Asset sales lift AIG’s profit to $11.2 billion

American International Group Inc. posted its first profit in three quarters Thursday on gains from divestitures.

Fourth-quarter net income of $11.2 billion, or $16.60 a share, compares with a loss of $8.87 billion, or $65.51, a year earlier, the New York-based insurer said in a regulatory filing.

Chief Executive Robert Benmosche raised almost $37 billion last year selling American Life Insurance Co. to MetLife Inc. and divesting a majority stake in AIA Group Ltd. in a public offering.

Benmosche is adding to reserves, hiring risk managers, and settling lawsuits and regulatory probes as he prepares the company for private ownership. The Treasury Department accumulated 92% of AIG’s stock and plans to divest its holdings.

“Some of the transactions resulted in larger gains than expected,” said Jonathan Hatcher, a Jefferies Group Inc. analyst in New York. The gains boosted capital and should make the company “feel a little bit more comfortable with the reserve additions that they needed.”

Shareholders’ equity, a measure of assets minus liabilities, rose to $85.3 billion from $80.8 billion on Sept. 30. The insurer booked $17.6 billion of gains on asset sales, including AIA and Alico.

AIG advanced 1.4% to $41 in extended trading.

AIG’s earned $7.8 billion for the year, compared with losses of $10.9 billion in 2009 and $99.3 billion in 2008. The insurer earned $6.2 billion in 2007.