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M&G’s pre-tax profits halve in H1

Coins fallingM&G’s half-yearly results have shown profit before tax has fallen by nearly half.

The asset manager’s results show pre-tax profit decreased 44% year-on-year to £182 million.

In the same period, assets under management (AUM) fell by £21.1 billion to a total of £348.9 billion.

The fund house has blamed the fall in AUM on adverse market conditions. 

The drop in profits was put down to short-term fluctuation losses in the value of surplus assets in the annuity portfolio and derivatives used to hedge M&G’s Solvency II balance sheet, caused by increasing yields.

John Foley, chief executive at M&G, said: “The current macro-economic environment is creating uncertainty in the markets in which we operate. 

“However, our diversified sources of earnings and strong shareholder Solvency II coverage ratio protects our ability to invest in the business and, as today’s interim dividend of 6.2 pence per share shows, deliver attractive shareholder returns.”

There were also some signs of growth in M&G’s Institutional Asset Management business, with net client inflows of £300 million. 

According to M&G, this division was “well placed” moving forward, given consistent strong performance with £4.4 billion of committed client capital for private assets and further client wins yet to be funded.

Net client inflows, excluding M&G’s Heritage arm, were £1.2 billion for the period. 

Wholesale asset management received £800m of net inflows, compared to outflows of £3.4 billion in 2021, and the first positive half-year period since 2018. 

The firm stated it was “cautiously optimistic” about the turnaround in wholesale asset management but remained mindful of the challenging external environment.

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