UK's Hargreaves Lansdown profit rises as savers seek to boost returns

By Sinchita Mitra

(Reuters) - British investment platform Hargreaves Lansdown reported a 31% jump in half-year profit on Wednesday, citing savers' efforts to boost returns in the face of a crippling cost of living crisis.

The company benefited from robust growth in its retail unit Active Savings as clients poured more cash into their accounts, and its net interest margin rose helped by higher interest rates.

"There is uncertainty and people want to make sure they are getting value from how they are managing their cash savings," Chief Executive Officer Chris Hill told Reuters.

Hill added people were looking to control their short-term cash as fears over inflation and potential recession erodes consumer and investor confidence.

The Bank of England, which is battling double-digit inflation that has exacerbated a cost-of-living crisis, raised interest rates by a combined 325 bps in 2022 alone to their highest since late 2008.

Hargreaves said its Active Savings unit had 1.7 billion pounds ($2.05 billion) in cash flows in the six months to Dec. 31, compared with 600 million pounds in the same period last year.

Shares in the company were up 0.7% by 0838 GMT.

Hargreaves reported profit before tax of 197.6 million pounds for the half year, compared with 151.2 million pounds a year ago.

The company however, reported a 10% fall to 127.1 billion pounds in its assets under administration due to turbulence in financial markets.

"Challenging external conditions and low investor confidence impacted asset values and stockbroking volumes in the period," Hill said in a statement.

Net new business also fell 30% to 1.6 billion pounds.

($1 = 0.8275 pounds)

(Reporting by Sinchita Mitra in Bengaluru; Editing by Rashmi Aich and Emelia Sithole-Matarise)