Standard Life posts asset growth despite market turmoil

* Total (LSE: 524773.L - news) assets rise 7 pct to 328 bln pounds

* GARS fund sees first quarterly outflow

* Company looks to bring down cost base (Adds CEO comment, analyst comment, detail from statement, share reaction)

By Simon Jessop

LONDON, Aug 9 (Reuters) - British insurer and asset manager Standard Life (LSE: SL.L - news) weathered a tough market environment to post forecast-beating asset growth and profits in the first six months of the year, sending its shares almost five percent higher.

Money managers have faced heightened market volatility so far this year, with many suffering mutual fund outflows as retail investors were spooked by events including Britain's vote to leave the European Union in June.

Standard Life's flagship 26 billion pounds ($33.83 billion) Global Absolute Return Strategies Fund (GARS) fund saw quarterly outflows for the first time ever in the three months including the June 23 referendum date.

Barclays (LSE: BARC.L - news) analyst Alan Devlin noted that flows remained positive over the half-year at 600 million pounds, albeit sharply below the figure of 5.6 billion a year earlier.

"The company indicated institutional flows were stickier than wholesale flows. The key will be if the performance of GARS can stabilize and hence flows stabilize," he wrote in a note.

Total assets under administration rose 7 percent to 328 billion pounds, however, up from 307.4 billion pounds at end-December, helped by 19.7 billion pounds in market gains as sterling weakened and bond yields dropped after the Brexit vote.

The growth in total assets exceeded a 313.9 billion pound consensus forecast of 16 analysts provided by the company and helped the firm's underlying operating performance rise 14 percent over the period.

Operating pretax profits, meanwhile, rose 18 percent to 341 million pounds, underpinning a 7.5 percent increase in its interim dividend to 6.47 pence a share.

The performance sent shares in Standard Life up 4.6 percent to 333.1 pence by 0855 GMT, the second-biggest gainer on the FTSE 100.

By contrast, shares in Legal & General (LSE: LGEN.L - news) fell almost six percent to 205.4 pence after lower profits in its investment management and general insurance businesses took the shine off an overall 10 percent rise in first-half operating profit.

Looking ahead, Standard Life Chief Executive Keith Skeoch said the firm would make further savings to drive significant improvements in its cost-to-income ratio.

The ratio was 62 percent during the period, a slight improvement on the 63 percent recorded in the full-year 2015, but the company said it aimed to lower it significantly, and take it below 60 percent "in the not too distant future".

"We're well aware the market and economic background is a bit more challenging in 2016 than it was in 2015, and it's important that we cut our cloth to suit," Skeoch said. ($1 = 0.7702 pounds) (Additional reporting by Vikram Subhedar; editing by Sinead Cruise/Keith Weir)