By Carolyn Cohn
LONDON (Reuters) - M&G said on Tuesday it was on course to meet its capital generation target, after the British insurer and asset manager beat estimates for first-half operating profit.
Total capital generation was 869 million pounds ($1.20 billion), on track for a target of 2.2 billion pounds by the end of 2022.
That prompted Bank of America (NYSE:BAC) analysts to say they expected M&G to buy back 500 million pounds in shares in 2022-24, while reiterating their "neutral" rating on the stock.
The results "show good progress on our actions to reposition the business for sustainable growth", Chief Executive John Foley said in a trading statement.
Adjusted operating profit rose 6% to 327 million pounds against an estimated 293 million pounds, according to a company-supplied consensus poll.
M&G's assets under management and administration totalled 370 billion pounds, however, below the 376 billion pounds forecast.
Institutional assets under management reached a record high 89.7 billion pounds, but the retail asset management business saw net outflows of 3.4 billion pounds in the six months to end-June.
Investors pulled 900 million pounds from M&G's UK retail property fund after it reopened in May following 17 months of suspension.
M&G's shares were trading at 236 pence at 0728 GMT, down 1% against a steady FTSE 100.
Asset managers Schroders (LON:SDR) and St James's Place last month reported record levels of funds under management, helped by strong asset performance and a focus on savings during the pandemic.
But abrdn, formerly Standard Life (LON:ABDN) Aberdeen, said on Tuesday that assets under management and administration dropped over the last six months, driven by 5.6 billion pounds in net outflows.
Foley said M&G, formed after Prudential (LON:PRU) split off its UK and European insurance and asset management business in 2019, had received no takeover approaches.
Schroders had considered buying M&G's asset management business but decided the unit was too expensive, Bloomberg reported earlier this year.
"I think it's lazy thinking which suggests you might benefit from separating the (M&G) companies," Foley told Reuters.
M&G said it would pay a dividend of 6.1 pence per share, against a forecast 6.0 pence.
($1 = 0.7218 pounds)