Legal and General will provide a £750m dividend payment to shareholders, despite warnings from the Bank of England that insurers should cancel payouts amid the ongoing pandemic.
The group said it will confirm its previous recommendation for a final dividend of 12.64p (2018: 11.82p) giving a full year dividend of 17.57p (2018: 16.42p), 7% higher than 2018.
It comes at the cost of £753m, and over the full year, the dividend payouts will amount to more than £1bn.
The Bank of England’s Prudential Regulation Authority wrote to banks and insurers last Tuesday urging them to cancel their payouts. Legal and General said that it has given “careful consideration” to the letter, but will proceed with its payment of final dividends nonetheless.
A statement from the group read: “The board continues to pay close attention to the need to protect its customers and employees at this difficult time.
“The board has carefully considered the need to act prudently in maintaining safety and soundness, and in so doing ensure that Legal and General plays its full part in supporting the real economy.”
It continued: “It also recognises the importance of dividend income to many institutional and retail shareholders, particularly in the current environment.
“The board observes that, notwithstanding significant market volatility, the group’s solvency position remains robust.”