AP Features, January 24th, 2008
Insurer Allianz SE said Thursday it hit its profit targets for last year, although its banking business posted a fourth-quarter operating loss following writedowns of some $1.3 billion.
Allianz is Europe's biggest insurer by gross premiums and also the owner of Dresdner Bank.
In a brief statement of preliminary figures, it said it "confirms its forecast for the 2007 results," with full-year net profit of 8 billion euros (nearly $11.7 billion) and operating profit of more than 10.8 billion euros ($15.8 billion). In 2006, the company made a net profit of 7.02 billion euros.
It did not give overall fourth-quarter net and operating profit figures, but said that its banking business had a quarterly operating loss of some 450 million euros ($657 million).
"This is largely due to valuation adjustments on structured products in the trading book of around 900 million," euros Munich-based Allianz said in a statement.
It added that the segment nevertheless had a full-year operating profit of some 750 million euros ($1.1 billion).
Allianz shares, which had been battered over recent days amid worries that the company could be hard hit by the global financial crisis, rose sharply on the news. Stocks rose 10.6 percent to close at 123.80 euros ($180.80) in Frankfurt Thursday — outpacing a 5 percent overall rise in the DAX index of blue-chip stocks.
Konrad Becker, an analyst at Merck Finck, said both the figures and their early release were good in the current climate, soothing market speculation that Allianz could issue a profit warning.
UniCredit analyst Lucio Di Geronimo called the data "a clear signal of the company's strength." He said writedowns were in line with his forecast of between 750 million euros and 1 billion euros ($1.1 billion and $1.46 billion).
Allianz is set to publish full results for 2007 on Feb. 21.
