Prudential rules out big buys in Asia as H1 profits rise - UPDATE

12th Aug 2014 09:36

Prudential ruled out big acquisitions in Asia as its businesses in the region and the US helped the insurer to boost first-half operating profits by 17% to £1.52bn.Chief executive Tidjane Thiam said the group would grow in Asia by increasing its own business internally, but would not be making major acquisitions on the scale of the ill-fated move for Asian rival AIA in 2010."That is the only acquisition we wanted but we did not get it, it's gone and we're growing organically," Thiam told reporters on a telephone news conference.He also refused to comment on a potential exit of the UK from the European Union and said the possibility of a Scottish vote for independence from the UK was an issue for the Scots.Rival insurer Standard Life has hinted at the possibility of moving its head office operations out of Scotland in the event of independence."We'll look after our staff and customers whatever the result of the referendum," Thiam said.The Pru said first-half fee income rose 24% to £764m, mostly as a result of the success of its strategy in the US, where its life insurance business boosted operating profit by 28% to £686m.In the UK, life IFRS operating profit rose 10% to £374m despite changes triggered by the government's decision to axe rules forcing people to buy annuities with their pension pots.The group's retail annuity sales fell 43% but it said its UK business completed sales of £104m of bulk annuity transactions above its hurdle rate and significantly increased sales of with-profits bonds by a quarter.The Pru said it believed there would be a role for annuities in pension provision in the longer term despite the changes, but said it was looking at other ways of ensuring what it described as "longevity protection".The Asian business renewed and expanded its long-standing bancassurance partnership with Standard Chartered for another 15 years and increased operating profit by 19% at constant exchange rates to £525m, although it faced currency headwinds.Thiam highlighted growth opportunities in Asia despite the changes in the UK and uncertainty in the eurozone.He said: "The fundamentals for our businesses in Asia remain compelling - strong economic growth and significant and rising demand for insurance from a rapidly growing, increasingly prosperous and under-insured middle class."Shares in the Pru rose 28.5p or 2.1% to 1367.5p at 11:10 in London.PW