Tags: AIG | Profit | Dividend | Buyback

AIG Logs Higher Profit, Resumes Dividend, Plans Buyback

Thursday, 01 Aug 2013 05:48 PM

 

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American International Group Inc. said Thursday that its profit grew 17 percent in the second quarter as the insurer benefited from higher net premiums, prices and income from investments.

The New York-based company also declared a 10-cent quarterly dividend — its first since it nearly collapsed in 2008 during the financial crisis before being bailed out by the federal government. And it announced board approval of a share buyback plan of up to $1 billion.

AIG reported that net income rose to $2.7 billion, or $1.84 per share, in the three months ended June 30. That compares with net income of $2.33 billion, or $1.33 per share, a year earlier.

Analysts polled by FactSet expected, on average, adjusted earnings of 86 cents per share.

Net premiums written at AIG's property casualty business increased 1.8 percent to $9.3 billion, aided by higher prices.

AIG nearly collapsed after making huge bets on mortgage investments that later soured. Federal regulators were concerned that if it were allowed to fail it would hurt the broader financial system, which was already reeling after Lehman Brothers collapsed in the fall of 2008.

The Treasury Department provided about $68 billion to AIG through its Troubled Asset Relief Program, or TARP. The rest of the bailout, $114 billion, came from the New York Fed.

AIG became a symbol for excessive risk on Wall Street and was criticized, among other things, for paying millions of dollars in bonuses to executives after it was bailed out.

In recent years AIG has undergone a massive restructuring that cut its size in half and turned its focus to its core business of writing insurance.

AIG shares ended regular trading up $1.56, or 3.4 percent, at $47.07. The stock added $1.91, or 4.1 percent, to $48.98 in after-hours trading.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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