Hello everyone, and welcome to today's Prudential plc Capital Management Update call. My name is Seb, and I'll be the operator for your call today. If you would like to ask a question, please press Star 1 on your telephone keypad. If you would like to withdraw your question, please press Star 2. I will now hand the floor to Patrick Bowes to begin the call. Please go ahead.
Thank you, Seb. Good morning and good afternoon. Welcome to our Capital Management Update Q&A session. I am Patrick Bowes, Chief Investor Relations for Prudential plc. Together with me here today are our CEO, Anil Wadhwani, and Ben Bulmer, our CFO. I hope you've had a chance to review the RNS's slides and scripts that we published last night on our website, and we provided a brief trading update in the RNS, but we've yet to reach the end of the quarter, so we'll not be commenting any further. The RNS also confirmed that our half-year results are the August 28th. I will now pass over to Anil and Ben to kick off with some opening remarks before opening up for questions. Thank you. Over to you, Anil.
Thank you, Patrick. Hello everyone. I'm delighted to provide a Capital Management Update today. As a result of our strong capital base, the progress that we've made on our strategic priorities, as well as the recent clarification of the rating agency's treatment of IFRS 17 CSM, we will return $2 billion of capital to our shareholders through a buyback program over the next two years. This represents approximately 8% of our outstanding stock. The share buyback is consistent with our priorities for allocating capital, and with the current share price, we see this as a compelling opportunity to create value for our shareholders. We have importantly retained sufficient capital flexibility to further accelerate organic growth and enhance our capabilities. There is no change to our dividend policy and our expected annual dividend growth of 7%-9% in 2024.
Given our focus on quality growth in both value and cash, and an account of the progress of the execution of our strategy, we remain confident in our full year 2024 new business growth and in achieving our 2027 financial and strategic objectives. We expect that the progress towards our 2027 financial objectives will increase the potential for further cash returns to our shareholders. Ben Bulmer, our Chief Financial Officer, will now summarize the key financial aspects of this Capital Management Update. Ben?
Thanks, Anil, and hello everyone. So look, when we introduced our new strategy in August last year, we set out our capital allocation philosophy, and that philosophy remains unchanged. But there's a few developments that have subsequently clarified management's view that there's capital available for return to shareholders. Firstly, as Anil briefly referenced, credit rating agencies have updated their methodologies to reflect the implementation of IFRS 17. We have comfortable leverage headroom even after the $2 billion buyback, and our pro forma Moody's leverage ratio would be 15% as of year-end 2023. Secondly, we now introduce a free surplus ratio and provide additional guidance as to how we think about the deployment of free surplus in the context of our growth aspirations, leverage capacity, as well as our capital and liquidity needs.
As no doubt you will have seen, the group's free surplus stock, which is our preferred measure of distributable shareholder capital, stood at $8.5 billion at the end of 2023. The free surplus ratio we've defined is set as group free surplus plus the EV required capital of the life business divided by the EV required capital of the life business. At the end of 2023, our free surplus ratio was 242%. Based on our current risk profile and our business unit's applicable capital regimes, we will seek to operate between a range of 175%-200%. If we project the free surplus ratio to be above that operating range over the medium term and taking into account opportunities to reinvest at appropriate returns and allowing for market conditions, capital will be returned to shareholders.
So the $2 billion buyback we've announced today is forecast to reduce the free surplus ratio from 242% at year-end 2023 to marginally above 200% on a pro forma basis, and that's taking into account both the buyback and the 2023 second interim dividend. Looking forward, we expect significant acceleration in annual gross free surplus generation from the end of 2025. This will increase our financial flexibility and the potential for further cash returns to shareholders. Back to you, Patrick, for the Q&A session.
Thank you, Ben. So now over to Seb. Please initiate the Q&A process. Thank you.
Thank you. So once again, if you'd like to ask a question, please press Star 1 on your telephone keypad. If you change your mind and would like to withdraw your question, please press Star 2. And our first question comes from Kailash Mistry from HSBC. Please go ahead.
