26 Jul 2001

Prudential Interim Results and New Business Sales, First Half 2001

  • Total group insurance and investment sales £10 billion, up 44 per cent on first half 2000.
  • Record group new business achieved profit £342 million, up 8 per cent on first half 2000.
  • Achieved basis operating profit £677 million (before UK re-engineering costs), up 16 per cent on first half 2000.
  • Total group funds under management £168 billion, as at 30 June 2001.
  • Dividend increases 6.1 per cent to 8.7 pence per share.

Jonathan Bloomer, group chief executive of Prudential plc, comments: "Prudential’s new business sales and interim profit results clearly show another strong group performance. I am particularly pleased that this result has been achieved against a back-drop of an increasingly competitive environment and adverse market conditions in some areas. These results demonstrate that the business is in good shape for the future.

We will maintain our strategy of developing an international retail financial services business by broadening our geographic presence, distribution channels, and range of products. We continue with our stated ambition for sustainable growth as we seek to expand the business by organic means, through joint ventures, and by acquisition."

ENDS

Media Enquiries Analyst/Investor Enquiries
Geraldine Davies +44 20 7548 3911 Rebecca Burrows +44 20 7548 3537
Steve Colton +44 20 7548 3721 Andrew Crossley +44 20 7548 3166
Tina Christou +44 20 7548 3719

Notes to Editors:

1. A presentation to analysts will take place at 10.00am on Thursday 26 July at Laurence Pountney Hill, London EC4R 0HH.

A webcast of the presentation slides will be available on the group’s website, www.prudential.co.uk/plc.

There will be a conference call for international investors at 2:30pm (dial in telephone number: +44 (0) 20 8781 0598, US callers 1 303 267 1006). A recording of this call will be available for replay for one week by dialling: UK: 020 8288 4459, access code 651912; US: 1 303 804 1855, access code 1132247.

2. A Press Conference will take place at 11.45am, at Laurence Pountney Hill, London EC4R 0HH. If journalists wish to attend, please call the Press Office in advance on 020 7548 3304. Photographs are available at www.newscast.co.uk.

3. A broadcast of an interview with Jonathan Bloomer (in video/audio/text) will be available on www.cantoscomms.com and www.prudential.co.uk from 8.00am on 26 July 2001.

4. Total number of Prudential plc shares outstanding at end of June 2001 was 1,991,352,052.

PRUDENTIAL PLC 2001 UNAUDITED INTERIM RESULTS
Half year
ended 30 June Full year
Results Summary 2001 £m 2000 £m 2000 £m
New Business
Long-term insurance and investment products
Single premiums 9,681 6,709 13,354
Regular premiums 351 253 569
Insurance products 6,045 5,571 10,439
Investment products 3,987 1,391 3,484
Total 10,032 6,962 13,923
Annual premium equivalent (4) 1,319 924 1,904
Achieved Profits Basis Results (1)
Operating profit before tax
UK Insurance Operations
Long-term business 377 329 708
General business 35 35 33
M&G 40 69 125
Egg (63) (81) (155)
UK Operations 389 352 711
US Operations 238 208 226
Prudential Asia 134 77 213
Prudential Europe 5 9 17
Other income and expenditure (including development expenses) (89) (60) (138)
UK re-engineering costs (24) - -
Total operating profit before tax (2) 653 586 1,029
Analysed as operating profit from:
Long-term business
New business 342 317 613
Business in force 401 304 544
Other operations (90) (35) (128)
Operating earnings per share (2) 23.4p 21.3p 38.2p
Profit on ordinary activities before tax 364 545 728
Shareholders' funds £9.1bn £8.9bn £8.8bn
Statutory Basis Results
Operating profit before tax (2) 362 425 840
Operating earnings per share (2) 13.4p 15.7p 31.5p
Dividend per share 8.7p 8.2p 24.5p
Insurance and investment funds under management £168bn £156bn £165bn
Banking deposit balances under management £6.9bn £7.9bn £7.6bn

