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Legal & General reports losses of £189m

Legal & General has revealed it made an operating loss of £189m in 2008, compared to a profit of £658m in 2007.

The group’s net loss from ordinary activities was £1.13bn in 2008, compared with a profit of £718m in 2007.

The loss has prompted the company to recommend a 50% cut in its final dividend to 2.05p a share, from 4.1p.

The group says the loss reflects its increased credit default reserving.

Tim Breedon, group chief executive, says: “Today’s dividend recommendation balances our strong operational cash generation and the need to promote balance sheet resilience.

“We took action in 2008 to improve business cashflow and strengthen capital by substantially increasing our credit default reserves, reducing our equity exposure, and managing our cost base. Our £1.8bn IGD surplus after dividend is strong and resilient to further stress scenarios.

“Balance sheet strength remains our priority in 2009 and will be underpinned by further improvement in the cash profile of our businesses and management of costs. We will be selective about sales growth and are reducing new business capital strain through product design and pricing action.

“Today’s dividend decision reflects our realism about the current environment, but also our confidence in the business model and underlying strength of the Company to trade through current economic uncertainty and emerge stronger after the recession.”


Dunfermline fails to quash bailout rumours

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BDS launches Platform exclusive

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