Allianz SE, Europe's biggest insurer, said first-quarter profit fell 66 per cent on writedowns at the Dresdner Bank unit tied to the credit-market collapse.
Net income declined to about €1.1 billion ($1.7 billion) from €3.2 billion a year earlier, the Munich-based insurer said in a statement today. Last year's earnings were swelled by €2 billion from selling stakes in companies.
Allianz dropped as much as 2.2 per cent in Frankfurt trading. Allianz's earnings have been eroded by Dresdner since its €23.5 billion purchase in 2001.
The Frankfurt-based banking division marked down almost €900 million on credit securities in the first quarter related to the US subprime mortgage market meltdown, adding to the €1.3 billion it wrote down last year.
The banking division, mainly consisting of Dresdner, is set to report a loss of €470 million, reversing a €625 million profit, analysts estimate.
Reaching the 2009 target of 10 percent operating-profit growth is "still feasible, even though this will become harder, the longer the financial crisis will last," Allianz chief financial officer Helmut Perlet said in today's statement.
The insurer reports final first-quarter figures on May 9th. Allianz fell 0.9 per cent to €129.65 as of 10.30am.
The company has lost 12 per cent this year, valuing it at €58.6 billion. The drop compares with a 10 per cent decline in the 28-member Bloomberg Europe 500 Insurance Index.
First-quarter operating profit fell to €1.8 billion from €2.9 billion a year ago, Allianz said. It previously said it expected as much as €400 million in further writedowns in the quarter, based on market prices at the end of January.
Bloomberg