Hi, thanks for taking my questions. Good afternoon, everyone. A couple of things. I know you've just announced this share buyback, but the predictable question is, how would you think about your sort of payout policy after the buyback is completed? Is it fair to say that you would think about it on a payout ratio similar to your nearest peer? Secondly, in terms of financial resources, you highlight a 15% debt leverage on a Moody's basis. What is the additional debt capacity you calculate to maintain the AA rating? And lastly, just on new business trends, you highlight that sales trends in the first quarter, sorry, in the second quarter, are similar to the first quarter. Is there any further color you can provide on business mix and momentum and how that may or may not differ between Greater China and ASEAN? Thank you.
Thanks, Kailash. It's good to hear from you. Let me start with the third question first, and then I'm going to hand over to Ben to respond to your first two. We did put out in the RNS that the quarter two trends are similar to the one that we experienced in quarter one. We are not going to get into specific market details. We look forward to having a much more in-depth conversation on our first half performance in August. Just to come back to what we had said at the quarter one results announcement, against a strong prior period competitor that reflected what we believe was a significant outperformance in 2023, those competitors and base effects will come into play when we discuss the first half 2024 results.
But as I said, we are looking forward to having the in-depth conversation on Hong Kong, Mainland China, as well as in ASEAN when we speak to you in the August timeframe.
Thank you, Anil, and morning, Kailash. Maybe I'll start with the payout ratio. Look, I think as you're rightly referencing, today's announcement is funded by stock. Our focus, as we've said before, in the near term is growth in NBP and, of course, accelerating operating free surplus generation. In terms of the free surplus ratio, as we think how we move across the objective period, I'm expecting to operate very much at the upper end of that ratio. We've disclosed the profile of our gross operating free surplus generation. Ultimately, progress towards those objectives means increased potential for further cash returns to shareholders. While I expect free surplus generation to generate in the near term, of course, we need to be mindful of our billion-dollar investment capability program. Of course, growth in regulatory capital as we layer on successive cohorts of profitable new business.
In terms of today, as you know, our dividend policy is linked to growth in operating free surplus generation. That's not changed with today's announcements. The underpin of 7%-9% continues to apply in 2024. On your Moody's leverage point, so the 15% pro forma number I gave gives us headroom of slightly north of $2 billion.
Thank you. Back to you, operator.
The next question is from Edwin Lu at CLSA. Please go ahead.
Hi. Good morning and good afternoon. Thanks for the opportunity to raise questions. If I may, two questions from me. Firstly, I know this is a $2 billion buyback program, but I guess if the share price does go up subsequently, would you still fully execute this $2 billion program, or would it be sort of a threshold that once the share price is above that, probably the program would not be fully executed? That's my first question. Second question is, we noted your operating range of 175%-200%, which is a bit lower than your nearest peer. Could you share some of the consideration behind? And that's the second question from me. Yeah, thank you.
Thanks, Edwin, and appreciate your questions. I think the answer to the first question, we strongly believe that the stock price makes it highly compelling for us to initiate the buyback program as soon as we possibly can, and we will be in the market quite quickly to take opportunity of where our share price is. And as you would expect, we will continue to monitor our share price. The point being that we are very focused in making commercial decisions that are both focused on returning cash to our shareholders and at the same time driving a quality value business.
But that is something that we will monitor as we believe our share price does not reflect our fair value, as well as takes into account the performance that we have delivered in 2023, as well as back that up with double-digit new business profit growth in the first quarter of this year on an ex-economic basis. I'm going to stop there. I'm going to now turn to Ben to talk about your second question.
Thanks. Thanks. Hi, Edwin. Look, clearly it wouldn't be right for me to comment on others. What I can say is that our operating range is obviously based on our risk profile and the applicable local capital regimes that we operate in. The range set out provides us capital to accelerate organic growth opportunities and provides a bit of additional resilience. In terms of our in-force book, if we step back, we're very much weighted towards health and protection with-profits-style savings products and unit-linked-style savings products. And these products, by their very nature, tend to have relatively low first-order shareholder exposure to market risk.
