RATING agency Standard & Poor’s has rewarded Prudential for its forecast-beating results and better-than-expected costs on the failed AIA deal by removing it from “credit watch”.
S&P put the insurance giant on notice in March due to concerns over the balance sheet strains involved in its $35.5bn (£22.8bn) pursuit of AIG’s Far Eastern arm.
Yesterday it took Prudential off negative watch, citing the FTSE 100 company’s above-consensus £968m first half operating profit and lightened £388m charge for advisers on AIA.
S&P analysts wrote: “We believe Prudential’s very strong financial performance over the past year is indicative of its strong risk management and operational delivery.”
But S&P said it was still “mindful” of what it described as “management’s heightened risk tolerance in strategy execution, as evidenced by Prudential’s decision to pursue the AIA acquisition”.