American International Group Inc's
Speaking at AIG's annual meeting on Tuesday, CEO Edward Liddy nevertheless expressed optimism the insurer will be able to repay government loans as it tries to rebound from punishing losses tied to derivatives.
AIG lost $99 billion last year, largely because of its exposure to credit default swaps, and has been pilloried for bonuses awarded in its financial products unit, the source of much of its losses.
The bailouts have left the government with a 79.9 percent stake in the company, which is trying to sell assets to help repay $83 billion of government loans.
I can give you no assurances that it will ever change, Liddy, installed as AIG's chief executive by the government last September, said of the government stake. But he said there was an excellent chance the government will be repaid.
Last week, AIG said it planned to give the Federal Reserve Bank of New York stakes in two large life insurance units and eventually spin those units off, reducing debt to the government by about $25 billion.
On Tuesday, the company said it would sell its credit card business in Taiwan to Far Eastern International Bank. Liddy said AIG is trying to decide what to do with its aircraft leasing unit, International Lease Finance Corp.
Liddy said the financial products unit has nearly halved its derivatives exposure, to $1.4 trillion from $2.7 trillion, and by year-end our risk will have been reduced substantially from its current status.
Shares of AIG, once the world's largest insurer by market value, have traded below $2 nearly all year. In morning trading they were down 20 cents at $1.13.
RATS FLEEING SINKING SHIP
AIG held its annual meeting in a company building next door to its Wall Street headquarters, both of which it is selling.
It was the first public opportunity for shareholders to vent frustration since AIG's financial implosion.
Even so, fewer than 200 people attended, a far lower number than a year earlier, and the meeting lasted less than an hour.
All of the company's proposals were approved, except for one relating to the number of authorized shares; all shareholder proposals were rejected.
AIG had delayed its annual meeting, usually held in May, to give it more time to shuffle its board, which has been almost entirely reconstituted over the last year.
They were like rats leaving a sinking ship -- goodbye and good riddance, shareholder Kenneth Steiner of Great Neck, New York, said at the meeting, referring to departed directors.
The board shuffle reflects the muscle wielded by federal authorities since taxpayers ponied up billions of dollars to keep AIG afloat.
At least seven of the new directors were recommended by either the U.S. Treasury Department or the trustees overseeing the government's stake.
Liddy, a former chief executive of Allstate Corp
(Reporting by Lilla Zuill and Paritosh Bansal; Additional reporting by Juan Lagorio and Jonathan Stempel; Writing by Jonathan Stempel; editing by John Wallace)