AEGON announces Q2 2011 net income of EUR 404 million
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Growth offset by unfavorable currency movements and anticipated exceptional charges
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Underlying earnings before tax of EUR 401 million; growth offset by unfavorable currency movements (EUR 44 million), higher provisioning for longevity in the Netherlands (EUR 23 million) and UK customer redress charges (EUR 14 million)
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Net income amounts to EUR 404 million, supported by realized gains on investments
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Return on equity of 8.0% in the first half year of 2011
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Continued strong sales in fee-based businesses in line with strategic focus
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Total sales1 decline to EUR 1.3 billion, due mainly to unfavorable currency movements
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New life sales total EUR 431 million; declines in the Americas and the UK following repricing of products
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Gross deposits amount to EUR 6.7 billion, supported by strong variable annuity and pension deposits
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Strong capital position and healthy cash flows
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Excess capital of EUR 1 billion at the holding after full repurchase of core capital securities from Dutch State
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IGD solvency ratio of ~200% reflection of strong capitalization
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Capital base ratio of 73%; full repurchase of core capital securities partly offset by retained earnings
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Operational free cash flow of EUR 283 million
Statement of Alex Wynaendts, CEO
“During the second quarter, we made solid progress in delivering on AEGON’s key strategic priorities, not least of which was the completion of repayment to the Dutch State. The particularly strong sales of variable annuities and pension and retirement products in the United States are a result of the successful repositioning of our business toward more fee-generating income. Our pursuit of growth opportunities in AEGON’s new markets led to strong new life sales in Central & Eastern Europe, as well as expanded distribution in Spain, where we recently strengthened our life insurance and pension partnership with Unnim, a leading savings bank in the northeastern region of the country.
“The weakening of the US dollar had a notable impact on AEGON’s reported results. Net income was strong for the quarter, however, underlying earnings were negatively affected by anticipated exceptional items in the United Kingdom and the Netherlands.
“Clearly, the current economic environment poses considerable challenges. However, over the past years we have implemented measures to strengthen and protect AEGON’s balance sheet by reducing our exposure to equity and credit markets, as well as interest rate risks. At the same time, we are restructuring our businesses in our key markets. These actions, along with our very limited exposure to peripheral European countries, support our confidence in AEGON’s growth prospects going forward.”