Pru reports mixed nine-month results |
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Published
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Thu, 19 Oct 2006 10:10
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LONDON - Britain's second-largest life insurer Prudential reported mixed results at the end of the nine months saying that though their nine-month sales have increased by 11 percent, its UK sales have taken a hit while its Internet bank Egg will be losing money.
The company reported that sales in UK, Asia and the US regions have risen from 1.6 billion pounds last year to 1.8 billion pounds this year.
However it said that the sales in UK region have dropped by over 4 percent generating 664 million pounds. The company attributes the drop to increased competition in the bulk annuity market, which has seen lowers sales in that department. However it added that business has picked up in the last quarter and they are optimistic of a better performance.
Analysts had predicted the nine-month sales to rise to 1.81 billion pounds forecasting in the range of 1.78 billion to 1.84 billion pounds.
Meanwhile its Internet bank arm, Egg has said that it is expecting half-year losses after the borrowing levels were lower than expected. It added that the levels of bad debt have far exceeded the forecasts. This is more prevalent in relation to personal loans.
In a statement released to the media, the Prudential said, "During the third quarter, Egg has been affected by a marked deterioration in market trends that are being seen across the banking sector. Interest income was lower due to lower than expected borrowing on cards, as consumers reduced their spending and borrowing."
Business in UK is the weakest among its competitors who have all reported good business largely due to recent pension rule changes allowing people to save more.
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