Aviva 2007 Annual Report Download - page 35
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Please find page 35 of the 2007 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Morley is one of the largest managers in European
commercial property assets and in a move to try and
replicate that kind of success we announced in April
plans to expand Morley’s property investments across
Japan and the rest of Asia. Morley will work with multiple
property partners throughout Asia to develop partnerships
in the same way it has done across Europe. The first of
these joint ventures is with Mitsubishi UFJ Trust and
Banking Corporation (MUTB) of Japan.
Our geographical expansion hasn’t been confined
to our property business. In February, we opened our
Frankfurt office to increase our presence in that part
of Europe. Our ambitions in the fast-growing Chinese
market were boosted by the opening of Morley’s
Shanghai Representative Office in November when we
also announced that we had signed a memorandum
of understanding to form a fund management joint
venture with China National Oils, Foodstuffs and Cereals
Corporation (COFCO). COFCO is also Aviva’s partner
in the life business in China and both the relationship
with COFCO and the new office should provide us with
an excellent platform to grow in this exciting market.
Both in the UK and overseas, our people remain
our core asset and we continue to invest in the talent
at Morley and to strive to attract the best talent from
elsewhere in the industry. We hired extensively throughout
the year, bringing new expertise to all our teams and
deepening the pool of talent available for our clients.
In September, Alain Dromer took on the leadership
of Morley. Alain brings with him the skills and experience
of working in large international organisations and as such
he is also charged with building Aviva’s global asset
management business. Previously global head of group
investment businesses at HSBC, and with a seat on the
group executive committee, Alain is well placed to fast
develop Aviva’s plans in the investment area.
The Morley group overall performed strongly in 2007
against a background of volatility in financial markets and
concern about the collapse of the US sub-prime mortgage
market, with operating profit increasing to £91 million
(2006: £79 million). Operating profit from fund
management rose to £87 million (2006: £76 million),
with £70 million being generated by our UK business
(2006: £62 million) and £17 million from Morley’s overseas
units (2006: £14 million). Our pooled pensions business
contributed £4 million (2006: £3 million) to operating
profit which is reported in the UK long-term savings
segment. Our cost to income ratio remained broadly
in line with its 2006 comparative at 73% (2006: 72%).
Sales were strong to third-party distributors and we
won a number of institutional mandates across our key
asset classes.
The strength of our individual teams and our
innovative new products are expected to sustain growth
into 2008 and we will continue to explore new ways
of adding value for our client base moving forward.
UK fund management
In addition to sales under the Morley brand, we sell ISAs,
unit trusts, open-ended investment companies (Oeics)
and structured products under the Norwich Union and
The Royal Bank of Scotland brands.
UK – Other operations
Our UK other operations reported an operating loss of
£8 million (2006: £36 million profit) due to lower results
from RAC non-insurance which included a contribution
of £17 million in 2006 from disposed operations
(Manufacturing Support Services and Lex Vehicle Leasing),
and investment in the businesses of AutoWindscreens,
BSM and HPI. Having completed the investment in
transforming these businesses, we are looking to leverage
maximum benefit from these operations.
In 2007 we also incurred costs of £31 million
(2006: £29 million) through our continuing investment
in Lifetime, our wrap platform business.
Aviva plc
Annual Report and
Accounts 2007
31
Business
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