Prudential shares rise on bigger-than-expected share buyback plan

The insurer kicked off the programme with an initial 700 million-dollar (£553 million) tranche of buybacks.

Prudential has seen its shares jump as it kicked off the first tranche of a two billion-dollar (£1.6 billion) share buyback to return cash to investors (Dominic Lipinski/PA) (PA Archive)

Prudential has seen its shares jump as it kicked off the first tranche of a two billion US dollar (£1.6 billion) share buyback to boost returns for investors.

The insurance group, which is focused on Asian markets, announced over the weekend that it would launch the buyback plan, with an initial 700 million-dollar (£553 million) tranche starting on Monday.

Shares in Prudential lifted as much as 6% on Monday morning as investors cheered the bigger-than-expected buyback programme.

We had factored in one billion US dollars (£790 million) in the second half, so this buyback is double the amount we anticipated, but is spread over two years rather than six months

Philip Kett, Jefferies

Prudential – which is listed in Hong Kong and London – said the programme will be completed by mid 2026.

Chief executive Anil Wadhwani said: “I am pleased with the progress we continue to make in executing our strategy, as we drive towards generating growth in both value and cash returns for shareholders over the long term.

“The significant growth opportunity ahead of us has not changed and we remain focused on realising that opportunity.”

The group also remains committed to dividend growth plans, with aims to increase the payout by 7% to 9% a year.

Philip Kett, an insurance analyst at Jefferies, said the buyback was larger than predicted.

“We had factored in one billion US dollars (£790 million) in the second half, so this buyback is double the amount we anticipated, but is spread over two years rather than six months,” he said.

Prudential added alongside the announcement that it remains confident of achieving its 2024 new business growth targets, with second quarter sales trends “similar” to those in the first quarter.

It added that progress towards achieving 2027 targets will increase the potential to return further capital to shareholders.