The high provisions put pressure on profits.
(Photo: imago images/Schöning)
Munich Allianz has to dig deeper and deeper into its pockets for its failed hedge fund bets in the US: Europe’s largest insurer put aside another 1.9 billion euros for the approaching settlement with American plaintiffs, as it announced on Wednesday.
The provisions for the debacle now add up to 5.6 billion euros. In Munich, it is now assumed that this is a “realistic” assessment of the remaining financial risk – both in terms of compensation payments and possible penalties to the authorities.
Despite the sum, investors reacted with relief, after all, the smoldering legal dispute has been weighing on Allianz shares for around two years. With an increase of around five percent, the paper was at times one of the biggest winners in the Dax on Wednesday.
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