AMSTERDAM--Dutch insurance and pension company Aegon NV (AEG)
said Thursday that second-quarter net profit fell by 2% on the
year, largely due to hedging losses caused by higher equity
markets, increased market volatility and rising interest rates.
However, the company said that underlying earnings grew 5%, as the
positive effects of business growth and favorable equity markets
outweighed restructuring costs and unfavorable currency exchange
rates, and that it will increase its interim dividend.
MAIN FACTS:
-Net profit was EUR243 million, compared with EUR204 million in
the second quarter of 2012, impacted by fair value losses mainly
due to higher equity markets, increased equity market volatility
and rising interest rates.
-Underlying earnings increased to EUR478 million from EUR445
million, as positive effects of business growth and favorable
equity markets partly offset restructuring costs in Spain and
unfavorable currency exchange rates.
-Return on equity amounted to 6.7%, or 7.4% excluding run-off
businesses
-New life sales increased 21% to EUR520 million; driven by
particularly strong pension sales in the UK and the
Netherlands.
-Deposits rose 30% to EUR12.7 billion, as increases in asset
management, variable annuity, retail mutual fund and pension
deposits partly offset lower stable value deposits
-The market consistent value of new business increased to EUR202
million, the result of increased sales volumes, higher interest
rates and management actions to improve margins
- The IGD solvency ratio was 220%, while excess capital at the
holding rose to EUR1.9 billion at holding level.
-Aegon reported an operational free cash flow of EUR674 million;
market impact and one-time items of EUR 308 million
-Aegon will increase its interim dividend increases to EUR 0.11
per share; dilutive effect of stock dividend to be neutralized
-"The growth of our underlying earnings and sales during the
quarter demonstrates that Aegon continues to benefit from its
strategic transformation," Chief Executive Alex Wynaendts said in a
statement. "Our strong capital position and operational free cash
flows enable us to increase our interim dividend, a sign of our
confidence in the company. With the business positioned to benefit
from rising interest rates, recent developments in the US and
elsewhere allow us to create further long-term value for both our
customers and our shareholders," he said.
- Write to Amsterdam Bureau at amsterdam@dowjones.com
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