Allianz shells out 140 million euros to shut U.S. fund unit after fraud

The brand of Allianz is seen on a constructing in Paris, France, April 30, 2020. REUTERS/Charles Platiau

FRANKFURT, Aug 5 (Reuters) – Allianz spent round 140 million euros ($143.11 million) on restructuring to wind down a U.S. funds unit on the centre of a multi-billion fraud, the German insurer disclosed on Friday, an expense that added to a worse-than-expected 23% fall in quarterly revenue.

Allianz in Might agreed to close down the unit, Allianz International Buyers in the USA, as a part of a responsible plea for securities fraud and a $6 billion settlement with U.S. regulation enforcement and regulators. learn extra

The cost, unveiled in its second-quarter earnings report, is a remnant of the fallout of the case, which has dogged the funds and repute of one among Germany’s most beneficial firms for months.

The expense got here on prime of risky markets that additionally dampened earnings. Web revenue attributable to shareholders of 1.706 billion euros within the quarter to June 30 missed a consensus forecast of 1.846 billion and was down from 2.225 billion a yr earlier.

Shares fell 2.5% midmorning in Frankfurt, among the many greatest losers on the DAX index of blue-chip shares.

However the insurer’s goal of 2022 working revenue between 12.4 billion and 14.4 billion euros stays intact, the corporate stated.

“We’re well-positioned to handle the impression of excessive inflation and the financial pressures which are notably evident in Europe,” Chief Government Officer Oliver Baete stated.

Unstable markets took a toll on Allianz within the quarter, prompting it to take a 282 million euro impairment cost and likewise contributing to a 12% drop in working revenue at its life and well being division.

Analysts with Jefferies, which charge Allianz a “purchase”, famous that the non-operating losses and company prices “had been far increased than anticipated” and referred to as the outcomes a “blended beat”.

($1 = 0.9783 euros)

Reporting by Tom Sims and Alexander Huebner; modifying by Miranda Murray, Jason Neely and Ros Russell

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