for the new growth flows please. And just to close on Workplace and you see very steady net flow there, when does the on bundle to bundle DC opportunity really kick in and how much is that now?

Thank you.

Barry if you want to do this first one.

Yeah. We don't have a number on the bps yields on the new gross flows, so we just calculate that and disclose that on an aggregate basis.

But as I said in the answer to answer think earlier, it's a function of our success if you like with the highest quality schemes that we've taken on board over the last decade that they they're growing faster than some of the older schemes or potentially even some of the new auto enrollment schemes that are at the price cap of 75 pips. So you just see that mix coming through, mix impact coming through.

On the bundle-to-bundle, this is a continuing opportunity, it's continuing slow opportunity here because there is a large amounts of conflicts of interest as well as everything else to overcome in terms of moving that that market from on bundle-to-bundle, but we think the long term drivers are still there, the bundled market as it gets more and more efficient it means that the case for moving from one bundle to one bundle gets better year-on-year. So it will move and the opportunity as you know is vast, but it is as suppose taking several years and I think part of that is as a result of out of auto enrollment actually the going through the program of auto enrollment has been a top priority over the past couple of years, and now there's some evidence that large corporates are thinking about moving from one bundle-to-bundle, but it's we've seen only a trickle so far.

On India, I think we are benefiting from demonetization, if you look pre-demonetization the market shares of in particular the bank assurance channel, HDFC Life was strong on was under pressure, because it had much stronger KYC requirements actually that's beginning to turn the other way and because of improved KYC and in fact their digital capabilities, I think you are beginning to see an improvement in market share. Oliver, and then I'll move over to the section on my right hand side.

Oliver Steel, Deutsche Bank. So first question on Elevate, I think you did actually give us a figure for Elevate and 1825, but just so that it's clear in my mind at least, what the revenues in the expenses for Elevate just so that we can back - so that I can back them out from both sides.

And I suppose linked to that on Elevate you've talked about sort of expenses I guess or something with the loss increasing in the second half, so just what's going on there and what's your timetable still on getting up to the normal level of profit to the Elevate? And then secondly just coming back to this question on the UK Life margin and I'm sort of putting it in aggregate now, I mean I think you show your margins on a 12 month rolling basis, so you come out with 58 to 24, but actually if I do first half to first half it's more like 59 to 52 and I can't quite reconcile that as being just the effect of Elevate and larger work place schemes growing fast in smaller Workplace schemes, and so can you sort of - can you sort of think a bit harder as to whether how is going on there?

Thanks.

So I didn't actually give a figure for revenue and expenses for 1825 and Elevate and off the top of my head, I don't want to quite a number at the top of my head, what I did say was that the net loss for them was in the order of £3 million for the first six months. But due to the timing of integration expenses for Elevate in particular that we would expect small uptick in second half, so in terms of what that might look like, it might be closer to £10 million for the full year rather than taking in the £3 million and doubling it.

I think in terms of the margin now let Barry talk to some of that, but the you've got to remember the 72 and there was couple of basis points which was in the first half of last year and not the first half of this year, as one of the drives in that.

A just a couple things in that, first of all just to reiterate the Elevate plan is on course, so in line with the previous guidance we gave. On the margin if you look at some of the disclosures we've made 54 to 51 on Workplace which as Luke said, includes the 72 wrinkle and this mix effect that I talked about earlier.

46 to 44 on retail some of that is Elevate you'll remember that we've increased the price for a new Elevate clients since acquisition, but the existing Elevate clients around the deal they had prior to acquisition, and so that dilutes the margin on our platforms. And also there's some - there's a quality mix impact in there as well, particularly some of the DB to DC we've got very, very high average case sizes, and they obviously trigger the highest level of large account discount, so there's a little bit of a discount effect in there as well.

And finally we've got the mature book which is still very substantial, the margin on those going from 77 to 75, a few things happening on that including the reduction in price on legacy Workplace schemes and as a result of the IPB report in the IGC implementation of that, so they went from some legacy schemes went from 1.0% to 1% or cap to 1%, so there's a little bit of an impact from price capping in there and between the three that explains the reduction in the revenue margin.

