TIDMPRU
Prudential PLC
20 December 2023
20 December 2023
Prudential and CITIC to PROVIDE growth capital FOR CPL
Prudential plc (" Prudential ") today announced that
CITIC-Prudential Life Insurance Company Limited (" CPL "), a 50/50
joint venture between Prudential Corporation Holdings Limited (" P
CHL "), an indirect wholly-owned subsidiary of Prudential, and
CITIC Financial Holdings Co., Ltd. (" CITIC "), has announced that
CPL's shareholders have approved an increase of its registered
capital by RMB2.5 billion (US$351 million) (" Capital Increase ").
Under the terms of the Capital Increase, each of CPL's
shareholders, PCHL and CITIC, will contribute RMB1.25 billion
(US$176 million) in cash. As a result, the registered capital of
CPL will increase from RMB2.36 billion to RMB4.86 billion (US$331
million to US$682 million), while the equity stakes of the
shareholders remain unchanged at 50/50. The Capital Increase is
subject to relevant regulatory approvals.
Upon completion of the Capital Increase, the proforma China
Risk-Oriented Solvency System (C-ROSS) core and comprehensive
solvency ratios as at 30 September 2023 are estimated to have been
121% and 215% respectively, well above regulatory requirements.
The Capital Increase underscores the common belief of both
shareholders in the attractive long-term prospects of life
insurance business in the Chinese Mainland and their strong ongoing
commitment to CPL. Prudential's share of the Capital Increase will
be funded out of its reported free surplus of US$8.3 billion (as at
30 June 2023) which the Group will look to further deploy for
future growth opportunities.
Anil Wadhwani, Chief Executive Officer said: "As disclosed in
our strategic update in August 2023, we are building a sustainable
growth platform through targeted investment in structural growth
markets. CPL plays a pivotal role in our overall strategy and
growth, and we will continue to focus on delivering our
customer-led and multi-channel distribution strategy in the Chinese
Mainland. This includes the development of whole life protection
products and retirement solutions to address customers' needs at
different life stages, as well as further enhancing our
professional high-quality agency force and expanding the
bancassurance network. We are confident that the continued focus on
quality establishes a good foundation for future growth, and we
remain excited about the significant potential of the
business."
Please access the following link for CPL's disclosure on the
Capital Increase:
https://www.citic-prudential.com.cn/UploadFiles/file/202312201122209635934-
.pdf
This announcement is made on a voluntary basis.
Contact
Media Investors/Analysts
Sonia Tsang +852 5580 7525 Patrick Bowes +852 9611 2981
Sophie Sophaon +852 6286 0229 William Elderkin +44 (0)20 3977 9215
Darwin Lam +852 2918 6348
Note to Editors:
Exchange rates of US$1 = RMB 7.1215, which is the closing
exchange rate as of 15 December 2023, have been used throughout
this document for illustrative purposes.
About Prudential plc
Prudential plc provides life and health insurance and asset
management in 24 markets across Asia and Africa. Prudential's
mission is to be the most trusted partner and protector for this
generation and generations to come, by providing simple and
accessible financial and health solutions. The business has dual
primary listings on the Stock Exchange of Hong Kong (2378) and the
London Stock Exchange (PRU). It also has a secondary listing on the
Singapore Stock Exchange (K6S) and a listing on the New York Stock
Exchange (PUK) in the form of American Depositary Receipts. It is a
constituent of the Hang Seng Composite Index and is also included
for trading in the Shenzhen-Hong Kong Stock Connect programme and
the Shanghai-Hong Kong Stock Connect programme.
Prudential is not affiliated in any manner with Prudential
Financial, Inc. a company whose principal place of business is in
the United States of America, nor with The Prudential Assurance
Company Limited, a subsidiary of M&G plc, a company
incorporated in the United Kingdom.
https://www.prudentialplc.com/
About CPL
CPL is a 50/50 life insurance joint venture between PCHL and
CITIC in the Chinese Mainland. As at 30 June 2023, it had an
extensive footprint with 23 branches and operations in 100 cities.
It distributes products through multiple distribution channels with
around 15,000 tied agents, 61 bank partners and access to over
6,600 bank branches. As at 30 September 2023, CPL's C-ROSS core and
comprehensive solvency ratios were 109% and 203% respectively.
C-ROSS is the solvency regime that governs the insurance industry
in the Chinese Mainland.
Forward-looking statements
This announcement contains 'forward-looking statements' with
respect to certain of Prudential's (and its wholly and jointly
owned businesses') plans and its goals and expectations relating to
future financial condition, performance, results, strategy and
objectives. Statements that are not historical facts, including
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businesses') beliefs and expectations and including, without
limitation, commitments, ambitions and targets, including those
related to ESG matters, and statements containing the words 'may',
'will', 'should', 'continue', 'aims', 'estimates', 'projects',
'believes', 'intends', 'expects', 'plans', 'seeks' and
'anticipates', and words of similar meaning, are forward-looking
statements. These statements are based on plans, estimates and
projections as at the time they are made, and therefore undue
reliance should not be placed on them. By their nature, all
forward-looking statements involve risk and uncertainty.
A number of important factors could cause actual future
financial condition or performance or other indicated results to
differ materially from those indicated in any forward-looking
statement. Such factors include, but are not limited to:
-- current and future market conditions, including fluctuations
in interest rates and exchange rates, inflation (including
resulting interest rate rises), sustained high or low interest rate
environments, the performance of financial and credit markets
generally and the impact of economic uncertainty, slowdown or
contraction (including as a result of the Russia-Ukraine conflict,
the conflict in the Middle East and related or other geopolitical
tensions and conflicts), which may also impact policyholder
behaviour and reduce product affordability;
-- asset valuation impacts from the transition to a lower carbon economy;
-- derivative instruments not effectively mitigating any exposures;
-- global political uncertainties, including the potential for
increased friction in cross-border trade and the exercise of laws,
regulations and executive powers to restrict trade, financial
transactions, capital movements and/or investment;
-- the longer-term impacts of Covid-19, including macro-economic
impacts on financial market volatility and global economic activity
and impacts on sales, claims (including related to treatments
deferred during the pandemic), assumptions and increased product
lapses;
-- the policies and actions of regulatory authorities,
including, in particular, the policies and actions of the Hong Kong
Insurance Authority, as Prudential's Group-wide supervisor, as well
as the degree and pace of regulatory changes and new government
initiatives generally;
-- the impact on Prudential of systemic risk and other group
supervision policy standards adopted by the International
Association of Insurance Supervisors, given Prudential's
designation as an Internationally Active Insurance Group;
-- the physical, social, morbidity/health and financial impacts
of climate change and global health crises, which may impact
Prudential's business, investments, operations and its duties owed
to customers;
-- legal, policy and regulatory developments in response to climate change and broader sustainability-related issues, including the development of regulations and standards and interpretations such as those relating to ESG reporting, disclosures and product labelling and their interpretations (which may conflict and create misrepresentation risks);
-- the collective ability of governments, policymakers, the
Group, industry and other stakeholders to implement and adhere to
commitments on mitigation of climate change and broader
sustainability-related issues effectively (including not
appropriately considering the interests of all Prudential's
stakeholders or failing to maintain high standards of corporate
governance and responsible business practices);
-- the impact of competition and fast-paced technological change;
-- the effect on Prudential's business and results from, in
particular, mortality and morbidity trends, lapse rates and policy
renewal rates;
-- the timing, impact and other uncertainties of future
acquisitions or combinations within relevant industries;
-- the impact of internal transformation projects and other
strategic actions failing to meet their objectives or adversely
impacting the Group's employees;
-- the availability and effectiveness of reinsurance for Prudential's businesses;
-- the risk that Prudential's operational resilience (or that of
its suppliers and partners) may prove to be inadequate, including
in relation to operational disruption due to external events;
-- disruption to the availability, confidentiality or integrity
of Prudential's information technology, digital systems and data
(or those of its suppliers and partners) including the Pulse
platform;
-- the increased non-financial and financial risks and
uncertainties associated with operating joint ventures with
independent partners, particularly where joint ventures are not
controlled by Prudential;
-- the impact of changes in capital, solvency standards,
accounting standards or relevant regulatory frameworks, and tax and
other legislation and regulations in the jurisdictions in which
Prudential and its affiliates operate; and
-- the impact of legal and regulatory actions, investigations and disputes.
These factors are not exhaustive. Prudential operates in a
continually changing business environment with new risks emerging
from time to time that it may be unable to predict or that it
currently does not expect to have a material adverse effect on its
business. In addition, these and other important factors may, for
example, result in changes to assumptions used for determining
results of operations or re-estimations of reserves for future
policy benefits. Further discussion of these and other important
factors that could cause actual future financial condition or
performance to differ, possibly materially, from those anticipated
in Prudential's forward-looking statements can be found under the
'Risk Factors' heading of Prudential's Half year 2023 Report and
2022 Annual Report. Such reports are available on Prudential's
website at www.prudentialplc.com.
Any forward-looking statements contained in this announcement
speak only as of the date on which they are made. Prudential
expressly disclaims any obligation to update any of the
forward-looking statements contained in this announcement or any
other forward-looking statements it may make, whether as a result
of future events, new information or otherwise except as required
pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK
Disclosure Guidance and Transparency Rules, the Hong Kong Listing
Rules, the SGX-ST Listing Rules or other applicable laws and
regulations.
Prudential may also make or disclose written and/or oral
forward-looking statements in reports filed with or furnished to
the US Securities and Exchange Commission, the UK Financial Conduct
Authority, the Hong Kong Stock Exchange and other regulatory
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shareholders, periodic financial reports to shareholders, proxy
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officers or employees of Prudential to third parties, including
financial analysts. All such forward-looking statements are
qualified in their entirety by reference to the factors discussed
under the 'Risk Factors' heading of Prudential's Half year 2023
Report and 2022 Annual Report.
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