August 9, 2017 / 12:40 PM / 2 years ago

UPDATE 1-Sampo profit falls on smaller Nordea contribution

* Q2 pretax profit falls 9 pct yr/yr

* Shares down 2.6 percent

* Danske deal could boost dividends - CEO (Adds comments, Danske deal, updates shares)

HELSINKI, Aug 9 (Reuters) - Finnish investment holding company Sampo reported a fall in quarterly earnings on Wednesday, blaming a smaller profit contribution from Nordea Bank.

Sampo also shed light on the upcoming sale of part of its insurance portfolio to Danske Bank, saying the deal would release about 200 million euros ($235 mln) of capital, which could help it pay bigger dividends.

Sampo’s second-quarter profit before tax fell 9 percent from a year ago to 435 million euros, topping the 426 million expected by analysts in a Reuters poll.

Nordea’s profit contribution to Sampo fell 27 percent to 150 million euros. Sampo owns 21 percent of Nordea, the Nordic region’s biggest bank by market value, which reported last month smaller-than-expected earnings due to higher costs and low loan growth.

Shares in Sampo were down 2.6 percent by 1204 GMT.

However, the Finnish group said it expects its biggest unit, its property and casualty (P&C) insurance business, to reach a full-year combined ratio in the range of 86 and 89 percent. It had previously forecast a ratio of 87 to 90 percent. A lower ratio indicates better profitability.

Sampo is due next year to sell a portion of the insurance portfolio of its subsidiary Mandatum Life worth 334 million euros ($392 million) to Danske.

Sampo CEO Kari Stadigh said the sale would release an estimated 200 million euros in capital.

Asked at a news conference whether that money would be paid out to shareholders or maintained by Sampo, he said:

“I suppose it will be both ... Unless Mandatum finds ways to use this money, it will likely be returned to Sampo.”

“We want to be a dividend stock and increase the dividend as we have done for the past eight years,” he said.

Prior to Sampo’s second-quarter results, analysts had forecast Sampo would pay a dividend of 2.44 euros per share from 2017 and 2.58 euros from 2018, up from 2.30 euros paid from last year.

Sampo also owns P&C insurer If and close to half of the shares in Danish insurer Topdanmark.

$1 = 0.8511 euros Reporting by Jussi Rosendahl; Editing by Jason Neely and Susan Fenton

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