Notes

  1. The achieved profits basis results include the results of the Group's long-term insurance operations on the achieved profits basis combined with the statutory basis results of the Group's other operations, including unit trusts, mutual funds, and other non-insurance investment management business. In the directors' opinion the achieved profits basis provides a more realistic reflection of the performance of the Group's long-term insurance operations than results under the statutory basis.
  2. Operating profit for insurance operations includes investment returns at the expected long-term rate of return. For the purposes of the presentation shown above, to be consistent with the alternative earnings per share, operating profit excludes amortisation of goodwill and merger break fee, net of related expenses. The directors believe that operating profit, as adjusted for these items, better reflects underlying performance. Profit on ordinary activities before tax includes these items together with actual investment returns and profit on business disposals.
  3. Further achieved profits basis information and an abridged statutory profit and loss account are included within this announcement.
  4. Annual premium equivalents are calculated as the aggregate of regular new business premiums and one tenth of single new business premiums.
  5. The financial information included in the results summary of this announcement has been extracted from the Company's Interim Report to shareholders which contains an independent review report by KPMG Audit Plc.
  6. The dividend will be paid on 29 November 2001 to shareholders on the register at the close of business on 21 September 2001. A scrip dividend alternative will be offered to shareholders.

GROUP OVERVIEW

In the first half of 2001, Prudential plc delivered a strong financial performance, demonstrating the group’s commitment to increasing the breadth and depth of the business worldwide.

The overall strength of the business is clearly demonstrated by our group-wide sales in the first half, with a record inflow of new insurance and investment funds of £10 billion, up 44 per cent on the same period last year. Sales on an annual premium equivalent basis were £1,319 million, 43 per cent ahead of same period last year.

New business achieved profit was at an all time high at £342 million, 8 per cent ahead of the same period last year. This was mainly due to strong sales growth in the UK, and across the Asia region, including first time contributions from its new operations. Fifty eight per cent of our new business achieved profit now comes from outside the UK and Europe.

Total group achieved basis operating profit (before UK re-engineering costs of £24 million) was £677 million, up 16 per cent on the same period last year. The re-engineering costs relate to the closure of the UK direct sales force.

Group total new funds inflow in the first half of 2001 of £10.9 billion was 31 per cent above new funds inflow in the first half of 2000 of £8.3 billion.

Our banking operations, Egg and Jackson Federal Bank, have grown retail assets by £900 million in the first half of 2001. Our total funds under management at the end of June 2001 were £168 billion.

Modified statutory basis operating profit for the first six months of 2001 was £362 million, down £63 million on the prior year. This primarily reflects: the effect of the continued fall in world equity markets on our income; our investment in Japan; development expenditure for initiatives in Europe; and the cost of the closure of the UK direct sales force.

Dividend

The Board has increased the interim dividend by 6.1 per cent to 8.7 pence per share.

Driving the Business Forward

We will maintain our strategy of developing an international retail financial services business by broadening our geographic presence, distribution channels, and range of products. We continue with our stated ambition for sustainable growth as we seek to expand the business by organic means, through joint ventures, and by acquisition.

The new business sales and interim profits show a strong group performance and the success of our strategy. This result has been achieved against a back-drop of an increasingly competitive environment and adverse market conditions in some areas. These results show that the business is in good shape for the future.

The proposed merger with American General was in line with our strategy, although clearly of a much larger scale. It demonstrated our focus on growth opportunities on an international platform and would have radically increased our scale and market share in the United States. Combined with our rapid expansion in Asia, the exciting potential in Europe and our strong position in the UK, it would have greatly accelerated the Group’s overall scale and position. Despite the fact that we did not complete this particular merger, our ambition to grow the business in the US remains. This focus on growth is how we intend to deliver long-term value to our shareholders.

UNITED KINGDOM

Prudential is a scale operation with some of the biggest financial services brands and customer bases in the UK. Over the last five years, our domestic business has undergone a transformation.

Five years ago we had a total of 16,500 UK employees, of which 5,000 were in the direct sales force, and we only operated under one brand. We now have a UK business model with multiple brands, enhanced delivery channels both direct and through intermediaries, and a broad product range.

In 1997 we acquired Scottish Amicable, to increase distribution via the intermediary channel. In 1999 we acquired M&G, now our UK and European investment manager, to increase our retail unit trust presence and product diversification in this important and rapidly growing market. Just over five years ago we created Prudential Bank, aiming to capture maturity monies. In 1998 we took the concept of banking to a higher level, with the establishment of Egg. With over 1.7 million customers, Egg is now widely acknowledged as the UK’s leading digital financial services provider.

With over four million new customers gained through channels added since 1996, Prudential has continued to change, innovate and evolve across the UK business, diversifying both products and distribution.

In the first half of 2001, the UK businesses recorded strong sales results in the key product areas, where we have leading market positions. UK sales (excluding M&G) were £2,816 million, 7 per cent above 2000, and on an annual premium equivalent basis £427 million, 10 per cent above the first half of 2000.

