Prudential has posted an 81% fall in net profit to $182m (£138m) in its opening half results, down significantly from the $947m (£717m) the group reported in H1 last year.

The life insurer, which is incorporated in the UK but focuses on Asian life insurance, cited rising interest rates as well tougher trading conditions in its key markets of China and Hong Kong as reasons behind its stalling growth.

Prudential’s performance in Hong Kong saw the group register a 3% drop in new business profit, which is a measure of expected earnings from products recently sold, falling to $651m (£492.9m) in the six months to 30 June.

However, Prudential said it had taken steps to “reposition the business” in the Chinese mainland ahead of both regulatory and macroeconomic changes.

Prudential’s CEO, Anil Wadhwani, said: “We entered this year with a clear strategy and a set of outcomes we are confident in achieving by 2027, namely a compounded annual growth rate for new business profit of 15 to 20% and double-digit for cash generation, both measured from a 2022 base.”

Prudential confirmed that it is still committed to a $2bn (£1.51bn) share buyback scheme to return capital to shareholders, and revealed that as of 22 August, 22 million shares had been repurchased for $192m (£150m).

Head of markets at interactive investor, Richard Hunter, commented that there is “promising evidence emerging” that Prudential is beginning to deliver against its own “stretching strategic objectives”.

“While Prudential is not traditionally known as a group where the dividend payment is a shining light – indeed, the 9% increase announced takes the projected yield to a pedestrian 2.4% - the $2bn share buyback programme is now underway and there is the strong possibility of more to come should the current metrics stay in range,” Hunter said.

Investment director at AJ Bell, Russ Mould, also highlighted that Prudential’s latest results compared “unfavourably” with Hong Kong-based insurer AIA.

However, Mould added: “After a miserable run for the shares, the mildly positive reaction to Prudential’s numbers suggests the market is willing to give it the benefit of the doubt, helped by the fact full-year guidance is being maintained and by a material increase in the dividend.

“Wadhwani has only been in post for a little over 18 months so he is likely to be given time to turn things around, but he will need to demonstrate that the targets outlined for 2027 are credible before long.”

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