Giant US-based insurer American International Group has recorded its biggest-ever quarterly loss after taking a $11.12bn (£5.63bn) write-down on investments linked to US sub-prime mortgages.
The Manchester United shirt sponsor posted a net loss of $5.29bn in the December quarter compared with a profit result of $3.44bn in the same period last year, as it was forced to write down guarantees sold to cover fixed-income investors.
The losses stem from write-downs in the value of credit-default swaps as a result of the US sub-prime mortgage collapse.
They come hard on the heels of a regulatory filing that it was likely to take a $4.88bn write-down for October and November, prompted by a PricewaterhouseCoopers finding of a ‘material weakness’ in AIG’s financial reporting.
Further reading:
PwC unravels ‘material weakness’ in AIG’s CDS
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