EUROPE - As the financial reporting season gets into full swing, Aegon, the Dutch life insurer and pensions provider has reported first half earnings of e859m, an increase of 13% over this time last year.
On Aegon’s second quarter earnings of e466m, Donald Shepard, CEO commented: Our second quarter results reflect a modest improvement in our businesses.
“The relative recovery in the equity markets, the continued improvement in the level of corporate bond defaults and the actions we’ve taken to improve profitability, have had a positive impact on our results.
“However, the low interest rate environment continues to compress margins and the euro / dollar exchange rate has also affected our earnings.”
Excluding currency influence, net income increased 28% while total new life production increased 11%, with a 14% increase in the Americas, 5% increase in the UK and 29% decrease in the Netherlands.
In the Netherlands income before tax totalled e361m, a 4% increase compared to the first six months of 2002. Earnings reflect a reduction in additions to guarantee provisions, which was offset by additions to credit provisions, increased employee pension related costs and higher DPAC amortisation.
Rival firm ABN Amro, the Netherlands' largest bank, reported a 46% rise in second-quarter earnings although the asset management division’s net profit fell 15.2% in the first half of this year. Total revenue in the first half of 2003 decreased by 18.5% to e229m, compared to the first half of 2002, but this was offset somewhat by lower costs.
Meanwhile, Barclays Global Investors, the largest manager of European pension fund assets, saw its assets under management rise by 18% and its first-half operating profit jump 52%.
Fees and commissions increased by 8% to £306m, with the increase constrained by foreign exchange translation movements of £37m and lower average market levels. Strong net new asset growth and investment performance and sales of higher margin products drove growth in investment management fees. Actively managed assets now generate over 60% of management fees and over 50% of total income.
Operating costs decreased 4% to £220m. Higher performance compensation costs were offset by the impact of foreign exchange translation movements of £26m. Total assets under management increased 18% (£81bn) to £543bn.
This was the net result of £34bn attributable to net new assets and £60 billion attributable to market movements offset by £13bn of adverse exchange rate movements. Assets under management comprise £385bn (71%) indexed assets, £109bn (20%) active assets and £49bn billion (9%) managed cash assets.
The global iShares (exchange traded funds) business assets grew to £28bn, an increase of 27%.
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