Tweet
The Dutch government today injected €3bn (£2.4bn) into insurer Aegon in the latest move by European authorities to stabilise their financial systems.
The government, which has already nationalised the Dutch operations of Fortis bank and injected €10.5bn into its bigger rival ING, is to take two seats on the Aegon board under the deal.
The insurer, which has scrapped its final dividend, also announced a 28% fall in pre-tax profits to €500m and said it would make a net €350m loss in the third quarter.
Under the transaction Aegon has the right to return €1bn to the state "at any point during the next 12 months should financial markets improve" and its key shareholder, an association of stakeholders owning 11% of common shares and all the preference shares, will cut its voting rights from 34% to 24%.
Alex Wynaendts, chief executive, said the deal would "strengthen Aegon's position during this period of uncertainty and unprecedented economic turmoil" and provide an improved capital buffer. He insisted the insurer's finances were sound and the transaction would enable it to "enter 2009 with a significantly reinforced capital position".
The move comes a day after the Belgian government made a €3.5bn loan to Flemish bank KBC which has been forced to write down more structured products and warned it would lose almost €1bn in the third quarter.
guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
