Net income declined to EUR 254 million as higher underlying earnings, more favorable results on fair value items and lower impairments were more than offset by lower realized gains and a one-time charge in the Netherlands of EUR 265 million before tax included in Other charges.
Fair value items
The results from fair value items amounted to
EUR 101 million
. Positive results in
and the holding were partly offset by negative fair value results in the Americas and New Markets.
Realized gains on investments
In the second quarter, realized gains on investments amounted to
EUR 85 million
and were mainly the result of normal trading in the investment portfolio.
Impairments amounted to
EUR 42 million
which were primarily linked to residential mortgage-backed securities in
the United States
Other charges amounted to a loss of
EUR 254 million
May 31, 2012
AEGON announced the acceleration of product improvements for unit-linked insurance policies in
and the related one-time charge of
EUR 265 million
The results of run-off businesses amounted to
EUR 6 million
. The amortization of the prepaid cost of reinsurance asset related to the divestment of the life reinsurance activities was offset by improved results from the institutional spread-based business.
Net income contained a tax charge of
EUR 85 million
in the second quarter, translating into an effective tax rate of 25%.
Return on equity
Higher average shareholders' equity excluding revaluation reserves, compared with the second quarter of 2011, resulted in a return on equity of 6.8% for the second quarter 2012. Return on equity for AEGON's ongoing businesses, excluding the run-off businesses, amounted to 7.7% over the same period.