Prudential is preparing to spin off its US unit as it focuses on its main Asian business which boosted operating profit four per cent last year.
The insurance giant reported overall adjusted operating profit from continuing operations of $5.5bn while Asia operating profit jumped 13 per cent to $3.7bn.
It comes after a difficult first half of the year when the business was hit by a decline in Asia sales of 24 per cent year-on-year in large part because of problems in China and Hong Kong.
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Prudential announced it was preparing to split off its US division Jackson through a demerger and may raise between $2.5bn and $3bn in an equity raise.
“The proposed demerger will complete Prudential’s structural shift from a diversified global group to a growth business focusing exclusively on the… needs of people in Asia and Africa,” chief executive Mike Wells said in a statement.
Jackson’s operating profit dropped nine per cent to $2.8bn for the year in large part because reinsurance costs have risen.
“You can see in these numbers why Prudential is keen to get out of the US and focus on Asia,” Nicholas Hyett, equity analyst at Hargreaves Lansdown said.
“We suspect the pandemic will only increase demand for health and protection insurance products in [Asian markets] going forwards,” he added. “By comparison the US business has really struggled… Asset management profits in the market are minimal, as a result capital requirements are high.”
“The demerger of Jackson can’t come soon enough. It will leave Prudential a simpler, more focussed, and ultimately more exciting business.”
The group announced a final dividend of 10.73 cents per share, taking the full year total to 16.10 cents.
Shares inched 0.8 per cent higher in morning trading.