Diversified financial services company Allianz AG has increased its profits in the first three months of the year off the back of strong earnings from its banking subsidiary and property and casualty insurance businesses.

Profits at the Munich-headquartered banking and insurance company have increased by 30% to E1.1 billion in the first quarter of 2005. Allianz subsidiary Dresdner Bank contributed significantly to the improved figures. The bank achieved E240 million in profits for the quarter after spending the fourth quarter of 2004 in the red.

However, investor joy was offset by employee woes as Allianz chief executive Michael Diekmann had to reduce Dresdner’s headcount by a third to achieve the positive figures. Additionally earnings were boosted by the sale of shares in a number of Allianz companies including Bayer AG and MAN AG.

Meanwhile, profits from property and casualty insurance increased as the company’s combines ratio improved from 95% to 92%. Elsewhere premium income in life insurance and the asset management division both increased by 10%. Assets under management from third parties rose 7% from the end of 2004.