(Adds quotes, detail, share movement)
By Richa Naidu
LONDON Aug 12 UK insurer Prudential Plc
posted a jump in first-half profit as a strong performance in
Asia and the United States offset negative currency swings in
some of its most important markets.
Shares in Britain's biggest insurer by market capitalisation
rose as much as 3 percent on Tuesday, making it the top gainer
on the FTSE 100 Index, after the company boosted its
interim dividend by 15 percent to 11.18 pence per share.
Prudential's operating profit, based on IFRS international
accounting standards, rose 17 percent to 1.52 billion pounds
($2.55 billion) on a constant-currency basis, boosted by fee
income from its U.S. business and higher sales of health and
protection products in Asia.
Operating profit rose by just 7 percent on an actual
exchange rate basis, however. Prudential blamed the depreciation
of key Asian currencies against the pound.
"The Asian performance came despite political uncertainties
in Indonesia and Thailand, with Hong Kong up an eye-catching 32
percent," UBS analyst James Shuck wrote in a note.
"Importantly, there are no changes to the outlook for Asia,"
he said, maintaining his "buy" rating on the stock.
A growing, wealthy middle class in Asia has been a focus for
the British life insurance and pensions heavyweight,
particularly in countries whose citizens and businesses are
largely uninsured such as Indonesia, Malaysia, Philippines,
Vietnam and Thailand.
Chief Executive Tidjane Thiam said the business fundamentals
in Asia remained "compelling". New business profit grew 15
percent at its Asia life business.
Ahead of the results, 21 out of 24 analysts had either a
"buy" or "strong buy" rating on the stock, according to Thomson
"It's largely to do with the growth prospects in Asia being
under-appreciated," said UBS analyst Shuck. "No one has the same
distribution network that Prudential does in Asia, apart from
AIA, which is a Hong-Kong listed company."
ISSUES AT HOME
The company weathered changes to British pensions announced
in March. The reforms scrapped a requirement for retirees to
swap their pension pots for an annuity, which provides an income
Prudential's UK life business posted a 10 percent rise in
IFRS operating profit to 374 million pounds as it made up for a
hit to individual annuities by selling 104 million pounds of
'bulk annuities' in the six months ended June.
Rival pensions groups such as Legal & General and
Aviva have been mitigating the impact of the reforms by
striking such bulk deals with firms looking to outsource all or
part of their pension scheme liabilities.
During a media call, Thiam brushed aside concerns about any
impact on Prudential's business as a result of Scotland's vote
for independence next month.
He said Prudential would continue operating in Scotland and
fulfill its obligations to customers and staff "no matter what
Thiam's comments come a week after Edinburgh-based rival
Standard Life reiterated plans to potentially relocate
some operations to England in the event of a 'yes' vote that
could create risks for its business.
($1 = 0.5958 British Pounds)
(Reporting by Richa Naidu; editing by Laura Noonan and Tom