Aberdeen Asset Management posted losses of £87.6m today after it accounted for its contribution to a compensation pot for investors.

The fund manager set aside £77.7m as part of its involvement in a scheme agreed with the Financial Services Authority (FSA) and 17 other firms to compensate those who lost money in ill-fated split capital trusts.

Details of the £194m fund were announced on Christmas Eve and Aberdeen said today it hoped the agreement, which followed a near three-year investigation by the FSA, now drew a line under the affair.

Announcing results for the year to September 30, Aberdeen said the investigation and the state of the financial markets meant the last few years had been "exceptionally challenging". However, it said it entered the new financial year in a much stronger competitive position.

Profits lifted

During the year, assets under management grew by £1.5bn to £22.1bn while profits before exceptional items lifted in line with market expectations to £15.1m, from £5m in 2003. Today's overall losses of £87.6m compare with a deficit of £6.4m in the previous year.

Chief executive Martin Gilbert said it had been "an excellent year" for new business wins with the company benefiting from strong performances in Asia and emerging markets.

The FSA settlement will require an immediate outlay of £17.5m with further payments spread over the period to October 2006. The funds are expected to come from existing and additional bank facilities.

Mr Gilbert said: "The settlement with the FSA finally allows us to focus exclusively on the business once again."

Aberdeen is the biggest provider to the compensation agreement, which will reimburse people who invested in the complex investment vehicles, many of which were advertised as low risk.

The trusts had different classes of shareholders, with some investing for income and some for growth. But the sector ran into problems due to stock market falls in 2001 and 2002.