FINLAND – Finnish bancassurance firm Sampo says its acquisitions in the Polish pensions and life insurance industry will not hit their profitability targets.

Sampo bought into the Polish market in 2000, buying PTE and Zycie from the UK’s Norwich Union for 177.3 million euros and 47.5 million euros respectively.

It said in a statement today: “The economic situation in Poland has deteriorated considerably since the original acquisitions and the companies’ operating potential has weakened at the same time.”

“In the present situation, they are not expected to meet the profitability targets set within a reasonable period.”

Sampo said that it has written off all the 26 million euros in goodwill relating to life insurer Sampo Zycie and half of the 142 million euros of goodwill of pension fund Sampo PTE. It said the moves were “one-time write-offs”.

Sampo PTE saw its assets under management grow by more than 35% to 227 million euros and has 440,000 members, Sampo said. It said it “recorded a profit” but gave no further details.

Chief executive Bjorn Wahlroos said: “The year 2003 will remain challenging, even though I believe the worst of the downturn is now behind us.” He said Sampo expects sales growth to persist in the pension, life insurance and mutual fund businesses as “the savings activity of Finns is growing
all the time”.

The total amount of assets under Sampo’s management grew to around 17 billion euros, from 10.1 billion euros a year earlier.

Overall, the company posted an operating profit of 542 million euros in 2002, down from 2001’s 1.1 billion euros.