FCA orders Aberdeen to increase capital buffer

Martin Gilbert Aberdeen

The FCA has told Aberdeen Asset Management to increase its capital buffers to cushion the business against large financial shocks.

The asset manager now has a capital requirement of approximately £475m compared to £435m previously, which included self-imposed headroom of £100m.

“It seems the FCA’s regulatory gaze has now fixed upon the asset managers and so we would be surprised if Aberdeen is alone among its peer group in being required to hold more capital,” a Credit Suisse analyst said in The Telegraph.

The analyst said there was a “good chance” the asset manager would maintain its dividend.

Aberdeen says the group’s remain “comfortably” above the new minimum requirement, which the FCA imposed following a periodic review.

Aberdeen said the increase in the requirement was due to the FCA removing insurance mitigation when modelling operational risk and introducing an allowance to cover “unsighted and unquantifiable” risks.

Aberdeen said it had previously tried to address this with its self-imposed headroom, which the board has now decided to remove.