Prudential cheers shareholders with big leap in dividend

The insurer’s boss Tidjane Thiam faced calls to quit last year after the Pru lost £377m on a failed bid to land the Asian arm of US giant AIG.

Mr Thiam survived the furore and yesterday announced that the Pru’s existing Asian operations helped power a 24 per cent rise in operating profits to £1.9bn.

The performance and confidence in future growth prompted Pru to rebase its dividend and increase the payout for 2010 by 20 per cent to 23.85p a share.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “This expression of future confidence in prospects should help to mollify shareholders upset by the distraction of the failed AIA approach last year.

“The company is now committed to promoting value over volume in its chosen markets, where the likes of the US and UK should complement the success story in Asia.”

Prudential said the emerging markets of South-East Asia – such as Indonesia, Malaysia, Vietnam, the Philippines and Thailand – were particularly attractive. It added: “They remain the priority destination for our new capital investment. With our compelling platform of distribution, brand and product development capabilities in the high growth markets of Asia, we believe we are particularly well positioned to take advantage.”

In December, Mr Thiam set out his target to double the value of profits from Asian new business by 2013, compared with the £713m in 2009.

It is more cautious over mature western economies where unemployment is high and progress is expected to be more sluggish. In the UK, the Pru has concentrated on driving profits through value rather than volume growth.

The Pru said the UK business remained a market leader in individual annuities and in with-profits business.