STANDARD Life is understood to have given a strong internal vote of confidence to its long-standing Canadian operation against the backcloth of reports that it was considering a sale.
It is believed both the current chief executive of the Edinburgh-based life assurer, Sir Sandy Crombie, and newly announced successor David Nish are agreed that Canada remains a core part of the business.
However, industry sources say Standard Lif
e continues to keep an open mind about selling Standard Life Bank.
Nish takes over the helm from Crombie in January, and a weekend report said that the chief executive-designate had asked Standard's advisers, UBS and Merrill Lynch, to test the water for a possible buyer after it conducted a review of the Canadian business.
But The Scotsman understands that the speculation is wide of the mark, and that Standard believes the Canadian arm is in much better shape now than when it made a £102 million loss in 2008 based on IFRS accounting standards.
City analysts also believe the business has much improved, and some are forecasting Standard Life Canada will bounce back into the black in 2010. Oriel Securities is forecasting an underlying profit of £70m at the subsidiary next year.
Standard Life employs 2,000 in Montreal, primarily in its life and pensions business. The Scottish company also has a fund management arm in Canada and both have suffered from the prolonged economic downturn in that country in the wake of the US recession.
One analyst said: "The economic ties between the US and Canada are very strong. Look at the fallout in their linked motor industries. When America sneezes, Canada catches a cold. When America catches a cold, Canada gets flu.
"But Standard Life has been in Canada for 175 years, the Canadian business is nearly as old as Standard itself.
"It would be a very powerful wrench to leave, particularly as North America looks over the worst of the recession and prospects for life and pensions, not to mention the stock market as far as the fund management arm is concerned, look better."
It is thought that the Canadian business suffered through being de-prioritised in 2004 when Standard Life had its well- publicised funding difficulties.
At that time the Scottish parent was seen as focusing mainly on the UK business, which was coming out of a three-year stock market downturn, and sorting out its balance sheet.
A similar exercise began in the Canadian business in 2006 and is understood now to be on the point of bearing fruit.
Meanwhile, analysts believe Standard Life Bank, which specialises in mortgages, may be sold for up to £300m.
The City consensus is for worldwide life and pensions sales of £10.63 billionn when Standard publishes its Q3 trading update on Thursday.
