Banking Shake-Up
May 9, 2008
Detailing Allianz's first-quarter earnings, group chief financial officer Helmut Perlet said on Friday, May 9, that Europe's biggest insurer wanted to play a role in any restructuring of the German banking sector and hoped to complete the break up of its Dresdner banking unit by August.
"As already announced, we will make an active contribution to this consolidation," said Perlet, adding that the German banking industry was too fragmented.
His comments came after Allianz reported a 65-percent slump in first-quarter earnings following a first-quarter loss booked by Dresdner in the wake of the global financial crisis.
Munich-based Allianz said net profits dropped to 1.15 billion euros ($1.8 billion) in the first-three months of the year following a 513-million-euros loss run up at its Dresdner banking group.
This followed a 64.5-percent drop in revenue at Dresdner with the Frankfurt-based bank writing down asset-backed securities by 845 million euros during the first quarter. Allianz shares dropped by 0.8 percent to 129.95 euros in early trading Friday.
"While 2008 will remain a challenging year, the longer this environment persists the harder it will also be to achieve our medium term outlook," Perlet said.
Dresdner split part of consolidation plan
Allianz plans to divide Dresdner operations into two completely separate entities under a holding company to help it participate in the drive for consolidation in Germany's banking industry.
The insurer's push to break up Dresdner comes about seven years after Allianz acquired the bank as part of efforts by the insurance group to cash in on the then German government's plans to promote private pension schemes.
Allianz's plans for Dresdner also come in the wake of media speculation that the insurer could be considering orchestrating a broad banking merger in Germany.
This could include the merger of Dresdner with Germany's second biggest listed bank, Commerzbank AG and Deutsche Postbank AG, the banking offshoot of the postal and logistic group, Deutsche Post AG.