Mandatum profit drops despite record assets under management

Finnish financial services group Mandatum reported a 55% drop in second-quarter pretax profit, citing the impact of lower interest rates on its insurance business, even as its assets under management reached a new high.

Profit before taxes for the April-to-June period fell to 34.2 million euros from 75.8 million euros a year earlier, the company said on Thursday.

The company attributed the decline to a weaker net financial result, which was primarily driven by a fall in long-term interest rates used to value its insurance contract liabilities.

"It is important to remember that fluctuations in the net financial result are part of the nature of life and pension insurance business," Chief Executive Petri Niemisvirta said in a statement.

Despite the profit decline, the company's assets under management grew 11% year-on-year to a record 14.4 billion euros, which helped boost its fee result by 26% to 18.5 million euros.

The results come as Mandatum focuses on its growth strategy, which includes divesting non-strategic holdings like its stake in Saxo Bank and expanding its capital-light asset management business.

The company said it is establishing a new sales unit in Luxembourg to accelerate growth in Continental Europe.

Mandatum maintained its full-year outlook, stating it still expects its fee result to increase from 2024.