Pru results a boost for investors … and the boss

Published on Tuesday 8 March 2011 22:07

INSURANCE giant Prudential surprised shareholders by proposing a 20 per cent increase in its final dividend yesterday as it posted results that impressed the City and helped put last year's failed takeover of American Investment Group's Asian business behind it.

The Pru more than doubled its net profit during 2010 despite writing off 377 million for the AIG debacle.

The results were a boost for chief executive Tidjane Thiam, who had been in his post less than a year when he launched a $35.5 billion (22bn) bid for AIA, the Asian unit of AIG.

The bid faltered as shareholders of the Pru balked at the high price and AIG refused to accept a lower price, prompting calls for Thiam to quit.

Yesterday the chief executive said the company had set itself "ambitious objectives for cash generation not only from Asia but also from other parts of the group".

He added: "The quality of our strategic options, our discipline in putting value ahead of volume and our focus on execution should allow us to continue to grow profitably and to generate significant returns for our shareholders."

Thiam declined to comment on whether shareholders were still pushing for his resignation. Neither would he acknowledge reports that some investors had asked the company to limit his performance-related bonuses for 2010. Thiam's pay package will be made public when the Pru issues its annual report on 13 April.

The insurer reported a net profit of 1.43 billion for last year, up from 676m in 2009 and better than analysts had expected.

Eamonn Flanagan, analyst at Shore Capital, said: "Prudential reported a terrific set of 2010 results with all key metrics ahead of our forecasts and, more often than not, ahead of the top end of market expectations."

The firm has recommended a final dividend of 23.85p, bringing the total dividend for the year to 23.85p per share, up from 19.85p in 2009.