Asset Management stars as Legal & General profit beats expectations

Legal & General Group PLC on Wednesday said it expects growth in full-year core earnings to be above the top end of its target range after a strong first half.

The London-based insurer and asset manager said pretax profit ballooned to £2.00 billion in the half-year ended June 30 from £406 million a year prior.

Core operating profit increased 6.9% to £918 million from £859 million, 3.8% ahead of company-compiled consensus of £884 million.

Core operating earnings per share grew 11% to 12.15 pence from 10.94p, ahead of 11.70p consensus.

For 2026 as a whole, L&G expects core operating EPS to be above the top end of its 6% to 9% target range. In 2025, L&G reported core operating EPS of 20.93p.

Operational surplus generation was £790 million in the period, up 3.1% from £766 million, ahead of £750 million consensus.

Solvency II coverage ratio declined more than forecast to 201% from 217% on year, compared to 206% market consensus. It remains above L&G's 160% to 190% target operating range.

Chief Executive Antonio Simoes said the highlight of the first half was the performance of the Asset Management division, with fee-related earnings increasing 37%, supported by record annualised net new revenue and a reduced cost-income ratio of 71%.

"We are on track to meet or exceed our strategic targets," he added.

Institutional Retirement operating profit increased by 5% to £646 million, 2% above consensus, Asset Management operating profit grew 10% to £222 million, 7% ahead of consensus, and Retail operating profit rose by 5% to £248 million, beating consensus 2%.

In response, shares in L&G were up 0.5% at 304.15 pence each in London, close to its all-time high of 310p reached in July. The wider FTSE 100 index was up 0.1%.

L&G raised the interim dividend 2.0% to 6.24p per share from 6.12p and said it is nearing the midpoint of the £1.2 billion share buyback programme it announced in March.

"We are on track to return more than £5 billion to shareholders over 2025-27. We have grown our dividend per share while improving dividend cover," L&G said.

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