M&G H1 fund inflows improve, interim profits and AUM fall

M&G said interim operating capital generation was up 40% year-on-year at £433.0m, while its shareholder solvency II rating remained "very strong" at 214% despite total capital generation tumbling from £869.0m to £24.0m as a result of increasing yields and falling equity markets.

Adjusted pre-tax operating profits fell from £327.0m to £182.0m, impacted by current market conditions, and short-term fluctuation losses in the fair value of surplus assets in the group's annuity portfolio and derivatives used to hedge its Solvency II balance sheet led to a first-half IFRS loss after tax of £1.04bn.

Assets under management and administration decreased by £21.1bn to £348.9bn, driven mainly by adverse market movements, with net client inflows of £1.2bn, excluding its Heritage business.

M&G also declared an interim dividend of 6.2p per share, in line with its policy of paying one-third of the previous year's total dividend, with the dividend per share up 2% as a result of its share buy-back programme.

Reporting by Iain Gilbert at Sharecast.com