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SIFI status no impediment to AIG's $25B capital return goal


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SIFI status no impediment to AIG's $25B capital return goal

President and CEO Peter Hancock said that the company's continued status as anonbank systemically important financial institution would not keep it fromachieving a target to return $25 billion in capital to shareholders through2017.

Respondingduring a conference call to an analyst's question about the implications ofMetLife Inc.'s recentfederal court victoryin its challenge to its designation as a nonbank SIFI, Hancock said he iswatching closely the Financial Stability Oversight Council's appeal of thatdecision.

"Ithink that the MetLife decision certainly raises the opportunity should it befavorable to consider that down the road," Hancock said regarding hisgeneral thinking about AIG remaining a nonbank SIFI.

Inthe meantime, he expressed confidence that the capital return target remainsachievable after a first quarter that saw AIG pay $363 million in dividends andengage in approximately $3.5 billion in share repurchases and $173 million ofwarrant repurchases. To date in the second quarter, the company has bought backan additional $870 million of its shares.

"Iwould say that there is a contingency against [an] adverse market environmenteven baked into our plan, so I do not think that being a SIFI in any wayinhibits that $25 billion goal," Hancock said.

Headded that AIG's "strong capital and leverage ratios, attractive free cashflows and risk-management discipline" gives him confidence in the company'sability to execute on its plan. Hancock also affirmed AIG's full-year targetfor a normalized return on equity of between 8.4% and 8.9%.

Regardinganother matter involving the federal government, AIG officials said theycontinue to review the implications of the Department of Labor's addressing the saleof retirement products on its business. The company is in "activediscussions" with distributors and intends to continue to offer a broadproduct suite, said AIG consumer insurance CEO Kevin Hogan.