Prudential’s move to offload its loss-making Egg credit card business to Citigroup has helped drive UK profits. It also says its strategy to focus on profitable business in the UK – such as in the retirement and savings space – has paid off following “clear” full-year profit growth at its domestic arm.
Pru sold the loss-making Egg credit card business to Citigroup last year, which helped the group deliver a 25% rise in 2007 operating profits. Retail new business profit rose 17% in the UK, with total profits from sales up 4% at £277m.
However, UK success was overshadowed by growth in its Asian operation, where Prudential has recorded a 34% leap in new business profit. The Asian division now accounts for more than half of the group’s new business profits and helped lift group-wide oeprating profits by a quarter to £2.54bn.
Prudential says the UK and US were set to suffer amid an economic slowdown, but growth drivers are still “powerful” in Asia, where it has a strong presence with life insurance operations in 12 markets.
It has also announced a cost-cutting drive of £195m to revive the UK arm, which will include outsourcing nearly 2,000 jobs. It has already cut annual costs by £115 million as at the end of 2007 and Pru added that “plans were in place” for the remaining £80 million.