UPDATE 1-Dutch SNS Reaal says wide interest in insurance division

Thu Aug 28, 2014 4:24am EDT

(Releads on interest in insurance business, adds comments from chief financial and risk officer)

AMSTERDAM Aug 28 (Reuters) - SNS Reaal, the Dutch financial services group nationalised last year, said international and domestic parties had expressed interest in its insurance operations which will go up for sale in September.

The comments came as the financial services group, which was bailed out for $14 billion last year, reported that it narrowed losses in the first half of 2014.

The sale of its insurance business, which has been rebranded as Vivant, is part of a strategy to transform SNS Reaal into a stand-alone bank under the terms of the emergency state cash injection that averted bankruptcy.

The group posted a net loss of 125 million euros ($165 million), due mainly to provisions in its insurance operations, it said in a statement on Thursday. A one-off provision of 269 million euros was made to meet asset liability requirements.

SNS Reaal lost 1.59 billion euros in the same period a year earlier after massive writedowns in its property division, Property Finance, the assets of which have since been ring-fenced and are no longer part of the group.

Maurice Oostendorp, the group's chief financial and risk officer, told reporters in a conference call that "there is wide domestic and international interest from financial and strategic parties" to buy the insurance business.

He did not comment on media reports in recent days that Delta Lloyd, a smaller Dutch insurer, is interested in acquiring the division.

For the remainder of 2014, SNS said it expected continued low interest rates and "difficult market conditions".

"That combination means the result in the second half of the year will remain under pressure," Oostendorp said.

The group's banking division has completed "intense" consultations with the European Central Bank as part of its Asset Quality Review and, in anticipation of possibly stricter European criteria, it has taken into account "possibly higher provisions in the second half", Oostendorp said.

In recent months the group has focused on separating its banking and insurance activities. It is expected to sell its insurance division in the coming year.

"We expect to take the final steps in this process in the course of 2015. Furthermore, we have taken important steps in preparing for the sale of the insurance activities," it said.

Net profit at SNS Bank fell by nearly half in the six-month period - to 114 million euros, from 218 million euros in the same period last year, it said. (Reporting By Anthony Deutsch; Editing by David Clarke and Pravin Char)

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