Allianz shares plunge after profit warning

Shares in the German insurance group Allianz plunged on Thursday after the group warned that it would not reach its operating profit target going into 2009 following a difficult second quarter.

Allianz shares plunge after profit warning
Photo: DPA

Allianz shares fell 3.52 percent to €109 in early trading on the Frankfurt stock exchange after the company had also said in a statement that the international financial crisis was likely to persist.

In 2006, the group had set a goal of increasing its operating profit by an average of 10 percent by next year. But in light of “contrary winds in the market,” Allianz said it now expected to miss that target.

Net profit plunged by 28 percent in the second quarter to €1.5 billion ($2.3 billion) and operating profit shed 36 percent to €3.3 billion, the statement said. Turbulence on international financial markets had seriously cut into its life insurance activities, the group explained.

Its banking unit Dresdner Bank was also hit by the turmoil, posting an operating loss of 566 million euros in the three months from April to June. Dresdner’s investment banking activities suffered in particular from losses in market operations and asset writedowns linked to the crisis.

Allianz said it expected the difficult market conditions to continue into

next year. Its profit warning comes a week after one from the German reinsurance group Munich Re.


Four injured as WWII bomb explodes near Munich train station

Four people were injured, one of them seriously, when a World War II bomb exploded at a building site near Munich's main train station on Wednesday, emergency services said.

Smoke rises after the WWII bomb exploded on a building site in Munich.
Smoke rises after the WWII bomb exploded on a building site in Munich. Photo: picture alliance/dpa | Privat

Construction workers had been drilling into the ground when the bomb exploded, a spokesman for the fire department said in a statement.

The blast was heard several kilometres away and scattered debris hundreds of metres, according to local media reports.

Images showed a plume of smoke rising directly next to the train tracks.

Bavaria interior minister Joachim Herrmann told Bild that the whole area was being searched.

Deutsche Bahn suspended its services on the affected lines in the afternoon.

Although trains started up again from 3pm, the rail operator said there would still be delays and cancellations to long-distance and local travel in the Munich area until evening. 

According to the fire service, the explosion happened near a bridge that must be passed by all trains travelling to or from the station.

The exact cause of the explosion is unclear, police said. So far, there are no indications of a criminal act.

WWII bombs are common in Germany

Some 75 years after the war, Germany remains littered with unexploded ordnance, often uncovered during construction work.

READ ALSO: What you need to know about WWII bomb disposals in Germany

However, most bombs are defused by experts before they explode.

Last year, seven World War II bombs were found on the future location of Tesla’s first European factory, just outside Berlin.

Sizeable bombs were also defused in Cologne and Dortmund last year.

In 2017, the discovery of a 1.4-tonne bomb in Frankfurt prompted the evacuation of 65,000 people — the largest such operation since the end of the war in Europe in 1945.