Total achieved operating profit (before UK re-engineering costs) for our UK Insurance long-term businesses was up 15 per cent to £377 million (new business achieved profit was up 14 per cent to £140 million). This is mainly due to strong sales of annuities and pensions. In particular, we have seen a good result from our bulk annuity business.

In the UK we have very strong positions in a number of product lines, specifically:

Annuities

Prudential has a leading market position in the UK annuities market, with a 22 per cent market share. Our annuity funds under management total £13 billion, and more than doubled in the last five years.

Our customers now have greater and different expectations for retirement and this has led us to create a new breed of annuity that offers more flexibility, control and transparency. We have led the way in launching such a product, the Flexible Retirement Income Account, in April 2001.

We have a fully established bulk annuity business, with sales of £352 million in the first half of 2001, compared to £30 million in the first half of last year. We remain fully committed to this market and will actively compete as the Defined Benefit market changes and schemes continue to pursue the buy-out option, a market we estimate of about £10 billion over the next few years.

We can now write new bulk annuity business within a shareholder-financed operation, Prudential Retirement Income Ltd (PRIL). This enables shareholders’ funds to participate directly in the future growth opportunities in the bulk annuity market, rather than participating indirectly through the 90:10 Prudential Assurance Company life fund. Scope still remains for the shareholder financing of other annuity businesses and we shall continue to investigate these opportunities.

Pensions

Our focus in the pensions market has been one of our traditional areas of strength: pension provision to large corporates and local authorities. Our concentration has been on securing schemes with access to large numbers of employees and where premium income will materialise quickly, resulting in more profitable business.

Of the 12 million people in the UK who are members of an occupational pension scheme, Prudential is the provider of Defined Contribution (DC) arrangements to companies or authorities which employ over 20 per cent of these people.

Of the 10 million people in the UK who are not in occupational pension schemes, around seven million have started individual pensions. The Prudential group provides nearly one in four of these (23 per cent).

In the first half of 2001, we have secured new DC pension schemes which cover over 55,000 employees. We have gained a significant number of tenders as a replacement provider to Equitable Life’s AVC business.In the last six months, our share of the local authority AVC market has risen from 25 per cent to 46 per cent and we now provide AVCs to 45 local authorities, 20 of which have appointed us within the last six months, who together employ 200,000 people.

Stakeholder pensions present a further opportunity for us to grow our pensions business. There are still some five million working people in the UK today who do not have any provision over and above that provided by the State.

The strength of our brand has attracted many small and medium sized enterprises (SMEs) directly to our stakeholder products. These have all designated over the telephone or online, which clearly improves the future economic potential. To date over 9,000 small businesses have directly registered with us. These SMEs employ over 340,000 people, and we have attracted a higher proportion of those in medium sized enterprises, than those in the very small enterprise segment.

With Profit Bonds and Investment Products

We manage over £15 billion of funds for more than 500,000 With Profit Bond customers, and have around 25 per cent of the market by funds under management. The sales of Prudence Bond in the second quarter of 2001 improved on that of the first quarter. Recent product enhancements and initiatives to improve the attractiveness, and maintain profitability of the product, are underway.

On Investment products, our retail funds include a number of leading fixed income and equity funds. We are the second largest unit trust manager in the UK, with over £16 billion retail unit trust funds under management, giving us a market share of over 6 per cent. Within this £16 billion, our £5 billion of ISA/PEP funds under management represent over 6.5 per cent of the whole UK’s non-cash ISA/PEP market.

With Egg and Cofunds, we also have stakes in two leading fund supermarkets, which between them have already captured more than £220 million of funds.

Restructuring

In February, we announced changes to our direct sales channels and customer service operations in order to continue to meet changing customer needs and to ensure that we continue to operate cost-effectively as a scale player in the UK market. These changes included the closure of the direct sales force, and an expanded customer service offering through remote channels such as the telephone, the internet and the workplace.

The development of this business is not just about bringing down cost, it is about revenue generation. During the first half of the year, we have built up our service related sales proposition. This will help us offset the decline in sales through the direct sales force. Some 59 per cent of individual pension top-up sales in the first half of 2001 were through remote channels.

The strong UK sales and interim profits achieved during the first six months of 2001 highlight that the benefit of the recent restructuring is already feeding through, ensuring a healthy business going forward. As the UK market changes we will continue to focus on key strategic areas, maintaining a structure and cost base that matches market developments in the UK.

