RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

Continue Reading

Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

Continue Reading


Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

Continue Reading


Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

Continue Reading


Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

Continue Reading

Categorized | Insurance

Allianz: bore-geois

Posted on November 11, 2016

Stability, conservatism, predictable returns — the stolid values of the Victorian bourgeoisie are also those of Allianz, the Munich-based insurer.

Friday’s results demonstrated its reliability. After a tough second quarter, nine-month operating profits to the end of September wilted 2 per cent year on year, but a robust performance from its Life/Health division left overall post-tax income broadly unchanged.

Was there anything to be excited about? Allianz’s asset manager Pimco provided an unexpected boost, recording its first net inflows (€4.7bn) since 2013. But this must be seen against €130bn of net withdrawals over the preceding six quarters. And at a fifth of operating income, asset management plays a clear second fiddle to insurance.

Income is the main attraction for those who own the shares. A dividend yield of 5 per cent suggests there is some doubt over whether Allianz can sustain its progressive payout, set at 50 per cent of post-tax income. Yet the results suggest it can. Post-tax income grew by an annualised 3.5 per cent. True, that is less than its 5 per cent target, but some additional thrift could wring out a bit more growth.

Allianz has a war chest of roughly €2.8bn and has pledged to distribute what it does not spend by the end of the year. While that would reduce its Solvency II ratio (currently a solid 186 per cent), the planned disposal of its Korea business should ensure it remains comfortably above its 160 per cent targeted minimum.

Conservative indeed, for no one wants an exciting insurer.

Email the Lex team at