Jonathan Bloomer: Prudential chief says 'don't compare me to Blair' and shrugs off resignation call

He's aroused some noisy critics, but claims he has good reasons to be cheerful about growth. Jason Nissé reports
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The Independent Online

Jonathan Bloomer could not believe what he read in the papers on Wednesday. The chief executive of Prudential, which had surprised the City with a £1bn cash call the day before, read quotes calling for his head. One, unnamed, fund manager said: "We live in a country where the Prime Minister won't resign despite not finding WMD. Nobody goes easily these days."

Speaking after three days of "constructive" meetings with more than 50 institutional investors, Mr Bloomer is able to laugh about what was written. "It was surprising to be compared to Tony Blair," he says. "I only run a company."

In none of the meetings, Mr Bloomer says, did the question of his resignation ever rear its ugly head. Nor should it, he argues. He is not even considering quitting. "This is the right thing to do," he argues. "There is a very good opportunity for growth."

The Pru's £1bn rights issue certainly caught the market on the hop. But more than the fact of the cash call was the reasons given for it - investing in the UK market. Of the £1bn, between £100m and £200m will be needed to add to the company's capital to meet tougher regulatory requirements. Another £100m is likely to be used to increase its holding in its Indian life assurance venture, ICICI Prudential, from 26 per cent to 49 per cent, taking advantage of likely changes in Indian law.

The rest - anything up to £800m - will be invested in growing the Pru's UK life and pensions business.

Shareholders and analysts have expressed unhappiness about this for a number of reasons. The first is the Pru's apparent change of direction. Three years ago, it failed to buy a large US life company. Then it said it was focussing on growing its business in Asia, something the City found much to its liking. Now it appears to be emphasising the UK. "It's not a question of Asia or the UK," Bloomer argues. "It's Asia and the UK, and the US for that matter."

Analysts point to the Pru's targeted rate of return on investment of 14 per cent in the UK, versus at least 20 per cent in Asia.

Mr Bloomer argues that business has higher risks in Asia and says that the Pru has enough capital available for all its business opportunities in the Far East at the moment.

He rejects comments by analysts that suggest there is little growth in the UK. Mr Bloomer says regulatory changes, the Government's recognition that pensions need attention, and a cooling of price pressures, have created a strong environment for the Pru. This was the case he put to last month's board meetingwhere the rights issue was agreed.

Mr Bloomer also argues that the UK life and pension market has improved greatly since February, when the Pru said it would not need any more funds even if it failed to sell its stake in internet bank Egg.

The disposal of Egg duly failed - "we were a willing seller but there was no willing buyer" - yet here is Mr Bloomer asking a sceptical stock market for money.

The final accusation, that the Pru should have used the bond markets to raise money, is swatted by Mr Bloomer, himself a former finance director of the group.

"We have only £400m to £500m of hybrid debt capacity. If we'd used that up we would have had no financial flexibility," he says.

From apparently dead in the water midweek, Mr Bloomer now feels confident this weekend. "It's been a good few days," he says.