Dutch insurance company Aegon has reported a 61% increase in net profits for 2004. However, the impressive improvement was built on strong income from investments gained from a positive stock market trend not growth in its core insurance business.

Including one-off income from capital gains on shares and real estate of E600 million, Aegon achieved total profits of E1.66 billion, up from E1.03 billion in 2003, a rise of 61%. Without gains and losses on stock and real estate sales taken into account, the company achieved profits of E1.78 billion, a 22% increase on the previous year.

However, although annual sales increased slightly by 4% to E28.51 billion, income from insurance premiums remained level and income from banking operations decreased by 20%.

The company’s executive board will propose a 2004 dividend of E0.42 per common share, representing a 5% increase compared to the prior year. Taking into consideration the interim dividend paid in September 2004, the proposed final dividend amounts to E0.21 per common share.

Despite recording a healthy overall increase in profits, the company’s share price fell slightly after reporting as it failed to issue an outlook for the coming year. Donald Shepard, chief executive, in a release from the FT, did state, however, that the company does not expect any major changes in 2005 except a possible moderate increase in interest rates, which will aid the business.