L&G profits soar 87%

Legal & General's (L&G) pre-tax profits leapt by 87% last year to hit £1,109m, compared to £592m in 2008.

Operating profits for the protection or risk element of L&G's business hit £735m for 2009, up from £222m in 2008.

Profits from its savings business were also significantly up, from £7m in 2008 to £55m last year.

Net cash for 2009 totalled £699m, up 118% on 2008 (£320m), which L&G attributed partially to a 17% cut in UK staffing. This led to an overall annual reduction in costs of £69m.

L&G's final dividend per share was 2.73p for 2009, a 33% (2.05p) improvement on the previous year.

International operating profits were also up at £127m for the year compared to £59m for 2008, an increase of 115%.

In London, L&G's share price bounced 5.17% to 85.5p, up 4.2p on the news.

Going forward, L&G highlights the impact of Solvency II, the European wide insurance industry directive due to be implemented by 2012, as a "key uncertainty for the business".

However, it calls intensified discussions with the UK Government and Opposition, the FSA and European Commission over the past six months "encouraging".

Group chief executive Tim Breedon says: "Today's results demonstrate the significant progress we continue to make in transforming the Group into a lower cost, capital efficient, cash generative business."

He expects "modest growth" in the UK economy in 2010.

"However, UK Risk and Savings markets which were depressed in 2009 are expected to rebound. These results show that Legal & General is in excellent health and is ideally placed to take advantage of new opportunities as they emerge in a financial services sector which is undergoing rapid change," he says.