Legal & General reports rise in profit in first half of 2017

Caitlin Morrison
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L&G said it's not complacent about the economy which has some "structural" weakness

Legal & General (L&G) has reported a rise in profit and an increase in funds under management in the first half of the year.

The figures

Operating profit rose 27 per cent to £988m during the first six months of the year.

L&G retirement continued to grow, with operating profit up 40 per cent to £566m, and L&G Investment Management's funds under management rose 13 per cent to £951m.

The company hiked its interim dividend by 7.5 per cent to 4.3p per share.

Shares in the firm dipped 0.9 per cent in early trading but were down 2.34 per cent at 269.5p by mid-morning.

Why it's interesting

Operating profit came in ahead of a forecast £821m, however profit from the general insurance arm of the business fell by 52 per cent in the first half, to £15m from £31m.

The group said this was "primarily due to higher than expected costs from non-weather related claims in Q1, predominantly escape of water, in line with wider market experience".

What L&G said

"Our consistently improving financial performance is due to: investing for the long term in our market leading businesses, excellent execution by my colleagues and delivering value for customers," said chief executive Nigel Wilson.

"Our strategy, based around six long term macro and demographic growth drivers, not only allows us to grow L&G's business, but also the scale of our long term capital enables us to support inclusive growth across the UK. We are replicating our successful UK model with measured expansion in the US, where we are experiencing increasing customer acceptance and an ever improving financial performance.

Our business model has proven to be resilient to political, economic and regulatory uncertainties. We are not being complacent as we recognise that there are currently some structural weaknesses in the UK economy.

"Notwithstanding this we have tremendous momentum across our business, a strong AA- rated balance sheet and increasing access to global growth opportunities, therefore we remain confident in our ability to deliver growth."

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