By Oliver Griffin
Prudential PLC (PRU.LN) said Wednesday that it will demerge M&G Prudential, which also intends to sell its 12 billion pounds ($16.71 billion) U.K. annuity portfolio, to Rothesay Life.
The international financial services group said that following the demerger, M&G Prudential will be an independent U.K. and Europe savings and investment provider. Prudential PLC will continue to focus on high-growth opportunities in Asia, the U.S. and Africa, the company said.
M&G Prudential will be led by its current Chief Executive John Foley and remains on track to deliver its previously announced savings target, Prudential said. The decision to sell its U.K. annuity portfolio to Rothesay Life is part of M&G Prudential's move toward a more capital efficient and derisked business model, the company said.
Prudential PLC reported that operating profit in 2017 rose 10% to GBP4.7 billion, from GBP4.26 billion in the year-earlier period. The insurance company also said that gross premiums in 2017 rose 13% to GBP44 billion, while assets under management at M&G Prudential rose 13% to GBP351 billion, driven by record net inflows.
The group's Solvency II surplus--a measure of financial stability--rose to GBP13.3 billion, from GBP12.5 billion in 2016.
Prudential raised its final dividend to 32.5 pence a share, from 30.57 pence in 2016, taking the total dividend for the year to 47 pence, an 8% increase on the previous year.
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