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Dresdner sale inflates Allianz net loss

Latest update : 2009-02-26

German insurance giant Allianz has reported a worse-than-expected net loss of 2.44 billion euros for 2008, due in large part to a massive charge connected with the sale of its Dresdner Bank subsidiary to Commerzbank.

AFP - The German insurance giant Allianz on Thursday posted a worse-than-expected 2008 loss owing in large part to a massive charge connected with the sale of its Dresdner Bank subsidiary.

Allianz said its net loss amounted to 2.44 billion euros (3.1 billion dollars), while analysts polled by Dow Jones Newswires had pencilled in a more modest drop of 1.86 billion euros.

In 2007, Allianz had made a net profit of 7.97 billion euros.

The insurance group said it booked a charge of 6.4 billion euros in connection with the sale of Dresdner to the second biggest German bank, Commerzbank, last year.

That sale was completed on January 12 2009, "more than half a year earlier than originally intended," the insurer noted in a statement.

On the operating level, Allianz made a profit of 7.43 billion euros, but that was 25 percent below the year earlier figure, and slightly lower than an analyst forecast of 7.50 billion euros.

The management board would propose a dividend of 3.50 euros per share for 2008, the statement said, down from 5.50 euros in 2007.

"Our result of 7.4 billion euros deserves recognition considering the challenging environment," it quoted Allianz chairman Michael Diekmann as saying.

Combined revenues last year fell by 5.3 percent to 92.5 billion euros, the statement said, while net income from continued business, excluding Dresdner, dropped to 4.0 billion euros from 7.3 billion in 2007.

"The difficult conditions in the capital markets will continue throughout 2009. We are in the midst of the toughest economic downturn for decades," Diekmann added.

"Reliable profit forecasts for 2009 are not possible in this environment."

In the final quarter of 2008, a period marked by volatile financial markets following the bankruptcy of US investment bank Lehman Brothers, Allianz showed a net loss of 3.11 billion euros, compared with a profit of 665 million euros in the same period a year earlier.

That period had included results from Dresdner Bank.

In Allianz's core activity of property and casualty insurance, the company reported a slight increase in premium income to 43.2 billion euros, along with an operating profit of 5.6 billion euros, which represented a decline of around 10 percent from 2007.

Date created : 2009-02-26