One of the UK's oldest fund management firms lifted half-year profits by 70 per cent after achieving more higher margin business.
Schroders, which looks after £112.1 billion of money for clients ranging from insurers and pension funds to local authorities, charities and individuals, said half-year profits hit £123.5 million, up from £72.6 million a year earlier.
The improvement was helped by a one-off gain of £20 million to cover the termination of an outsourcing agreement with JP Morgan, but also included the contribution from returns on more lucrative investments, ranging from specialised equity products to property.
Schroders, which was founded as a small merchant bank in London in 1804, also managed to offset an increase in administrative expenses in its asset management arm, which lifted from £151.5 million to £174 million.
With revenues in asset management up 28 per cent to £313.6 million, Schroders said the growth had resulted in higher remuneration costs.
The end of the JP Morgan outsourcing agreement will increase the company's costs by £2.5 million a quarter but Schroders said it expected to absorb the rise through continuing cost controls.
Schroders said its drive for higher profit margins - it has been restructuring its business away from running balanced, multi-asset portfolios - had helped it continue its recovery from stock market weakness between 2000 and 2002.
Shareholders will receive an interim dividend of 7p a share, an increase of half a penny on a year earlier.
Shares closed down 19.5 at 875.5p.