Aegon sees rise in Q4 earnings

February 25, 2010

“Clearly, the steps we have taken over the past year have delivered solid results,” says Alex Wynaendts, CEO.

Aegon posted a sharp rise in its profits for the fourth quarter Thursday, as markets improved and measures taken by the company over the past year further strengthened its financial position.

In a statement, CEO Alex Wynaendts said the company’s measures had delivered “solid results – a return to profit, reduced expenses and continued customer confidence”.

Mr. Wynaendts, however, warned that the business environment remains “uncertain”, and said Aegon would not be declaring a dividend for common shareholders since write-downs over the past year had lowered the company’s cash flows.

Aegon’s underlying earnings before tax rose 22% from the third quarter to EUR 427 million, while net income more than doubled to EUR 393 million – the fourth straight quarterly increase and Aegon’s highest quarterly net income for two years. New life sales were up 13% at EUR 549 million as most of Aegon’s businesses reported an increase for the quarter.

The company’s earnings were also boosted by gains from investments and the lowest quarterly write-downs since the middle of 2008, a further sign of improving market conditions.

Over recent months, Aegon has taken steps to reduce costs, lower financial risk and free up capital from its existing businesses – part of the company’s strategy to combat the global financial crisis.

Today’s figures showed that Aegon’s cost measures saved EUR 250 million last year, well ahead of the company’s target of EUR 150 million, and released another EUR 800 million in capital in the last quarter.

Aegon’s excess capital now totals EUR 3.7 billion – an important buffer given current uncertain market conditions.

In his statement, Mr. Wynaendts said that, as market conditions gradually improve, the company’s strategy “will continue to reinforce Aegon's strong position”.