Tags: Pimco | Allianz | Payouts | Gross

Pimco Parent Allianz Lifts Payouts, Affirms Goals Post-Gross

Thursday, 06 Nov 2014 07:14 PM

Allianz SE pledged to pay a higher share of profit to shareholders and confirmed its full-year profit target as the Pimco asset management unit struggles to contain outflows following the departure of Bill Gross.

“Starting with the financial year 2014, the intention is to propose an increased regular payout to Allianz shareholders of 50 percent of net income,” the Munich-based company said Thursday in a statement. That compares with a pay-out ratio of 40 percent at Europe’s biggest insurer in the past.

Investors have pulled billions of dollars from Pacific Investment Management Co.’s funds since the Sept. 26 announcement that Gross, who was chief investment officer and co-founded Pimco more than four decades ago, was joining Denver-based Janus Capital Group Inc. Pimco, based in Newport Beach, California, suffered 49.2 billion euros ($60.9 billion) in client redemptions in the third quarter, Allianz said. Most of the outflows occurred in the last week of September.

The asset manager said earlier in the week that clients pulled $27.5 billion in October from its biggest mutual fund.

“Net outflow development after the resignation of Bill Gross is within our expectation,” Chief Financial Officer Dieter Wemmer said in the statement. “Our unchanged outlook for the full year 2014 and the newly established multi-year dividend policy are visible demonstration of management confidence about the future of Allianz.”

Profit Advances

Allianz’s net income climbed 11 percent to 1.61 billion euros in the third quarter. That compared with an average estimate of 1.57 billion euros in a Bloomberg survey of 13 analysts. Operating profit at the asset-management unit, which includes Pimco and Allianz Global Investors, fell 5 percent to 694 million euros.

Before Thursday’s announcement, the insurer had been expected to pay 6.20 euros a share for this year, according to the Bloomberg Dividend Forecast. Allianz has promised investors to update them on payouts before year-end. It paid 5.30 euros a share as dividend for 2013, or 40 percent of profit.

Allianz said Thursday that it will “evaluate and pay out the unused budget earmarked for external growth every three years.” The first such evaluation will take place at the end of 2016. Payouts won’t be allowed to push the insurer’s Solvency II ratio, a measure of financial stability, below 160 percent, Allianz said.

Allianz shares have declined 2.8 percent this year, valuing the company at about 58 billion euros. The Bloomberg Europe 500 Insurance Index has risen 4.3 percent during the same period.

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Allianz SE pledged to pay a higher share of profit to shareholders and confirmed its full-year profit target as the Pimco asset management unit struggles to contain outflows following the departure of Bill Gross.
Pimco, Allianz, Payouts, Gross
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2014-14-06
Thursday, 06 Nov 2014 07:14 PM
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