M&G

M&G was acquired by Prudential in 1999. It is responsible for managing £120 billion of funds and is one of the largest retail unit trust managers in the UK.

Total sales were £499 million compared to £656 million in the first half of last year, mainly due to a special offer to former M&G shareholders which yielded £105 million in May 2000. Excluding this one-off item, gross sales were down 9 per cent due to the current adverse market sentiment for equities which was partially offset by increased fixed income sales. However net sales in the first half of the year increased to £119 million from £27 million, in the same period last year. M&G has performed creditably in a difficult market environment and its share of retail sales has increased by 15 per cent over the first six months of 2000.

Total operating profit for the first six months of the year was £40 million, down from £69 million in the same period of 2000. This fall in operating profit was due to the transfer of M&G’s Life and Pensions business to Scottish Amicable last year and the sale of our institutional equity business, and falling stock markets in 2001, and investment in new operations in both Cofunds and Europe which totalled £10 million. M&G has not recognised any performance related fee in respect of its management of the life fund at the half year, despite being 1.5 per cent above the long-term strategic benchmark for the year to date. M&G do not anticipate this fee at the half-year stage.

When we purchased M&G, we set out three key areas of focus for the business going forward: managing the smooth integration of M&G with PPM; improving fund performance; and given this platform, achieving an increase in sales.

The integration with PPM has been successfully completed and despite testing market conditions, M&G is delivering strong performance in a number of its equity and fixed interest funds, in addition to the life fund which has continued to outperform its benchmark during 2001.

M&G’s strong position in fixed interest is reflected in sales of fixed interest products increasing in the first half by 15 per cent to £276 million. This demonstrates the benefit to M&G of having a diversified fund portfolio, particularly at a time when investor appetite for equities is low. Recent industry research (conducted by Tulip Financial Research) shows more high net worth individuals invested with M&G than any other fund manager. M&G has also made progress throughout its refocused wholesale division, maintaining strong performance in the life fund and continuing to win new institutional fixed income mandates at attractive fees.

M&G is also investing in related areas, such as Cofunds, the fund supermarket for intermediaries, which was launched five months ago and already has over £120 million of funds under management.

Following M&G’s establishment as the group’s European asset management business, it is now seeking to maximise opportunities for sales growth in the UK, in Europe, where it plans to launch at the beginning of 2002, and in Asia, where Prudential Corporation Asia will be selling M&G investment funds in a number of countries.

EGG

Since Prudential launched Egg in 1998 as a division of Prudential Banking, it has grown into one of the UK’s leading digital financial services brands. Today Prudential retains a 79 per cent stake in Egg, the remainder of which was floated in a public offering in June 2000.

Egg reported its half-year results on 24 July. A pre-tax loss for the period of £63 million (down from £81 million in the first half of 2000) was in line with expectations. Customer acquisition continued to grow rapidly with 370,000 net new customers joining Egg, leading to a total customer base of 1.72 million. Retail assets grew by 21 per cent to £4.5 billion and card balances now exceed £1.5 billion.

The results show that Egg is on track to achieve a break-even position for the existing UK business during the fourth quarter of 2001.

EUROPE

Prudential Europe was established in 1999 and is responsible for spearheading Prudential’s expansion into continental Europe. We currently have operations in France and Germany where we have established strategic alliances with strong local partners. During the first half of 2001, we continued to increase our range of products, services and distribution channels, and build on our existing partnership agreements.

In France, we opened a Paris-based branch in January, launched Prudential Europe Vie, an innovative equity-backed life insurance product that builds on the success of Prudence Bond in the UK, and signed an additional distribution agreement with Centre Français du Patrimoine, the largest multi-product broking service in France. Sales of Pru Vie are currently running at FF 10 million per week.

In Germany, we re-launched the Vorsorge critical illness product which has innovative features. At the end of May we launched our online insurance broker service, Quinner AG, and in early July, we launched two new mutual funds which were developed jointly with DWS Investment GmbH, a subsidiary of the Deutsche Bank Group. These are funds of funds (Dachfonds), and are the first Prudential-branded products to be available on the German market.

Total sales of £36 million in the first six months of the year were up 89 per cent on the same period last year, principally due to the success of Prudential Europe Vie in France. Total achieved operating profit was down from £5 million in the first half of 2000 to a loss of £6 million in the first six months of 2001, principally due to increased development expenditure. New business achieved profit decreased by £1 million to £3 million, due to lower sales and higher acquisition costs in Germany which were partially offset by profits from sales of Pru Vie.

