UPDATE 2-Generali's CEO pushes on with balance sheet clean-up
* FY net profit 90 mln euros after 1.7 bln impairments
* Solvency ratio rises to 150 pct end 2012
* Operating profit at 4.2 bln euros, above target
* Dividend of 0.2 euros/shr, in line with 2011
By Lisa Jucca
MILAN, March 14 (Reuters) - New Generali chief Mario Greco took decisive action on Thursday to clean up the Italian insurer's balance sheet by taking 1.7 billion euros of writedowns on its assets, part of a turnaround plan to boost the group's profitability.
The clean-up hit Generali's 2012 net profit which fell to 90 million euros from 856 million a year earlier but the Trieste-based insurer's operating profit still managed to beat targets and its capital strength improved.
The writedowns follow Greco's audit of Generali's assets started soon after he took over as CEO in August from long-standing boss Giovanni Perissinotto. The new CEO has promised a 'revolution' at Italy's biggest insurer.
Generali, like other insurers in Europe such as Aviva , is being forced to restructure to cope with low interest rates, tighter regulation and the weak economic climate in Europe.
"We are making the right steps that will help us achieve a higher profitability," Greco told journalists. "The first quarter has started well. We are on a path that should take us from the current 4.2 billion euros of operating profit towards 5 billion euros (in 2015)."
Generali's shares reacted positively to Greco's kitchen-sinking exercise, gaining 6 percent.
The chief executive is also aiming to raise 4 billion euros from asset sales. He said Generali was pushing ahead with a planned sale of Swiss private banking arm BSI and the U.S. reinsurance business. But the company gave no further details.
Spain's Bankinter has joined forces with U.S. investment fund Apollo Global Management to bid for BSI in a deal worth up to 2 billion euros ($2.6 billion).
"The operating performance and the asset review are encouraging for 2013, which, at this point, should be without surprises," said one insurance analyst.
Generali's solvency ratio, a measure of an insurer's capital strength, rose to 150 percent, approaching a company target of 160 percent and higher than 117 percent at the end of 2011.
Greco said the ratio would fall back to around 140 percent at the end of March, when the group starts buying back an insurance joint venture with Czech group PPF.
Of the writedowns, nearly half were on assets available for sale with the rest on loans in Italy, real estate assets and a 148 million euro writedown on Generali's indirect investment in Telecom Italia.
Full-year operating profit rose 10.5 percent to 4.2 billion euros, in line with analysts' forecasts and above a company target of 4 billion euros.
In a sign of confidence, the company held its dividend at 0.2 euros per share, unchanged from 2011.
British insurers RSA and Aviva cut their 2012 dividends, but all other big European insurers that have reported results so far have maintained or increased payouts to shareholders.
The company, which did not disclose detailed fourth-quarter results in its statement, said it expected operating profit to continue to grow in 2013.
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