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(Alliance News) - Legal & General Group PLC on Tuesday lifted its interim payout as it reported growth in profit and capital generation during what was a "good start" to 2022.
L&G shares were 0.3% lower at 270.90 pence each in London on Tuesday morning.
The FTSE 100-listed life insurance and financial services company said its first half went to plan, despite posting a fall in assets under management, which were hit by volatile markets. It hailed growth in net flows, however.
L&G's pretax profit in the half-year that ended June 30 advanced 2.8% to GBP1.44 billion from the GBP1.40 billion it achieved 12 months earlier. Operating profit improved 7.5% to GBP1.16 billion from GBP1.08 billion, led by strong performances from its Retirement Institutional and Retail businesses.
Gross written premiums were 55% higher year-on-year at GBP6.61 billion from GBP4.26 billion.
"All four of our divisions are well positioned to execute on compelling structural market opportunities to deliver further profitable growth over the medium and long-term, notwithstanding market volatility," L&G explained.
Its divisions include bulk annuity provider Legal & General Retirement Institutional, alternative asset investment platform Legal & General Capital, as well as asset manager Legal & General Investment Management. It also has a retail arm, offering savings, protection and mortgage services.
L&G upped its interim dividend by 5.0% to 5.44 pence from 5.18p.
L&G's Solvency II coverage ratio improved to 212% from 182% a year earlier and 187% at the end of 2021. The improved ratio was put down to its "net surplus generation" as well as the impact of higher interest rates.
Chief Executive Nigel Wilson said L&G has made a "good" start to 2022.
L&G reported total income of negative GBP69.19 billion, swinging from positive GBP14.90 billion a year earlier. The figure was hit by what is classed as external income from the Legal & General Investment Management arm. LGIM's external income includes fees from fund management, as well as investment returns on unit linked funds.
Legal & General Retirement - the firm's largest unit - saw operating profit increase 6.7% to GBP560 million.
At Legal & General Capital, operating profit rose 5.2% year-on-year to GBP263 million. LGIM's operating profit edged 2.0% lower to GBP200 million. At the retail unit, profit rose 14% on-year to GBP332 million.
L&G's assets under management fell. AUM came in at GBP1.290 trillion at June 30, down 9.3% from GBP1.422 trillion at the end of December. L&G reported a GBP195.3 billion hit from market movements.
AUM was down 2.8% year-on-year from GBP1.327 trillion.
External net flows were higher than a year earlier, however, more than doubling to GBP65.6 billion from GBP27.4 billion. Average assets under management during the half were 6.2% higher year-on-year at GBP1.361 trillion.
L&G achieved 22% growth in cash generation to GBP1.0 billion and a 14% rise in capital generation to GBP900 million during the half.
It backed medium-term guidance of generation cumulative cash and capital generation between GBP8.0 billion and GBP9.0 billion for the period between 2020 and 2024.
L&G said it eyeing paying dividends of between GBP5.6 billion and GBP5.9 billion for the five-year period. So far, it has declared GBP2.5 billion worth of dividends during the 2020 to 2024 period.
L&G added: "We are pleased with the further progress we have made in H1 2022 and are confident in our ability to deliver further profitable growth going forwards.
"We will continue to maintain a defensive and diversified asset portfolio and a long-term investment horizon, supporting all our stakeholders by delivering Inclusive Capitalism through investments - both for our own portfolio and for clients - in areas such as infrastructure, clean energy and affordable housing, and by providing products to support individuals' financial resilience."
By Eric Cunha; ericcunha@alliancenews.com
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