Aegon posts fourth loss to partly repay state aid
Friday 14 August 2009
Aegon, the Dutch insurance giant, announced a €1bn share sale as it revealed its fourth consecutive quarterly loss yesterday, saying it would use the cash to partly repay the €3bn (£2.5bn) of state aid received at the height of the financial crisis last year.
The group – Europe's sixth-largest insurer in terms of balance sheet size – said it would save at least €370m by making the payment before 1 December. Aegon plans to issue new shares representing up to 10 per cent of its existing share capital as part of a process which began yesterday. Chief executive, Alex Wynaendts, said the share sale was a "first step towards the goal of full repayment" of state aid. "It has been our intention to repay the €3bn to the Dutch government at the earliest opportunity, provided it is both feasible and responsible to do so," he said.
KBC Securities analyst Dirk Peeters questioned the move, wondering why the group needed to raise the money given its excess cash position. "It is somewhat strange that Aegon is raising €1bn to [partly repay the state] when Aegon's excess capital position at the end of June was €3.5bn," he explained.
The ratings agency Standard & Poor's said its ratings and outlook on the main holding company and its core subsidiaries were unaffected by the move. "Execution of Aegon's de-risking and capital preservation initiatives has been ahead of schedule, supporting its capital adequacy, while the equity issuance will improve capital quality," S&P said in a statement.
News of the share sale was accompanied by the revelation that the group had fallen to a net loss of €161m in the second quarter, thanks in part to a €385m loss on the sale of its Taiwan life insurance operations. The figures were a surprise, with analysts anticipating €9m in profits. Aegon recorded a €276m profit in the same period last year.
The group, which said it will not be paying an interim dividend, posted €404m in underlying earnings before tax, compared to market expectations of €531m, while impairments, or bad debts, around half of which were connected to the slowdown in the depressed US housing market, came in at €393m.
- 1 Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
Migrants crossing the Mediterranean: Pope Francis joins calls for EU action on boat refugees
Yemen crisis: Meet the child soldiers recruited by the Shia Houthi rebels who have forsaken books for Kalashnikovs
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Isis in Afghanistan: Group claims responsibility for Jalalabad suicide bombing that killed 35
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...