US and Asia boost Prudential profits

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Double digit profit growth in Asia and the US have helped Prudential to overcome a weaker performance in its domestic market.

The insurer rose to the top of the FTSE 100 after it released full-year results, with shares rising 3 per cent to £17.14, their highest level since March 2015.

The group said that its performance in the UK had been dented by a decision to stop offering large scale annuity deals to corporate pension schemes.

It also took a £175m charge to cover a review into past sales practices in its individual annuity business. There was also a 4 per cent drop in profits at M&G, Prudential’s UK based asset manager.

In Asia and the US, both bigger businesses for Prudential than the UK, operating profits grew by 28 per cent and 21 per cent respectively, although both were helped by movements in exchange rates. In Asia there was particularly strong growth in Hong Kong and China.

The dividend was increased by 12 per cent to 43.5p per share.

Mike Wells, chief executive, said:

Prudential has delivered a strong financial performance in 2016. In a year that has seen continued low interest rates, market volatility and dramatic political change, our results continue to benefit from the scale and diversity of the Group’s global platform, the disciplined execution of our strategy and the strength of the opportunities in our target markets.

Our performance has been driven by Asia, which has delivered a seventh consecutive year of double-digit growth in new business profit, IFRS operating profit and capital generation.

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