Aflac Takes $610 Million 2Q Loss On Sale Of European Securities
June 23 2011 - 10:00AM
Dow Jones News
Insurer Aflac Inc. (AFL) said it will incur a loss of about $610
million in the second quarter as it continues to sell off
investments in Europe that had been flagged as problematic by
analysts and investors.
The majority of the loss, of $445 million before taxes, is on
the sale of securities tied to Portuguese banks, the company said
in a statement Thursday. The remaining $165 million are losses on
investments in financial institutions in Greece and Ireland.
Aflac had previously disclosed a portion of the investment loss
tied to Ireland.
The asset sales are part of Aflac's ongoing effort to unload
some of its sovereign and bank debt from financially stressed
regions, and reduce the size of the largest positions in its
investment portfolio. The company sold off Greek debt in the first
quarter.
Such investments have made some investors and analysts nervous
in recent years, first amid the 2008 financial crisis and later
when the European Union grappled with the mounting debts of Greece
and other member nations last year.
But analysts have warned more recently that the asset sales will
be a drag on earnings as the company takes losses on the securities
it's unloading.
Chief Executive Officer Daniel Amos said in Thursday's statement
that the effort to "de-risk" the company's investment portfolio
will be completed by the end of the year.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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