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Pru UK profits hold firm despite RDR sales hit

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Prudential chief executive Tidjane Thiam

Prudential has recorded a 1 per cent increase in UK pre-tax profit for the first six months of 2013, from £336m to £341m, despite suffering a hit on bond sales as a result of the RDR.

The provider’s half-year results, published this week, reveal year-on-year UK sales dropped 14 per cent, from £412m in the first half of 2012 to £355m this year.

Onshore bond sales fell 22 per cent, from £106m to £83m, while corporate pension new business was down 11 per cent, from £104m to £93m.

Individual annuity sales increased 6 per cent, from £105m to £111m. In addition, the provider did not write any bulk annuity business during the first half of 2013, having secured a single deal worth £27m in the same period last year.

Prudential says: “Advisers are still working through the impact of the RDR on their business models and the bancassurance market has continued to contract. The experience for many customers is that in the short-term their access points to advice are reduced.

“As a result, we anticipate a degree of market dislocation will persist and that this will dampen particularly our sales of investment bonds in 2013 compared to the unusually high level of sales achieved in 2012.”

Rowley Turton director Scott Gallacher says: “It looks like the Pru’s 2012 figures were boosted by commission hungry advisers selling bonds ahead of the RDR.”

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