* Non-life insurance pretax profit 10 mln vs 27 mln in poll
* Sees increase in full-year pretax profit
* Shares fall 6.5 pct
(Recasts with non-life weakness, adds analyst)
HELSINKI, Feb 6 Finland's Pohjola Bank
reported a smaller-than-expected fourth-quarter
profit from its non-life insurance business due to higher
claims, disappointing investors who saw the unit as the group's
Nordic financial institutions have been safe havens during
the euro zone crisis, thanks to strong capital and good
profitability. But they have lately been weighed down by tougher
regulations and low interest rates.
Pohjola said it expected 2013 pretax profit to be higher
than the 374 million euros it reported for 2012. But it also
said Finland's economy would grow slowly at best, and that the
operating environment would remain challenging.
Pohjola's shares fell 6.5 percent after it said non-life
insurance pretax profit was 10 million euros ($13.53 million).
That compared to a loss of 63 million a year earlier but was
much lower than an average profit forecast of 27.4 million euros
in a Reuters poll. It said claims rose by 29 percent, with large
claims increasing in particular, but did not give more details.
"The non-life insurance business had been their best
business," said Handelsbanken analyst Matti Ahokas. "Companies'
claims have been on the rise. The biggest question is whether
that is a normal variation or if that indicates a trend."
The non-life business's operating combined ratio - a key
measure of underwriting profitability which expresses costs and
claims expenses as a proportion of premium income - weakened to
95.3 percent from 91.0 percent a year ago, also missing a
consensus market forecast.
On a consolidated basis, however, Pohjola's earnings beat
market expecatations thanks to higher net commission and fees as
well as spending cuts introduced in September.
Its quarterly consolidated earnings before tax rose to 92
million euros from 13 million euros a year ago, beating the
market consensus of 91 million euros.
Shares in Pohjola Bank were down 6.5 percent at 11.58 euros
by 1003 GMT.
Ahokas said analysts may cut their estimates for this year
following the report.
($1 = 0.7392 euros)
(Reporting by Terhi Kinnunen; Editing by Tom Pfeiffer)