Legal & General has announced a £789m rights issue to bolster its capital base to take advantage of further consolidation in the industry. It says depressed markets are putting pressures on the industry which only the fittest will survive.
The money raised will add 2.4 per cent to its free asset ratio but L&G does not intend to inject cash into its with-profits fund.
L&G group chief executive David Prosser says the strategy has been vindicated by current developments and the rights issue will increase its flexibility to write new business. L&G also believes it will be signing more distribution deals.