M&G profits nearly halve despite return to inflows

According to the firm's half year results, adjusted operating profit before tax fell from £327m to £182m, which was attributed to current market conditions, increasing expenses and a high core cost base. IFRS loss before tax rose four-fold compared to the same period last year, up to £1.3bn from a figure of £304m. The main culprit was losses of £1.4bn across "short-term fluctuations in investment returns", which was explained mostly by shifting valuations in hedging instruments and unrealised fair value losses on surplus assets in the annuity portfolio. Adverse market movements pushed...