Legal & General has raised its dividend by 5% and announced a £500 million shares buyback, though profits fell slightly below expectations.

The life assurer’s buyback was significantly larger than expected but CEO António Simões said the FTSE 100 group was seeing “positive commercial momentum”.

He was also simplifying the portfolio through last September’s sale of Cala Homes for £1.35 billion and US Protection business last month for £1.8bn which had freed up some capital.

The distributions were revealed alongside results showing that the retirement and asset management firm increased 2024 core operating profit by 6% to £1.6 billion.

Mr Simões said: “2024 has been a year of significant strategic progress and strong financial performance.”

Cala was acquired by Ferguson Bidco, an entity owned by funds managed by Patron Capital and Sixth Street Partners. Legal & General sold its US protection business to Japanese firm Meiji Yasuda.