Asset management and insurance colossus Legal & General has announced a robust performance with steady growth across all divisions, in line with its strategy for international expansion.
The firm reported a six per cent uptick in core operating profit for the first half of 2025, following consistent advancement across its three main business sectors, as reported by City AM.
Core operating profit climbed to £859m, while IFRS profit before tax saw a significant increase of 28 per cent to £406m. Core operating EPS experienced a nine per cent rise to 10.94p, aligning with projections that full year core operating EPS growth would meet the company’s three-year target range of six to nine per cent.
Legal & General’s Solvency II capital generation improved to £729m, although its Solvency coverage ratio dipped from 232 per cent to 217 per cent, reflecting the substantial final dividend for 2024 and fully accounting for the £500m buyback.
The company is on course to fulfil its pledge to return over £5bn to shareholders within three years, with 90 per cent of the £500m buyback announced in the 2024 full year results now executed.
Meeting analyst forecasts, Interactive Investor praised Legal & General for a “punchy performance” and noted that the company’s “plan clearly coming together.”
Legal & General’s global moves
In the first half of the year, Legal & General offloaded its US insurance business to Japanese insurer Meiji Yasuda for £1.72bn ($2.3bn), as part of its strategy to reallocate capital to bolster the growth of its core divisions and enhance growth potential in the US.
The company also finalised the purchase of Proprium Capital Partners, a global property investor, in line with its plan to boost its presence in international markets.
The interim dividend was increased to 6.12p, aligning with the firm’s aim to raise the dividend per share by two per cent annually until 2027.
Business Performance
Overall, Legal & General reported robust commercial growth across its three business divisions.
The institutional retirement division secured £3.4bn in global pension risk transfer (PRT) deals during this period, and the company continues to anticipate £40bn to £50bn of risk transfer deals across the UK market this year. The division’s core operating profit climbed 11 per cent to £618m from £557m.
The company has intensified its focus on its asset management arm, as it continues to expand globally and sell more private market products such as pension schemes.
Efforts to transition towards higher-margin products were well received, with revenues growing by two per cent.
However, operating profit dipped from £214m to £202m, reflecting market volatility and a weaker USD, resulting in a one per cent lower average for assets under management (AUM).
Retail operating profit saw a modest increase of three per cent, reaching £237m, largely due to the strong investment performance of its annuity portfolio.
The company’s Workplace Defined Contribution (DC) sector continued to expand, with assets under administration (AUA) exceeding £100bn and net flows rising by 21 per cent to £400bn.
Antonio Simoes, CEO, expressed optimism about the company’s prospects, stating, “The outlook for the business is positive and we are firmly on track to achieve our financial targets.”
Despite the robust results, the firm’s share price experienced a dip of 3.29 per cent to 252p during early morning trading.
The insurer has upheld its forecast for the year, anticipating sustained strong capital generation.
