The Head Offices of Prudential, in central London. The Pru, which reported a 27% drop in half-year operating profits to 397 million, estimated a 40% fall in its annual payout to 16p a share. 16/10/03: The Insurance giant Prudential said it was still awaiting a full recovery in United Kingdom consumer confidence after figures showed sales remaining under pressure.
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The group warned it expects “high levels of volatility and macroeconomic uncertainties” to continue into the fourth quarter.
Retail investors pulled the funds out of its M&G investments arm during the third quarter after China’s economic slowdown hit markets.
Prudential was boosted by a 209% increase in drawdown sales in the third quarter, but its fund group M&G saw £3.9 billion of outflows for its retail business over the period.
New business profit for the first nine months of the year swelled by 17% to GBP1.76 billion from GBP1.51 billion.
The overall increase came about as new business profit in the USA increased by 21% to GBP186.0 million from GBP154.0 million, while new business profit in Asia rose by 11% to GBP312.0 million from GBP281.0 million.
However, funds under management at Prudential’s asset management business, M&G, slipped 5pc to £1217.3bn as a wave of retail customers withdrew their investments.
The GBP1.2 billion of net inflows into M&G’s institutional business were not enough to overcome the pressure on the retail side of the business, meaning that M&G’s total net outflows amounted to GBP2.7 billion in the quarter.
Wells was promoted to group CEO in June following Tidjane Thiam’s move to Credit Suisse Group AG.
He added Pru was benefiting in the United Kingdom from a “proactive response to the changes brought about by pension freedom reforms”.
“This performance reflects strong growth in our Asian and United Kingdom life operations and continued new business discipline in the USA”, Chief Executive Officer Mike Wells said in the statement.
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Looking ahead, the company said it will continue to perform well through 2015, highlighting the quality of its execution and well-defined successful strategy.
