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Swedish life insurer SPP plans mutual vote

SWEDEN – Swedish life insurer SPP’s policy-holders will vote in the next few months over whether it should demutualise, parent Svenska Handelsbanken said.

Handelsbanken bought SPP – or Sveriges Privatanstalldas Pensionskassa - in 2001 for 7.1 billon crowns (789 million euros at current exchange rates), with the aim of taking it from mutual ownership, as it did with Handelsbanken Liv in 2002.

The part Handelsbanken did not buy, which focuses on the ITP scheme, was renamed Alecta. Handelsbanken will ballot policyholders from early May-end June. Around 330,000 individuals and companies are entitled to vote.

If the vote goes through and the bank receives permission from financial supervisory authority, the Finansinspektionen, SPP will be demutualised on January 1 2006.

Handelsbanken would then inject six to eight billion crowns into SPP. “The assessment is that SPP will increase the Bank's operating profits already in 2006,” said Lars Gronstedt, Handelsbanken’s chief executive.

As at the end of March, SPP managed 90 billion crowns in assets, up from 80 billion crowns. Profits rose to 1.2 billion.

Handelsbanken Liv’s operating profit in the January-March period was 54 million crowns, from a 141 million-crown loss a year ago.

Handelsbanken Asset Management’s total assets under management rose to 267 billion crowns at the end of March, from 211 billion crowns. Operating profit at the unit was up 46% at 145 million crowns.

Meanwhile, Alecta’s total return in 2003 was 10.4% against –11% in 2002. Profit after tax amounted to 23.2 billion crowns, against a loss in 2002 of 31.3 billion crowns – mainly due to a 65 billion-crown improvement in investment income.

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