Thanks, Seb. Next question, please.
Next question is from Laura Lee at CGSI. Please go ahead.
Okay, thanks for taking my question. I have three questions. The first is about the leverage ratio. If there is a future M&A, how high is Prudential comfortable lifting its Moody's leverage ratio? If not, then what's the target Moody's leverage ratio range? And second is about the required capital and our operating free surplus ratio is based on the EEV required capital. What does the required capital and hence the target free surplus ratio differ between the EEV and the TEV based on a future TEV is adopted? And third question is also about the free surplus target. Can you give us more opinion on whether we may have a product mix that such it needs less capital to grow versus an industry average, or is the free surplus ratio target based on a conservative projected future growth rate, such as the current 2023 new business profit target?
That's all, thanks.
Yeah, thanks for your questions. We may come back to you on your second question because you got cut out a little bit. So we may come back to you for your second question. But let me start with the future growth question. You're absolutely right. I think the buyback that we've announced today is an illustration of the financial discipline that we would like to operate under, as well as importantly that we are retaining enough financial and capital strength to be able to deliver growth, if not surpass the 15%-20% range that we had spoken about when we announced our strategy late August. And we remain confident, as I said, that we have enough financial muscle to be able to pursue the growth opportunities that exist in our Asian and African markets. I'm going to turn to Ben to talk about the leverage ratio.
If you could just kind of once again just clarify the second question.
I think I caught that. Hi there, Laura. It's Ben here. So on the leverage ratio, so Moody's has set sort of a general default target leverage range between 5%-20% for companies targeting AA rating. And within that, they look to count 50% of the net CSM. We've been waiting for some clarity on this. We've spent time with the rating agencies, all three of them actually, over the last month. As I referenced earlier to Kailash's question, we're operating at about 15%. We've got just over north of $2 billion to the upper end of that headroom. I think your second question, and tell me if I got this wrong, was would required capital of the operating ratio change materially if we were to look at this through a TEV lens. I can't tell you exact numbers, but I think conceptually it would be very similar.
You wouldn't see a change in required capital. I wouldn't expect the free cash flows to materially change.
Thank you, Seb. Can I just ask when you ask your question, if you turn your phone on mute, we can hear someone tapping as they ask a question? Thank you. Okay, next question, please, Seb.
Next question comes from Andrew Crean from Autonomous. Please go ahead.
Good morning, good afternoon, everyone. I have three questions. Firstly, the mood music today is very different from the full-year figures where there was much more talk of inorganic and bancassurance deals. Could you give us a sense as you look forward over the next few years to what level of money you're thinking about in terms of potential bancassurance deals? Secondly, in terms of calculating the capital requirement of the OFSG each year, could you tell us what ratio of required capital? Because clearly the way you report it, it's on 100% required capital, which is too low. I mean, should we build in sort of 175% or 200% of capital requirements in terms of the real OFSG? And then thirdly, a point of clarification.
When you say the second quarter new business is similar to the first quarter new business, do you mean in dollars million terms or in terms of growth rate versus the prior year? Just, that's a definitional point.
Thanks, Andrew. Let me take your question third, which is relatively straightforward. So when we spoke about the trends, it was more from a year-on-year growth perspective and not from an absolute dollar perspective. In terms of your first question on bancassurance and inorganic, so let me kind of step back. When we did announce our strategy late August last year, we had been quite explicit that our primary focus would be organic growth, given the profitability and the returns that we continue to see in terms of deploying capital to drive our organic growth. We had also mentioned that we were keen to build our capabilities so that we create a much more sustainable value-creating platform over the medium to long term.
In terms of bank partnerships, so that we provide an additional level of clarification and color, we would like to pursue bank partnerships that complement the strength that we have in our agency force in some of our key markets. Now, while doing this, you could expect that we will be contrasting and comparing this with returns that we would get if we were to return the same capital back to our shareholders. But I think providing a lens of diversification, and you simply have to look at our 2022 performance, which was largely bancassurance-led versus 2023 when the borders opened up, it was largely agency-led. In terms of the size, Andrew, these are not massive Pan-Asian deals.
