Prudential shares drop after reporting quarterly outflows of GBP2.3bn

Prudential's share price has dropped after the company reported total outflows of £2.3bn for the quarter due to redemptions in the retail market.

The FTSE 100 insurance company posted its third quarter interim management statement to 30 September on Tuesday.

The latest results bring year-to-date outflows to £7.3bn and sent the share price plummeting 45.85p (2.96%) to 1,504.15 by 1228 GMT.

M&G Investments’ external funds under management also dropped 5% in the year to date to £127.3bn, reflecting retail net outflows.

However it has seen a 24% increase in its Asia new business profit in the year so far, boosting the company's overall new business growth.

New business profit across the group was £1.76bn for the year to date, a rise of 17% at actual currency rates and slightly ahead of consensus forecasts.

Third quarter new business of £574m was driven by £312m of new business in Asia, and 11% increase for the region from the same period in 2014.

The group’s Asia asset manager, Eastspring, also continued to generate positive net flows despite volatility in many of its major markets, with net inflows of £0.4bn for the quarter.

Prudential chief executive Mike Wells said the company continued to make good progress in the third quarter.

“This performance reflects strong growth in our Asian and UK life operations and continued new business discipline in the US, reinforcing the diverse and resilient nature of our business during a period of significant global instability.”

Investment bank Whitman Howard noted that the year to date figure were a touch above expectations.

“These numbers should reassure, especially the continued strong growth in Asian sales despite market volatility in the region,” it said in a note.

“However attention is likely also to focus on broader corporate factors and the possible exit from the UK, which we see as inevitable, but possibly brought forward by the impact of Solvency II on the UK and US operations.”