FBD spends €80m in share buyback as KBC sells stake

Insurance group FBD spent more than €80 million buying back four million of its own shares after Belgian bank KBC sold its 22 per cent stake in the company yesterday.

Earlier yesterday, the insurer announced an increase of 8.6 per cent in 2004 operating profits to €126 million from €115.7 million in 2003.

The company announced that one of its shareholders, Belgian bank KBC, was placing its 22.1 per cent stake on the market.

FBD subsequently bought back half this stake, amounting to 4.2 million shares, at €19.30 per unit or a total of €81 million. The share buyback was the maximum allowed under Irish Stock Exchange rules.

The insurer said that it intended to cancel 2.7 million units, and hold the remainder as treasury shares to meet outstanding options as they are taken up.

The placing and buyback meant that, at the close of business last night, FBD had a free float of 57.6 per cent of its issued share capital. The Farmer Business Developments plc stake was 34.5 per cent and FBD Trust Ltd had 7.9 per cent.

KBC sold its stake as it has a policy of only taking majority holdings in associated businesses. The Belgian institution owns IIB Bank.

It also has an asset management business based in the Republic and an infrastructure financing operation based in Dublin's International Financial Services Centre.

FBD's turnover dipped 5.6 per cent to €472 million in 2004 from €500 million the previous year, the company said yesterday. Gross premiums written fell by 4.6 per cent to €351 million.

The group said that this was after implementing sizeable rate cuts across all major classes of insurance in which it is involved, and after deducting €30 million in respect of a customer loyalty discount.

Operating earnings per share grew 8.7 per cent in 2004 to 258.8 cent from 238.1 cent the previous year. The company declared a dividend of 40 cent per share. Net assets per share stood at €8.88 at the end of 2004, compared with €6.75 a year earlier.

FBD shares closed at €20.90 in Dublin last night, up 45 cent or 2.2 per cent.