UPDATE 3-SNS writedowns hit H1 profit, growth at risk
(Adds CEO comment, updates shares)
UTRECHT, Netherlands, Aug 14 (Reuters) - Dutch financial group SNS Reaal (SR.AS) posted a 4 percent fall in first-half net profit on Thursday due to writedowns, and said this could hit future profits and its growth target, sending its shares down.
The group said net profit was 226 million euros ($338.5 million) in the first half of 2008, compared with 235 million euros in the same period last year and in line with analysts' estimates.
Chief Executive Sjoerd van Keulen told reporters SNS Reaal might not reach its earnings per share (EPS) growth target of 10 percent a year on average for the 2006-2009 period after first half EPS fell 15 percent to 0.85 euros.
"It is less important whether we reach the target in 2009 or 2010 as long as we stick to our strategy. This is a period of lower returns," Van Keulen said.
Shares in SNS fell as much as 5.6 percent and were down 3.5 percent by 1010 GMT, lagging a 0.3 rise in the DJ Stoxx European Financial Services index .SXFP.
"The results are not good," Petercam analyst Ton Gietman said in a note, adding he would lower his 2008 earnings per share forecast and 15 euro price target due to expected future impairments and increased funding costs.
Weak equities markets and increased interest rates knocked 41 million euros off net profit and 750 million euros off its fair value reserve. SNS has an investment portfolio of 27.9 billion euros, of which about 2.8 billion euros is in shares.
SNS, which has no exposure to the risky U.S. credit assets that have weighed on the profit of rivals such as ING (ING.AS) and Fortis (FOR.BR), expected impairments to increase in the coming quarters if share prices kept at current levels.
SNS Reaal was preparing for a possible further decline of equity markets and higher interest rates, saying it had secured an option for 500 million euros in capital support from a foundation that owns about 54 percent of SNS Reaal shares.
The possible support could be in the form of a loan or special shares, and Van Keulen ruled out issuing normal shares to prevent dilution of per-share earnings.
The group was working on new funding deals to strengthen and refinance its liquidity position, and SNS Bank had about 4 times as much liquid assets as usual, totalling more than 14 billion euros.
The group, which has been on an acquisition spree since listing in 2006, would not consider buying new assets due to current market volatility and uncertainty, CEO Van Keulen said.
(Editing by Victoria Bryan)
