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 on Wednesday, 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 criticism 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. All of the firm’s UK building sites have reopened but its property division expects to sell 30pc fewer houses.
The company's life insurance arm pencilled in £80m of virus-related claims, offset by a £32m boost from the early deaths of customers with a pension.
Mr Wilson said L&G’s balance sheet remains robust. Its solvency ratio - a key measure of insurers’ financial resilience - increased from 171pc to 173pc.
Shares were almost flat on the day at 220p, but are down from 300p at the start of the year.