Prudential plans to enter Europe in other ways over the course of the next year. M&G intends to start selling mutual funds in Germany in 2001 and Egg is exploring commercial partnerships with a number of European businesses. Egg has recently joined forces with Microsoft in a European strategic alliance, the first stage of which will be to provide a fund supermarket in the UK available via MSN.

USA - JACKSON NATIONAL LIFE

Jackson National Life is one of the top 20 life companies in the United States, in terms of total assets. Since Prudential acquired the business it has been transformed into a market-leading provider in its chosen product lines. In 1995 JNL was largely a life and fixed annuity provider, with these products accounting for 96 per cent of sales. Since this time the current management team has broadened both the product range and distribution capability, enabling JNL to write business in any economic environment. Reflecting this diversification, the percentage of total sales accounted for by fixed annuities and life has dropped to 34 per cent, with 66 per cent of retail sales being equity-based (i.e. variable annuities and equity linked indexed annuities (ELIs), sold through banker brokers, agents and institutions).

In the first half of 2001, new business achieved profit decreased by 31 per cent to £93 million, largely reflecting a change in sales mix and the impact of more conservative new business profit assumptions reflecting the tougher more competitive economic climate currently being experienced in the US. However, business in-force almost doubled to £134 million, largely due to a positive lapse experience variance achieved against our more conservative assumptions, following the negative experience variance of £71 million in the first half of 2000.

Sales of individual fixed annuities have increased to £814 million, up 54 per cent on half year 2000, in a volatile market. This reflects the successful execution of JNL’s strategy to provide diversified products through multiple distribution brands.

Variable annuity sales have been significantly adversely affected by the continuing volatility in the US equity markets in recent months. Sales of £447 million were recorded, 57 per cent lower than the first half of 2000. This decline in sales reflects the recent turmoil in equity markets and the fierce competition from companies chasing top line growth at the expense of product profitability. The S&P 500 had its worst year in more than a quarter of a century and the NASDAQ suffered its worst ever decline, down 39 per cent.

Sales of stable value products have increased by 30 per cent to £1,205 million in the first half of 2001. These sales figures include £1,055 million of European Medium Term Notes or Global MTN-sourced funding agreements, up 40 per cent on first half of 2000.

Despite mixed results in the first six months, mainly due to tough market conditions, JNL remains a leading player in the equity linked index and fixed annuity markets, and maintains its top 10 position within the stable value market. Our top 10 net sales position in the variable annuity market in the first quarter has been achieved in tough market conditions, and while this ranking is lower than the position held in fixed annuities and ELIs, it reflects our strategy of pricing for profitability, rather than for market share.

In the second half of 2001, JNL will continue to develop its product range, and enhance its distribution channels to further benefit from the largest financial services market in the world.

PRUDENTIAL CORPORATION ASIA

During the first half of 2001, Prudential Corporation Asia (PCA), has continued its impressive growth across the region. PCA is now very well placed to capture a significant part of the anticipated growth in Asia’s high potential retail financial services market.

Six years ago Prudential’s Asian presence was confined to just Singapore, Hong Kong and Malaysia. Today we have a strong regional presence, with 20 operations in 11 countries. We have in place the infrastructure, the people and the organisational depth to enable us to leverage synergies across the region, particularly powerful strengths when entering new countries and launching new products.

Total insurance sales of £642 million, in the first six months of 2001, were up 213 per cent on the first six months of 2000. Achieved basis operating profit in Asia, before regional development expenses, increased by 74 per cent to £134 million, driven by a 89 per cent increase in profit from new business, up to £106 million. The strong contribution from new business principally reflects strong sales growth across all territories (insurance sales growth of 124 per cent on an annual premium equivalent basis).

New business achieved profit margins are now 50 per cent (60 per cent at HY 2000). This reflects a planned and managed shift in the new business mix, including increased proportions from countries with lower margins (Taiwan and Japan), and a higher proportion of single premium business (ie CPF related business in Singapore, where single premium sales are a feature of the first half of this year only). Across the region, country by country, margins for regular and single premium business have either been sustained or have improved.

