By Jonathan Gould

FRANKFURT |
Tue May 15, 2012 8:43am EDT

FRANKFURT (Reuters) – Allianz (ALVG.DE) warned on Tuesday that fallout from the euro zone crisis could cause it to stumble even though Europe’s biggest insurer reported a 40 percent jump in first quarter earnings.

“We expect further shocks before the situation finally calms down and therefore we remain very cautious,” Chief Financial Officer Oliver Baete told a conference call with journalists.

“As a company with total assets of over 600 billion euros ($770.28 billion), we hang on the (financial) markets.”

Political instability in Greece and the prospect that it might exit the euro sent European stock prices plunging this week.

“That would have terrible consequences for Greece and must be avoided at all costs,” Baete said, adding that a Greek exit could spur contagion and would be costly for German taxpayers.

“We are very concerned about the situation in Spain, particularly the coming recapitalization of the banking sector, which must now succeed,” Baete said.

Allianz wrote 77 million euros off the value of its stake in Spain’s Banco Popular (POP.MC), an Allianz partner in asset management and life insurance, in the first quarter.

Baete said Allianz’s stake in Spain’s No. 5 retail lender would fall to just under 5 percent in the next two years, from over 7 percent, due to Popular’s merger with rival Pastor.

On the situation in Italy, Baete said Allianz was confident in the country’s government and financial system, despite a credit rating downgrade by Moody’s of 26 Italian banks.

The insurer benefited from a decline in financial market volatility in the first quarter, with unrealized losses on its portfolio of government bonds from the euro zone’s periphery states falling to 1.16 billion euros at the end of March from 3.71 billion at the end of December. The decline was largely due to a rally in Italian government bonds.

STRONG START TO YEAR

Allianz is on its way toward its target of earning 8.2 billion euros, plus or minus 500 million, in operating profit this year. Baete would not say if it might reach the top of that range.

The insurer confirmed quarterly operating profit rose to 2.330 billion euros, helped by low damage claims and rising revenue, particularly in its property-casualty business.

The company had published preliminary first quarter figures last week.

Damage claims from natural catastrophes were just 42 million euros, down by 695 million from last year, during which there were devastating earthquakes in Japan and New Zealand.

Operating profit in Allianz’s main money-spinner – property and casualty insurance – surged 80 percent to 1.189 billion euros. Operating profit in life and health insurance rose 18 percent, as improving investment income offset a fall in revenue. Profit from asset management rose 16 percent.

Group revenue overall rose just 0.5 percent, roughly in line with Europe’s No. 2 insurer Axa (AXAF.PA) in the first quarter.

Allianz’s shares rose 1.5 percent to 78.28 euros by 1220 GMT, outpacing a flat STOXX Europe 600 insurance index .SXIP.

It has risen by nearly 6 percent this year, outpacing a 2 percent rise in the insurance index, while Axa has fallen 5 percent over the same period.

According to Thomson Reuters StarMine, which weights analyst forecasts according to their track record, Allianz trades at 6.7 times 12-month forward earnings, a premium to Axa, which trades at a multiple of 5.1.

(Reporting by Jonathan Gould. Editing by Jane Merriman)

Alex McLeish believes Aston Villa striker Darren Bent could yet be available for Euro 2012.

After rupturing ankle ligaments in February, Bent is stepping up his rehabilitation work in the hope of being part of new England head coach Roy Hodgson’s squad.

The England medical team have been monitoring his progress, with physio Gary Lewin initially visiting Bodymoor Heath three weeks ago and making a second visit to Villa’s training complex this week.

McLeish said: “Darren is working hard and training well. He’s not joined the group yet. It’s important that Darren gets a good summer behind him and regroups for the start of next season.

“He has come through a lot and he’s at a good stage just now. He’s enjoying his one-on-ones with the physios, he’s working really hard.

“Can he make the Euros? Roy Hodgson would have a better idea. If there were six weeks of the season to go, he’d certainly be back within those six weeks.

“But whether he goes to the Euros would be Roy’s decision. It seems at this moment that, with another two or three weeks’ training, he could be fine and available, put it that way.”

McLeish admits the absence of Bent has been a massive blow for Villa.

He said: “I think it’s 19 games the big fellow has missed. God knows how many goals he’d have got us and maybe have taken us into a little comfort zone.

“Hopefully he makes a full recovery in the summer and he’s ready all guns blazing for next season.”

Alex McLeish believes Aston Villa striker Darren Bent could yet be available for Euro 2012.

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After rupturing ankle ligaments in February, Bent is stepping up his rehabilitation work in the hope of being part of new England head coach Roy Hodgson’s squad.

The England medical team have been monitoring his progress, with physio Gary Lewin initially visiting Bodymoor Heath three weeks ago and making a second visit to Villa’s training complex this week.

McLeish said: “Darren is working hard and training well. He’s not joined the group yet. It’s important that Darren gets a good summer behind him and regroups for the start of next season.

“He has come through a lot and he’s at a good stage just now. He’s enjoying his one-on-ones with the physios, he’s working really hard.

“Can he make the Euros? Roy Hodgson would have a better idea. If there were six weeks of the season to go, he’d certainly be back within those six weeks.

“But whether he goes to the Euros would be Roy’s decision. It seems at this moment that, with another two or three weeks’ training, he could be fine and available, put it that way.”

McLeish admits the absence of Bent has been a massive blow for Villa.

He said: “I think it’s 19 games the big fellow has missed. God knows how many goals he’d have got us and maybe have taken us into a little comfort zone.

