NORD/LB starts into the year successfully
- Earnings before taxes up to € 229 million
- Ship Finance segment generates positive earnings
- Increase in net interest and commission income
NORD/LB Norddeutsche Landesbank achieved earnings before taxes of € 229 million in the first three months of 2015, a significant improvement on the € 133 million achieved in the first quarter of the previous year. Consolidated profit totalled € 156 million in the first quarter of 2015 (first quarter of 2014: € 92 million).
“We have had a good start to the year,” stated Dr. Gunter Dunkel, Chairman of the Managing Board of NORD/LB. “Our income has risen once again, and at the same time we have further reduced costs. We are on the way to achieving our goal of generating a higher profit in 2015 than in 2014. The environment remains challenging, though, and the very good first quarter should not be projected forward for the whole year.”
Regarding the development in the Ship Finance segment, Dunkel commented: “Although the crisis is not yet over in all segments, the transformation of our ship portfolio and the active remarketing are having success. In the first quarter we generated a positive contribution to earnings of € 23 million in the Ship Finance segment for the first time since 2012.”
Net interest income totalled € 501 million in the first three months of the year and therefore rose once again despite the continuing low level of interest rates (first quarter of 2014: € 492 million). Net allocations to loan loss provisions totalled € 104 million (€ 100 million).
Net commission income rose compared to the same period of the previous year by € 15 million to € 55 million. The profit/loss from financial instruments at fair value including hedge accounting totalled € 142 million (€ 5 million). The profit/loss from financial assets was € 2 million (€ 35 million) and was affected by the write-down of securities of Hypo Alpe Adria Bank in the amount of € 66 million. Developments in the investments accounted for using the equity method finally led to a balanced result (minus € 4 million).
Administrative expenses fell by 2 percent to € 284 million (€ 291 million) in the course of an efficiency improvement programme. The cost-income ratio also improved significantly and is currently 46 per cent (57 per cent). Other operating profit/loss totalled minus € 77 million (minus € 24 million) and was affected in particular by the € 61 million increase in expenses for the expected annual contribution to the new EU Single Bank Resolution Fund, which were recognised in full in the first quarter.
Earnings before reorganisation expenses and taxes rose to € 235 million (€ 153 million). Reorganisation expenses totalled minus € 6 million (minus € 20 million) and include expenses for measures relating to the capital-boosting programme agreed with the EU Commission. Earnings before taxes therefore rose to € 229 million (€ 133 million). After deducting income taxes in the amount of € 73 million (€ 41 million), consolidated profit after taxes totalled € 156 million (€ 92 million).
Due to the strong rise in the US dollar against the euro in the first quarter, NORD/LB Group’s total assets have increased as at 31 March 2015 by 3 per cent to € 202.9 billion (31 December 2014: € 197.6 billion). Loans to customers have also risen by 3 per cent. The total risk exposure amount (previously risk-weighted assets) totalled € 71.9 billion (€ 69.2 billion).
The Common Equity Tier 1 capital ratio was 10.2 per cent (10.7 per cent), while the total regulatory capital ratio was 13.5 per cent (13.2 per cent). Both ratios have been reported since the start of 2014 in accordance with the new rules of the Capital Requirements Regulation (CRR) based on IFRS.
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