Buoyant Prudential committed to growth

Prudential yesterday renewed its long-term commitment to expansion by acquisition in its key UK market, as it announced an 8.6 per cent increase in total operating profits to pounds 873m in 1996.

But Sir Peter Davis, the company's group chief executive dampened down hopes of an imminent takeover raid on a building society, arguing: "We can't see value in that from a shareholder perspective."

The company said its total profits before tax were pounds 1.6bn last year, up from pounds 1.04bn in 1995. The Pru's profits rise was boosted by pounds 766m realised by the sale of its reinsurance arm, Mercantile & General, to Swiss Re last year.

Sir Peter said yesterday the disposal of Mercantile & General, plus the launch of a banking arm, meant the Pru was focusing even more on markets it believed were crucial to its long-term success. This included an acquisition strategy in areas reflecting its long-term ambitions in the market.

Sir Peter said: "We have recently submitted an offer for Scottish Amicable. This company has a respected brand name and significant presence in the independent financial adviser [IFA] market in the UK and, if successful, the acquisition would enhance our core UK operations."

He refused to comment on further targets, especially in the building society sector.

"We said 18 months ago that we wanted to buy a life company with an IFA presence. We indicated 12 months ago that we might be interested in adding a branch network alongside our new banking operation. But at the moment we are concentrating on shareholder value. The time is not right."

Prudential's continuing growth came as the company announced that it is currently processing more than pounds 100m in mortgage applications for its new home loans and banking subsidiary, launched in October, which has also taken pounds 98m in deposits.

Sir Peter said the seemingly slow start lay in the Pru's unwillingness to roll out its products across the entire salesforce until they are fully trained.

Jackson National Life, the Pru's US subsidiary, recorded operating profits up 35 per cent to $512m (pounds 350m), achieved through diversification both of its product range and distribution network. The Prudential also announced that it is paying a record pounds 1.8bn in bonuses on its UK with-profits policies. For 10-year policies with monthly payments of pounds 50, payouts of pounds 9,274 involve a drop in returns from 8.9 per cent last year to 8.4 per cent in 1997. However, maturing 25-year policies with the same premium will pay pounds 101,215, a 13.1 per cent rate of return, up from 13 per cent in 1996.

Jim Sutcliffe, chief executive of Prudential UK, said: "We have increased payouts for the majority of our customers and maintained the payouts for many others."

The company added that negotiations with the Department of Trade and Industry (DTI) over the ownership of so-called orphan assets, announced last year, were continuing.

Analysts have claimed the Pru could release between pounds 500m and pounds 3bn to shareholders from its orphan assets.

PROMOTED VIDEO
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Arts and Entertainment
arts + ents
News
Morrissey pictured in 2013
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Financial Analyst - Forecasting - Yorkshire

£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

Business Architect - Bristol - £500 per day

£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices