Prudential unveils $2b share buyback plan

It expects its 2024 annual dividend to grow in the range of 7% to 9%.

Prudential launched a share buyback programme with a capital return of $2b. The buyback will be completed by no later than mid-2026.

“With our strong capital base, strategic progress and the recent clarification of the rating agencies’ treatment of the IFRS17 CSM, we can now provide a capital management update. We will continue to prioritise investment in organic new business at attractive returns and in enhancing our capabilities as we execute our strategy,” Prudential’s Chief Executive Officer, Anil Wadhwani, said in a press release.

The Wadhwani also emphasised it will continue selective partnership opportunities to boost its presence in key markets.

“Progress towards our financial objectives will increase the potential for further cash returns to shareholders. Our dividend policy remains unchanged, with the Board continuing to expect the 2024 annual dividend to grow in the range of 7-9 per cent,” Wadhwani said.

The CEO also said its outperformance in the first half of 2023 was attributable to the reopening of the Hong Kong and Chinese mainland border. 

“Given our focus on quality growth in both value and cash and on account of the progress on execution of our strategy, we have confidence in our FY2024 new business growth and in achieving our 2027 financial and strategic objectives,” Wadhwani added.

Prudential also aims to maintain a free surplus ratio of 175%-200%. At the end of 2023, its free surplus ratio was 242%. 

The proposed share buyback programme will follow shareholder approval at the 2024 and 2025 AGMs. 

The timing and form of the capital return will depend on market conditions and regulatory processes. Shares repurchased will be cancelled. 

Prudential will also continue neutralising the dilutive effects of the Share Scheme and other share issuances through additional repurchases.