As part of our expansion strategy in Asia, we acquired Orico Life in Japan, in February 2001. Japan is the second largest life insurance market in the world. Orico Life is an operationally and financially sound, modern life insurance company with excellent growth potential. The business was re-launched under the name PCA Life at the beginning of July. The company has operations in 11 locations throughout Japan and offers a wide range of insurance options including term, savings and protection products. With the significant changes currently taking place in the Japanese life insurance market, PCA Life provides us with a very strong platform to apply our distribution management and product innovation skills to build scale rapidly.

Our purchase of Allstate’s Indonesian and Philippine operations has just completed regulatory formalities. Although relatively small, these acquisitions complement our existing operations.

In line with our strategy of expanding our successful unit trust operations across the region, we have recently launched Prudential Unit Trusts in Malaysia and Singapore. These new operations are the latest additions to PCA's existing network of mutual funds businesses in India, Japan and Taiwan.

In Vietnam, PCA continues its impressive growth as the largest foreign life insurer with over 9,000 agents. In our other new life markets of China and India, we have made a very good start with rapidly growing agent numbers. We were also the first foreign company to launch unit-linked products in China in May.

Building superior quality multi-channel distribution continues to be high priority. We also continue to add complementary alternative distribution through the ongoing roll out of our successful bank distribution model. In the first half of 2001, the proportion of sales on an annual premium equivalent basis, through bancassurance channels, increased three times over last year.

We are beginning to see a slowdown in some Asian economies, particularly export-led economies. While we will clearly watch developments, we believe that there are enormous opportunities for strong players, like Prudential, with a diversified business and a long-term commitment to the region, to continue to sustain profitable growth.

ACHIEVED PROFIT BEFORE TAX

Achieved basis operating profit before amortisation of goodwill was £653 million, up 11 per cent on the same period last year. Included in this result are UK re-engineering costs of £24 million associated with the closure of our direct sales force, announced in February 2001, made up of the £13 million direct cost to shareholders and £11 million shareholders’ share of the £97 million cost borne by the life fund.

The result also includes development costs of £33 million relating to investment in our long term businesses, including £22 million in Asia, comprising the rebranding and relaunch of our new operation in Japan as PCA Life, together with other investments in the region; and £11m of investment in Europe. Looking to the second half of the year, we expect similar levels of development expenditure for Europe and M&G, and a slight increase for our businesses across Asia, particularly Japan.

Achieved profit on ordinary activities before tax fell £181 million to £364 million. This was mainly due to negative short-term fluctuations in investment returns of £580 million, of which £399 million relates to the UK life fund and £116 million to Jackson National Life. The fluctuations represent the variance between our expected long term return and the actual return arising in the period, and principally reflects the fall in equity markets experienced around the world in the last six months.

Profit before tax also includes the merger break fee of £338 million received from American General Corporation, net of related expenses comprising external advisors’ fees and staff retention payments in the United States.

STATUTORY BASIS PROFIT BEFORE TAX

Statutory basis operating profit before amortisation of goodwill for the first six months of 2001 was £362 million, down £63 million on the prior year. This reflects a £10 million decrease in profit from our UK Insurance Operations, reflecting the impact of lower terminal and reversionary bonuses in light of weaker equity markets in the UK, and a £29 million decrease in M&G’s profits, offset by a lower loss of £63 million in Egg, compared with a loss of £81 million for the same period last year. Also contributing to the result are a £10 million fall in profit from our US operations reflecting the impact of economic conditions on our investment book and a reduction in variable annuity fees, and a £9 million fall in profit from Asia due to higher development expenses.

Under the statutory basis, UK re-engineering costs reflect the £13 million direct cost to shareholders.

Statutory basis profit on ordinary activities before tax of £548 million includes negative short-term fluctuations in investment returns of £105 million, principally arising in Jackson National Life and on assets supporting the UK General Insurance operation, and the merger break fee mentioned above.

Shareholders’ Funds

Total achieved profits basis shareholders’ funds were £9.1 billion at 30 June 2001 (31 December 2000: £8.8 billion). We maintain long-term triple A financial strength ratings from both Moody’s and Standard and Poor’s.

SUMMARY

The broad international spread of our business has allowed us to retain our focus on adding value at the same time as increasing sales. This, together with the active management of our capital, maintains our sound financial position.

The benefits of our strategy of diversification by product and distribution channel internationally are clear. As much as the strategy itself, it is our ability to execute it successfully across the group which underpins these results.

Links to supplementary information about this release: PDF Excel
Prudential Interim Results And New Business Sales, First Half 2001

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