PORTUGAL – Espirito Santo Financial Group says its life and pensions arm, Companhia de Seguros Tranquilidade Vida, made a net profit of 13.2 million euros in the first half, against a loss of 59.7 million euros a year before.

“This positive result has been achieved after the full amortization of 39.5 million euros of unrealised losses in Tranquilidade Vida's investment portfolio, still pending from 2001,” the Lisbon-based group said.

It said the turnaround was due to measures it took to make Tranquilidade Vida's investment portfolio less vulnerable to equity declines, as well as the improvement in the performance of stock markets and a restructuring of Tranquilidade's insurance portfolio.

Total premiums rose 11.2% to 377 million euros, up from 338.9 million euros in June 2002. It added that premiums in private pension plans rose 19.3% in the first half, to 155.2 million euros. It estimates its total market share has risen to 17.5% from 16.7%.

According to consulting firm Watson Wyatt pension funds in Portugal were net buyers of equities in the first quarter. It also found that the funds’ median return in the first quarter was 0.5%. In the last quarter of 2002, they returned 2.1% - although 2002 as a whole saw a 3.3% decline.