Legal & General boosts shareholder returns with £500m buyback after strong 2024 performance

Legal & General, the insurance and asset management behemoth, has announced a six per cent rise in core operating profit for 2024.

Core operating profit reached £1.6bn, while pre-tax profit under IFRS accounting standards was reported at £542m, as reported by City AM.

Following these strong results, Legal & General declared a £500m share buyback for 2025, as part of its pledge to return over £5bn to shareholders within three years.

The group also increased its dividend per share by five per cent to 21.36p.

The company's Solvency II capital generation hit £1.8bn, with its Solvency coverage ratio climbing to 232 per cent.

Over the course of the year, the firm sold its homebuilding business, Cala Homes, for £1.35bn and its US Protection business for £1.8bn.

Legal & General also formed a strategic partnership with Japanese life insurance company Meiji Yasuda.

On a divisional level, the group's Institutional Retirement arm recorded £10.7bn in global pension risk transfer (PRT) deals, including £8.4bn in the UK and record volumes in the US and Canada.

Core operating profit rose to £1.1bn, up seven per cent. Meanwhile, Legal & General Asset Management reported total global assets under management (AUM) of £1.1trn.

Higher fee margin products and a strategic investment in US real estate equity specialist, Taurus, helped improve margins, but the division's core operating profit fell 10 per cent to £400m.

Legal & General's retail operations reported record annuity sales of £2.1bn and ongoing growth in Workplace Defined Contribution (DC) pensions, with core operating profit increasing 12 per cent to £504m.

The company's CEO, António Simões, commented: "2024 has been a year of significant strategic progress and strong financial performance. We delivered six per cent growth in our core operating profit and core EPS, alongside excellent new business volumes, while investing for the future."

Simões further noted: "We are seeing positive commercial momentum as we execute our strategy with rigour and pace. By sharpening our focus and simplifying our portfolio – through the sale of Cala and US Protection – alongside our strategic partnership with Meiji Yasuda and our investment in Taurus, we are strengthening our ability to generate sustainable growth."

He added: "We stated at our capital markets event that we intended to return more to shareholders and that is exactly what we are doing. Our clear capital allocation framework supports our plan to return over £5bn over the next three years, through dividends and buybacks. The dividend per share increased by five per cent to 21.36p, underscoring our commitment to delivering value to our investors."

Looking forward, Simões expressed confidence in the company's ability to meet ambitious targets, stating: "Looking ahead, our momentum demonstrates why we are confident in our ability to deliver on our ambitious targets, directing our capital and expertise where they can create lasting value, and making a meaningful impact for customers, shareholders, and communities."

Richard Hunter, head of markets at interactive investor, remarked: "Legal & General is in the midst of a new chapter and is transforming, although given the nature of a business entrenched in investment, it is one which is viewed through the prism of the longer term."

"The progress of the group is almost swan-like, with gradual movements masking some furious paddling underneath the water."