Swiss Life bids to raise extra funds

Shares in Swiss Life have fallen more than 70 per cent this year Keystone

Switzerland's largest life insurer, Swiss Life, is reportedly looking to sell off part of its business to boost its balance sheet.

According to Friday’s Financial Times, the ailing Swiss insurer is trying to raise more than SFr2 billion ($1.38 billion) by offloading its operations in neighbouring Germany and the Swiss private bank, Banca del Gottardo.

Swiss Life has declined to comment on the report. However, Roland Chlapowski, its chief executive, said earlier this month that the company was examining ways to strengthen its financial situation.

He pledged to give more details when Swiss Life announces half-year results in September.

Banca del Gottardo

The Financial Times reports that the Swiss insurer has hired Germany’s biggest commercial bank, Deutsche Bank, to sell Swiss Life’s German operation.

The company is said to be hoping to raise more than SFr720 million from the sale. But analysts believe a price of up to SFr600 million is more realistic.

Insurance and financial services groups in Italy, Germany and Britain are said to be interested in Swiss Life’s German operation.

In addition, Swiss Life is understood to be trying to raise more than SFr1.5 billion by selling off its Banca del Gottardo private banking unit. The insurer bought the bank for SFr2.4 billion three years ago.

Drop in share price

Shares in Swiss Life have fallen by more than 70 per cent this year amid concern from investors about insurance companies’ exposure to weak equity markets.

There are also concerns about the potential need for insurers to raise fresh capital.

Swiss Life, however, issued a statement on Thursday saying its business was on a sound footing, despite the collapse in equity markets.

swissinfo with agencies