Prudential shareholders welcome dividend jump
Prudential rebuilt bridges with its shareholders by announcing a 20% jump in its dividend alongside better-than-expected annual profits.
The insurer's boss Tidjane Thiam faced calls to quit last year after the Pru lost £377m on a failed bid to land the Asian arm of US giant AIG.
Mr Thiam survived the furore and yesterday announced that the Pru's existing Asian operations helped power a 24% rise in operating profits to £1.9bn.
The performance and confidence in future growth prompted Pru to rebase its dividend and increase the pay-out for 2010 by 20% to 23.85p a share.
Prudential shares jumped 3% following the results.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: "This expression of future confidence in prospects should help to mollify shareholders upset by the distraction of the failed AIA approach last year.
"The company is now committed to promoting value over volume in its chosen markets, where the likes of the US and UK should complement the success story in Asia."
Prudential said the emerging markets of South-East Asia - such as Indonesia, Malaysia, Vietnam, the Philippines and Thailand - were particularly attractive.
It added: "They remain the priority destination for our new capital investment. With our compelling platform of distribution, brand and product development capabilities in the high growth markets of Asia, we believe we are particularly well positioned to take advantage."
In December, Mr Thiam set out his target to double the value of profits from Asian new business by 2013, compared with the £713m in 2009.
It is more cautious over mature western economies where unemployment is high and progress is expected to be more sluggish. In the UK, the Pru has concentrated on driving profits through value rather than volume growth.
The Pru said the UK business remained a market leader in individual annuities and in with-profits business. Cost savings also helped deliver an 11% rise in UK operating profits to £673m, while the division contributed net cash of £420m to the group last year.
Profits in Asia were up 29% to £536m and rose by 35% to £833m in the US.
Mr Thiam said: "We have achieved a strong performance in 2010, with results ahead on all key measures."