These will be typically in-country, much smaller sizes, but something that I believe will provide us a greater level of diversification as we look at expanding our distribution in some of our key ASEAN markets in specific. But I'm going to stop there and turn to Ben to answer the second question.
Morning, Andrew. So you're right. Our reported basis has 100% of prescribed capital requirements that reflect the regulations in each jurisdiction. And I don't think we're unique in that. Of course, for our larger balance sheets, this can be a sort of 1 in 200 sort of level. But what we're saying today is we're electing to hold distributable capital in excess of this at 175%. Now, dipping below that momentarily doesn't necessarily stifle growth, but I'd likely look to take management actions. So I think as we think about cash distribution going forwards, yes, absolutely keep in mind the 175 level that we've set out today.
Thank you, Seb. Okay, next question, please.
Thank you.
Next question is from Thomas Wang at Goldman Sachs. Please go ahead.
Thank you. Hi, Ben here. A couple of questions. Firstly, on the, you mentioned on the slide that the operating free surplus generation target $4.4 billion. With this buyback, do you feel the need to adjust it? Because I mean, rough calculation, that's going to remove $100+ million or so from 2027 free surplus generation. So just want to quickly check, do you feel the need to make a small change to that? And secondly, on this excess, in a way, excess capital, the 75%-100% target above the required capital, do you have any sort of comfort range in terms of how much of that is debt versus equity within that excess capital? Thank you.
So yeah, sure, if I can kick off on Thomas, your first question, no, absolutely no change to our OFSG objectives. Of course, the funding that's earmarked for today's announcement is set in Topco in our Holdco cash. Given its geography, it doesn't impact gross operating free surplus generation quantums, but kind of comes through in the net number. So no change to that. I think I caught parts of your second question. If you wouldn't mind just repeating it, sorry.
No problem. Just excess capital on top of the required capital, excess free surplus on top of the required capital. Do you have any currently? I think $1 billion within that $3.5 billion or so is debt? Do you have any sort of comfort range on how much of that will be debt financing going forward?
Well, I think what, and given the certainty we recently got around leverage ratios, what we're saying is we will likely use that flexibility to pursue select partnership opportunities. I think Anil's touched on some of that. I'm certainly happy doing that. In addition to that, of course, because we've set out a range, there are elements of capital available in that free surplus on the balance sheet that we can use to accelerate organic growth. And we've never been shy of saying that it's our aim, if we can, to exceed the growth targets that we set for ourselves in 2027.
Thank you. Seb, next question.
The next question is from Andrew Sinclair at Bank of America. Please go ahead.
Thank you. Three for me, please. So first, you've said a couple of times that investment decisions will be judged against the alternative of returning capital to shareholders. How can we evaluate that? What valuation multiples are you considering? And will you give some updates to targets or some valuation multiples when you do sign any partnership opportunities? That's question one. Question two is just to understand the $1 billion of investment spend, what impact should we think of from that and the ratio and just any comments around that? And third was just on the 15%-20% new business compound target. Can you give me an idea of what would that be if you adjusted it for today's economics?
Thanks, Andrew. Let me start with your first question, and I'll answer the third one as well. I'll ask Ben to talk about specifically the $1 billion investment and the progress that we are making and what you could expect in that regard. In terms of evaluating our bank partnerships versus returning capital to our shareholders, clearly we have certain thresholds that we evaluate these bank partnerships on. Now, as you could imagine, these are commercially sensitive thresholds, so we can't be more explicit about it. Rest assured, there's a high degree of evaluation when you are comparing and contrasting with the dollar invested in the bank deals versus when we are returning that to the shareholders. I also wanted to point out, as I've kind of mentioned on a number of occasions previously, is that the bancassurance margins are quite healthy.
