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