Legal and General hikes dividend by 25pc as profit beats forecast

British life insurer Legal & General raised its shareholder payout by a quarter as it reported better-than-expected first half profits, helped by strong growth at its investment management and international divisions.

L&G, Britain's fourth-biggest insurer, made a pre-tax operating profit of £523m in the six months to June 30, down from £542m a year earlier, the company said on Wednesday.

Analysts had expected a profit of £508m, according to the average of 13 forecasts collected by the company.

The 175-year old insurer, which in May flagged its capacity to grow its dividend, also increased the interim shareholder payout by 25 per cent to 1.66 pence per share, ahead of the 1.61 pence pencilled in by analysts.