LONDON, Aug 10 (Reuters) - Prudential will merge its UK asset management unit M&G with its UK and European insurance divisions, it said on Thursday, as it posted a 5 percent rise in first-half operating profit.
Active managers such as M&G are facing pressure from lower-cost passive funds, driving a round of consolidation in the sector.
“Combining these businesses will allow us to better leverage our considerable scale and capabilities,” Chief Executive Mike Wells said in a statement.
The combined business manages 332 billion pounds ($430.44 billion) in assets for over 6 million customers, Prudential said.
John Foley, currently Chief Executive of Prudential UK&Europe, will become Chief Executive of M&G Prudential.
Anne Richards will remain Chief Executive of M&G and will be a deputy chief executive of M&G Prudential, alongside Clare Bousfield, CEO Insurance for Prudential UK&E.
Prudential’s operating profit rose to 2.36 billion pounds in the first half, boosted by growth in Asia and above a forecast 2.2 billion pounds.
It said it would pay an interim dividend of 14.5 pence per share, up 12 percent and in line with forecasts.
$1 = 0.7713 pounds Reporting by Carolyn Cohn; Editing by Rachel Armstrong