Ashik?

Hi good morning Ashik Musaddi from JP Morgan. Just few questions on the cost base, so if I think about UK cost base you mentioned that ex-Elevate your cost base was down £4 million on an absolute basis and that included a £6 million drag from the transfer pricing of SLUK to SLI, so that's a £10 million improvement, which is quite chunky, because it's like 5% of your UK cost base.

How should we think about this number going forward because we're talking about absolute decline in cost base rather than bps decline, so that's one question, how should we think about it going forward, is it like a continuing focus for the next two three four years as well or is it just like a one off improvement? Secondly on SLI again your cost base when down by £13 million, £14 million, is it a function of revenue or AUM or is it just a function of business as usual i.e.

you're focusing on reducing cost base in SLI irrespective of what's going on in the revenue and the AUM side? And third one would be on the asset manager - on your capital, I mean you have £800 million holding company cost as like the earlier you would receive something from cash from Indian IPO as well, so that that is basically quite a lot of holding company cash, because you have sufficient capital I guess in the subs as well.

So what are your plans for that holding company cash, are you thinking about any bolt-ons in Workplace, in platform or anywhere else any thoughts on that would be great? Thank you.

Well perhaps if I'd start by picking up on the costs in the U.K. is actually £4 million increase in costs including the £6 million, so when you back out the £6 million you end up with the net £2 million reduction rather than £10 million which is quite a different sort of scale of net reduction, and maybe Barry if you want to talk about the opportunities in terms of evolving customers what that can do.

Yeah, Okay. Yeah, we continue as you would expect to invest in cost reduction exercises, we are a very efficient business as you probably know in terms of looking across the industry where we are a cost leader, but we still identify opportunities.

I think actually at the year-end my predecessor talked to the bit about what we're doing the Workplace to make our employer platform much more efficient that's been very well received by the clients that use it and that will drive some efficiency improvements obviously we've got the Elevate integration which will drive further improvements. And as Luke saying we're investing in improvements to the customer experience particularly prioritizing the digital first strategy so as that implements we expect to see further cost savings in the back office, but it is a series of incremental improvements really.

On SLI, it's absolutely financial discipline under recognition that we need over the medium term to continue to reinvest in the business, and the best means of finding means reinvesting in the businesses as your own resources, so actually revenue slowed then actually the appropriate adjustments were made to costs, so making sure that the cost income ratio came down maintain that EBITDA margin at 45%, of course there were not a lot of costs associated with you know the substantial winning of new books of business, so it's the kind of dynamic optimization of the cost structure that I think you'd expect from manager. Luke on capital.

That around the £800 million surplus, we've said that the Aberdeen integration is going to cost in the order of £320 million that's cash that needs to come from somewhere that's one use and some that I can't be going to, we need to continue to fund the work on the integration of Elevate in the short term we will be paying an interim dividend assume the merger completes on Monday on the expanded share base of around three billion shares, so there's an incremental cost over and above the profits that have been driven from our own business, because we'll be paying on the Aberdeen shareholders as well as our own. And then is Keith to start from we've continued to invest.

So the Ignis acquisition, the Elevate acquisition, the build out of 1825, the increase in our India stake has all been finance out of our in resources without coming back to shareholders or debt holders. As we've said before, if we can't put that money to use in a reasonable order then we would always look at it in return to shareholders, but it's not the right time to be to talking about that at this point.

Ben?

Hi, it's Ben Bathurst from Societe Generale. I've got a question on the UK.

Looking at drawdown I wonder if you could give some color on the market, the movements in the six months between market movements and also net flows, I was also hoping you perhaps given updates on the progress of the direct drawdown proposition whether or not that's been growing as well as you might looked a year or so ago?

Yeah. Suppose it's, as you were if you like its goes on drawdown there the and you're seeing from the FCA study on what's happening in the one of those drawdown market that actually our experience is pretty consistent with right across the industry.

