Prudential profit beats forecasts

The Prudential is eyeing up big cost savings

Life insurance company Prudential has reported a 33% rise in operating profit, well ahead of market estimates.

The UK's second-largest listed insurer said it earned £1.7bn in 2005, above an average forecast of just under £1.6bn

But a "deterioration in consumer credit conditions" hit its internet bank, Egg, where profits fell 16% to £60m.

Prudential said it had seen good growth in its UK and US pensions businesses and expected to earn a profit from its Asian operations this year.

Following its move to buy out the remaining shares in Egg last year, Prudential said it had identified £40m ($70m) in annual cost savings to be made across its UK operations.

It is also working on a plan to harmonise its global IT infrastructure, which it says could save the company £20-£25m per year.