Prudential launches $2bn share buyback plan and outlines progress for further returns

The FTSE 100 firm said it planned to complete the buyback by the middle of 2026.

Insurance giant Prudential has launched a $2bn (£1.6bn) share buyback programme and outlined progress on the potential for further shareholder returns.

The FTSE 100 firm said it planned to complete the buyback by the middle of 2026. Shares repurchased under the plan are expected to be cancelled.

Prudential also laid out its plans for capital returns going forward. It is looking to operate with a free surplus capital ratio of between 175 per cent and 200 per cent and said it would return any additional capital to investors.

The company said its free surplus ratio was 242 per cent at the end of 2023.

Prudential reiterated its commitment to grow its dividend by seven per cent to nine per cent this year.

The first $700m (£554m) of Prudential’s buyback is being conducted by Goldman Sachs and will enable the purchase of ordinary shares from 24 June to no later than 27 December.

Prudential, which counts Hong Kong and China as two of its biggest markets, has recently been boosted by the reopening of the border between the two regions, which had been closed for several years as authorities tried to control the spread of coronavirus.

The company’s new business profit – measuring the profitability of new insurance policies – rose nine per cent in the first quarter. In March, Prudential reported an eight per cent rise in annual operating profit after policy sales across its key markets in Asia and Africa boosted revenue growth.

Prudential announced last year that it aimed to more than double its new business profit by 2027.

Prudential’s shares rose as much as six per cent in Hong Kong. The stock also rose six per cent in London, although its dual primary listing in the capital remains down 12 per cent this year.

“Progress towards our financial objectives will increase the potential for further cash returns to shareholders,” said chief executive Anil Wadhwani said in the statement.

“We will continue to prioritise investment in organic new business at attractive returns and in enhancing our capabilities as we execute our strategy,” he continued.

“We will pursue selective partnership opportunities to accelerate growth in our key markets. Investment decisions will be judged against the alternative of returning surplus capital to shareholders.”

Wadhwani added that Prudential’s board continued to expect its 2024 annual dividend to grow in the range of seven per cent to nine per cent.

Updated with London shares