L&G confirms intention to pay final 2019 dividend despite PRA guidance

Written by Adam Cadle

06/04/2020

Legal & General (L&G) has confirmed its current intention to pay the 2019 dividend despite giving consideration to the PRA’s letter of 31 March.

PRA deputy governor, Sam Woods, recently said that UK insurers’ boards considering any distributions to shareholders or making decisions on variable remuneration “must pay close attention to the need to protect policyholders and ensure their firms can play a full part in supporting the real economy throughout the economic disruption arising from COVID-19”.

Woods also reminded insurers that when deciding on distribution boards should satisfy themselves that each distribution is prudent and consistent with their risk appetite.

However, in a statement on its website today, L&G said: “The board continues to pay close attention to the need to protect its customers and employees at this difficult time. The board has carefully considered the need to act prudently in maintaining safety and soundness, and in so doing ensure that L&G plays its full part in supporting the real economy. It also recognises the importance of dividend income to many institutional and retail shareholders, particularly in the current environment.

“The board observes that, notwithstanding significant market volatility, the group’s solvency position remains robust. Whilst the board will continue to monitor events, its current intention is to confirm its previous recommendation for a final dividend of 12.64p (2018: 11.82p) giving a full year dividend of 17.57p (2018: 16.42p), 7% higher than 2018.”

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