Insurer Prudential says profits soar, despite failed AIA bid

12th August 2010, Comments 0 comments

British insurance giant Prudential said on Thursday that profits jumped 41 percent in the first half, and cut the cost of its failed takeover of US insurance giant AIG's Asian unit AIA.

Operating profit surged to 968 million pounds (1.177 billion euros) in the six months to the end of June, boosted by soaring sales in Asia, the group said in a results statement.

That compared with profit of 688 million pounds in the same part of 2009 and easily beat market expectations of 724 million, according to analysts polled by Dow Jones Newswires.

The group also switched into a net profit of 442 million pounds in the first half, compared with a loss of 254 million last time around.

Prudential added that the failed 35.5-billion-dollar (27.5-billion-euro) takeover of AIA, which collapsed in June, would cost 377 million pounds. This less than the original estimate of 450 million pounds.

Chief Executive Tidjane Thiam, who came under fire from some shareholders over his leading role in the failed AIA bid, said that Asia held the biggest potential and expressed "disappointment" over the failure of the takeover.

"Prudential has delivered strong results during the first half of 2010 as we continued to allocate capital to the geographies and products with the best profitable growth prospects, in line with our strategy," Thiam said in the earnings release.

"Asia remains the region with the best potential for high and profitable growth, and despite our disappointment at not being able to further accelerate our strategy through the transaction with AIA, the prospects for future profitable organic growth remain excellent.

"We are cautious about the outlook for the western economies. However, our Asian business gives us a material and powerful presence in the most attractive markets in our industry, and one that will continue to underpin our growth."

Thiam, asked by reporters on whether the group was ruling out another tilt at AIA, replied:

"Yes, it's ruled out. It's not on the agenda. We tried, it didn't work out.

"So we're back on the organic growth strategy, which is producing excellent results," he added in a conference call.

© 2010 AFP

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