The provisions have burdened the net profit of 2.8 billion euros for the past year.
(Photo: dpa)
Munich The losses of US investors with their hedge funds at the beginning of the corona crisis are expected to cost Allianz at least 3.7 billion euros. According to the Munich insurer, it is about to be compared with large investors in the “Structured Alpha” funds of its subsidiary AllianzGI.
However, the burden could be even higher because talks with other plaintiffs and the US supervisory authorities are still ongoing, Allianz announced on Thursday evening in Munich. Because the operative business is booming even more than expected, she can cope with it well.
Net income fell just 3 percent to 6.6 billion euros, despite being weighed down by 2.8 billion euros in hedge fund loss provisions.
The dividend is to be increased sharply by EUR 1.20 to EUR 10.80 per share. In addition, Allianz wants to buy back its own shares for up to one billion euros this year and in this way also return excess capital to investors. In operational terms, Allianz’s earnings soared by a quarter to a record 13.4 (previous year: 10.8) billion euros. The recovery from the Corona year 2020 was even stronger than expected.
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In November, the insurance giant promised 13 billion euros. “Despite ongoing challenges in 2021, Allianz has proven its resilience and adaptability,” said CEO Oliver Bäte.
Hedge fund debacle masks good numbers
However, the past year was overshadowed by the debacle with the “Structured Alpha” hedge funds from Allianz Global Investors (AllianzGI), which had given the insurance group negative headlines, especially in the USA – and are now costing billions.
The funds were mainly sold to large US pension funds that believed in a safe investment. But when the markets wobbled in March 2020, they suffered billions in losses. Allianz reported on this for the first time in August. In the meantime, the lawsuits from investors add up to more than six billion dollars. The harsh criticism of the investors has also called the US supervisory authorities into action.
In a first step, Allianz has now set aside 3.7 billion euros for this. “The forthcoming settlements are an important step towards a settlement of all litigation,” she said. Negotiations are still ongoing with other plaintiffs, the US Department of Justice and the Securities and Exchange Commission. Therefore, “additional burdens are to be expected before these procedures can finally be completed”.
In the new year, Allianz wants to maintain the operating result – with the usual range of one billion euros up and down.
More: Financial experts are cautiously positive about the new Allianz strategy.