SNS. Utile risicato nel Q3.
UPDATE 2-SNS Reaal profitable, forecasts two Q4 charges
Tue Nov 10, 2009 5:12am EST
* Q3 underlying profit 43 mln euros, net profit 26 mln euros
* Rising impairments hurt property finance unit
* Sees Q4 charges for DBV integration, DSB failure * Shares 0.7 pct higher
(Adds analysts' comments, share price, conference call)
By
Ben Berkowitz
AMSTERDAM, Nov 10 (Reuters) - Dutch bancassurer SNS Reaal (
SR.AS) said it was profitable in the third quarter, as improved results in the insurance business offset declining profits at the bank and rising impairments at the property finance unit.
It also showed signs of improving market share after its share of the savings, mortgages and life premium markets declined or was flat in the first half. SNS Reaal is the Netherlands' second-largest insurer and a top-five retail bank.
SNS shares rose 0.7 percent to 4.788 euros at 0821 GMT. Since a recent peak on Oct. 12 the stock has lost about 23 percent of its value, compared with declines of 1.5 percent for the European banks index .SX7P and 7.7 percent for the European insurance index .SXIP.
"Reported figures were better than we expected despite the losses recorded at SNS (property finance)," KBC Securities analyst Dirk Peeters said in a note. SNS Reaal posted an underlying net profit of 43 million euros ($64 million) and a net profit of 26 million euros on Tuesday, versus an 88 million net loss a year ago.
Profitability at the bank was hurt by lower net interest income on savings deposits, due to high rates offered on term deposits late last year. It also gained a full percentage point of mortgage market share in the quarter, to 8.3 percent. Its share had declined almost a full point in the first half. Results at the insurance unit were boosted by improving regular life premiums and lower operating costs. Regular life market share rose to 19 percent after falling fractionally to 17.5 percent in the first half of 2009.
In the property finance unit, rising impairments offset higher interest income, and SNS said impairments would stay "relatively high" this year.
EXPECTED CHARGES
SNS forecast two fourth-quarter charges, one of 4 million euros for the integration of the DBV brand, the other of an unknown amount to guarantee deposits of the failed DSB Bank.
Banks have to pay into the guarantee fund at a rate proportional to their market share in savings, and SNS Reaal said its portion would be 6 percent. Based on the central bank's estimate of a maximum need of 3.25 billion euros, SNS could face a charge of up to 195 million euros.
But Chief Financial Officer Ference Lamp said he "did not recognize that number," and that while it was too soon to know what the recovery rate on DSB's assets would be, analysts' estimates of 60 percent to 70 percent sounded "more familiar".
If the court-appointed curators made a 70 percent recovery on DSB's assets, it would imply a guarantee need of about 975 million euros. SNS's obligation at those rates would be just over 58 million euros, according to Reuters calculations.
Last week SNS said it would repay a quarter of its aid from the Dutch government by early December. [ID:nL3541998]
Chief Executive Ronald Latenstein said there was no timetable on repaying the rest. "It's a bit early to predict anything in that area," Latenstein said on a conference call. "Our intention to go to full repayment is clearly there." ($1 = 0.6678 euro) (Reporting by Ben Berkowitz; editing by Dan Lalor and Simon Jessop)
