Sampo group_ a well-positioned but overvalued finnish insurer – sampo oyjb (otcmkts_saxpf) _ seeking alpha

Even if Sampo does not operate directly on the bank market, the company holds more than 20% of the share capital of Nordea. Central bank of india interest rates 2013 Profit before taxes mainly coming from the dividend paid by Nordea increased by 63.9% to 749 million from 2011 to 2015. Bank interest rates compare nz During the first nine months of 2016, profit before taxes decreased by 11%, impacted by the lower contribution of the Nordic bank and by investment losses.

With a 5-year average combined ratio of 88.6%, the non-life division is a very profitable business (as reminder, a net combined lower than 100% means that the paid claims are lower than the earned premium). All bank interest rates list 2015 Better yet, the net combined ratio decreased by 6.6 points to reach 85.4% in 2015. Saraswat bank fd interest rates 2014 During the first nine months of 2016, the net combined ratio amounted to 84.0, or a 0.6 point improvement compared to the same period of the last year. Best bank interest rates on savings accounts However, it is important to note that the combined ratio was positively impacted by a review of mortality tables done by the Swedish insurance federation, allowing the company to release 72 million of reserves. Lloyds bank accounts interest rates Excluding this release, the combined ratio was 86.3%. Fd interest rates in union bank of india In our view, the profitability of the P&C segment should remain stable. Commercial bank interest rates However, it is also important to note that 31% of the net profit of the P&C activities comes from the net income from investments. Td bank interest rates Hence, a decrease in investment income could impact significantly the profitability of the P&C operation (which delivered a 21.5% RoE in 2015).

The Life operations are also profitable, mainly driven by the positive impact of the net investment income. All bank interest rates The expense ratio (i.e., expenses divided by load income. Bank of interest rates on fixed deposit Expense ratio measures the effectiveness of life insurance activities.) is higher than 100% on a 5-year basis, but has been reduced year after year from 2011 to reach 100% in 2015. Federal bank interest rates for fixed deposits During the first nine months of 2016, the expense ratio amounted to 103.6% (versus 99.4% for the first nine months of 2015). Interest rates on bank deposits in india Regarding the development of expense ratio in 2016, we could expect Sampo to have an expense ratio above 100%.

Even if Nordea Bank AB is only an associated company, it remains important to have a look on the profitability of the listed bank.

Icici bank interest rates on fd Hopefully the operating profit increases year after year, the RoE level following the same trend. All bank home loan interest rate list 2014 2016 would become the first year where both operating profit and RoE would decrease compared to the prior year. Bank loan interest rates philippines 2016 With an RoE of 11.1% (versus 12.6%) for the first nine months of 2016, Nordea could be significantly impacted by negative rates (which have been put pressure on deposit margins).

As the main of the European companies, Sampo is not interested in repurchasing its own shares – even if the company repurchased its own shares in the past. Normal bank interest rates The other good thing is the number of shares is stable over the time. Highest bank interest rates From 2011, the number of shares has always been the same: 560 million. Canadian bank interest rates comparison On 04/21/2016, the company’s Annual General Meeting authorized the board to repurchase a maximum of 50,000,000 Sampo A shares; but investors should keep in mind that it is only an authorization. Latest bank interest rates in malaysia At least the insurer’s management may be aware of the benefits of share repurchasing program and could launch this kind of program if it is considered accretive. All bank fixed deposit interest rates As the company is not interested in repurchasing its own shares, it is completely focused on increasing the dividend payout and has tried to increase the dividend payout amount year after year. Highest bank interest rates in the world From 2008 onwards, the paid dividend has been constantly increased. Interest rates on bank fixed deposits in india However, the payout is quite high. All nationalised banks fixed deposit interest rates It would be difficult for Sampo to continue increasing the paid dividend without harming its financial situation. Bank fd interest rates 2013 Management may be tempted to increase both dividend per share and the book value per share by repurchasing the company’s own shares – a win-win situation if the shares are repurchased at below fair value.

The effect of share buybacks could sometimes be considered as magical. Axis bank current interest rates on fixed deposits You do not do anything and you have a bigger part of the company in which you have invested – you just need to let time do its job. Bank of india interest rates 2013 Same is the case for Sampo. Different bank interest rates As mentioned previously, the Finnish insurer has invested in Topdanmark, which massively buys back its own shares every year. Compare bank interest rates savings accounts australia In other words, the company could be become the majority shareholder of the Danish insurer without doing anything – and then redeem the remaining floating shares if necessary.

Some events could impact Sampo’s profitability either permanently or temporarily. Bank account interest rates Every long investor who would like to invest in the company should be aware of these major risks.

Nordea Bank AB represents an important part of Sampo’s profit. Fd bank interest rates The Nordic bank paid a dividend of over 550 million to Sampo in 2015. Commonwealth bank interest rates mortgage Any change on the regulatory rules (e.g., Basel III capital requirements) could reduce the amount received by the Finnish insurer and accordingly impact its ability to return cash to shareholders.

Sampo places a strong emphasis on bonds, which totaled around 74% of the portfolio at year-end 2015. Current bank interest rates for term deposits Hence, the company could be harshly impacted by a big jump in interest rates, but has huge interest in a progressive rate rise in order to roll its debt securities portfolio.

Even if Sampo has a strong underwriting discipline (a targeted combined ratio <95%, very good performance in the P&C segment), any deterioration of the claims situations (increase in severity or frequency, large losses) could negatively impact the company's profit.

Sampo is exposed to different currencies, due to its presence across Nordic countries and the Baltic region. Commonwealth bank interest rates A variation of the foreign exchange rates could impact the company’s results. Bank loan interest rates in india 2013 However, this risk remains minor compared to the others.

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