By Ed Frankl
Allianz SE said Wednesday that it will take a 1.9 billion euro ($2.0 billion) provision in the first quarter after it reached further settlements related to Structured Alpha funds in the U.S.
The provision will hit quarterly group net income by EUR1.6 billion after tax, resulting in net profit of around EUR600 million in the three months to the end of March, the German insurer and asset manager said.
The Munich-based company previously booked a EUR3.7 billion provision in its 2021 accounts over the funds at Allianz Global Investors, which suffered billions of dollars in losses amid the market downturn at the market panic amid the onset of the pandemic.
“Allianz believes that this provision booked is a fair estimate of its remaining financial exposure in relation to compensation payments to investors and to payments under any resolution of the governmental proceedings,” the company said.
Allianz said it is seeking a timely resolution to governmental proceedings in discussions with both the U.S. Justice Department and the Securities and Exchange Commission.
The company said its Solvency II ratio at the end of the first quarter stood at 199%, and its dividend policy remains unchanged.
Frankfurt-listed Allianz shares climbed 2.5% in morning trade.
Write to Ed Frankl at firstname.lastname@example.org