Go faster spikes

7 August 2008 By Mike Prest

The German insurance giant s second quarter net income fell by 25%, largely because of losses at whollyowned Dresdner Bank. That could depress the value of the bank, which Allianz is trying to sell. But it could also deter buyers. Allianz needs a solution fast.

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Allianz, the German insurance company, announced on August 6 a fall in net income for the second quarter of this year to E1.5bn against E2.1bn for the same period a year earlier. Allianz said it could not maintain its target of 10% annual compound growth in operating earnings.

Most of the decline is attributable to losses in Dresdner Kleinwort, the investment banking division of Dresdner Bank, which is whollyowned by Allianz. Dresdner's secondquarter operating loss was E566m, the fourth quarterly loss in a row. Dresdner made write downs of just over E400m in the quarter, in addition to E2.5bn of write downs already taken.

Allianz has said it wants to sell Dresdner Bank. Commerzbank, which is a possible buyer for Dresdner, reported on August 6 that its net income for the second quarter rose to E817m from E768m in the same period of last year.

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