Prudential rides Asia to bumper profits

10 Aug 2012 | News - Comment now

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Prudential rides Asia to bumper profits

The UK’s largest insurer, Prudential (LON:PRU), has seen its operating profit rise 13 per cent to £1.162 billion in the first half of the year.

The group’s Asia life-insurance business contributed an operating profit of £409 million to this, up more than a quarter on the same period in 2011.

Prudential’s group chief executive, Tidjane Thiam was delighted with the strong performance in defiance of what he termed ‘considerable global macroeconomic challenges’.

‘Our track record of profitable growth has continued as we have delivered our highest-ever first-half new-business profit and IFRS operating profit of £1.14 billion and £1.16 billion respectively. Net cash remittances from our business units to the group have grown in line with our strategy and we retain one of the strongest capital positions in the sector’.

The firm has pursued a strategy of recycling revenues from its long-established business in Britain to faster-growing markets in Asia. The returns from Asia since January have led Thiam to comment that ‘our business in Asia continues to deliver both growth and cash for our shareholders’.

Thiam singled out the group’s asset-management brand, M&G, for special praise. He lauded net inflows of £4.9 billion in the half, 69 per cent higher than in the same period last year, as ‘a particularly good performance in a difficult investment market’.

‘Once again’, he added, ‘our high-margin retail business continues to be the driver of our strong inflows being the market leader in UK retail net flows for the 14th quarter in a row’.

Prudential’s asset-management business is now the largest in the UK retail market by funds under management.

M&G, including Prudential Capital, delivered an operating profit of £199 million in the six months to June, exactly the same as it had been in the first half of 2011.

Following the release of its results, Prudential’s share price slipped almost half a per cent to 800.5p. The company also announced a 2012 interim dividend of 8.4p per share, an increase of 5.7 per cent.

Related topics: Asian growth, Insurance, M&G, Prudential

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