L&G posts £1.49bn loss

by Gill Montia

Story link: L&G posts £1.49bn loss

Legal & General (L&G) has posted a pre-tax loss of £1.49 billion for 2008, compared to a profit of £883 million in 2007.

The insurer has also reported that its capital surplus stood at an estimated £1.5 billion in March, down from £1.6 billion in February.

The change reflects the group’s decision to double its provision against losses on credit defaults, to £1.2 billion.

L&G chief executive, Tim Breedon, says “balance sheet strength remains our priority in 2009″, adding that in the months ahead the business “will be selective about sales growth”.

In addition, further job cuts are expected at the company, which shrank its workforce by around 10% last year.

Mr Breedon’s pledge regarding L&G’s balance sheet has been reflected in the group’s dividend which has been set at 2.05p per share, down from 4.1p a year earlier.

Last month L&G followed other leading life and pension providers in slashing bonuses for investors in its with-profits fund.

Holders of with-profits bonds were the worst affected with bonuses on investments which begun in 2004 down 18.3% over the year.