Aviva doesn't rule out Pru UK bid as it posts £1.8bn profit
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Aviva made an IFRS profit before tax of £1.8bn compared with a loss of £1.3bn the previous year, while chief executive Andrew Moss refused to rule out a bid for Prudential’s UK arm.
The firm’s international financial reporting standards results compared to a profit before tax of £3.7bn on a market consistent embedded value basis. The MCEV profit was up from an £11.3bn loss in 2008.
The firm says this turnaround in total profits reflects the combined effects of a recovery in equity markets, together with its disciplined business management and cost control.
In a conference call this morning, Moss insisted the firm was set on growing the business organically.
But he refused to rule out a bid for Prudential’s UK arm following a plunge in the firm’s share price in response to its planned acquisition of AIG’s Asian arm for £23.5bn.
When asked: “People might think well if the Prudential share price is low after what they have announced this week there might be temptations for somebody to launch a bid for them. Would you rule out being tempted by a bid for the Pru?”
Moss said: “Our strategy over the last two years has been very clear, which is to realise value from the businesses we have and I think in 2009 you started to see the first fruit of that beginning to flow through into profitability. We believe for our shareholders that is the best way to maximise value creation so that will remain the focus for us.”
Meanwhile, Aviva announced the dividend per share has dropped from 33p in 2008 to 24p for last year. It has also doubled its capital position over the past year to £4.5bn, reflecting a number of capital management initiatives and a recovery in investment markets the firm says.
Total life and pensions business was down on a PVNBP basis to £32bn from £36bn in 2008. New business margins improved to 2.2 per cent from 2.1 per cent in 2008. The biggest improvement was in the UK where margin increased from 1.7 per cent to 2.8 per cent.
Aviva says it exceeded its sustainable cost savings target of £500m one year early with a 19 per cent global headcount reduction over two years.
The firm has also appointed Pat Regan to the role of chief financial officer.
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Readers' comments (1)
Anonymous | 4 Mar 2010 9:45 am
They seem to have ruled it out as far as I can judge by the words quoted. Less sensational headline writing please.
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