They are not as strong as what you would expect from agency, rightfully so, but they are quite healthy. We reflect the entire economics, the fully loaded economics of our bancassurance partnerships in the margins that we disclose. I think that's a very important factor that you need to know. This makes us believe that these are still accretive and do provide a level of diversification wherever we have agency strength. In terms of your 15%-20% new business profit question and whether it is going to account for the interest rates movements, I think we've been quite explicit about that. Again, when we set the targets that it's going to be on an ex-economic basis. That is something that we continue to report, as you would have seen in our quarter one earnings results as well.
I'm going to stop there, and I'm going to turn to Ben to talk about the $1 billion investment.
Just before we move on to Ben, if I can, Anil, almost combining those two questions. I mean, I understand the difficulties and commercial sensitivities around bancassurance deals, but I think shareholders will very much appreciate the capital return today, but also will want to understand what they're getting for any of these bancassurance deals. I mean, you set out those targets originally as being organic. Do you see scope to increase your targets once you've done a couple or even of bancassurance transactions?
Yeah. So I think, Andrew, firstly, if you look at our aggregate portfolios, right, the IRRs on our current portfolio continue to remain in excess of 25% with payback periods of less than four years. So I think that's a good indicator for us to how we kind of think about some of these things. Now, as you can imagine, this is portfolio and not deal specific. And I just want to be very, very clear about that. But as you would expect, we can't get into every single bancassurance partnership commercials purely because of sensitivity reasons.
But we understand that the bar is high, and you can take great confidence based on the announcement that we have made of returning $2 billion of capital, that we are being very focused on both driving quality value growth, but at the same time, focused on returning capital back to our shareholders. And the last point, similar to what I was responding to Andrew's question, these deals are not large as compared to what you would have probably experienced us do in the past. For example, with the likes of Standard Chartered or UOB, who've been excellent in terms of our partnership and the value that they have created, these are going to be much smaller and much more in-country, in markets that are of strategic importance to Prudential.
Yeah, thanks. Morning, Andy. So thanks for your question on the $1 billion investment. We're making good progress on deploying that capital, and I'll be able to tell you more when we meet at the interim results. Just by way of reminder, though, as people try to model out our free cash flows, we in 2023 have invested just over $130 million. So we have just short of $900 million to go to be deployed. In 2024, I'm expecting that quantum to be around $250 million-$300 million. And similarly, in 2025, which in part accounts for at least some of the shape that you're seeing in the acceleration of gross OFSG.
Okay. If we go to the next question, please.
The next question is from Dom O’Mahony from BNP Paribas. Please go ahead.
Thanks for taking our questions, folks. Three from me as well, if that's okay. First, maybe it's too early to ask this, but you're clear in saying that the new capital management framework, combined with your target search, could lead to further capital returns. I'm just wondering whether you expect to re-examine your capital position on an annual basis, on a regular basis, or whether it's likely to be more ad hoc when you think about additional capital returns. Second question, just a technical one on the metric. So it's capital excluding the intangibles. I wonder if, firstly, you might just explain why that is. I mean, as I understand it, they do contribute to capital. In what sense is it important to exclude them from the ratio?
And then relatedly, if you do agree further banking partnerships and if there is an asset value on those partnerships, presumably those assets would be excluded from capital as well. But if you could confirm that, that would be helpful. And then lastly, just on the 2027 targets, you've made a couple of clarifications in the release, which is very helpful. You say that you'll reach those targets primarily to growth rather than margin. I wonder if you might just expand on that a little. Should we anticipate that the shape of free surplus emergence from new business vintages will be similar to 2023? Or actually, might you see similar NVP margins, but earlier emergence? And might that help get towards those targets? Thank you.
I'll have a go at those three, if that's okay, Anil. So hi, Dom. So maybe if I start with that last one, do them in the reverse order. So I think for us, the 2023 cohort of new business had a slightly weaker signature, candidly, than I would have liked. There was a greater weighting than historically towards Hong Kong savings products and a lower weighting from a number of countries that typically have slightly earlier cash signatures. We certainly want to improve on that new business cash signature. We have done some repricing, including here in Hong Kong. There are some other actions we've alluded to. Clearly, Dom, as you know, we need to tackle variances, and we talked about setting a provision on medical claims. It is early days in the capability build.
