Aberdeen Asset Management has revealed it is to make £57m in annual cost savings, the first time it has quantified long-promised cuts in its expenses, as it adjusts to troubled financial markets.

Finance director Bill Rattray told The Herald yesterday that the focus would be on squeezing savings from deals with outside companies, but he acknowledged that Aberdeen would see a reduction in head count while analysts suggested staff could see a cut in bonuses.

The news cheered the market, which sent its shares up 17.1% to 142.25p as some analysts calculated that this could offset the impact of weaker financial markets. The stock was also boosted by rumours that the company is on the verge of establishing a joint venture in Japan.

Rattray played down the scale of the cutbacks: "This is not in any way a major cost-cutting exercise. You will see a large number of relatively small items across a variety of projects."

He styled the exercise as "good housekeeping", tidying up costs that rose during the bull market from 2003 until last summer. Analysts at Cazenove also suggested the company was looking at cutting its bonuses.

In a trading update to the market, Aberdeen said it has identified £27m of annual savings within the fund management division and £30m in the property division, including around £7m from the acquisition of Goodman Property Investors, which completed at the end of May, and of German property manager DEGI.

The company added: "There will be some consequential reduction in annualised income from elimination of low-margin property business, but we expect the net annualised benefit of these cost savings to be approximately £40m before tax.

"We expect approximately £3m of net benefit to be reflected in the second half of the current financial year, rising to approximately £35m for the financial year to September 30, 2009, with the full annualised benefit reflected in subsequent years. One-off costs associated with these cost savings are expected to be approximately £12m."

The company managed to grow funds under management over the past three months from £107.3bn to £113.7bn thanks to the acquisition of Goodman Property Investors, which brought with it some £7.3bn.

But withdrawals of £4.7bn and market movements that cut £1.8bn overwhelmed new business wins of £5.6bn.

"Redemptions have continued to run at approximately 50% higher than last year's levels as many investors have reduced risk appetites in current market conditions," the company reported.

It has also decided to stop accepting new emerging markets mandates to cope with inflows although it will continue to accept new investments in its pooled funds.

At the same time it reopened a number of fixed income strategies after absorbing large inflows last year.

Rattray said Aberdeen, which is keen to boost its presence in the hedge fund space and has also been linked to a deal with for-sale F&C Asset Management, would continue to look for further purchases: "If something comes along that is attractive we are happy to look at that."