Aegon unveils surprise loss and cash call
AEGON, the Dutch insurer, yesterday reported a surprise loss in the second quarter and said it would ask markets for up to €1bn (£862m) to pay off part of its government bailout.
The group, whose Aegon UK arm has two million customers across its life, pensions and asset management operations, saw its Dutch shares plummet almost nine per cent on news of the unexpected rights issue.
It unveiled a net loss of €161m, compared to a €276m profit in the same quarter last year, thanks in part to a €385m loss on the sale of its Taiwan life insurance operations.
But it said it will save at least €370m by making the repayment to the Dutch state before 1 December.
Chief executive Alex Wynaendts said there remains no timetable on repaying the rest of the firm’s aid. It received €3bn from the Dutch government and De Nederlandsche Bank in October to boost its depleted capital levels.
Wynaendts said the firm is to issue new shares representing up to 10 per cent of the firm’s existing share capital.
Largest shareholder Vereniging Aegon will not take part in the equity offering but will buy additional preferred shares to maintain its level of voting rights, Aegon said.
KBC Securities analyst Dirk Peeters said it was “somewhat strange” the group is raising cash from markets when it has €3.5bn of excess capital to hand. He added the company might be preparing to repay the rest of the aid next year, or to look at possible acquisitions.
Underlying earnings before tax came in at €404m, and impairments totalled €393m. Half of these were thanks to the US housing downturn.
Aegon also said yesterday it would not pay an interim dividend, but would make a decision on a full-year dividend early in 2010.