British insurance giant Prudential insisted Wednesday that growth in Asia was the group’s priority as it announced a doubling of net profits for last year to £1.4 billion.
Prudential, which in 2010 failed with a massive takeover bid for the Asian arm of US insurer AIG, reported profit after tax of £1.43 billion (1.67 billion euros, $2.31 billion), compared with net earnings of £676 million in 2009. The group unsuccessfully bid $35.5 billion for AIA. “With or without AIA, Prudential has continued to power ahead in the Asian region,” said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.
Prudential chief executive Tidjane Thiam welcomed the group’s “very strong performance” in 2010 and said expansion in Asia would remain its priority. “At the centre of our strategy is the acceleration of our profitable growth in Asia, which offers many of the highest growth and return opportunities. “The emerging markets of South-East Asia — such as Indonesia, Malaysia, Vietnam, the Philippines and Thailand, together with Hong Kong and Singapore — are particularly attractive.
“They remain the priority destination for our new capital investment. With our compelling platform of distribution, brand and product development capabilities in the high growth markets of Asia, we believe we are particularly well positioned to take advantage of the considerable opportunity that the region offers,” Thiam said in the earnings statement. Prudential posted a 24 percent rise in 2010 operating profit to £1.94 billion, on strong sales of its policies in Asia. That beat analyst forecasts for a rise to £1.73 billion, according to Dow Jones Newswires. The group’s shares shot to the top of London’s FTSE 100 index, showing a gain of 4.15 percent to 743.6 pence in midday trade, after the group also hiked its latest dividend by a fifth. The FTSE was down 0.40 percent at 5,950.94 points.
Britain’s biggest insurer by market value said its failed AIA takeover bid, which collapsed last June, would cost the group a pre-tax sum of £377 million, an estimate that was unchanged from six months ago. Thiam, born in the Ivory Coast but with French nationality, had come under heavy fire over the failed takeover from some shareholders, who accused him of taking a huge gamble by making the bid just eight months into his tenure. Thiam defended the bid as a potentially transformational deal that would have made Prudential the world’s top non-Chinese insurer by market capitalisation, ahead of competitors Allianz and AXA.
It would also have transformed Prudential into an international insurance powerhouse — but the high price asked by AIG caused a shareholder revolt and Thiam was unable to persuade AIG to lower its demands. Analyst Hunter said Wednesday that Prudential’s “future confidence in prospects should help to mollify shareholders upset by the distraction of the failed AIA approach last year.”
London, March 9, 2011 (AFP)
