French Insurer Axa H1 Profit Leaps

Confirming its reputation as the country's most profitable insurer, Axa said net consolidated profit climbed to FFr1.98 billion ($388 million) from FFr1.30 billion a year earlier.

Group turnover, at FFr87.5 billion, rose 21.2 per cent while earnings per share climbed 33.1 per cent to FFr10.57.

The showing by Axa, the lone French insurer whose balance sheet has not been hammered by exposure to a long-running property slump, beat most analysts' expectations and drove the shares up nearly four per cent to FFr297.

It's a very good set of numbers, an analyst said. Axa is the best (French) insurance stock in the market, a trader said.

 

Chairman Claude Bebear told an analysts' meeting that he expected a good second half but that it would be a bit optimistic to expect it to match the first half.

Axa, which has grown from a sleepy mutual company in the 1980s into a global player that now earns less than a third of its profit in France, said it was aiming for a 15 per cent return on equity after the year 2000, up from 10.9 per cent currently.

It forecast annual earnings per share growth above 15 per cent to the year 2000.

Seeking to defuse market rumours, Bebear said no talks were under way with rival UAP, whose shares were boosted recently by speculation Axa was eyeing it as a takeover target.

Bebear, who recently declared Axa had a 30 billion franc war chest, also said there were no talks of any importance under way with other groups. At the moment we are in no discussions of any significance with anyone, he said.

Axa's earnings were powered by a near doubling of non-life insurance profits to FFr610 million from FFr320 million. Financial services, whose profits leapt to FFr618 million from FFr397 million, were another driving factor.

Especially important was the contribution frominvestment bank Donaldson, Lufkin and Jenrette of the United States which sharply increased its profit contribution to FFr343 million.al="/incs/right.asp"-->