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FRANKFURT (Dow Jones) — Further settlements with injured investors in Allianz US funds will cost the group additional billions. As Allianz SE announced, it booked another provision of 1.9 billion euros, which weighed on the result in the first quarter. A timely agreement is being sought with the US authorities.
Funds from Allianz Global Investors (“Structured Alpha”) suffered massive losses in 2020, after which several investors complained. In addition, the US Securities and Exchange Commission and the Department of Justice switched on.
Allianz had already made a provision of 3.7 billion euros for settlements with most investors, which reduced profits in the past financial year. In the further provision, the group sees “a realistic assessment of the remaining financial risk in relation to compensation payments to investors and payments in the context of a possible conclusion of the official proceedings”.
The provision weighed on net income in the first quarter by 1.6 billion euros, which fell to 0.6 billion euros from 2.57 billion in the previous year. Operating profit fell to 3.2 billion euros from 3.34 billion. However, analysts had only expected 3.02 billion. At the end of the quarter, the solvency ratio calculated according to the Solvency 2 regulations was 199 percent.
The dividend policy remains unaffected, Allianz continues. The group will release its full first-quarter results on Thursday.
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(END) Dow Jones Newswires
May 11, 2022 03:11 ET (07:11 GMT)
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