AIG reports 2Q profit, first since 2007

The troubled insurer made $1.82 billion during the second quarter ended June 30. Of that, $311 million, or $2.30 per share, was attributable to common shareholders because the U.S. government owns 80% of the company after bailing it out last year.
AUG 07, 2009
American International Group Inc. reported its first quarterly profit since 2007 on Friday, as the company saw stability in some of its businesses. AIG shares rose $1.97, or 8.7 percent, to $24.50 in pre-market trading. The troubled insurer made $1.82 billion during the second quarter ended June 30. Of that, $311 million, or $2.30 per share, was attributable to common shareholders because the U.S. government owns 80 percent of the company after bailing it out last year. For the year-ago second quarter, AIG lost $5.4 billion, or $41.13 per share. AIG now has received a government loan package worth up to $182.5 billion. The company has been aiming to spin off some of its assets to begin to repay the government money. It said in a filing with the Securities and Exchange Commission on Friday that it expects proceeds of about $8 billion from sales so far this year, giving it about $4.6 billion to begin repaying debts, including what it owes the government. The company said its profit was driven by the stabilizing value of some of its riskier investments, including in its AIG Financial Products Corp. portfolio, the much-maligned division responsible for many of the transactions that prompted the government bailout. AIG's near-collapse late last year was because of risky contracts such as credit default swaps, which act as insurance to protect an investor against default on an investment such as a mortgage-backed security. The financial-products division was able to increase the value of remaining swaps on its books by $636 million during the quarter, thanks to improving credit markets. In the second quarter of 2008, AIG cut the value of those holdings by $5.57 billion. Total revenue rose 48 percent, to $29.53 billion from $19.93 billion a year earlier. However, premiums fell during the quarter.

Latest News

IRA assets swell to $19.2 trillion as 401(k) rollovers drive growth
IRA assets swell to $19.2 trillion as 401(k) rollovers drive growth

IRAs now hold nearly twice the assets of 401(k) plans — and most of that money didn't arrive through annual contributions.

Women feel confident about saving, but many still keep cash in low-yield accounts
Women feel confident about saving, but many still keep cash in low-yield accounts

A new survey finds that many women prioritize financial security but continue to leave savings in accounts that may not keep pace with inflation.

SEC seeks comment on prediction-market ETFs after May pause
SEC seeks comment on prediction-market ETFs after May pause

Roundhill, Bitwise and GraniteShares funds remain on hold while the agency weighs how novel ETFs should be regulated.

Dump investment banks, buy alternative asset managers, says Oppenheimer
Dump investment banks, buy alternative asset managers, says Oppenheimer

"Shares of alternative assets managers have lagged this year as investors grow wary of private-credit exposure."

TaxStatus rolls out rules-based tool to flag advice gaps
TaxStatus rolls out rules-based tool to flag advice gaps

The fintech platform is touting a new AI-free Planning Observations feature, which draws on IRS tax records to uncover opportunities for advisors.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.