Infinite Unknown

Nov. 8 (Bloomberg) — Allianz SE, Europe’s second-biggest insurer by market-value, posted a 2 billion-euro ($2.6 billion) loss and said it may miss operating profit forecasts for this year and next because of the turmoil in financial markets.

Allianz had a net loss including discontinued operations in the third quarter, compared with net income of 1.9 billion euros a year earlier, the Munich-based insurer said in a statement today. That was less than the 3.85 billion-euro estimate of 14 analysts surveyed by Bloomberg. Net income from continuing operations, which reflects the sale of Dresdner, was 545 million euros, the company said, missing analysts’ estimates of 782 million euros.

“Without a major equity market recovery, the operating profit outlook of 9 billion euros before banking for this year and next year cannot be reached,” Allianz Chief Financial Officer Helmut Perlet said in the statement.

Allianz, led by Chief Executive Officer Michael Diekmann, agreed on Aug. 31 to sell Dresdner Bank to Frankfurt-based Commerzbank AG for cash and stock. Commerzbank shares lost about 40 percent of their value in the month ended Sept. 30. Discontinued operations, which reflect the sale of Dresdner effective from Sept. 1, accounted for “transaction-based impairments according to IFRS 5” of 1.4 billion euros as well as for a net loss of 1.2 billion euros from Dresdner’s operations, Allianz said.

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Tags: Allianz, Banks, Commerzbank, Dresdner Bank, Economy, financial crisis, Germany, insurer

NP Paribas Chief Executive Officer Baudouin Prot speaks during a news conference to announce the bank’s third-quarter results in Paris November 5, 2008.

PARIS (Reuters) - A raft of European bank results did little to lift gloom around the sector on Wednesday, with a recurring trend of falling profits and rising bad debts stemming from the global financial crisis.

France’s biggest bank BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) posted a 56 percent fall in third-quarter profits, Allied Irish Banks (ALBK.I: Quote, Profile, Research, Stock Buzz) cut its earnings forecast, and Greece’s Emporiki Bank (CBGr.AT: Quote, Profile, Research, Stock Buzz) swung to a loss.

Capital rebuilding continued in the face of a tough outlook as Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) looked to raise up to 3 billion pounds ($4.7 billion) from a government-backed bond, and Austria’s Raiffeisen Zentralbank said it may ask the government for 2 billion euros ($2.6 billion).

By 7:15 a.m. EST the DJ Stoxx banking index was down 0.7 percent, led by 4 percent falls for BNP and Allied Irish.

Profits have tumbled across the sector, and several banks have warned of more writedowns and rising bad debts this year, though there is optimism that government rescue packages have left balance sheets strong enough to withstand more losses.

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Tags: ABN Amro, Banks, BNP Paribas, Commerzbank, Economy, RBS, UBS

The French state has threatened to seize control of the country’s banks and fire top staff unless they do their part to stabilise the economy by stepping up lending to companies in need.

“The banks have got to open up credit to business: they have the means to do it,” said prime minister Francois Fillon, accusing lenders of hoarding cash. “We don’t think the banks are stepping up to task as necessary. We can withdraw the credit that we have extended to them under the state’s contract with the banks, and that will put them in difficulty. At that moment the question arises whether we should take an equity stake, change their managers, and assume control over their strategy.”

Speaking on French television, he warned: “Broadly speaking, we’ll be able to judge over the next 10 days whether they are playing the game as they should, or not.”

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Tags: Banks, Commerzbank, Credit Crisis, credit crunch, Economy, France, Government, Hypo Real Estate, IMF, mortgage crisis, Mortgages, Politics

Commerzbank, Germany’s second-largest bank, today said it would accept a €8.2bn (£6.44bn) capital injection from the state and a further €15bn in guaranteed funding.

Commerz, which is taking over Dresdner, its smaller rival, said it had agreed to pay no dividends for the next two years. It will also scrap all boardroom bonuses in 2009 and 2010 and cap its chief executive’s salary at €500,000.

The bank made its moves as it reported a net loss of €285m in the third quarter when it was heavily exposed to both Lehman Brothers, the bankrupt US investment bank, and Iceland, the virtually insolvent country.

It said it made a combined operating loss of almost €900m through these two events. In the first nine months its pre-tax earnings of €2.3bn a year ago shrank to €419m.

Germany’s private sector banks have been under considerable pressure from chancellor Angela Merkel to join her government’s €500bn stabilisation package, with the biggest, Deutsche, creating a storm by saying it would be “ashamed” to take part.

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Tags: Angela Merkel, Banks, Commerzbank, Economy, Germany, Government, Politics

Germany and other industrialized nations are desperately trying to brace themselves against the threat of a collapse of the global financial system. The crisis has now taken its toll on the German economy, where the weak dollar is putting jobs in jeopardy and the credit crunch is paralyzing many businesses.

A trader reacts in front of the DAX board at the Frankfurt stock exchange.

The Bundesbank, Germany’s central bank, doesn’t like to see its employees working too late, and it expects even senior staff members to be headed home by 8 p.m. On weekends, employees seeking to escape the confines of their own homes are required to sign in at the front desk and are accompanied to their own desks by a security guard. Sensitive documents are kept in safes in many offices, and a portion of Germany’s gold reserves is stored behind meter-thick, reinforced concrete walls in the basement of a nearby building. In this environment, working overtime is considered a security risk.But the ordinary working day has been in disarray in recent weeks at the Bundesbank headquarters building, a gray, concrete box in Frankfurt’s Ginnheim neighborhood, where the crisis on international financial markets has many employees working late, even on weekends. Continue reading »

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