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Press release, Hanover, 7 August 2000 Deutsche Hypo records increase in new mortgage business and income New mortgage business despite declining mortgage industry average The Bank succeeded in increasing the volume of new mortgage loans concluded in spite of a lean domestic property financing market. Contrary to the trend in the industry as a whole, new business was up 11% to EUR 727 million. This can be attributed to the already high proportion of foreign financing and several large-scale transactions in Germany. Restraint in awarding of public sector loans With regard to capital market business the Bank adopted a reserved approach towards interest rate risks, with the result that there were only isolated opportunities for awarding new public sector loans. New business was down by 50% to EUR 1.1 billion. For refinancing purposes the Bank issued bonds with a value of EUR 1.9 billion (compared with EUR 2.8 billion in the previous year). Jumbo Pfandbrief issues accounted for EUR 1.0 billion of this amount. Further improvement in income situation Despite the drop in capital market business the Bank's income situation has continued to develop positively. Deutsche Hypo was able to increase its net interest and commission income by 7.2% to EUR 49.3 million, whilst administrative expenses rose only slightly, up 2%. The Bank thus managed to reduce its in any case low cost/income ratio by a further 5% to 28.1%. Risk provisioning amounted to EUR 11.8 million (compared with EUR 12.4 million in the previous year) and was in line with the budgeted figures. Provisions were made to take account of all discernible risks based on conservative benchmarks and using appropriate valuation methods. The gratifying developments overall led to an increase in the operating result after provisioning for risk of 4.5% to reach EUR 20.8 million. Outlook Business in the second half of the year will, in the Bank's view, be marked by interest rate uncertainty on the capital market and subdued expectations in terms of real estate financing business. The Board of Managing Directors of Deutsche Hypo therefore expects income development to be down slightly in the second half of the year. The aim for the year as a whole is to match the good result achieved in 1999. For further information please contact: Markus Nitsche Head of Marketing and Sales Georgsplatz 8 30159 Hannover Telefon: +49 511 3045-580 Telefax: +49 511 3045-589 E-Mail: Markus.Nitsche@Deutsche-Hypo.de |
