AIG suffers $11.12bn quarterly loss
AIG posts its biggest ever quarterly loss after taking a $11.12bn write-down of sub-prime investments
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
Five former insurance execs convicted of fraud
Read
story in The Daily Telegraph