Ageas hit by cost of Greek bailout in H1
By
Ben Deighton
BRUSSELS | Wed Aug 24, 2011 3:23am EDT
BRUSSELS (Reuters) -
Belgium-based insurer Ageas (AGES.BR) made less profit from its insurance operations than expected in the first half of the year due to a writedown on its Greek bond portfolio.
First-half net profit from its insurance operations was 111 million euros ($156.4 million), compared with 275 million euros expected by seven banks and brokerages polled by Reuters.
However, the company, which is the insurance operation left over after Dutch-Belgian bank Fortis was broken up during the 2008 financial crisis, said this included a 150 million euros net writedown on its exposure to
Greece.
"This was absolutely the prudent thing to do at this time, given the ongoing economic uncertainties in the
euro zone," Chief Executive Bart De Smet told reporters during a conference call.
"I would like to emphasize that we are continuing to recalibrate our portfolio to ensure that it stays well balanced and well diversified while achieving attractive returns to meet our future liabilities."
Ageas said its net exposure to southern European sovereign debt was down to 4.3 billion euros on August 19 from 6 billion euros at the end of 2010.
Europe's biggest insurer Allianz (ALVG.DE) also missed profit forecasts earlier this month, hurt by a writedown on its Greek government debt, while Franco-Belgian bank Dexia SA (DEXI.BR) posted its biggest ever quarterly loss, hit by its contribution to a Greek rescue.
Last month euro zone leaders agreed on a second rescue package for Greece that would include a contribution by private sector bondholders estimated to total as much as 50 billion euros ($72.4 billion) by mid-2014.
Overall Ageas's net loss, which is a complex figure that reflects a host of issues relating to Fortis, was 59 million euros in the quarter.
This compares with a profit of 48.4 million euros expected by seven banks and brokerages polled by Reuters.
Stripping out the Greek impairment, Ageas, which operates as AG Insurance in Belgium and sells insurance for the supermarket group Tesco (
TSCO.L) in Britain, said its insurance net profit rose 44 percent in the half as it benefited from an improvement in its non-life operations.
It said that for 2011 it expected inflows to be close to last year's. That is slightly more cautious than its previous forecast of inflows at least in line with 2010.
Ageas said Deputy Chief Executive Bruno Colmant would leave the company and that it had appointed Christophe Boizard as chief financial officer, replacing Patrick Depovere, who is also leaving.
It also said it would start a share buy-back program of its outstanding common stock for a maximum amount of up to 250 million euros.