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Allianz Annual Report 2013

Annual Report 2013    Allianz Group86 Earnings summary Our operating result in Corporate and Other improved by € 110  mn to a loss of € 1,004  mn. The € 162  mn improvement in Holding & Treasury was partly offset by a € 57  mn deterioration in Banking. The operating result in Alternative Investments remained almost stable at € 24 mn. Our net loss decreased from € 1,854  mn to € 1,334  mn. This improvement was supported by a higher non-operating investment result, lower interest expenses from external debt and a decline in amortization of intangible assets. Our reduced operating loss also contributed to this development. Earnings summaries by reportable segments Holding & Treasury Our operating loss improved by € 162  mn to € 939  mn. This was driven by a recovery of our net interest result and a better net fee and com- mission result. Our net interest result increased from € (169)  mn to a net loss of € 63  mn. Interest and similar income increased by € 33  mn to € 278  mn due to the resumption of interest payments on our silent participa- tioninCommerzbank,butpartlyoffsetbylowerinterestincomefrom other debt instruments. Our interest expenses, excluding interest expenses from external debt, decreased by € 73  mn to € 341  mn as rates and internal borrowing diminished. Our net fee and commission result advanced by € 54  mn to a loss of € 178  mn. This reduction was mainly due to the higher revenues of our internal IT service provider. Administrative expenses (net), excluding acquisition-related expenses, grew by € 93  mn to € 684  mn, mainly due to higher pension costs as a result of lower discount rates. During the second half of 2013 we reduced restructuring provi- sions mainly related to our data center consolidation project by € 34  mn. Investment expenses were down by € 22  mn to € 79  mn due to increased cost recovery from other group companies. Banking Our operating loss worsened by € 57  mn to € 91  mn due to higher restructuring charges and a decrease in the net interest result. In 2013, we incurred restructuring charges of € 88  mn almost completely related to the closure of the ­Allianz Bank’s business oper- ations. In this context, it is worth mentioning that our restructuring charges have been presented within the operating profit since the beginning of 2013. Excluding the restructuring charges, the operating result in Banking would have improved from 2012 by € 31  mn to a loss of € 3 mn in 2013. Our net interest, fee and commission result decreased by € 33  mn to € 545  mn due to a lower net interest result. Because of the low inter- est rate environment and a reduction in our exposure to government bonds, the net interest result was down by € 37  mn to € 332  mn. Our net fee and commission income increased by only € 4  mn to € 213  mn as the effects of growth in sales of insurance and investment-oriented prod- ucts in Italy and the closure of ­Allianz Bank’s business operations in Germany essentially offset each other. Administration expenses were reduced by € 43  mn to € 468  mn, mainly as a result of the closure of the ­Allianz Bank’s business oper- ations. Our loan loss provisions decreased by € 25  mn to € 86  mn. The pre- vious year was burdened by increased loan loss provisions due to financial guarantees within certain unit-linked products related to peripheral sovereign bonds (which matured or were sold by the end of 2012). However, we recorded higher loan loss provisions related to our ship financing business in 2013. Our operating income from financial assets and liabilities carried at fair value through income (net) dropped by € 6 mn to € 8 mn. Alternative Investments Our operating result remained stable at € 24 mn (2012: € 22 mn). Lower interestincomeandslightlyincreasedinvestmentandadministrative expenses were more than compensated for by a € 14  mn rise in our net fee and commission income.

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