We have seen a move to taking cash at the smaller end and technically all of those customers going to drawdown before taking cash particularly, obviously if they're struggling at over a couple of tax year end like. And the flows in drawdown are continuing to be positive.

We have we're now up but £2.4 billion in Active Money Personal Pension which is our main non-advised drawdown vehicle up from £2 billion in at the year-end. So that's a combination of inflows of £0.5 billion and some outflows in market movements for the rest, but yeah, it's still an important product for us, small in the grand scheme of things compared to our advised platform, but it's an important product for allowing people access to the pension freedoms.

Abilash?

Hi, it's Abilash from HSBC Bank. I've got two questions, please.

First one is, it's not the one of the cost excluding 1825 and Elevate, you're already at 60% cost income ratio in the medium term previously highlighted to drive it down below that. Is that still the expectations or should we just be thinking about more stabilization there.

And on the platform side, the FCA launched a platform review given that you've got three platforms now. Do you have any expectations around that?

Thanks

Own costs and future expectations, I think it's important to know a couple of things, one of the things that will come with the merger is the creation of that £200 million of cost synergies which will help drive down the medium term cost income ratio. Of course, the extent to which we start to give guidance and we have metrics for financial discipline going forward will be a subject matter for the new Standard Life Aberdeen board, which meets in September.

So we will come back at some point and update on those issues. Barry, platforms?

On the platform review, we really welcome this actually one of the hallmarks of the Standard Life when we launched this nearly 11 years ago was around transparency. So we never had retrocession sessions between fund managers and the platform and all the benefits of pricing were always passed on to the end client.

So from our perspective and you might remember when we went through RDR and we introduced super clean pricing for asset managers, we got a bit of flak in the press for that, but it was largely because we wanted to create an opportunity for our fund managers to compete on price on our platform. And I think that's exactly what the FCA are trying to achieve with this trying to make sure that and clients get maximum value for money.

Alan?

Thank you. Alan Devlin from Barclays.

A couple questions, first of all when we update us your thoughts on the newly portfolio is when your competitors would to be selling as emphasis portfolio. And then just on the Workplace in a £3.5 billion to £4 billion if lose you reference and what are you assuming for updates when the contribution of those actually increase?

And then a final question the DB to DC at £0.9 billion if lose. What do you think the opportunities now market was the DB market is huge in itself and what you think of that could flow to the DC market?

Thanks.

Okay. I'll start on the updates on maybe hand to one of you guys on the portfolio that the - it's very, very difficult to predict up that's we're currently I think around 6% of updates, market is about 9%.

So but we're all conscious of the fact that we're at the early stages of the room, we haven't seen the step up and so we factored in the prudent allowance, I think I just leave it at that in terms of for updates in 2018 and 2019, but there is an allowance for increased updates in there. On the £0.9 billion of flows again this is quite difficult to predict because obviously it's a function of long term interest rates, now assuming long term interest rates stay low then this opportunity could last for a couple of years, but it's like any market in particular I supposed DB and the large transfer values in DB are skewed towards a very small number of people, because DB schemes tended to benefit people who served for quite a long time and rose quickly through the ranks.

So there are a small number of people and that's manifested the very high average transfer value that we see on our book. We've been encouraging the IFAs advises more generally to focus on the low risk opportunity in DB, which tends to be very wealthy people with independent income that aren't reliant on the DB income in retirement and there is a substantial poll remaining.

We think there's maybe a couple of a year at this sort of level of flow, but it should tail off at that stage and again assuming that the interest rate environment stay as it is as it is currently.

On the annuity portfolio position remains the same there's nothing of any significance to say at the moment.

Any more questions. No, in which case, thank you very much again a real pleasure.

The next time we meet I will be start up here with Martin, delivering the first set of preliminary results for Standard Life Aberdeen. Thank you very much.

Thank you for coming along. Thank you for your questions and I hope you have a good day.