According to the Group's press release, the decline reported in AEGON's underlying earnings before tax compared with the same quarter last year was mainly due to higher exceptional charges and expenses in the United Kingdom related to the customer redress program, the effects of lower equity markets and interest rates and a one-time benefit for the holding in the comparable period last year. Total holding costs increased to EUR 84 million as the comparable quarter last year included a one-time benefit of EUR 20 million. Also in 4Q2011, operating expenses decreased 4% to EUR 872 million as a result of cost savings and the positive effect of changes to employee benefit plans.
Compared with the fourth quarter of 2010, the value of new business declined considerably to EUR 53 million, reflecting current market circumstances of lower interest rates in the Americas and lower mortgage production in the Netherlands.
Statement of Alex Wynaendts, CEO:
"The past year was challenging, but also one of considerable progress for AEGON, having delivered on our key strategic priorities. The completion of the repayment to the Dutch State was a singular achievement, allowing us to turn our full attention to pursuing the clear opportunities for our business. In order to strengthen our competitive position, we initiated a broad restructuring program to reduce costs and create a more focused and responsive organization. This had an impact on earnings in the fourth quarter of 2011. We are on track, however, to realize the benefits this program aims to deliver, having achieved our targeted cost reductions in the United Kingdom. A clear indication of the continued strength of our franchise was the very high level of deposits throughout the year relating to our successful variable annuity and pension businesses in the United States. We aim to further leverage our broad capabilities and expertise to serve the growing demand for retirement security while strengthening our position in this core market.
"Reflecting the strength of our capital position, we reiterate our intention to propose a dividend of EUR 0.10 per common share over the second half of 2011. In what has been a year dedicated to transforming our business as well as our prospects for the future, we have strengthened AEGON's position to deliver sustainable earnings growth going forward."
See the detailed report on the 4Q2011 results here.