Aegon's 4th-quarter profit jumps 32% to $358 million Providian acquisition proves profitable


March 20, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Aegon N.V., the large Dutch insurance company with its U.S. headquarters in Baltimore, said yesterday that fourth-quarter net income increased 32 percent as the company continued to benefit from its acquisition of Providian Corp.

Net income was $358 million, up from $272 million in the year-earlier quarter. Total revenue was $4.29 billion, up 18 percent from $3.64 billion. Earnings per share were $1.25, up 23 percent from $1.02.

"In 1997, we have surpassed all our previous records," said Aegon N.V. Chairman Kees Storm.

For the year, Aegon reported net income of $1.13 billion, up 22 percent from $929 million in 1996. Net income per share was $4.05, up 15 percent from $3.51. Total revenue increased 11 percent, to $16.03 billion from $14.5 billion.

Storm said the 1997 results reflect "the largest earnings increase in Aegon's history."

Aegon shares lost $2.875 to $120.125 on the New York Stock Exchange.

The company said its life insurance business grew by about 48 percent as measured by the Dutch guilder, with accident and health insurance increasing 25 percent, general insurance up 16 percent and banking activities climbing 8 percent. Aegon attributed some of the annual growth to the expansion of its life insurance and pension businesses into a broad range of investment and savings products.

But the company said buying Providian Corp., a Louisville, Ky.-based life insurance company, was its most important transaction. Providian accounted for an increase of about 5 percent in Aegon's net income per share for 1997, and the transaction is likely to boost 1998 earnings.

Aegon N.V. acquired Providian last summer for more than $3.5 billion. Insurance industry analysts called it the biggest U.S. life insurance acquisition ever.

Providian was folded into Aegon's Baltimore-based subsidiary, Aegon USA. The acquisition nearly doubled Aegon USA's size in assets.

Aegon USA operates Monumental Life Insurance Co. and Monumental General Insurance Group, both in Baltimore.

Pub Date: 3/20/98

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