NORD/LB achieves earnings of EUR 96 million for the first half of the year
NORD/LB Norddeutsche Landesbank achieved earnings before taxes of EUR 96 million in the first half of 2013, while its consolidated profit totalled EUR 87 million. In the first six months of the previous year earnings before taxes totalled EUR 131 million and consolidated profit EUR 67 million.
“After a difficult start to the year we’re back in the profit zone,” said Dr. Gunter Dunkel, Chairman of the Managing Board of NORD/LB. “However, we once again exercised great caution in the second quarter regarding loan loss provisions to arm ourselves against possible defaults in ship financing. Overall, the earnings show that the bank continues to sail a steady course despite a profound crisis in shipping. That is not least a consequence of our well diversified business model. For instance, in the first half of 2013 the areas of Corporate Customers and Markets, Aircraft, Renewable Energies and Real Estate Banking Customers made substantial contributions to earnings.”
NORD/LB Group’s income statement shows that net interest income re-mains the most important earnings component with a contribution of EUR 974 million (first half of 2012: EUR 972 million). Loan loss provisions were increased significantly to EUR 432 million (EUR 146 million), which is again largely attributable to the area of ship financing, continuing the trend of the last three quarters. Whilst specific valuation allowances of EUR 293 million were made in the first half-year, the figure for portfolio valuation allowances was EUR 127 million.
Net commission income was 77 EUR million (EUR 83 million). The profit/loss from financial instruments at fair value including hedge accounting improved to EUR 102 million (EUR - 168 million) due to increased market interest rates among other things. Profit/loss from financial assets was EUR - 4 million (EUR 12 million). Profit/loss from investments accounted for using the equity method improved to EUR 18 million (EUR - 8 million). The previous year’s result was negatively affected by residual write-downs in relation to an investment.
Administrative expenses rose by 4 per cent to EUR 575 million (EUR 554 million), largely influenced by negotiated wage increases, increased pension provisions and investments in the bank’s IT infrastructure. Other operating profit/loss, which included a provision for the bank levy for the whole of 2013, totalled EUR - 24 million (EUR - 35 million).
Profit/loss before reorganisation expenses and taxes is EUR 136 million. The reorganisation expenses in the amount of EUR - 40 million included ex-penses for measures relating to the capital-boosting programme agreed with the EU Commission and in particular provisions for voluntary separa-tion agreements.
Total assets of the NORD/LB Group reduced by 8 per cent to EUR 208 billion as compared to the previous year 2012. The core capital ratio rose to 11.1 per cent (31 December 2012: 10.9 per cent) and the regulatory total capital ratio rose to 13.9 per cent (13.8 per cent).
Dunkel was cautiously optimistic about the bank’s further development: “The effects of the shipping crisis will be with us for a long time to come. To that extent the loan loss provisions will remain at a high level in the coming quarters. At the same time, business is succesful in many of the bank’s other fields. We are in the process of further consolidating our market position in many of our fields of competence. Assuming there are no new upsets on the financial markets, we will stick to our goal of achieving a higher profit this year than last.”
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