Allianz Says Structured Alpha Losses Could Be Booked by End of Year -- Update
By Ed Frankl
Allianz SE said Wednesday that it hoped to be able to give a
firm figure by the end of the year for its provisions on
investigations and lawsuits into its Structured Alpha fund
The German financial major said it is working closely with the
Securities & Exchange Commission and the U.S. Department of
Justice, which launched probes in the summer into hedge funds that
caused investors significant losses as the market took a downturn
in the early stages of the pandemic in 2020.
Several large investors have also filed civil lawsuits against
the Munich-based company.
"I could definitely imagine that by year-end we will be able to
make a booking [for provisions], but I can't promise that now,"
Allianz's Chief Financial Officer Giulio Terzariol told a media
conference at the company's third-quarter results, in which it said
full-year profits would be at the higher end of its guided range,
as it posted quarterly earnings that beat expectations.
Mr. Terzariol said, however, that he couldn't give a figure at
the moment as the company couldn't reliably assess the impact.
"Clearly it is in our interest to find a solution as fast as
possible, but we also need to ensure that we do find an economic
solution that is reasonable," he added.
Mr. Terzariol called Structured Alpha issues a high priority,
and said the company wanted to move on from the uncertainty.
Allianz has said provisions would be significant. Berenberg, a
German bank that downgraded the stock from buy to hold in
September, has put its worst-case scenario of settlement for claims
and fines at EUR7.6 billion.
The Munich-based company said provisions wouldn't affect
operating profits or have an impact on Allianz's dividend or
This came after Allianz said 2021 operating profit would now be
at the top end of its target range of EUR11 billion-EUR13 billion.
After third-quarter results, the company has now posted operating
profit of EUR9.9 billion in the year to date.
In the quarter to the end of September, net profit was EUR2.11
billion, compared with EUR2.06 billion a year earlier, the company
Quarterly operating profit rose 11.3% to EUR3.24 billion, driven
by Allianz's asset-management and life/health business segments,
even after higher claims from natural catastrophes in the quarter,
the company said.
The figures beat analysts' expectations of net profit at EUR2.04
billion and operating profit at EUR3.05 billion, according to a
Pimco and Allianz Global Investors recorded strong net inflows,
while assets under management have reached a record level, Mr.
Group sales in the third quarter rose 9.5% to EUR34.4 billion,
driven by all business segments, the company said.
Allianz's solvency II ratio--a measure of an insurance company's
financial strength and ability to meet its debts--was 207%,
slightly down on expectations of 211%.
However, the good operational result will continue to be
overshadowed by the expensive legal disputes in the U.S., DZ Bank
--Matthias Goldschmidt contributed to this story.
Write to Ed Frankl at firstname.lastname@example.org
(END) Dow Jones Newswires
November 10, 2021 10:44 ET (15:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Historical Stock Chart
Von Jul 2022 bis Aug 2022
Historical Stock Chart
Von Aug 2021 bis Aug 2022