(Reuters) – Italy's leading insurer Generali Group said on Thursday it would delay the payment of the second tranche of the dividend from 2019 to next year to meet regulatory requirements, after reporting nine-month operating results above expectations.
The Italian insurance agency IVASS has asked companies, including Generali this week, not to pay dividends this year following recommendations from the European Systemic Risk Board to save cash in the coronavirus crisis.
Generali said it still aimed to pay out 4.5-5 billion euros. ($ 5.5- $ 5.9 billion) in dividends under a three-year plan for 2021.
The insurer will hold a virtual investor day on November 1
Generali's CEO Philippe Donnet told analysts he was "a little surprised" by IVASS 'decision, which had "nothing to do with our capital and our cash position" but was based on general macroeconomic considerations.
"Italian regulators are not in favor of a new dividend limit for 2021, they said a few days ago," he added.
IVASS declined to comment.
Generali's solvency ratio, an important measure of economic strength, had risen to 207% in November. 9, CFO Cristiano Borean told a media lecture, after achieving 203% better than expected at the end of September.
According to Jefferies analysts, the dividend ban is "somewhat disappointing" given "Generali's strong underlying performance" which "bodes well for the future."
In May, Generali paid a first installment of the 2019 dividend of EUR 0.50 per share for a total of EUR 0.96.
The Insurance Group's nine – month operating profit, a performance measure that investors have carefully considered, beat analysts' estimates, increasing by 2.3% to EUR 4 billion.
Net profit decreased by 40% to EUR 1.3 billion, after EUR 666 million in non-recurring items, partly related to write-downs on COVID-linked market volatility.
Profit in 2020 is expected to be lower on an annual basis due to the negative impact of the pandemic from the financial markets and from certain non-recurring costs, said Generali.
Mr. Donnet said that Generali was still interested in small and medium-sized acquisitions and that some opportunities could arise from the COVID-19 crisis.