Le­gal & Gen­eral pledges to pay same in­terim div­i­dend as last year, de­spite 73pc drop in prof­its

The Daily Telegraph - Business - - Business - By

Michael O’Dwyer

SAV­INGS be­he­moth Le­gal & Gen­eral is to pay share­hold­ers the same in­terim div­i­dend as last year – de­spite a slump in prof­its sparked by in­ter­est rate cuts and a fall in the value of some in­vest­ments.

Pre-tax prof­its sank to £285m in the first half, 73pc lower than in the same pe­riod last year, but it still in­tends to pay 4.93p per share to in­vestors.

L&G sur­prised the City in April when it be­came the first ma­jor in­surer to com­mit to pay­ing its £754m full-year div­i­dend for 2019, de­spite a Bank of Eng­land warn­ing that firms should hold back cash to guard against a down­turn.

The pen­sion and in­sur­ance com­pany’s boss Nigel Wil­son de­fended the pay­ment yes­ter­day, say­ing it had been cleared with the Bank.

He said: “We cer­tainly wouldn’t have done it with­out telling the reg­u­la­tors what we were do­ing.

“It’s in­ter­est­ing that we got no criti- cism at all from the reg­u­la­tor… there were a lot of sto­ries in the me­dia, but they weren’t backed up with any sub­stance.”

The Bank warned in­sur­ers to be pru­dent in mak­ing pay­outs to share­hold­ers, but as­sessed firms on a case-by-case ba­sis. In con­trast, banks were ef­fec­tively hit with a blan­ket ban on div­i­dends.

Covid costs re­duced L&G’s prof­its by an es­ti­mated £129m, in­clud­ing £21m spent on re­mote work­ing.

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