Prudential PLC (LON:PRU) reported a 6% rise in annual operating profit before tax that beat market forecasts, led by growth in its Asian division.
The insurance and pension giant, which is in the process of spinning off its UK and Europe operations into a separate company called M&G, said operating profit before tax rose to £4.8bn, ahead of analysts’ expectations of £4.6bn.
The Asia businesses delivered a 14% rise in profit to £2.2bn on the back of a 14% rise in new business profit.
READ: Prudential says M&G demerger on track as it reports growth in new business profits
The UK and Europe unit achieved a 19% increase in profit to £1.6bn, supported by a £440mln reserve release as the company revised its estimates for how long annuity customers might live following the release of new longevity data.
However, profit in the US fell 11% to £1.9bn, reflecting higher market-related amortisation of acquisition costs and lower spread-based income.
M&G demerger making progress
Prudential said it was making “continued progress” in the demerger of M&G through a stock market listing, having reorganised its UK and Hong Kong businesses, sold a £12bn chunk of its annuity book to Rothesay and started the process of splitting the group’s debt.
“The intended demerger of M&GPrudential from Prudential plc will further enhance the strategic focus of both businesses,” said chief executive Mike Wells.
“I am confident that, given the extent of our opportunities and our proven ability to execute and innovate, we are well positioned to continue to grow profitably.”
The company ended the year with a Solvency II capital surplus of £17.2bn, equivalent to a ratio cover of 232%.
Prudential raised its full-year ordinary dividend by 5% to 49.35p per share.
Prudential to buy stake in African life insurer
The group also announced it would buy a majority stake in Group Beneficial, an African life insurance firm.
“The acquisition will significantly add to Prudential's growing scale in Africa, and is subject to various conditions and regulatory approvals,” Prudential said.