Dresdner posted a quarterly operating loss of 453 million euros, about the same level as in the fourth quarter, and Allianz said it was not possible to give a meaningful forecast for earnings at the lender due to financial market uncertainty.
“We do not expect that the years 2008 and 2009 will make up for the shortfall in 2007,” Europe’s biggest insurance group said of its banking arm.
Dresdner said in March it would split itself in two — a retail bank and investment bank, Dresdner Kleinwort — to play a more active role in industry consolidation.
“The pressure to overhaul the banking business has once again risen,” LBBW analyst Robert Mazzuoli said in a note.
Allianz’s share had fallen 1.6 per cent to 128.27 euros by 0712GMT, compared with a 1.2 per cent decline among European insurance peers.
Speculation that the Dresdner parts could be sold or merged has periodically boosted Allianz’s share price.
Traders and analysts have examined multi-merger combinations with Germany’s other big banks, such as Deutsche Bank, Commerzbank and Postbank, but do not rule out foreign interest from the likes of Spain’s Santander.
Those banks have all declined comment on the speculation.
Allianz bought Dresdner in 2001 in a 24 billion euro deal that one shareholder described as the biggest disaster in German industrial history. Dresdner racked up losses of almost 3 billion euros after the merger.
That unhappy track record, combined with the latest downturn, will make potential buyers wary, even if its writedowns are not in the league of rival Deutsche Bank’s 2.7 billion euros in the first quarter.
The crisis has not forced Germany’s commercial banks to turn to shareholders to raise cash, as Swiss rival UBS and the UK’s Royal Bank of Scotland have done.
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