February 15, 2018 / 7:24 AM / 5 days ago

UPDATE 1-Aegon earnings jump in fourth quarter, sees boost from U.S. tax cut

(Q4 net income 986 million euros vs f‘cast 652 mln Solvency improves to 201 percent in Q4 vs 195 pct in Q3)

By Toby Sterling

AMSTERDAM, Feb 15 (Reuters) - Dutch insurer Aegon NV on Thursday reported a doubling of quarterly net income to 986 million euros ($1.2 billion) and raised estimates for future earnings, thanks to a corporate tax cut in the United States where it does around 60 percent of its business.

Analysts polled for Reuters had seen net income of 652 million euros, compared with 470 million in the fourth quarter of 2016.

The lower tax rate resulted in a reduction of deferred tax liabilities, which Aegon booked as one-time gain of 554 million euros. Chief Financial Officer Matthew Rider said the lower tax rate had also improved the company’s future prospects.

“It looks like we’re going to get a bit of an uplift in terms of capital generation, which is an important one, maybe on the order of $100 million,” Rider said in a telephone interview.

“We see improved return on equity for the group going forward of something on the order of 55 basis points,” or 0.55 percent.

Aegon’s return on equity for the full year 2017 was 8.2 percent.

Aegon shares have rallied since June, as it began to put behind it two years of worries over its solvency under Europe’s Solvency II regime.

That trend continued, as it reported solvency improved to 201 percent in the fourth quarter, up from 195 percent in the third quarter, due to asset disposals and underlying profitability. ($1 = 0.8024 euros) (Reporting by Toby Sterling; Editing by Subhranshu Sahu and David Holmes)

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