- Pensions provider Just group reported Thursday first-half adjusted profits rose sharply, but it held back dividends, citing uncertainty over the outcome on mortgage rules that could result in a 'material' reduction in its capital position.

Just said it would defer any dividend declaration until there was greater clarity on its capital position, which is vulnerable to a proposed regulatory change requiring companies like Just to increase capital reserves.

The Prudential Regulation Authority, or PRA, issued proposals (CP13/18) in July requiring companies to set aside more capital to protect against the risks posed by mortgages from a fall in house prices.

The PRA has stated that the process would close on 30 September 2018 with a view to implementation for the 31 December 2018 year end.

For the six months to June 30, adjusted operating profit rose 85% to £124m, and IFRS profit before tax fell to £45.7m from £66m.

New business profit rose 88% to £121m, led by a 64% increase in retirement income sales, and an increase in margin from 8.9% to 10.2%.

Retirement income products Defined Benefit, gIfL and care, delivered increased sales compared to 2017.

Against the threat to its finances from proposed changes around lifetime mortgages, the company said it had adjusted the terms of its retirement income products and lifetime mortgages to mitigate the impact on new business.

'CP13/18 is for us primarily a back book issue and we believe we have a robust mortgage book that is performing well economically. Additionally we are already making material allowances for mortgage risk within our Solvency II balance sheet,' said Rodney Cook, Group Chief Executive Officer. At 9:07am: [LON:JUST] Just Group Plc share price was +2.3p at 89.5p

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