ibusinesslines.com March 18, 2018

Prudential To Demerge Fund Manager M&G

15 March 2018, 02:34 | Kelvin Horton

Prudential shares jump on spin-off news: This is how the City is reacting

Prudential to spin off UK and European business

On March 14, London-based business Prudential, one of the biggest insurance and financial services companies in the world, announced it will split into two separately listed companies, demerging its United Kingdom and Europe division from its worldwide operations.

The group announced plans to combine its United Kingdom savings and investments businesses to create a single entity named M&G Prudential in August.

M&G Prudential will be led by its current chief executive John Foley and will continue its drive to become a more capital-efficient and customer-focused business, targeting growing demand for comprehensive financial solutions.

John Foley, Chief Executive of M&G Prudential, said: "The demerger will allow M&G Prudential to play a broader leadership role in the fast-changing savings and investments market within the United Kingdom and Europe".

The group said it will be seeking a separate listing on the London Stock Exchange for M&G Prudential.

But with £12bn of Prudential's existing annuity portfolio to transfer to Rothesay Life, combined with the recent news that Phoenix is taking on Standard Life's annuity portfolio, the total value of annuity liabilities taken on by the eight insurers now active in the market is expected to hit £40bn in 2018. The transfer is expected to be completed by the end of 2019. Looking forward, we believe we will be better able to focus on meeting our customers' rapidly evolving needs and to deliver long-term value to investors as two separate businesses.

Following the demerger, shareholders will be left with shares in both companies.

Prudential group chief executive Mike Wells says: "Following separation, M&G Prudential will have more control over its business strategy and capital allocation". Prudential's primary listing will be in Hong Kong.

Meanwhile, Prudential will be able to focus on the attractive returns and growth potential of its business in Asia and the US. Proceeds will be used to support the group's demerger.

In the US, IFRS operating profit increased by 3 per cent, due mainly to growth in fee income on higher asset balances, which outweighed the anticipated reduction in spread earnings.

The UK and Europe region posted a 10% increase in operating profit and a 28% rise in net business profit.

For fiscal 2017, Prudential's profit before tax grew to 3.97 billion pounds from last year's 3.21 billion pounds.

Hikma was another big mid cap gainer, jumping 14 percent after the drugmaker's full-year profit and revenue met analyst expectations.

Total revenue, net of reinsurance, was 86.56 billion pounds, up from 71.84 billion pounds a year ago.

The company improved its capital strength with Solvency II surplus rising by 6% to £13.3bn and the ratio increasing by 1 percentage point to 202%.

Other News

Trending Now

Russell Westbrook becomes fourth player ever with 100 triple-doubles
There isn't much left to say about Westbrook, who obliterated the Hawks' defensive efforts with his energy and offensive dynamism. Westbrook was the third-fastest to accomplish the feat after Oscar Robertson (277 games) and Magic Johnson (656 games).

Barcelona vs Chelsea match to show live on GOtv
The Blues will need to win by a minimum scoreline of 1-0, no mean feat when one takes into account the opposition and the venue . Antonio Conte doesn't hide it: He expects Chelsea to struggle against Barcelona at the Camp Nou.

Microsoft to open 2 cloud centres in Germany
Over the last three years, we've more than doubled the number of Azure regions available. The company is also expanding cloud options for it customers in Germany .

Snow showers working way back into area through mid-week
By Tuesday morning, our temperatures will be back at the freezing mark and potentially sub-freezing by Thursday morning. It's a windy and cold Tuesday morning in the mountains, where a few more snow showers are falling.

American Idol: Katy Perry kissed a boy, he didn't like it
Katy beckons the boy over to the panel before letting him plant a wet one on her cheek. Representatives for ABC and Katy Perry did not respond to requests for comment.

Nate Solder To Sign With New York Giants
If the Broncos land Solder, they would likely move Garett Bolles to right tackle (or perhaps move Solder to right tackle). The Hall of Fame-bound quarterback should feel more comfortable with Solder holding down the left side in 2018 and beyond.

France to Sue Google, Apple Over 'Abusive Trade Practices' - Economy Minister
Commerce Secretary Wilbur Ross about the U.S. tax plan and is expected to call for an exemption for countries in the EU. The findings of a similar inquiry into Amazon a year ago are being reviewed by a tribunal, his office said.