German insurer Allianz has added one other €1.9bn to provisions to cowl a scandal at its US asset administration enterprise, taking the full quantity to cowl fines and different prices to €5.6bn.
In February, the Munich-based group put aside €3.7bn to pay for settlements with traders who put cash into hedge funds managed by its asset administration arm Allianz World Traders. On the time, it mentioned the prices have been prone to rise.
The additional €1.9bn booked within the first quarter will cowl extra settlements with traders and can replicate “progressing discussions with governmental authorities within the US”, the group mentioned in an announcement on Wednesday.
“Allianz SE believes that this provision booked is a good estimate of its remaining monetary publicity in relation to compensation funds to traders and to funds beneath any decision of the governmental proceedings,” it added.
The Allianz funds on the coronary heart of the scandal, often called “structured alpha”, have been touted to shoppers as secure however suffered heavy losses in the course of the early phases of the coronavirus pandemic in spring 2020. Traders have accused Allianz of using a “reckless technique”.
The US Division of Justice and the Securities Trade Fee are investigating the collapse. Allianz mentioned on Wednesday it was searching for “a well timed decision to the governmental proceedings in ongoing discussions” with the DOJ and the SEC, including that it’s going to disclose extra particulars “as soon as an settlement with the authorities has been reached”.
The brand new provision will dent earnings within the first quarter by €1.6bn after tax, the group mentioned.
