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Prudential’s pretax profit rises 19% as Asia life sales grow

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(Bloomberg) — Prudential Plc, the U.K.’s largest insurer, said full-year earnings climbed 19 percent, boosted by rising life insurance sales in Asia. The shares rose.

Pretax profit rose to 3.15 billion pounds ($4.5 billion) on a constant-currency basis from 2.6 billion pounds a year earlier, the London-based company said in a statement Wednesday. The insurer’s Solvency II capital ratio rose to 193 percent from 190 percent reported in January. The dividend is 38.78 pence a share, and the company will also pay a special dividend of 10 pence, the first since 1970, it said.

Prudential rose as much as 4.1 percent in London trading to the highest since Jan. 19 and was up 3.4 percent at 1,371 pence at 11:08 p.m.

“Despite a series of headwinds across the globe, regulatory and economic, the group’s results exceeded both our and the market’s expectations across each of the main financial metrics,” Eamonn Flanagan, an analyst at Shore Capital with a buy rating on the stock, said in a note.

China Restrictions

The insurer’s shares were down 13 percent this year through Tuesday as China restricted buying overseas insurance to reinforce the country’s limits on sending money abroad. The insurer’s market value fell by 2.8 billion pounds in one day last month on concern the curbs would damp purchases by mainland Chinese buyers. The new rules will have little impact on the business, Chief Executive Officer Mike Wells said in a call with reporters.

“We continue to grow across our key metrics despite the macroeconomic uncertainty and the challenges presented by low long-term interest rates,” Wells said in the statement. The insurer’s life and asset management businesses in Asia made an operating profit of 1.3 billion pounds, a 17 percent increase from a year earlier.

Profit at M&G, Prudential’s U.K.-based investment unit, fell 1 percent to 442 million pounds as it reported 7 billion pounds of net outflows in 2015. Jackson Life, Prudential’s U.S. unit, reported a 10 percent gain in full-year operating profit to 1.7 billion pounds.

In Asia, operating profit rose 16 percent on a constant currency basis to 1.2 billion pounds, boosted by growth in Hong Kong and China.