Prudential says it has no plans for Asia listing as profits surge

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The Independent Online

The life insurer Prudential scotched rumours of a potential stock market listing in Asia, as it unveiled an expected 25 per cent growth in group profits and brought forward its aggressive growth targets for its Asian business.

Investors had begun to speculate about the possibility of a new listing for the group, as its shares have failed to reflect the true value of its Asian business. But the chief executive Mark Tucker said the company had no plans for a new listing.

Asia continues to be the engine room of Prudential's growth. New business profits in the region were up 34 per cent in 2007, and the group expects to double the value of new business in 2008. Although the company had been aiming to double new business profits in Asia between 2005 and 20009, it now expects to achieve that goal a year early.

"Bringing [the Asian target] forward one year is effectively guiding for 26 per cent new business profit growth in Asia this year," analysts at Lehman Brothers said in a research note, adding that this would be 17 per cent ahead of its forecasts. "[To] increase guidance for this year in this sort of market should in our view be taken as a strongly positive signal."

The rest of the business also performed well in 2007, with UK and US new business profits up 17 and 19 per cent respectively.

Mr Tucker said: "Each of our businesses is performing strongly, representing a powerful geographic spread to our growth platform. Spectacular growth in Asia has been accompanied by a very strong performance by the US and clear profit growth in the UK. Combined with our excellent performance in asset management across the group, these results demonstrate the benefits of Prudential's diversified international strategy."

Mr Tucker said the outlook for the year ahead was positive, in spite of the turmoil in global stock markets. He added that the longer-term drivers of the business were also solid, with demographic, economic and social trends likely to continue driving growth for the business.

Shares in Prudential jumped as much as 3 per cent in early trading but dropped back after news of Bear Stearns' troubles hit the market in the afternoon. In the end, the stock finished down just under 5 per cent, at 622p. It has now fallen 12.6 per cent this year alone. But it has slightly outperformed the wider life insurance sector, which has fallen 14.6 per cent over the same period.