Hong Kong-listed insurer AIA Group has lifted its final dividend by a quarter as it reported “excellent results” for the 2016 financial year.
Net profit after tax rose by 50.9 per cent to $4.21bn in the 12 months ended December 31, as total revenues rose by about a fifth to $20.44bn. The pick up in revenue was partly due to higher investment returns as AIA booked net gains on its equity and debt securities last year, compared to losses in 2015.
The company also pointed to the value of new business (VONB), a key measure, which rose 28 per cent last year to $2.75bn. Hong Kong, which accounted for about 42 per cent of adjusted VONB in 2016, saw year-on-year growth of 42 per cent to $1.16bn, while growth in China was up 54 per cent to $536m.
Mark Tucker, AIA Group’s chief executive, said:
AIA has delivered an excellent set of results in 2016. We have achieved record new business profits, significant earnings growth, strong free surplus generation and a step up in shareholder dividends.
The board recommended lifting the company’s final dividend by 25 per cent to 63.75 US cents, and taking the full-year payout to 85.65 cents, 23 per cent higher than in 2015.
Mr Tucker added:
We have made an excellent start to 2017 with strong value of new business growth in the first two months of our financial year.
The company’s share price overcame mid-year jitters as China’s Union Pay, the state-backed bank card provider, banned mainland customers from using its bank cards to purchase most kinds of insurance policies in Hong Kong in a move aimed at limiting capital outflows from China. However, the share price has retreated 9.1 per cent from a record high hit in October.