Pru to boost payout after £760m profit

PRUDENTIAL will smash profit forecasts and hike its dividend this week as it tries to win back investors’ confidence following its disastrous $35.5bn (£22bn) attempt to buy AIA.

The insurer is expected to report first-half operating profits of more than £760m, the top end of City consensus, boosted by strong performance in Asia. Prudential has already said sales for the first five months of the year soared 27 per cent to £1.4bn.

One analyst said the FTSE 100 giant would “throw everything it’s got” at the interim figures after the collapse of its bid for AIG’s Far Eastern arm in June left investors fuming. Prudential will increase its first-half payout by at least five per cent to 6.6p and try to placate shareholders by revealing advisory costs for the transaction came in at less than the £450m previously published, thanks to last-minute haggling with Credit Suisse.

Chief executive Tidjane Thiam and chairman Harvey McGrath have faced calls to resign since the fiasco. They are expected to say they are still listening to shareholders. Although neither man will announce his departure, it is thought McGrath could leave before the end of the year.

One large investor said: “I would like there to be change at the board level and I would be supportive of [McGrath exiting]. The numbers are good but over the next three years it’s going to be much more competitive.”