Legal & General half-year results 2026: EPS growth tops target

Legal & General Group Plc has reported a solid first half of 2026, with higher core operating profit, faster earnings-per-share growth and improved capital generation.

The insurer and asset manager now expects full-year core operating earnings per share growth to exceed the top end of its 6% to 9% target range. That upgrade is arguably the most important detail for investors, although strong Asset Management results, a well-funded balance sheet and continued shareholder returns also stand out.

Legal & General's key half-year figures

Metric	First half of 2026	Change or context
Core operating profit	£918 million	Up 7%
Core operating EPS	Not disclosed	Up 11%
IFRS profit before tax	£1,997 million	Includes a disposal gain
Solvency II capital generation	£790 million	Up 3%
Solvency II capital generation per share	14.16p	Up 7%
Solvency II coverage ratio	201%	Above the 160% to 190% operating range
Asset optimisation	£288 million	Up 36%
Interim dividend per share	6.24p	Up 2%
Buyback completed by end-July	Approximately £450 million	Part of a £1.2 billion programme

Core operating earnings per share, or EPS, increased faster than total core operating profit. This measure divides earnings attributable to shareholders by the number of shares and is useful for assessing the progress made for each share held.

Management expects full-year 2026 core operating EPS growth to come in above 9%, compared with the previous 6% to 9% target range. That provides investors with a clearer indication that the first-half momentum was not simply a backward-looking achievement.

Asset Management delivers the standout improvement

Asset Management was the highlight of the period. Fee-related earnings rose 37%, while the division's cost-income ratio fell by four percentage points to 71%.

The cost-income ratio shows how much of the division's income is consumed by operating costs. A falling figure is positive because it indicates better efficiency, although 71% also leaves room for further improvement.

Global assets under management stood at £1.2 trillion. Within this, Private Markets assets increased 22% to £79 billion.

Annualised Net New Revenue, or ANNR, reached £23 million. This measures the annual revenue expected from net new business secured during the period. More than half of Asset Management's first-half ANNR was supported by what L&G calls controlled distribution, meaning asset flows originating from its pension risk transfer, individual annuity or Workplace businesses.

The fee margin expanded to 9.6 basis points. One basis point is one-hundredth of a percentage point, so this is equivalent to 0.096%.

These results support management's argument that the links between L&G's divisions create a competitive advantage rather than simply adding complexity.

Retirement and Workplace businesses retain scale

Institutional Retirement had written or become exclusive on £5.7 billion of global pension risk transfer business by the end of July. Pension risk transfer, or PRT, involves an insurer taking responsibility for some or all of a pension scheme's obligations.

L&G said it maintained strict pricing discipline. That matters because chasing large volumes at unattractive prices could undermine the long-term value of new business.

Approximately 98% of UK PRT volumes transacted during the first half involved long-standing Asset Management clients. Around 90% of annuity assets were also managed by the group's Asset Management operation.

In Retail, annuity volumes reached £1.2 billion. Workplace net flows were £6.2 billion by the end of July, while Workplace defined contribution assets under administration increased 27% year on year to £128 billion.

Total UK defined contribution assets under management rose 23% to £236 billion. Approximately 95% of Workplace assets under administration were managed internally by Asset Management, while the Private Markets Access Fund grew beyond £3 billion.

Again, the attraction is the ability to win customers in one part of the group and manage their assets in another.

Capital strength supports shareholder returns

Solvency II capital generation rose 3% to £790 million, or 14.16p per share. The per-share figure increased by 7%.

Solvency II is the regulatory framework used to assess whether insurers have enough capital to meet their obligations. L&G's coverage ratio was 201%, comfortably above its stated operating range of 160% to 190%.

A ratio above the operating range provides a substantial capital buffer, although investors will want that surplus deployed productively rather than remaining idle indefinitely.

Asset optimisation contributed £288 million, 36% more than in the comparative period. L&G has consequently raised its guidance for this activity to more than £400 million per year. Asset optimisation involves improving the efficiency or returns generated by the group's existing asset portfolio.

Dividend and buyback remain central to the story

The interim dividend has been increased by 2% to 6.24p per share. L&G also completed approximately £450 million of its £1.2 billion share buyback by the end of July.

The company intends to return more than £5 billion to shareholders over 2025 to 2027. Crucially, management said dividend cover had improved through both earnings and capital generation, making the capital return programme look better supported by underlying performance.

The interim dividend timetable is:

Event	Date
Ex-dividend date	20 August 2026
Record date	21 August 2026
Payment date	25 September 2026

The next scheduled update is the third-quarter trading statement on 16 November 2026.

What investors should watch next

There is plenty to like in these results. Core operating profit and EPS both advanced, full-year EPS expectations improved, Asset Management delivered better fee earnings and efficiency, and the capital position remained strong.

The main qualification is that IFRS profit before tax of £1,997 million benefited from a gain on the disposal of the non-retained US business. Investors should therefore avoid treating that statutory figure as a clean measure of recurring performance.

Execution also remains important. Asset Management's cost-income ratio has improved but is still 71%, while the £5.7 billion PRT figure includes business that is either written or exclusive. Those categories are not necessarily the same as completed transactions.

Overall, this was a half-year update showing tangible progress towards a simpler and more focused group. The clearest tests in the second half will be whether EPS growth stays above the former target range, Asset Management continues improving its economics and the group maintains pricing discipline while delivering its capital return commitments.

Investors can review the figures and accompanying disclosures in the original company announcement.