U.S. News

Sampo First-Quarter Pretax Jumps on Bank Sale

Sampo said investors would have to wait until next year to hear what the group plans to do with the 5.1 billion euros ($6.9 billion) of excess capital it has following the sale of its banking operation to Danske Bank.

The Finnish insurer said it would update investors when publishing its full-year results in early 2008.

The announcement came as Sampo reported a quarterly pretax profit of 3.129 billion euros ($4.23 billion), including the 2.83 billion euros gain made on the sale of its banking unit.

That is just short of the consensus estimate for 3.169 billion euros, as recorded by Kauppalehti/SME. Underlying pretax profit was 299 million euros ($404.6 million), which compares with a profit of 339 million euros a year ago.

EPS rose to 5.3 euros ($7.2) from 0.44 euros. Analysts had been projecting an EPS of 5.34 euros.

The insurer's combined ratio was 93.8% for the quarter, down from 94.3% a year earluer.

"Overall, the year has started well. The competitive sitatution ... is at least not worsening in Scandinavia," said chief executive Bjorn Wahlroos.

"We therefore expect a stable outlook. We can even see some of our scale advantages now starting to work." He said that stability is reflected in a projection for a full-year combined ratio of between 90-93%.

He added that the group was a net buyer of equity during the quarter, due to the position it has built up in Nordea.

Sampo has invested almost 1 bilion euros in Nordea to take some 3.2% of the Nordic banking group's outstanding capital.