The more we can do on health and agency, frankly, help with the shape of those cash flows. And I would expect some mixed normalization in terms of country mix. So more Singapore, for example, helps with the sort of overall portfolio cash signature. So we are looking to improve that. You're absolutely right. I guess when we were referring to NVP and sort of not relying on margin build necessarily, that was sort of more of a reference to sort of country mix, channel mix, as opposed to not actively managing our product set. Of course, we're going to do that. Your question going in reverse order on intangibles, why have we excluded them? Basically, because we want to get to a deployable capital ratio in essence. GWS kind of works at a group level when we're thinking about SAP solvency.
But ultimately, we need to pay the bills and deployable capital. And having a keen eye on that tends to bite before GWS does. And to the extent, to Anil's point, to the extent we do further select partnerships, we tend to capitalize a degree of that funding. The upfront, you can see it sat on our balance sheet. It is fully reflected in the margins we write and indeed the cash flows we provide, the strain we give. So there is a degree of visibility there, notwithstanding the sensitivity of commercials. And then to your first question on examination of capital, I think the simple answer to that is yes, frequently. We actively look at the capital stack, think about how we're deploying that, how we are creating the best returns for our shareholders. And I hope last night's announcement was good evidence of that.
Thank you.
Can I just clarify?
Go ahead, Dom.
I just wanted to clarify. If you do put an asset value on any bancassurance partnerships agreed in the future, presumably those would also be deducted as intangibles from capital?
Yeah.
Yeah, sure. Short answer is yes.
Brilliant. Okay. All right, Seb, we can go to a few more. We're close on time, but Seb, you go to the next one, please.
The next question is from Farooq Hanif at JP Morgan. Please go ahead.
Hi, everybody. Thanks, Anil, Ben, and Patrick. I'm sure it's been a lot of work to get to this place. But firstly, my understanding was that you were in active conversations on some bank deals and were kind of waiting to see where those would turn out before you made this announcement. So I was just wondering whether that's still ongoing and you just feel confident in giving this money, this commitment back, or is it the case that we're probably not going to hear something active on partnerships this year? Secondly, you talk about increased confidence in your targets, particularly around OFSG. Now, you've talked about the improved profit signature, but from new business that you're trying to create that will get you to that $4.4+ billion.
Can you also talk about how much the $1 billion investment is going to help with those steps to get to over 4.4? Finally, very quickly, I'm not sure if you answered an earlier question, but you only give DPS guidance to 2024, which makes sense because that's what you've given previously. Are you considering higher dividend growth or something that's actually more closely aligned with free surplus generation? Thank you.
Thanks, Farooq. So let me start with the bank pipeline. And yes, we did mention about the active conversations. And unfortunately, I don't have any new news to share with you except the fact that those conversations are ongoing. Again, just to kind of provide clarity, and I might be repeating myself here, is that these are specific in-country deals, so they're not big in size as you would compare to some of the more regional partnerships that we engage on. And to Ben and my earlier comments, we are going to be selective and will have no issues in walking away from these bank transactions if they don't meet our return thresholds. And this goes to Andy's question around the way we evaluate a bank partnership versus returning it to our shareholders.
So yes, there is some degree of clarity, but I don't have a decision to give you right now on some of the ones that we are pursuing. But I guess the additional color in terms of size, in terms of the fact that we are going to be selective, and we will not hesitate to walk away from them if they don't meet our return thresholds.
So the attraction of the timing. So Ben, you want to go to the next one?
On the Farooq, I think you were asking about dividends. I mean, no change in policy today as we've set out. What I would say is the underpin of 7%-9% is, of course, on the absolute dividend number. So to the extent we've got a lower amount of outstanding stock, obviously, that's a tailwind for DPS, if you like. Your second question on increased confidence around OFSG and what does more health and agency do for that? Can I come back to you at the interims where I can actually give you some stats around that rather than giving an oblique trust me answer? I think that would be more helpful.
