TOTAL SALES at Standard Life Ireland slumped by 18 per cent in the first half of the year, despite robust growth in new business.

The Irish business of the Scottish financial services giant recorded sales of £372 million (€439 million) in the first half, down from £427 million a year earlier.

Although sales within the Irish market rose 8 per cent year-on-year, sales of bonds to abroad (mainly UK-based) contracted by 36 per cent to £173 million.

New business proved resilient, rising 4 per cent. This compared to an average decline in the market of 51 per cent. According to Standard Life Ireland, new business sales were driven by a number of factors including investor fears that the tax treatment of pensions may deteriorate in the next budget, coupled with proactive planning by investors in advance of the imposition of the 1 per cent levy on life and pension products on August 1st.

The Standard Life group as a whole was hit by the recession, and recorded a net loss of £20 million for the first half (on an international financial reporting standard) compared to a profit of £161 million in the first half of 2008.

On a European Embedded Value basis operating profit before tax fell to £348 million from £534 million a year earlier. New business sales shrank by almost one quarter to £5.2 billion.

“Standard Life gets almost 70 per cent of its profit from investing premiums received in previous years. We’re an asset managing business these days much more than an insurance business, and the value of assets transferred to us has been down,” group chief executive Sandy Crombie said yesterday.

“Inevitably, there’s been some mark-to-market losses and that’s what’s taken one of the bottom lines negative.” – (Additional reporting: Bloomberg)