Far East tipped to lift Pru earnings

THE Far East will feature heavily in the Prudential's interim results this week. Analysts expect continued growth from Prudential's Asian and US operations.

Consensus forecasts point to total underlying profits of 963 million for the six months to June, an increase of 13 per cent on the previous year.

Under Tidjane Thiam, Prudential has pursued an aggressive strategy in Asia, which the chief executive says offers the most attractive opportunities for the insurance sector.

His conviction led him into the disastrous and ultimately failed takeover attempt for AIA which left investors with a 377m bill for the botched deal.

There were calls for Thiam's head after the 22 billion pursuit was abandoned last year but he now appears to have the City on side.

Nic Clark at Charles Stanley said Prudential's Asian arm posted a 16 per cent rise in new business profits in the first quarter of this year. However, a downturn in India triggered by regulatory changes held overall growth in Asia to 2 per cent.

Most analysts anticipate single-digit growth for the half-year as Prudential redesigns its products to confirm with new regulations in India. The group says it remains on target to double its 2009 Asian operating profit by 2013, generating 300m of cash annually in the region by that year.

A number of insurers are due to report this week. Legal & General is tipped to post a solid set of half-year figures on Wednesday. It has set a target to deliver net cash of 700m this year, and should confirm it is about half-way towards that goal. Aviva is expected to report strong growth in its motor and household arms when it reports on Thursday. Broker JP Morgan is forecasting a 5 per cent rise in underlying profits to 1.34bn.