E Global Company News: Allianz, BLX, Mazor, Fibra Uno, Cosan, Shire

Allianz SE of Germany today reported good results thanks to data from Pimco in California, which was published separately from its parent's results. AZSEY reported yesterday that it plans a euros 3 bn buyback and raised its dividend 4.1% to euros 7.3/sh. The buyback alone will boost eps by 4.4%. The US bond specialist fund reported its second quarter in a row in inflows in Q4 as well as the highest operating profits since Q3 2014, when rainmaker Bill Gross walked away from the AZSEY-controlled fund manager, and when we bought on the assumption that Allianz would recover.

Allianz also reported that its Q4 profits hit euros 1.7 bn, about $1.8 bn, up 23% over Q4 2015 and beating analyst forecasts by 11%. Its full year profits came in at 6.9 bn euros also beating forecasts by 3%. It expects the current year to produce operating profits of around euros 6.9 bn, same as last year, plus or minus 500 mn euros for currency changes. 

It has taken longer than expected but Allianz's 23% increase in Q4 and its planned share buyback are coming because of Pimco reversing its woes. In Q3 last year Pimco's new money inflows came to $5 bn (euros 4.7 bn as reported by Allianz); in Q4, inflows came to euros 5.9 bn, Allianz said, about $6.4 bn. And year to date another euros 4.2 bn has already moved into Pimco as clients exit equities—either because they think stocks are too high, or because they are using index trackers rather than stock pickers for their portfolios.

For its parent, the impact of that new money was to lower the cost to income ratio in Q4 to 56.8% from 60.2% a year earlier, meeting its target of under 60%.

It also will change its dividend policy while keeping its return to shareholders of half the group net attributable income. However this will no longer be linked in its external budget in a 3-year cycle, so it can rise faster.

Alliance shares are up 2.5% in Germany today and gained nearly a quarter in the last half year. However the ADR is down fractionally less than a half percent.

Banco Latinoamericano de Comercio (BLX) of Panama reported consolidated Q4 profits of $13.3 mn and full year ones of $87 mn under IFRS standards. Q4 profits last year were $23.2 mn and full year ones $104 mn, so this is a bad report. EPS for the year was $2.34 vs $2.54 and for the quarter, per share 34 cents vs 72 cents. The Q4 profits were down 52% sequentially and 43% y/y as it took charges.

Return on equity fell to 8.8% from 11%. While its operating expenses were slashed its loan book also fell as the multilateral bank lost or turned away business. CEO Rubens Amaral said BLX “encountered more than expected headwinds in the non-performing loan portfolio”. This tends to be low (because trade finance is short term.)

However, last year the regional downturn in Latin America caused these to rise, which not only cost the bank repayments, but also generated costs for “complex” “restructuring efforts” however confined to a few countries. These included Brazil, Argentina, and Ecuador, according to CEO Amaral. One result was that BLX increased its reserves and cut its leverage. It also lowered its exposure to oil and gas businesses. A non-recurrent factor was BLX discontinuing its holdings in investment funds it liquidated last April. Its Tier 1 Basel 3 capitalization ratio rose to 17.9% of its loans from 15.9% in Q3, despite non-performing loans hitting 1.09% in Q4 and 1.31% in Q3. In normal times these levels are unheard of for trade financing.

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