ii view: mixed results but Prudential sticks with forecasts

First-half results to 30 June

• Annual Premium Equivalent (APE) sales up 4.2% to $3.43 billion (£2.57 billion)
• New business profit up 9.8% to $1.38 billion
• Adjusted operating profit up 10% to $1.81 billion
• First interim dividend up 15% to 8.88 US cents per share
• New $300 million 2026 share buyback, adding to previously announced 
  $1.2 billion (2026) and $1.3 billion (2027) programmes
• Capital cushion or free surplus ratio of 209%, down from 221% as of late December

Guidance:

• Continues to expect double-digit growth in full-year 2026 new business profit
• Continues to expect double-digit growth in the dividend over the full year 2026

Chief executive Anil Wadhwani said:

"Prudential continues to execute with discipline to generate long-term shareholder value. We remain focused on delivering long-term savings, health and protection solutions in our markets, meeting customer needs and supporting the societal aims of regulators and governments alike.

"In the first half of 2026, we delivered high-quality growth, margin expansion and strong capital generation - reflecting our focus on writing profitable new business across our diversified, multi-market and multi-channel platform. We are building the capabilities that will shape the next phase of growth.”

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ii round-up:

Prudential (LSE:PRU) provides life and health insurance as well as asset management services to around 18 million customers across Asia and Africa.

A constituent of both the FTSE 100 and Hang Seng Composite indexes, the financial services company operates across 20 markets including Greater China and India.

For a round-up of these latest results announced on 27 August, please click here.

ii view:

Started in London in 1848, Prudential in 2019 separated from UK and US businesses M&G  Ordinary Shares (LSE:MNG) and Jackson Financial Inc (NYSE:JXN), leaving it today focused on Asia and Africa. It sells to customers via approximately 65,000 agents and over 200 banking partners.

Geographically, Hong Kong, Greater China and Taiwan generated most sales in 2025 at 46%. That was followed by Singapore at 26%, Other growth markets including India and those in Africa at 13%, Malaysia 7%, Indonesia 6% and the EastSpring asset management business the balance of 2%.

Management focus includes powering the distribution of products via the use of technology, widening health-related insurance options for customers and growing shareholder returns.  

For investors, concerns regarding changes made in Chinese regulations to stop or reduce cross broader investments between China and Hong Kong cannot be ignored. Elevated energy prices pressuring consumer incomes could see customers reduce savings and insurance products. Exposure to Hong Kong, China and Taiwan comes against a backdrop of heightened geopolitical tensions between the West and China, while a prospective dividend yield of around 2.3% compares with estimates of over 5% at UK sellers Aviva (LSE:AV.), Legal & General Group (LSE:LGEN) and Standard Life (LSE:SDLF).

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On the upside, despite recent Chinese regulatory changes, demand for the group’s products in China and Hong Kong persist, with Prudential highlighting its experience in dealing with regulatory changes in the past. A focus on shareholder returns persists, with the newly announced $300 million share buyback adding to the $1.2 billion (2026) and $1.3 billion (2027) programmes previously announced. Both channel and geographical diversity exist, while investment in AI to boost sales opportunities and reduce costs is ongoing.  

In all, concerns about the impact of Chinese regulatory changes on sales offer caution. That said, customer benefits arising from the group’s products across Asia and Africa persist, with a consensus analyst fair value estimate above £14 per share pointing to continued optimism in the City.

Positives:

• Ongoing focus to improve operational performance
• Exposure to required health insurance across Asia and Africa

Negatives:

• China geopolitical tensions
• Potential currency headwinds

The average rating of stock market analysts:

Buy