Allianz SE, Europe's biggest insurer, said that its fourth-quarter profit fell 52 percent on subprime-related writedowns and trading losses at its banking division.
Net income declined to 665 million euros (US$979.6 million), or 1.48 euros a share, from 1.37 billion euros, or 3.21 euros a share, a year earlier, the Munich-based insurer said today in a statement.
That missed the 729 million-euro median estimate of 12 analysts surveyed by Bloomberg.
Chief executive officer Michael Diekmann plans to increase Allianz's earnings from insurance and expand operating profit by an average of 10 percent a year even as more than 1.3 billion euros in writedowns weigh on its Dresdner banking division's profits.
Banks worldwide have booked more than US$146 billion of writedowns and credit losses during the US subprime mortgage market collapse.
"Dresdner remains the problem child, which is disappointing because it looked like they managed the turnaround just before the subprime crisis hit," said Ernst Konrad, who helps oversee about 24 billion euros as head of equities at BayernInvest in Munich, including Allianz stock.
Allianz's dividend "has finally reached the payout level of peers such as ING or Fortis," he said.
Diekmann said yesterday that the company was "well-positioned" for this year and expected to meet medium-term profit targets. "However, financial markets and their future development will have a stronger impact on our business results than usual," he said.
Allianz has fallen 21 percent in Frankfurt trading this year, valuing the insurer at 53 billion euros, compared with a 14 percent decline in the 28-member Bloomberg Europe 500 Insurance Index.
Dresdner had a fourth-quarter loss of 589 million euros compared with a loss of 194 million euros a year ago.
The bank's ratio of costs to income for all of last year worsened to 89 percent from 79.7 percent a year earlier, Allianz said.
Frankfurt-based Dresdner said in a separate statement that it plans to provide "support" to its K2 structured investment vehicle. K2's volume has been cut to US$18.8 billion from US$31.2 billion since July, it said.
Allianz's banking division had an operating profit of 730 million euros last year, down from 1.4 billion euros in 2006, after writedowns on structured products led to an operating loss in the fourth quarter.
Dresdner wrote down the value of asset-backed securities by 350 million euros in the third quarter and by 66 million euros in the second.
The company plans to increase its dividend to 5.50 euros a share from 3.80 euros distributed to shareholders for 2006.
That beat the median estimate of 5.05 euros.
Allianz has repeatedly said it plans to raise the portion of profit it pays in dividends.
NEXT GENERATION: The four plants in the Central Taiwan Science Park, designated Fab 25, would consist of four 1.4-nanometer wafer manufacturing plants, TSMC said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to begin construction of four new plants later this year, with the aim to officially launch production of 2-nanometer semiconductor wafers by late 2028, Central Taiwan Science Park Bureau director-general Hsu Maw-shin (許茂新) said. Hsu made the announcement at an event on Friday evening celebrating the Central Taiwan Science Park’s 22nd anniversary. The second phase of the park’s expansion would commence with the initial construction of water detention ponds and other structures aimed at soil and water conservation, Hsu said. TSMC has officially leased the land, with the Central Taiwan Science Park having handed over the
AUKUS: The Australian Ambassador to the US said his country is working with the Pentagon and he is confident that submarine issues will be resolved Australian Ambassador to the US Kevin Rudd on Friday said that if Taiwan were to fall to China’s occupation, it would unleash China’s military capacities and capabilities more broadly. He also said his country is working with the Pentagon on the US Department of Defense’s review of the AUKUS submarine project and is confident that all issues raised will be resolved. Rudd, who served as Australian prime minister from 2007 to 2010 and for three months in 2013, made the remarks at the Aspen Security Forum in Colorado and stressed the longstanding US-Australia alliance and his close relationship with the US Undersecretary
‘WORLD WAR III’: Republican Representative Marjorie Taylor Greene said the aid would inflame tensions, but her amendment was rejected 421 votes against six The US House of Representatives on Friday passed the Department of Defense Appropriations Act for fiscal 2026, which includes US$500 million for Taiwan. The bill, which totals US$831.5 billion in discretionary spending, passed in a 221-209 vote. According to the bill, the funds for Taiwan would be administered by the US Defense Security Cooperation Agency and would remain available through Sept. 30, 2027, for the Taiwan Security Cooperation Initiative. The legislation authorizes the US Secretary of Defense, with the agreement of the US Secretary of State, to use the funds to assist Taiwan in procuring defense articles and services, and military training. Republican Representative
TAIWAN IS TAIWAN: US Representative Tom Tiffany said the amendment was not controversial, as ‘Taiwan is not — nor has it ever been — part of Communist China’ The US House of Representatives on Friday passed an amendment banning the US Department of Defense from creating, buying or displaying any map that shows Taiwan as part of the People’s Republic of China (PRC). The “Honest Maps” amendment was approved in a voice vote on Friday as part of the Department of Defense Appropriations Act for the 2026 fiscal year. The amendment prohibits using any funds from the act to create, buy or display maps that show Taiwan, Kinmen, Matsu, Penghu, Wuciou (烏坵), Green Island (綠島) or Orchid Island (Lanyu, 蘭嶼) as part of the PRC. The act includes US$831.5 billion in
RSS