Going Down: Legal & General

LEGAL & GENERAL's shares suffered their worst one-day performance in 10 years and fell 11 per cent on the week after it announced disappointing profit figures due to competition on margins. New entrants such as banks into its markets are limiting price rises. Full-year profits on British new life insurance business fell 7.7 per cent to pounds 78m, while sales rose 22 per cent.

The effect of declining margins on L&G's profits "calls into question the company's status as a growth stock," said Trevor May, an analyst at Salomon Smith Barney.

"We grow the company by giving the customer a better deal and that means thinner margins - no apologies for it," said chief executive David Prosser.