Legal & General recorded a 26% drop in operating profit (EEV basis) in 2007, to £912m.
The firm says the figure, which fell from £1.23bn, was lower last year due to “major one-off benefits” occurring in 2006.
UK life and pensions new business climbed to £1.16bn (APE basis) last year, up on the £1.07bn recorded in 2006. However, UK life and pensions operating profit fell, dropping from £874m to £720m last year.
L&G expects 2008 to be a challenging year for the economy and for the industry.
“Savings market conditions in 2008 are likely to be more testing than in 2007,” it says. “Equity market volatility coupled with CGT uncertainty may dampen short term market growth.”
The firm has also recommended a 7.6% dividend to 5.97p for 2007, up on the 5.55p the previous year.
L&G group chief executive Tim Breedon says the company has delivered some “robust” set results.
“Headline numbers are lower, but taking into account the significant positive regulatory and reserving changes in 2006, and the £269m of longevity strengthening this year, the business has performed consistently over the past two years,” he says.
“As at 29 February, £516mn of our £1bn share buyback has been completed and the programme continues.
“The strength of our balance sheet is unimpaired by the credit crunch. We have no material exposure to credit-impaired securities and our AA+/Aa1 financial strength ratings are unchanged.”
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