This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7546546.stm
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| AIG shares plunge on further loss | |
| (about 13 hours later) | |
| Shares in American International Group (AIG), the world's largest insurance firm have fallen 18% to $23.84, their biggest fall in more than two decades. | |
| It had reported another quarterly loss as profits were wiped out by writedowns on mortgage-related investments. | |
| In the April to June period it incurred a net loss of $5.36bn (£2.75bn) against a profit of $4.28bn a year ago. | |
| AIG sacked chief executive Martin Sullivan in June and replaced him with ex-Citigroup banker Robert Willumstad. | AIG sacked chief executive Martin Sullivan in June and replaced him with ex-Citigroup banker Robert Willumstad. |
| Mr Willumstad blamed the poor housing and credit markets for AIG's troubles. | Mr Willumstad blamed the poor housing and credit markets for AIG's troubles. |
| 'Comprehensive review' | 'Comprehensive review' |
| One of the main factors behind the loss was a pre-tax charge of $5.56bn that AIG took on the value of contracts sold to protect bond investors against losses. | One of the main factors behind the loss was a pre-tax charge of $5.56bn that AIG took on the value of contracts sold to protect bond investors against losses. |
| TOP WRITEDOWNS Billions of dollars Citigroup 46.40Merrill Lynch 36.80UBS 36.70AIG 20.23HSBC 18.70RBS 16.50IKB 14.73Bank of America 14.60Morgan Stanley 11.70Deutsche Bank 11.40Ambac 9.22Barclays 9.20Wachovia 8.90MBIA 8.41Credit Suisse 8.13Wasington Mutual 8.10HBOS 7.50 Source: Reuters | TOP WRITEDOWNS Billions of dollars Citigroup 46.40Merrill Lynch 36.80UBS 36.70AIG 20.23HSBC 18.70RBS 16.50IKB 14.73Bank of America 14.60Morgan Stanley 11.70Deutsche Bank 11.40Ambac 9.22Barclays 9.20Wachovia 8.90MBIA 8.41Credit Suisse 8.13Wasington Mutual 8.10HBOS 7.50 Source: Reuters |
| It also took a $6.08bn hit on its portfolio of residential mortgage-backed securities due to "the severe, rapid declines" in their market value. | It also took a $6.08bn hit on its portfolio of residential mortgage-backed securities due to "the severe, rapid declines" in their market value. |
| Mr Willumstad said: "We are conducting a comprehensive review of all AIG's businesses with the objectives of improving results, reducing AIG's risk profile and protecting our capital base." | Mr Willumstad said: "We are conducting a comprehensive review of all AIG's businesses with the objectives of improving results, reducing AIG's risk profile and protecting our capital base." |
| He said a progress report would be released in September. | He said a progress report would be released in September. |
| AIG shares dropped almost 8% in after-hours trade in New York on Wednesday, suggesting they could fall when the market opens on Thursday. AIG's share price has fallen by half since the start of the year. | AIG shares dropped almost 8% in after-hours trade in New York on Wednesday, suggesting they could fall when the market opens on Thursday. AIG's share price has fallen by half since the start of the year. |
| But analysts considered that AIG's prospects could improve as market conditions picked up. | But analysts considered that AIG's prospects could improve as market conditions picked up. |
| "It looks like the new CEO took what I call a kitchen sink quarter," Keith Wirtz, president and chief investment officer of Fifth Third Asset Management said, suggesting he was aiming to clear all the bad news at once. | "It looks like the new CEO took what I call a kitchen sink quarter," Keith Wirtz, president and chief investment officer of Fifth Third Asset Management said, suggesting he was aiming to clear all the bad news at once. |