UK's Prudential pays bumper dividend as profits climb

LONDON, March 13 Wed Mar 13, 2013 4:27am EDT

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LONDON, March 13 (Reuters) - Prudential, Britain's biggest insurer, raised its dividend by a bigger-than-expected 16 percent after continued strong growth at its flagship Asian operations drove a forecast-beating jump in profit.

Prudential investors will get a total of 29.19 pence per share out of 2012 earnings, surpassing the 26.65 pence expected by analysts in a company poll, the insurer said on Wednesday.

The bigger payout, which contrasts with dividend cuts from British rivals Aviva and RSA, reflected a 25 percent jump in Prudential's 2012 operating profit to 2.53 billion pounds ($3.77 billion), ahead of the 2.33 billion pencilled in by analysts.

Prudential, founded 165 years ago in London, has avoided the economic turbulence afflicting its European competitors thanks to a strong focus on fast-growing Asia, the source of nearly half its sales.

Shares in Prudential have risen 43 percent in the past year, more than double the 21 percent gain achieved by the wider European sector. The stock was up 0.7 percent at 1,036 pence by 0822 GMT.

Insurers' dividends have been under scrutiny since RSA and Aviva's reduced payouts triggered concern that years of ultra-low interest rates are taking their toll on the sector's finances. However, most big European insurers have maintained or increased their 2012 payouts.

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