Prudential says exposure to SVB minimal, sales to China travellers pick up

Prudential says exposure to SVB minimal, sales to China travellers pick up

HONG KONG, March 15 (Reuters) – Asia-concentrated insurance provider Prudential’s (PRU.L) reported its publicity to collapsed Silicon Valley Lender (SVB) is negligible, and expects small affect on its “conservative” equilibrium sheet.

The insurer has around $1 million publicity to SVB (SIVB.O), from a full personal debt e-book of $23 billion, James Turner, company’s main economic officer claimed at a news briefing on Wednesday.

“Our exposure to SVB is de minimis,” Turner claimed.

The failure of SVB and Signature Financial institution in the earlier week sparked fears of contagion in the banking and broader fiscal sector, triggering a selloff in worldwide inventory marketplaces.

“We are quite conservative in the positioning of our stability sheet”, Turner explained, incorporating all around 46% of Prudential’s credit card debt publicity is to sovereign bonds and 89% of its company money owed are expenditure grade.

The insurer’s stock price finished 1.18% reduced in Hong Kong on Wednesday, while the broader market place was up 1.52%. Its London-mentioned shares fell 4.7% by 9 a.m. GMT

Analysts say they assume a more powerful pickup in product sales from Chinese mainland readers to Hong Kong, the insurer’s crucial income centre.

Prudential’s growth in new sales is lessen than JP Morgan’s 2023 total-12 months forecasts, according to a investigate observe from the bank.

“This is a combined established of results compared to forecast by JP Morgan and consensus, and we expect a neutral to adverse share value response.”

The amount of Chinese visitors to Hong Kong is however only 45% of peak concentrations before the COVID-19 pandemic, Anil Wadhwani, the firm’s new main govt, reported at the information briefing.

He extra the original flow of site visitors had a constructive influence on the firm’s sales.

Prudential’s annualised top quality equivalent (APE) gross sales, a intently watched gauge of insurance revenue, jumped 15% for the first two months of this yr from the similar period of time a calendar year ago, reported Wadhwani, who formally assumed the leading task in February.

“The removal of the bulk of COVID-19-connected limitations across the area and the progressive opening up of the Chinese mainland financial state has meant that 2023 has started off well with encouraging development in 12 months-on-year gross sales,” Wadhwani mentioned.

As China ended its Zero-COVID policy, border constraints have been taken off past month letting mainland visitors to go to Hong Kong and obtain insurance plan all over again.

The insurer’s modified running gain came in at $3.38 billion on a frequent trade rate basis, up by 8% from $3.23 billion in 2021, Prudential mentioned in a assertion.

The consequence beat a forecast of all around $3.34 billion from 22 analysts’ forecasts delivered by the company.

The insurer has now concluded the move of its full senior administration workforce from London to Hong Kong – its new world-wide headquarters – which is nearer to its revenue resources.

The insurance company has no rapid strategy to modify its British isles domicile, its main govt explained.

Reporting by Selena Li, additioanl reporting by Scott Murdoch in Sydney and Ian Withers in London
Modifying by Shri Navaratnam, Sonali Paul and Kim Coghill

Our Expectations: The Thomson Reuters Have confidence in Ideas.