Shares in Prudential (LON:PRU) declined despite the Asia-focused insurance and savings group issuing reassuring FY earnings guidance. Investors seemed surprised at the drop in H1 profit after what looked like a strong period for new business sales.
FY26 guidance reaffirmed
Prudential ‘continues to execute with discipline to generate long-term shareholder value’, CEO Anil Wadhwani told investors alongside the H1 results. ‘We remain focused on delivering long-term savings, health and protection solutions in our markets, meeting customer needs and supporting the societal aims of regulators and governments alike.’
The group is also ‘firmly focused on the delivery of our FY26 guidance of double-digit growth in new business profit’, said Wadhwani. The CEO also reiterated the group’s targets for gross operating free surplus and adjusted EPS together with double-digit dividend per share growth.
However, despite 10% growth in H1 new business profit and adjusted pre-tax profit, net profit fell 27% on an IFRS basis. The group also said it expected new business profit in Mainland China to be flat this year due to regulatory changes.
Prudential H1 2026 earnings
| Est H1 2026 | Actual H1 2026 | |
| New business profit (bn) | $1.38 | $1.38 |
| Adj operating profit (bn) | $1.79 | $1.79 |
| EPS | 55.9c | 58.4c |
| DPS | 8.87c | 8.87c |
It’s hard to know where to pin the blame for the drop in IFRS earnings as Prudential mainly reports its own, alternative figures. Whether this is why the shares are down we can’t be sure, but the commentary on China and Hong Kong isn’t that uplifting either.
The group says the underlying drivers of demand for its products in Hong Kong ‘remain strong’, supported by ‘the continued attractiveness and refresh of our propositions’. Whether Chinese Mainland customers will alter their buying of health and life insurance is a big unknown though.
The CEO said he’s confident in the structural growth prospects of the Hong Kong business, a a view reinforced by a recent customer survey. He also stressed Prudential has successfully adjusted to regulatory developments in the past and any impact should be transitory.
