Bottom Line: Tidjane Thiam back on top as bet on Asian growth pays off

IT’S HARD to believe that just three years ago Prudential chief Tidjane Thiam was being called on to justify his position.

 

After a clumsily handled bid for Asian insurer AIA was derailed by nervous shareholders and widespread media opposition, the firm was left nursing costs of £377m. But a vote of confidence at the 2011 AGM gave Thiam the chance to start again – and he grabbed it with both hands. 

 

We now know – with the benefit of hindsight – that Thiam was right and his critics were wrong. AIA would have been a great acquisition and the price, far from being too high, would actually have been a steal.  Fortunately, the man from the Pru’s heart remained in the right place – namely, Asia. He set out six financial targets for the firm to hit by end 2013, and allocated vast amounts of capital to Asia and America. 

 

Now, after hitting four of the six goals ahead of deadline, Thiam’s refusal to be diverted from an easterly course has paid off. Asia life profits are up 18 per cent year on year, while new business grew 11 per cent. Remaining targets will soon be met.

 

At the start of June 2010, when the Pru abandoned its bid for AIA, shares were at a steady but uninspiring 561p. Yesterday they closed 119 per cent higher at a record 1,232p. Thiam’s bet on Asia has made the Pru one of the unlikely successes to emerge from the financial crisis. Luckily for the Pru’s investors, its Asian adventure has barely begun.