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Business
Hong Kong-listed insurer AIA remains unfazed by declines in net profits citing strong growth in its new businesses
CKN
2019/03/18 03:02:48
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China's News, China's Financial News, AIA

Mar 18, 2019 (China Knowledge) - Hong Kong listed insurer AIA Group reported a worse-than-expected decline in net profits for 2018, with net profits falling by 60% due to losses in the company’s stock and property investments. Net profits for 2018 was reported to be USD 2.6 billion, falling 60% from USD 6.5 billion in 2017.

Group chief executive and president Ng Keng Hooi stated that the results were due to economic uncertainty and volatility in the financial markets which affected the company’s short-term profitability and that the company’s cumulative operating after tax profits and net profits were still stable at about USD 30 billion, showing that AIA’s business is able to cope with such short-term volatility and fluctuations.

The decrease in net profits was largely due to a loss in valuation of about USD 2 billion in the company’s equities and real estate investment compared to a gain of USD 2 billion in 2017.

In addition, the value of the company’s new businesses continues to show strong growth, increasing 22% to USD 3.96 billion. AIA’s business in the mainland Chinese market still remains as its fastest-growing market with a 30% growth in new business. The company’s largest market, Hong Kong, also showed strong growth in its new business with a 24% increase.

AIA will be paying a final dividend of HKD 0.848 per share for a full-year dividend of HKD 1.14 per share, increasing by 14% from 2017.

The company will be maintaining a payout ratio of about one-thirds of its profits in order to keep a cash surplus to support its future growth.

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