Pru boost as profits top City forecasts
Published 13/08/2010 | 08:00
Prudential's efforts to rebuild bridges with investors over its botched Asian deal-making were boosted after first-half profits topped City forecasts.
The insurer, which shelled out £377m in the abortive bid to land the Asian arm of US giant AIG, upped its dividend 5% and posted a 35% hike in operating profits to £1.68bn.
Chief executive Tidjane Thiam - who faced calls to quit following the debacle - insisted he had the backing of most shareholders.
"Overall I believe that we have the support of the body of our shareholders and you can only operate on that basis really.
"I hope that these results ... will contribute to give confidence to our shareholders in the fact that we are running this company in the way it should be run."
Mr Thiam - who added that a second attempt to land AIA was "not on the agenda" - insisted the Pru had not taken its eye off the ball despite the fiasco.
"While the proposed AIA transaction was high profile and attracted a great deal of interest, the group continued to perform strongly," he said.
"We very much regret that this transaction did not proceed and that costs were incurred," the company said.
The performance drew favourable comment from the City as shares rose 1%.
Charles Stanley analyst Nic Clarke said: "We were concerned that the significant costs associated with the AIA bid would hit the dividend.
"Not only has the Pru been quick to point out that those costs have been reduced but that the strength of the Pru's performance has actually allowed it to increase the dividend by 5%."
Despite the failure of the bid - which came after major investors baulked at the $35.5bn (£22.6bn) price and AIG refused to budge - Prudential is sticking to its strategy of organic growth in Asia.