Farooq, just to answer your first question, just the timing of the announcement, obviously, you will have noticed we have a consent period that has to pass to get permission to transact. And obviously, we wanted to be able to execute during the course of this year. So we've undertaken a transaction with a counterparty that allows us to start that transaction early and continue through close periods and so forth. And obviously, at the current time, we believe the share price provides an attractive point to start executing this process. Okay.
Very clear. Thank you very much.
Seb, we've got time for one more question.
Thank you. The last question then comes from Larissa van der Venter from Barclay, please. Please go ahead.
Thank you very much. Two from my side, and one is actually just to clarify. No, actually, make that three. I just wanted to clarify. On the growth in the dividend, can you just confirm that I hear that you said that is a total nominal amount, not on a DPS basis? That's the first question. The second one, do you have a price point where you would switch from buybacks to rather increasing the ordinary dividend yield, or how should we think about that? And the last one on the $1 billion, you said that you will invest that in customer distribution and in health and technology and data. Is any of those areas receiving particular attention at the moment, or are you spending the amounts for this year proportionately throughout those three? Thank you.
Thank you for your questions. Let me start with the third question, and then I will have Ben answer the first and the second one. So we are making progress on all our strategic enablers. Obviously, as we had said, the primary focus again for us would be distribution and ensuring that we are investing in growing our distribution as well as investing in technology capabilities to be able to provide a much more seamless experience to both our agents as well as the experience that will then convert from agents providing that similar experience to our customers. The second one is we now have stood up our health vertical.
And again, we are making some quite decisive progress in terms of how we are thinking about repricing, how we are thinking about the product set, how we are thinking about underwriting, as well as fraud, waste and abuse. That is something that we will be happy to provide you greater clarity when we speak to you in the August timeframe. Ben, you want to take the first and second?
Yeah, sure. Maybe just to add to that one, Anil and Larissa, hi, this is sort of quoting from the full year 2023 numbers. The split of the $130, if you recall, was $70 distribution, $50 customer, and then $13 health. And obviously, we can update on those at the end of August. On the dividend question, yeah, you're right, it's a nominal. And then in terms of your second point, clearly, we'll look at market conditions and think about returns and ultimately reserve the right to change as we move through time.
Okay.
Thank you.
Seb, I think we've got one very last question left, and then we have to call it time as we want to get off before market trading.
Sure. We'll take another question from William Hawkins, KBW. Please go ahead.
Hi, I've got three, but I just heard what Patrick said, so I'll keep it to one and win a Brownie point. The $6 billion capital resources, can you just give us a hint of how you think that's going to grow over time in line with the other metrics that you've got? So if I'm thinking about the 15%-20% new business growth, the CSM runoff, and that kind of thing, what does that imply about how the $6 billion capital resources is going to grow, please? Thank you.
Yeah, thanks. Thanks, Will. It's hard to give a simple reference metric to point to. Clearly, it's going to grow with the balance of liabilities we have on the balance sheet as the book grows. My recollection is thinking about 2023 growth, that quantum grew roughly 10% year-on-year, whereas I think on terms of the build of shareholder assets liabilities, it was around 8%. But yeah, difficult to give a very simple rule of thumb. Fortunately, the answer is as the book grows in line with the book.
So, shape and size of the book is to be expressed as well. Okay. Sorry, was there anything else, Nick? William, you had a couple.
No, don't worry. That's fine. I'll follow up. Thank you.
Okay. Thank you very much. Delighted to have provided the capital management for you today. Obviously, IR team's at your disposal to answer any detailed modeling questions and for pre-close period roundups. We look forward to speaking to you at the interim results at the end of August. Thank you very much for your attention.
Thank you, everyone.
Thank you.
Have a good day. Bye-bye.
Cheers.
This concludes today's conference call. Thank you all very much for joining.