Friends scraps its sale thanks to meltdown

Life insurer Friends Provident today abandoned the sale of wealth management unit Lombard and its stake in F&C Asset Management as chaos in the financial markets scuppered any deals.

Chief executive Trevor Matthews said it would keep hold of Lombard and develop the business.

He also said the company would distribute its 52% stake in F&C to its own shareholders, having failed to find a buyer, although Friends is still open to offers.

"We are ending the uncertainty over Lombard and F&C," said Matthews. "Nobody could have predicted the market meltdown we have been through over the last nine months."

Friends reported a 14% slump in life and pension sales in the first nine months of the year to £701 million. Analysts had expected sales of £764 million. International sales were up 29% in the first nine months to £168 million. Friends said it had a capital surplus of £1 billion, the same as in June.