August 8, 2018 / 9:36 AM / 2 months ago

UPDATE 3-Asia drives profits as Prudential prepares for split in late 2019

* H1 operating profit up 9 pct to 2.4 bln stg

* Asia business leads profit beat

* Interim dividend up 8 pct to 15.67 pence (Adds Bloomberg report on Ping An, updates shares)

By Carolyn Cohn

LONDON, Aug 8 (Reuters) - Insurer Prudential is unlikely to split into two before late 2019, it said on Wednesday as growth in Asia helped it beat first-half profit forecasts.

Britain’s largest listed insurer said in March it planned to demerge M&G Prudential, its UK and Europe life insurance and asset management business, into a separate business with a London listing. The remaining Prudential business will focus on Asia and the United States.

Other insurers and asset managers such as Old Mutual and Standard Life Aberdeen have also restructured their businesses as they grapple with increased regulatory requirements and competitive pressures.

Bankers and analysts have speculated about further carve-ups of the group.

Chinese insurer Ping An is looking to buy Prudential’s Asia business, Bloomberg reported on Wednesday, helping send Prudential’s shares up more than 3 percent to the top of London’s FTSE 100 index. The insurer has not been approached by Ping An, a source told Reuters.

Work on the M&G Prudential listing was likely to finish by late next year, Prudential’s Chief Executive Mike Wells told a media call though he added that the precise date would likely be affected by “variables we can’t control”.

The need for court-sanctioned transfers of insurance contracts following Prudential’s sale of 12 billion pounds in annuity policies to Rothesay Life in March mean the listing date is unlikely to be sooner, Wells said.

M&G Prudential had made good progress towards the demerger on areas such as debt restructuring and management changes, Wells said.

After the spin-off, Prudential’s international business will be subject to Hong Kong regulation but will remain headquartered in Britain, Prudential said in a statement.

M&G Prudential and the international business are both likely to be in the FTSE 100 index after the demerger. Prudential reported a 9 percent rise in first-half operating profit to 2.4 billion pounds ($3.1 billion), boosted by its Asian business, its largest business in terms of operating profit.

Profit from new business in Asia rose 11 percent and Asia operating profit increased by 14 percent on a constant currency basis, Prudential said.

Group operating profit was forecast at 2.25 billion pounds, according to a company-compiled consensus.

“Pru remains the blue riband company within the sector,” Panmure Gordon analyst Barrie Cornes said in a note, reiterating his buy rating on the stock.

Rival Aviva last week announced a 2 percent dip in first-half operating profit.

Legal & General is due to report first-half results on Thursday.

Prudential said it would pay an interim dividend of 15.67 pence per share, up 8 percent and in line with forecasts.

Prudential shares were up 3.3 percent at 18.15 pounds per share at 1557 GMT, the best performer in the FTSE 100.

$1 = 0.7747 pounds Additional reporting by Noor Zainab Hussain in Bengaluru and Emma Rumney in London, editing by Huw Jones/Jane Merriman/Susan Fenton

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