AXA CEO slams French taxes, rules out Euronext stake
PARIS (Reuters) - AXA (AXAF.PA) Chief Executive Henri de Castries said the taxation policies of Socialist President Francois Hollande had endangered the world of French finance and ruled out buying into the Euronext stock exchange.
Sources close to the matter told Reuters last week that the government had approached France's banks and insurers about forming a consortium to buy at least 34 percent of Euronext, set to be spun off as part of Intercontinental Exchange's takeover of NYSE Euronext NYX.N.
As France's biggest insurer, AXA would be a logical candidate to join such a group, but Castries said on Friday that government moves to charge taxes on financial transactions and raise other levies made such an investment illogical.
"AXA feels no calling to be part of such a consortium," he told Reuters in an interview.
"I look at the issue of Paris as a financial center with sympathy, but I would note that you will find your answer in how market players are getting crushed by taxes," Castries said.
"Altogether these measures demonstrate that the government either doesn't want France to be a financial center or is being incoherent."
Castries' outspoken comments reflect widespread revulsion in France's business community over Hollande's effort to levy a 75 percent super-tax on million-euro salaries and eliminate limits on the country's wealth tax.
France has also unilaterally implemented a financial transactions tax, although other euro zone countries are expected to follow suit.
France's competitiveness has been "systematically ruined", he said, adding that if there were a move to lower transaction taxes to a level where they matched France's neighbors, AXA might be willing to reconsider.
Turning to company-specific issues, he added that AXA, which earlier this week sold a portfolio of old policies to Protective Life Corp of the U.S. for $1.1 billion, had no plans to raise its debt-reduction targets.
Some analysts view that the deal brought the insurer close to its goal of reducing debt gearing to 25 percent - especially given that it was already at 26 percent at the end of 2012.
"The 2015 gearing ratio is the 2015 gearing ratio, there's no need to change the target," he said.
He also reiterated that Europe's No. 2 insurer after Germany's Allianz (ALVG.DE) has a policy of paying out 40 to 50 percent of profit in dividends. Its 2012 payout was at the lower end of that range, giving it a dividend yield of 5.4 percent.
Turning to the industry's hot regulatory issue, proposed risk-capital rules due to take effect in the coming years known as Solvency II, Castries said he hoped a compromise could be found in the next two months over the rules, which the industry views as too restrictive.
"We're in the same position as the entire European industry," he said. "We want a certain number of adjustments which would allow us to manage our affairs to reflect the real nature of our liabilities."
A proper readjustment of the regulation would allow the company to boost its exposure to stocks, which he said had been cut to about 5 percent of its portfolio from 15 percent.
(Editing by James Regan)