Legal & General Income Up 12% In 2022, Rising Interest Rates Boost Pension Business By Investing.com

© Reuters.

Jeffrey Smith

Investing.com — Legal & General (LON:) has raised its dividend and hinted at more payouts.

The group said it had reached its five-year target for capital generation two years ahead of schedule and had £700m left to strengthen its balance sheet. dividend.

“The jaws between net capital surplus generation and dividends are widening, offering attractive capital options,” the group said in a statement.

L&G’s statement highlights that rising interest rates have given life to its core annuities business. Rising interest rates have reduced the cost of meeting future pension obligations for companies, making it easier for them to offload those obligations to outside managers such as her L&G.

L&G said its core pension risk transfer (PRT) business got off to a good start in 2023, said it was “strongly positioned to take advantage of this opportunity” in its home market, and expected to grow to 100% in its international PRT business by 2024. He said he was “confident” that he could book at least $10 billion. Depends on US market trends.

A strong performance in the pension management business helped offset lower profits in the fund management sector last year as both bonds and equities fell as central banks around the world raised interest rates.

Overall, the Group’s net profit and earnings per share increased by 12%, allowing the company to raise its dividend by 5% to 19.37p. Legal & General shares fell 1.3% at his London opening.

The group would lose long-time chief executive Nigel Wilson, who is stepping down after a decade at the helm. L&G said it is considering internal and external candidates to replace Wilson.

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