Prudential warns of job cuts following merger with M&G
Prudential has announced plans to merge its M&G asset management arm with its UK life and pensions business, but warned of job losses under cost-cutting plans from the move.
The insurance giant said the combined business will be called M&G Prudential and will manage £332bn of assets for more than six million customers in the UK and internationally.
It revealed that job cuts are likely as it looks to save £145m a year by 2022, but it said it was too early to say how this will affect the combined workforce of nearly 7,300 in the UK.
Prudential chief executive Mike Wells said: "M&G and Prudential UK & Europe have a long history of collaboration and we are fortunate to have two highly respected brands.
"Combining these businesses will allow us to better leverage our considerable scale and capabilities."
M&G - bought by Pru in 1999 - currently has nearly 2,100 staff in the UK, while the life and pensions division employs more than 5,200.
The group said M&G Prudential will be led by John Foley, current chief executive of Prudential UK and Europe, while Anne Richards will continue to head up M&G.
Ms Richards and Clare Bousfield, who leads insurance for Prudential UK and Europe, will become deputy chief executives of the combined business.
Pru said it will also be investing in the newly merged UK arm, with plans to "develop and fund joint product propositions and to build new digital service and distribution to meet fast-changing customer needs".
Mr Wells added: "In recent years, we have seen a convergence in the investments and savings markets, with customers across all geographies and demographics demanding more comprehensive solutions to their financial needs."
The plans were announced alongside Prudential's half-year results which showed its fast-growing Asian business once again led profits higher, with overall operating profits up 5% to £2.4bn for the six months to June 30.
Pre-tax operating profits across Asia lifted 16% to £752m at constant currencies - but soared by 30% including the benefit of currency translation, thanks to the weak pound. In the UK, operating profits edged 1% higher to £480m despite a 22% surge in life retail sales to £721m.