UPDATE 1-Aegon buys into Brazil, CEO says business sound
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By Reed Stevenson
AMSTERDAM, Oct 1 (Reuters) - Dutch insurer Aegon's (AEGN.AS: Quote, Profile, Research, Stock Buzz) balance sheet is solid and there are no liquidity problems, Chief Executive Alex Wynaendts said on Wednesday as he announced a deal expand operations in Brazil.
Hague-based Aegon, which said it was taking a 50 percent stake in Brazil's Mongeral, saw its shares hit a 13 year-low on Wednesday as financial stocks were pummelled worldwide ue to the spreading contagion of institutional rescues and nearly frozen money markets.
"Brazil has been targeted as a market we wanted to be in," Wyanendts said in an interview, noting that the deal was part of Aegon's new strategy announced in June of becoming less dependent on U.S. income, selling underperforming assets and seeking growth via new products and acquisitions.
Asked about the state of Aegon's business, Wynaendts said: "We have a solid balance sheet and no liquidity problems."
Aegon shares closed 2 percent lower to close at 6.07 euros on Wednesday, recovering from lows not seen since 1995. Traders in London and Amsterdam cited a variety of reasons for the decline, but did not pin it on one single factor.
Asked about the share drop, Wynaendts said: "Obviously I'm not pleased with what we've seen in the market. I also accept that's the price of being listed."
"We have shared with the market our exposures," he added.
On Monday, Aegon disclosed that it had 125 million euros in exposure to failed U.S. lender Washington Mutual. Before that Aegon also disclosed exposures of 265 million euros to collapsed U.S. investment bank Lehman Brothers and 500 million to American International Group which was saved by an emergency U.S. government loan.
In June, Aegon said it would overhaul its business to become less dependent on U.S. income, sell underperforming assets and seek growth via new products and acquisitions to deliver underlying earnings growth of at least 10 percent per year over the next five years. (Reporting by Reed Stevenson; Editing by Richard Hubbard)