Charges cause AIG to lose US$2.4b
Source: Agencies |
November 6, 2010, Saturday
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Print Edition
Print Edition
INSURANCE giant AIG yesterday reported a US$2.4 billion loss for the third quarter of this year, dragged down by hefty charges tied to selling off some assets.
But American International Group Inc, which is 80 percent owned by the United States government, remains confident in its core operations, which include its property and casualty and life and retirement services business.
"AIG's continuing insurance operating results remain solid," President and CEO Robert H. Benmosche said in a statement. "Despite soft market conditions in the property casualty market and a low interest rate environment, these businesses have demonstrated their market leadership and are maintaining their discipline."
New York-based AIG is in the process of repaying more than US$100 billion still outstanding from a government bailout it received two years ago during the credit crisis. It is selling off assets to help repay taxpayers.
AIG was one of the hardest hit financial firms by the credit crisis. Its bailout package enabled it to tap as much as US$180 billion in aid.
AIG lost US$2.4 billion, or US$17.62 per share, in the third quarter, compared with earnings of US$92 million, or 68 cents per share, a year ago.
Restructuring-related charges amounted to US$4.5 billion, mostly tied to the assets sales. The pending sale of AIG's 80 percent stake in consumer credit business American General Finance Inc weighed heavily on the quarter, as AIG incurred a US$1.9 billion loss related to the transaction.
American General Finance provides loans, retail financing and other credit-related products to consumers in the US, Puerto Rico, the Virgin Islands, and the UK.
AIG agreed in August to sell it to hedge fund manager Fortress Investment Group LLC for US$125 million.
AIG also saw a US$1.3 billion goodwill impairment charge related to its pending sale of AIG Star Life Insurance Co and AIG Edison Life Insurance Co. Removing the charges, AIG lost US$1.47 per share.
The insurance company said the charges were somewhat offset by a US$1.4 billion tax benefit.
But American International Group Inc, which is 80 percent owned by the United States government, remains confident in its core operations, which include its property and casualty and life and retirement services business.
"AIG's continuing insurance operating results remain solid," President and CEO Robert H. Benmosche said in a statement. "Despite soft market conditions in the property casualty market and a low interest rate environment, these businesses have demonstrated their market leadership and are maintaining their discipline."
New York-based AIG is in the process of repaying more than US$100 billion still outstanding from a government bailout it received two years ago during the credit crisis. It is selling off assets to help repay taxpayers.
AIG was one of the hardest hit financial firms by the credit crisis. Its bailout package enabled it to tap as much as US$180 billion in aid.
AIG lost US$2.4 billion, or US$17.62 per share, in the third quarter, compared with earnings of US$92 million, or 68 cents per share, a year ago.
Restructuring-related charges amounted to US$4.5 billion, mostly tied to the assets sales. The pending sale of AIG's 80 percent stake in consumer credit business American General Finance Inc weighed heavily on the quarter, as AIG incurred a US$1.9 billion loss related to the transaction.
American General Finance provides loans, retail financing and other credit-related products to consumers in the US, Puerto Rico, the Virgin Islands, and the UK.
AIG agreed in August to sell it to hedge fund manager Fortress Investment Group LLC for US$125 million.
AIG also saw a US$1.3 billion goodwill impairment charge related to its pending sale of AIG Star Life Insurance Co and AIG Edison Life Insurance Co. Removing the charges, AIG lost US$1.47 per share.
The insurance company said the charges were somewhat offset by a US$1.4 billion tax benefit.
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