Fund giant Schroders saw profits fall last year as it took on extra staff to handle an increasing inflow of funds.
Pre-tax profits fell by 12% to £360 million while a net inflow of £9.4 billion helped to push total assets under management up by 13% to £212 million.
Schroders added an extra 89 people to its staff last year as it broadens its investment offerings. That drove up costs and pushed down asset-management profits.
The much-smaller private banking arm had a difficult year with lower fee income, outflows of money and a bad-debt charge on commercial property loans.
Chief executive Michael Dobson said: “Corporate balance sheets are healthy and, while earnings may only grow modestly in 2013, dividends remain well supported.
“In the first two months of the year equity markets have extended their strong showing as investors have continued to switch funds from low-yielding cash and bonds. Good investment performance and a broad product range enabled us to benefit from this pick up in investor demand for equities.”
