Chief financial officer and incoming chief executive officer Tidjane Thiam refuses to comment specifically on the rumours but says: “Regarding the UK, our results are very strong with margins increasing from 29 to 32 per cent. The UK provides us with cash – about £290m, a significant sum in this economy – and capital. The group’s rating relies very heavily on the strength of the UK balance sheet. It is a core business for us and we are quite happy with its performance.”
Pru has raised its interim dividend by 5 per cent, to 6.29p per share. European embedded value operating profits fell by 8 per cent to £1.2bn for the first half compared with the same period last year but, using international financial reporting standards, it was up by 6 per cent to £688m.
The group’s annual premium equivalent new business sales were down by 8 per cent to £1.3bn, but margins increased over the period. In the UK, total sales were down by 14 per cent to £376m. Capital surplus was increased to £3bn at the end of July from £2.5bn in June.
Analysts have also put forward Aegon’s UK business as a possible target for Clive Cowdery’s consolidation vehicle, although the company would not comment on the subject as it posted its results last week.
Aegon has launched an £860m rights issue in a bid to repay part of the £2.5bn hand-out it received from the Dutch government last year.
It posted underlying earnings of £328m for the first half, compared with £1bn for the same period in 2008. In the UK, underlying IFRS earnings were £24m for the first half, down by 67 per cent from the previous year. UK new life and pension business fell by 19 per cent to £512m in the first half compared with the first half of 2008.