NORD/LB presents sound half-year earnings
- Earnings after taxes up to € 290 million Extraordinary effects of around € 180 million
- Capital ratios improved, total assets reduced further
NORD/LB Norddeutsche Landesbank closed the first half of 2015 with a consolidated profit of € 290 million after taxes (previous year’s figure: € 243 million). Earnings before taxes totalled € 314 million (€ 348 million).
“We are very pleased with our performance in the first half of the year. Although total assets were reduced further we have made progress in particular on the income side,” explained the Chairman of the Managing Board of NORD/LB, Dr. Gunter Dunkel. “Despite negative extraordinary effects totalling around € 180 million, we have already achieved our goal of once again improving on the previous year’s earnings by the half-year point. However, the conditions remain challenging. We will therefore continue to rely on our proven, stable business model and carry on with its strategic development.”
Net interest income totalled exactly € 1,000 million in the first half-year (previous year: € 995 million). Despite low interest rates, it therefore rose slightly once again. Net allocations to loan loss provisions remained stable at € 210 million (€ 224 million). They are still largely accounted for by the Ship Finance segment.
Net commission income rose significantly to € 111 million (€ 84 million). Profit/loss from financial instruments at fair value (including hedge accounting) totalled € 95 million (€ 105 million). Profit/loss from financial assets fell to € 26 million (€ 50 million). Profit/loss from investments accounted for using the equity method fell to minus € 59 million (minus € 8 million) and was largely affected by the extraordinary write-down of an investment in the amount of € 79 million.
Administrative expenses totalled € 562 million at the half-year point (€ 557 million). Successes in the bank’s internal efficiency improvement programme are seen alongside an additional expense of € 25 million due to the obligation to contribute to the security reserve for Landesbanks from 2015. Other operating profit/loss remained at around the same level of the previous year at minus € 80 million (minus € 84 million). This includes provisions for the new EU bank levy in the amount of around € 70 million, which were already recognised in the first quarter. Reorganisation expenses totalled minus € 7 million (minus € 12 million). Also reported in the income statement are income taxes in the amount of € 24 million (€ 105 million).
The cost-income ratio was 52.7 per cent (51.0 per cent) in the first half of 2015, while the return on equity was 8.7 per cent (9.1 per cent).
Total assets were reduced still further despite the strength of the dollar and totalled € 190.1 billion at the end of the first half-year (end of 2014: € 197.6 billion). The total risk exposure (formerly risk-weighted assets) fell slightly to € 68.9 billion (€ 69.2 billion). The Common Equity Tier 1 ratio rose to 11.2 per cent (10.7 per cent), while the total regulatory capital ratio improved to 14.6 per cent (13.2 per cent). The leverage ratio rose to 3.9 per cent (3.5 per cent).
“The first half-year was characterised by a very strong performance in income from traditional banking business on the one hand and special effects such as the bank levy, security reserve and the write-down of an investment on the other. We expect that the bank will continue to perform steadily on the income side in the second half of the year, although the result for the first six months cannot be projected forward for the whole year. We have also continued to make progress in ship finance with income up and loan loss provisions down compared to the previous year. Here the results of the thorough transformation of our ship portfolio can be seen. At the same time we are prepared for further loan loss provisions that will need to be made during the shipping crisis. Moreover, there is growing interest among institutional investors in our special finance business and as a result we will continue to extend our position as a provider of alternative capital investments,” stated Dunkel.
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