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Prudential’s new chief executive Anil Wadhwani said he would “do things differently” at the FTSE 100 insurer by investing in fast-growing markets across Asia and Africa and prioritising dividends.
It is the first time Wadhwani, who took over the group in February, has publicly set out his plan for the company, which has gone through a turbulent restructuring and shed its US and European operations.
His remarks came as Prudential reported its results for the first half of the year on Wednesday. New business profits, an important measure of predicted earnings on newly sold products, rose 39 per cent to $1.5bn, slightly above analysts’ expectations.
The figure surged in Hong Kong, rising 218 per cent to $670mn after Covid-19 restrictions ended, allowing mainland visitors to travel to the territory. But it dropped in mainland China, falling 16 per cent to $171mn because of lower sales and “averse economics”, Prudential said.
Prudential’s shares were little changed in Hong Kong at HK$98.2.
Wadhwani is under pressure to generate growth at Prudential, since its rationale for breaking away from its UK and US businesses was to focus on fast-growing Asian markets. The insurer said it was “highly optimistic of the medium- to long-term growth potential” of China, despite the country’s sluggish economic growth.
The insurer announced an interim dividend of 6.26 cents per share, up from 5.74 cents a year ago, and said adjusted operating profits rose 6 per cent on a constant currency basis to $1.5bn.
Prudential, the UK’s largest insurer by market value, whose history dates back to 1848, holds a joint primary listing and headquarters in London and Hong Kong and retains its UK domicile. Wadhwani is the company’s first chief executive to be based in Asia.
The Asia pivot has left the group, which has a market cap of £27bn, focused on mainland China and other Asian markets, with a smaller business in Africa. The company said there were “huge opportunities” to grow its franchise in India.
But the shift has raised questions about the future of its London headquarters and it has been pressed by activist shareholder Third Point to change its UK domicile.
The strategic shift took place at an awkward time as pandemic restrictions stopped the flow of mainland Chinese visitors into Hong Kong, an important source of life insurance sales for the group. With the border reopened earlier this year, analysts expected the rebound in sales to help the group’s fortunes.
New business profits rose in Prudential’s markets of Indonesia and Malaysia, though they fell 20 per cent in Singapore, it said.
Wadhwani was confronted with a scandal just three months into his tenure when Prudential’s chief financial officer James Turner resigned following an investigation into his conduct.
Prudential said it was linked to “a recent recruitment situation” where Turner’s actions “fell short” of its standards, without setting out details.