Legal & General share price leaps as it appoints new chairman and tells investors: "We're fine with Brexit"

Emma Haslett
Follow Emma
Commuters Take To The Road And Rail In London
City shares plummeted yesterday (Source: Getty)

Pensions giant Legal & General moved this morning to reassure its shareholders that Brexit is going to be a breeze - as it appointed former government asset management boss Sir John Kingman as its new chairman.

In a statement this morning L&G, whose shares fell 13 per cent between the market close on Thursday and yesterday evening, said it had planned for a 50-50 probability of a vote for the UK to leave the EU.

"We positioned our balance sheet accordingly to reduce risk for our customers and shareholders," it added.

Read more: We must fight to avoid permanent injury to Britain's vital finance industry

"We undertook a number of derisking actions in respect of our asset portfolios, including the traded equities held within our shareholder funds, before the referendum to mitigate our balance sheet against the downside risk of a Leave vote."

The company drew attention to the £5bn surplus of its solvency II capital - ie. if anything goes wrong, it has a £5bn cushion. It also pointed out that it has a diverse asset portfolio, the credit component of which has been "actively de-risked" in recent months.

In other words: it's all going to be ok. Investors certainly thought so: shares were up 9.6 per cent in early trading, at 180.7p.

Meanwhile, the company has been put into an arguably pretty safe pair of hands, in the form of Kingman, a former second permanent secretary to the Treasury, and the former chief executive of UK Financial Investments, the government body which manages the bailed-out banks it splashed cash on during the financial crisis.

"John's grasp of complex financial markets was a hallmark of the UK government's successful handling of the 2008-9 financial crisis," pointed out Rudy Markham, L&G's interim chairman.

If he can navigate the financial crisis, surely a little thing like Brexit is nothing to worry about...?