Switzerland's largest life insurance company, Swiss Life, has sold its private asset management subsidiary as part of efforts to focus on its core business.
STG Schweizerische Treuhandgesellschaft was bought by LGT group, owned by the Liechtenstein royal family, at book loss of SFr100 million ($65 million).
The Zurich-based company said in a statement on Monday it would net SFr197 million ($152.6 million) from the sale.
Swiss Life CEO Rolf Dörig said the book loss on STG would not affect the planned return to profit this year.
"Providing that market conditions do not deteriorate, we expect to return to the profit zone this year in spite of the loss on this sale," he said.
Swiss Life, whose stock has fallen by almost 70 per cent over the past 12 months, made a record loss of SFr1.7 billion last year.
But in recent weeks, the stock has risen as investors perceive improvements in the company's financial position.
The sale of STG, due to be concluded in the near future following regulatory approval, comes just weeks after Swiss Life secured the repayment of a SFr325 million loan made to Private Equity Holding, its struggling venture capital firm.
The company has changed practically all its top management and launched a SFr1.1 billion rights issue to shore up its capital position, weakened by a failed growth strategy.
STG, bought in 2000 as part of a management drive into bank and asset management-related services, brought no clear synergies and cost the group millions.
A remaining major challenge for Swiss Life is to find a buyer for the Swiss private bank, Banca del Gottardo, bought for SFr2.4 billion in 1999.
The group has written down the value of the Lugano-based bank by SFr1 billion but has still not found a buyer.
On Tuesday, Swiss Life shareholders are expected to give the outgoing chairman, Andres Leuenberger, a tough time at the annual meeting as they ask questions relating to the company's 2002 performance.
In particular, the company will be asked for more information about the activities of Long Term Strategy, a secretive fund operated by senior managers.
Last month, the Swiss Federal Office of Private Insurance found serious shortcomings regarding control mechanisms at Swiss Life.
It found that six members of the company's old guard had endangered the interests of policyholders by investing their own money in LTS, which had close ties to the insurer.
swissinfo with agencies
Swiss Life has sold asset manager STG to the LGT group for SFr197 million ($152.6 million), a book loss of SFr100 million.
Company CEO Rolf Dörig believes Swiss Life will return to profit in 2003.
Swiss Life made a record loss of SFr1.7 billion in 2002.
The share price has fallen by almost 70 per cent over the past 12 months.
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