SVG Capital reported a strong period of trading in 2013, but admitted the current year had started with a modest stock market correction, and particular weakness in emerging markets.
The private equity investor and fund management group said that against the background of a gradual tapering of the monetary stimulus provided by the Federal Reserve, and continuing structural issues in the EU, there was "a risk of a more severe correction if corporate earnings disappoint or there is a shock to the system".
In the 12 months ended December 31st, the group saw a continued improvement in the environment for private equity, with a return of confidence to the sector, which resulted in rising deal volumes and managers taking advantage of the relatively strong exit environment and buoyant credit markets to return capital to investors.
Profit for the year totalled £295.7m (2012: £131.8m), with basic earnings per share soaring to 120.1p from 47.7p a year earlier. This was despite a decline in total operating income from £38.0m to £16.88m year-on-year.
The group said its investment portfolio had performed strongly over the year, contributing to NAV per share growth of 31.5% to 514.5p and distributions of £304.7m.
Chief Executive Lynn Fordham said: "We have reported another year of significant growth with our investment portfolio reporting the fourth consecutive year of double digit growth.
"Our strategy is underpinned by disciplined capital allocation and we believe we have the beginnings of a well-diversified portfolio of leading private equity investors, laying the foundation for future NAV growth. We remain focused on maximising shareholder returns through disciplined capital allocation and are well placed to capitalise on potential opportunities as and when they arise."
Underlying profits at Lloyds Banking Group more than doubled in 2013 with the company citing improved profitability within the core business and a significant reduction in non-core losses.
Underlying profits surged to £6.17bn in the 12 months ended December 31st, up 140% from the £2.57bn recorded in 2012, as a 24% increase in core profits to £7.57bn outweighed non-core losses of £1.41bn, although the latter were 60% lower than the previous year.
Chief Executive António Horta-Osório said that the results "confirmed that the group is returning to robust health".
"We have a strong business model and have made significant progress, despite our legacy issues, in improving our capital position and profitability in a sustainable way. As a result, the UK Government started the process of returning the group to full private ownership," he said.
The boss was paid a bonus of £1.7m in shares
for his work in 2013, subject to additional performance conditions and deferred until 2019.
The company said that the total discretionary bonus pool for employees in 2013 was £395m, compared with £365m in 2012. This is equal to 6% of pre-bonus underlying profits, down from 12% the previous year, due to the big jump in the bottom line.
Profit growth was helped by a 2% increase in total underlying income to £18.81bn, a 5% reduction in total costs to £9.64bn and a 47% fall in impairment charges to £3.0bn, principally reflecting the mis-selling of PPI.
This helped Lloyds swing to a statutory profit before tax (PBT) of £415m (Shore Capital's estimate: £1.4bn), compared with a loss of £606m the year before. After higher taxation, however, the company still registered a loss per share of 1.2p, though this was an improvement from the 2.1p-a-share loss in 2012.
The lower-than-expected PBT owed to negative fair value movements, volatile items and an additional £200m of regulatory provisions for various issues that Shore Capital had not factored in.
The banking net interest margin (NIM) rose by 19 basis points (bp) to 2.12%, while the cost:income ratio fell by 220bp to 52.9%.
The cost:income ratio excludes the impact of its holding in St James's Place which was sold during the year, along with a number of other operations including its German life insurance unit, Heidelberger Leben. Lloyds also sold its Australian and Spanish banking businesses as it continued to increase its focus on the core UK business and reduce international exposure.
The company's strategy to sell-off non-core assets was ahead of plan, with £34.9bn of disposals made during 2013 taking non-core assets to £63.5bn.
"Non-core asset reductions continue to be capital accretive overall and, together with core underlying profit generation and management actions, resulted in a considerable strengthening of our capital ratios," Lloyds said.