THE HAGUE (dpa-AFX) - Aegon NV (AGN.L, AEG) announced new actions to accelerate its restructuring in the US, which will include further net reduction of over 500 positions. The company said its original $150 million expense savings plan will be completed in 2017, one year ahead of schedule, and the expense savings target to be achieved by year-end 2018 has now been doubled to $300 million. The additional savings will be realized through, among other measures, further reduction of positions, closure of locations, a more efficient use of technology and outsourcing capabilities.
Aegon has also decided to exit the Affinity, Direct TV and Direct Mail channels, which are part of its Accident & Health line of business in the United States. Aegon decided that these no longer fit with its strategic objectives. As a result, $100 million of capital will be released over the next three years, while underlying earnings before tax will be reduced by approximately $25 million per annum.
Aegon stated that the company is on track to reach its financial targets for 2018. The company now aims to reduce its annual operating expenses by 350 million euros by year-end 2018, up from its original target of 200 million euros. This will enable the company to reach the 10% RoE target in 2018. Restructuring charges associated with the expense savings target are expected to amount to 20 million euros in the fourth quarter of 2016.
During 2016, Aegon has returned 950 million euros to shareholders of the targeted 2.1 billion euros of capital over the 2016-2018 period. Aegon aims to return the remainder through growing dividends.
Copyright RTT News/dpa-AFX