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The Pru rules out rights issue to fund expansion

Chris Hughes,Financial Editor
Thursday 26 July 2001 19:00 EDT
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Jonathan Bloomer, chief executive of the Prudential, moved to reassure the City yesterday over the insurance group's expansion in Asia, saying it could fund its strategy without recourse to a rights issue.

"There is a lot more growth to come from Asia, and we could fund it from cashflow for the next several years. A rights issue is not something I've thought seriously about," he said.

The comments came as the Prudential posted half-year results showing total insurance sales in Asia jumping 213 per cent to £642m, helping the group post interim operating profits up 11 per cent at £653m.

In the UK new business premiums were up 26 per cent at £1.64bn as Prudential benefited from an outflow of business from the troubled Equitable Life. M&G, the investment management business acquired in 1999, suffered a 24 per cent decline in sales following the downturn in the equity markets.

Mr Bloomer said the Prudential remained committed to expanding in the US through organic growth and small acquisitions, following the collapse of its proposed merger with American General earlier this year. "I've been fending off bankers saying 'Here's the next deal'," he added. Prudential shares closed up 19p at 830p.

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