Friends First hit by €24m Irish writedowns
Published 18/08/2010 | 05:00
DUTCH financial giant Eureko booked another €24m of Irish writedowns in the six months to June as its Friends First insurance arm slashed the carrying value of investments and property.
The latest Irish hit was revealed in Eureko's first-half results commentary yesterday, and comes almost a year after the Dutch plc announced the closure of its Irish lending offshoot Friends First Finance.
The closure was blamed on the credit crunch and massive loan losses, which amounted to €35m in the first half of 2009 alone.
The new figures show that another tranche of hefty writedowns pushed the Friends First group to a €6m loss for the first half of the year, though the result was an improvement on the €12m of first-half losses in 2009.
Eureko does not break down the €24m booked this year, but it is understood the hit stemmed from investment funds and properties held by the life insurance company and not from further writedowns of Friends First Finance's loan book.
On the trading front, the life insurer's gross written premiums for the six months came in at €117m, down about 14pc year-on-year, according to Eureko's published figures.
It is understood, however, that Friends First's premiums dropped just 2pc based on the Irish industry standard of Annual Premium Equivalent (APE).
As well as treating single premium income differently, the APE measure also includes unit-linked investment sales that don't feature in Eureko's internal numbers. "The Irish economy continues to be hard hit with the crisis spilling over to all sectors," Eureko said.
"In a shrinking market with intense price competition, we have been able to maintain market share even though the recession is impacting retention rates across the industry."
Friends First's 2pc fall in APE was just slightly above the 1pc fall across the industry, with the life insurer's 6.7pc share of the market expected to be virtually unchanged.
Friends First has been cutting costs across its Irish operations, with the lending arm shedding 98 jobs over the course of its wind down and the company securing just over 50 voluntary redundancies in the last year.