Asia brings good fortune to Prudential, as operating profits boosted

Hayley Kirton
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Prudential has received a helpful boost from Asia so far this year (Source: Getty)

Prudential's Asian focus has helped drive new business for the financial services giant during the first half of 2016.

The figures

The company reported operating profits of £2.1bn, up six per cent on a constant currency basis or nine per cent on a reported basis from £1.9bn the year before.

Meanwhile, operating profit from Asia grew to £743m, an increase of 18 per cent on a reported basis, while Asia new business profit was reported as £824m, an increase of 24 per cent on a reported basis.

The company also reported profit after tax of £687m, down 52 per cent on a reported basis or 54 per cent on a constant currency basis from £1.4bn the year before, although this could be explained by various gains and losses on sales not being recognised for accounting purposes.

The company also increased its first interim dividend by five per cent to 12.93 pence per share.

Share in the company are currently trading up 1.9 per cent at 1,418.5p.

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Why it's important

Along with banks, insurers have been having a bumpy time as of late, as Brexit brought volatility to both the markets at large and to exchange rates. In the case of the latter, the fluctuating pound has mostly worked in Prudential's favour, helping profits to inch up slightly.

What Prudential said

Mike Wells, group chief executive, said:

The attractiveness and value to consumers of de-risking their financial lives, whether it is through protecting health or wealth, are accentuated in periods such as the one we have experienced in the first half of this year.

The secular, global trend of increasing self-reliance of the middle class to provide for savings and retirement, be it by a fast-growing, wealthier but younger population in our Asian markets or by a growing number of retirees in the US and the UK, remains intact despite the macro-economic uncertainty including the effect of historic low interest rates.

Prudential is well placed to serve these needs through our leading positions in three of the most attractive insurance regions globally.

Wells added he thought the company remained "on track to achieve our 2017 financial objectives", while the company could "successfully manage the effects of market turbulence" in the US and UK.

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