Recent interims from the life and pensions group that was formerly known as Standard Life Aberdeen were encouraging on three fronts says the bank.
First, the higher-margin business is either doing very well or heading in the right direction with net flows tipped by the broker to reach plus 4% at the start of 2023 against minus 12% in 2019.
Revenues also rose 7% year-on-year, while, thirdly, the expense ratio was under 80% for the first time since 2018.
“Based on this, we now forecast a revenue CAGR of 5.2% (revenue growth) across 2021-2023 and an expense ratio of 75% in the fiscal year 2023.”
Deutsche Bank says while these are still below management targets (mid-to-upper single-digit revenue growth and a 70% expense ratio), the shares look inexpensive on eight-times (8.4) 2022 earnings.
Shares were 260.9p, down 0,8%.