Prudential Profit Climbs, CEO Tidjane Thiam To Resign; Stock Down

(RTTNews) - U.K.-based insurer Prudential Plc. (PRU.L, PUK) reported Tuesday a significant increase in fiscal 2014 profit with strong growth in its all four business units. The company also lifted dividend and said its annual results represent solid progress towards its 2017 growth and cash objectives.

Separately, Prudential announced that Group Chief Executive Tidjane Thiam has informed the Board of his intention to step down this year from his role as CEO and director. Thiam has agreed to join Swiss banking giant Credit Suisse Group AG (CS) as CEO. Prudential shares were losing around 3 percent in the morning trading in London.

The company further said it has identified a successor to Thiam and would announce a new CEO once the regulatory approval process has been completed.

For fiscal 2014, the company's profit before tax attributable to shareholders, on IFRS basis, climbed 60 percent to 2.61 billion pounds from last year's 1.64 billion pounds.

Profit for the year attributable to equity holders of the company was 2.22 billion pounds, 65 percent higher than last year. Earnings per share were 86.8 pence, compared to 52.7 pence.

On European Embedded Value or EEV basis, post-tax profit attributable to shareholders was 4.34 billion pounds, compared to 4.36 billion pounds in the prior year.

Total operating profit based on longer-term investment returns before tax of 3.19 billion pounds grew 8 percent on a reported basis and 14 percent at constant currency. EEV new business profit grew 10 percent to 2.13 billion pounds, driven by higher volumes and pricing and product actions aimed at enhancing profitability.

The company said it delivered double-digit growth across its key metrics with all four of its business units delivering good performance in challenging operating conditions.

Total revenue, net of reinsurance, climbed to 60.13 billion pounds from last year's 52.38 billion pounds. Gross premiums earned was 32.83 billion pounds, compared to 30.50 billion pounds in the prior year.

APE sales increased 12 percent to 4.65 billion pounds, mainly with sales in Asia from 'sweet spot' markets continuing to be a strong driver of growth.

Looking ahead, the company said that cumulative group underlying free surplus generation from 2014 onwards to December 31, 2017 is still projected to be grater than 10 billion pounds.

Asia life and asset management IFRS operating profit is expected to be greater than 1.858 billion pounds for 2017 compared to 1.14 billion pounds in 2014.

Thiam said, "Looking ahead, the economic environment in the US and the UK appears to show signs of improvement. Furthermore, we are optimistic about the outlook for the emerging economies of Asia, where the long-term fundamentals of our life insurance business remain compelling... We remain confident in our ability to produce profitable growth over the long-term..."

Prudential also said its Board has recommended a final dividend of 25.74 pence per share, higher than last year, which brings the total dividend for the year to 36.93 pence, a growth of 10 percent.

In London, Prudential shares were trading at 1,612 pence, down 3.10 percent.