PRUDENTIAL has launched a US$2 billion share buyback programme which is expected to be completed no later than mid-2026.
On Sunday (Jun 23), the Asia-focused insurer also announced it will commence the first US$700 million tranche of the programme which will allow a maximum purchase of 200 million of Prudential’s ordinary shares.
This is expected to reduce the company’s issued share capital, so that it may return capital to shareholders.
Goldman Sachs was appointed to conduct the buyback and make trading decisions independently of Prudential for the first tranche of the programme, which will begin from Jun 24 and end no later than Dec 27, 2024.
Commenting on the launch of the group’s US$2 billion share buyback programme, Prudential chief executive Anil Wadhwani expressed confidence in the group’s FY2024 new business growth.
He also remains confident in the insurer’s prospects of achieving its 2027 financial and strategic objectives.
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Goals for 2027 include growing new business profit at a compound annual growth rate of 15 to 20 per cent from the level achieved in 2022, and delivering double-digit compound annual growth in operating free surplus generated from in-force insurance and asset management business.
“We are now able to provide additional guidance as to how we assess the deployment of free surplus, in the context of the group’s growth aspirations, leverage capacity and our liquidity and capital needs,” said Wadhwani.
The group seeks to operate with a free surplus ratio of between 175 and 200 per cent, based on its current risk profile and business units’ applicable capital regimes.
This ratio was at 242 per cent as at end-2023.
The company strives to return capital to shareholders should the ratio come in above the operating range over the medium-term.
“Progress towards our financial objectives will increase the potential for further cash returns to shareholders. Our dividend policy remains unchanged, with the board continuing to expect the 2024 annual dividend to grow in the range of 7 to 9 per cent,” added Wadhwani.
Shares of Prudential on the Singapore Exchange ended Friday US$0.30 or 3.1 per cent lower at US$9.29.