“Hopefully he makes a full recovery in the summer and he’s ready all guns blazing for next season.”
 

Barcelona captain Carles Puyol is still hoping to reach 100 appearances for Spain despite acknowledging he is almost certain to miss this summer’s European Championship due to a knee problem.

Barca announced on Tuesday that Puyol will undergo an arthroscopy on May 12 after feeling discomfort in his right knee following Saturday’s 4-0 defeat of Espanyol – and that is set to sideline the centre-back for around six weeks.

That means the 34-year-old is definitely out of Barca’s final Primera Division game at Real Betis at the weekend and he will also miss coach Pep Guardiola’s last game in charge – the Copa del Rey final against Athletic Bilbao on May 25.

His participation at Euro 2012 is also extremely doubtful with Spain opening their campaign against Italy on June 10 before going on to play the Republic of Ireland and Croatia in Group C.

However, while he admits it is highly unlikely he will be going to the Euros, Puyol, who has earned 99 caps for Spain and helped his country win Euro 2008 and the 2010 World Cup, is not ready to hang up his international boots.

He said: “My plan right now is only to undergo the operation and recover as soon as possible. I’m sure that things are going to turn out well and very soon I will be back playing again.

“I don’t know if it was my last European Championship but I do know that I want to retire on the pitch and not on the operating table.

“I’m only thinking about recovering and returning to 100%. If then I can return to play with the national team I would love to reach that number (100 caps).”

Asked about the possibility of him going to Ukraine and Poland as part of Vicente Del Bosque’s squad this summer, Puyol added: “I would love to but it looks very difficult. I have to wait and see what the doctors find, but I think that it’s impossible.

“There will be players in better condition than me to play.

“Those who are best are the ones who have to go. It would be unfair on the other players. In Spain there are good centre-backs and we don’t have to worry about anything.”

On the prospect of missing both the Copa del Rey final and Euro 2012, Puyol said: “It’s frustrating to miss these two competitions. The cup final is the nicest game of the year because of the atmosphere.

“If this had happened when I was younger it would’ve been worse but I see things in a different way now I’m 34. I hope to help from off the pitch and enjoy this final.”

Del Bosque will announce his provisional squad for Euro 2012 on May 15 which will then be whittled down when the final 23-man party is confirmed on May 27.

May 8 (Bloomberg) — David Zervos, market strategist at Jefferies Co., talks about the potential impact of last weekend’s elections in France and Greece on the euro zone and investors.
Zervos speaks with Erik Schatzker, Stephanie Ruhle and Scarlet Fu on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

Greece will probably leave the euro as
soon as next month as the government runs out of cash and
European institutions fail to lend more to the nation, according
to John Taylor of hedge fund FX Concepts LLC.

“This summer I think is very likely,” Taylor, founder and
chief executive officer of FX Concepts in New York, said today
in an interview on Bloomberg Television’s “Inside Track” with
Erik Schatzker and Sara Eisen. “The Europeans aren’t going to give
them the money, the International Monetary Fund’s not going to
give them an OK. They will be out of money in June.”

Greece raised 1.3 billion euros ($1.7 billion) of 26-week
Treasury bills today at a yield of 4.69 percent, compared to
4.55 percent at the previous auction on April 10, according to
the Athens-based Public Debt Management Agency. Investors bid
for 2.6 times the securities offered.

The nation’s political leaders are meeting for a second day
to try to form a government after New Democracy’s Antonis
Samaras, who won the most seats in Parliament, said he couldn’t
forge a coalition. Another election may be held in mid-June if
politicians fail to form a governing coalition.

The attempt to form a government now passes to Alexis
Tsipras, the head of Syriza. Tsipras ran on a pledge to overturn
Greece’s bailout, helping Syriza emerge as the country’s second-
most voted party. He has said he will seek to form a coalition
with other parties that favor reversing the 130 billion-euro
bailout, the country’s second aid package, which came after
Greece carried out the biggest debt restructuring in history.

Greek Debt

“I think that people are feeling the implications of a
Greek exit aren’t so bad,” Taylor said. If Greece leaves the
euro, Europeans will “turn around and huddle together and say,
‘how do I help Portugal and Spain?’”

Of Greece’s 266 billion euros of debt, about 194 billion
euros, or 73 percent, is held by the European Central Bank,
euro-area governments and the IMF, according to the Greek Debt
Management Office in Athens. In 2010, before the first bailout,
Greece owed about 310 billion euros, all to the private sector.

Tsipras said in Athens today that he wouldn’t agree to join
forces with New Democracy and Pasok, the two Greek parties that
have supported austerity measures in return for international
funds. He called on the leaders of both parties to withdraw
their pledges to impose the terms in writing by tomorrow when he
is to meet with both of them to discuss forming a government.

The 17-nation euro extended its longest run of declines
against the greenback since September 2008 as German Chancellor
Angela Merkel rejected government stimulus as the way to spur
economic growth, setting up a clash with French president-elect
Francois Hollande.

“Merkel is in a position where she can’t go too far to
push the Greeks to stay in or to give too much money to them,”
Talyor said. “I also feel passionately that the euro is
effectively a breakup.”

The euro declined 0.4 percent to $1.30 at 9:01 a.m. in New
York after sliding to $1.2955 yesterday, the weakest level since
Jan. 25.

To contact the reporters on this story:
John Detrixhe in New York at
jdetrixhe1@bloomberg.net;
Erik Schatzker in New York at
eschatzker@bloomberg.net

To contact the editor responsible for this story:
Dave Liedtka at dliedtka@bloomberg.net

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