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Press release, Hanover, 16 March 2007 • Deutsche Hypo presents successful 2006 financial year • New member of the Board of Managing Directors as of July 2007 The Supervisory Board of Deutsche Hypothekenbank (Actien-Gesellschaft), Hanover/Berlin, has approved the 2006 annual accounts at today’s balance sheet meeting and decided to propose to the General Meeting on 16 May 2007 in Hanover that, in addition to the unchanged dividend of € 11 per unit share, a special dividend of € 3 per unit share also be distributed. In addition, the Supervisory Board has appointed Andreas Rehfus (42) as a member of the Board of Managing Directors with effect from 1 July 2007. Rehfus, who has been Executive Manager of Deutsche Hypothekenbank (Actien-Gesellschaft) since 2005 will succeed longstanding Board Member Thomas von Tucher, who, having reached retirement age, will be leaving the Bank as planned on 30 June 2007. The highlights of the financial year at Deutsche Hypo were as follows: • A 77.7% rise in new mortgage business to in excess of € 2.1 billion, the highest result for new business ever recorded in this area. • An increase of 4.7% in total assets to € 34.7 billion. • A 4.4% rise in net interest and commission income. • A 6.0% rise in the result for normal business activity. • An improvement of 19.6% in net income for the year. Volume of new commercial real estate financing business exceeds € 2.1 billion: The best result in the Bank’s history In terms of commercial real estate financing, Deutsche Hypo was able to record the highest level of new business in its entire history during the 2006 financial year. It should be stressed that a rise in new business was recorded in nearly all of the Bank's target markets. The rise was particularly significant in the case of new foreign commitments, which were up by € 650 million or more than 70% on the previous year to in excess of € 1.5 billion. The drop in the portfolio still in evidence in the 2005 financial year was also brought to a halt, with an overall increase of almost 5% in the mortgage loan portfolio to approximately € 8.3 billion. Capital market business follows expected course At € 4.3 billion the new volume of capital market business, was 6.3% down on the previous year’s figure, confirming what was an expected result. New business, which was entered into with an awareness of risk and price, continued to grow more international in character, with the share of foreign borrowers rising from 46.3% in 2005 to 56.7% in 2006. Trouble-free issuing business Pfandbrief ratings remain as high as ever The 2006 financial year was also marked by the change in shareholder structure. Following the announcement of the new major shareholders, the rating agency Moody’s set the rating for long-term debt securities of Deutsche Hypo at A2. The AAA ratings for Deutsche Hypo Pfandbriefe were quickly and unreservedly confirmed by Moody’s and Standard & Poors. The confidence of institutional investors in the Bank’s business model proved to be as high as ever and resulted in the Bank's issuing business progressing smoothly, amounting to a total volume of € 8 billion in the year under review (previous year: € 10.3 billion), with € 4.8 billion relating to Pfandbrief products. Positive development of results continues The favourable development in operational activity over the financial year was replicated in terms of income. Net interest and commission income was up 4.4% to € 109.1 million. Administrative expenses rose by 10.1% or € 3.3 million, primarily due to increased costs as a result of business development. The cost/income ratio was 33.0% (previous year: 31.3%), maintaining the Bank's consistently good performance in this area compared with the industry average. Risk provisioning was down by € 1.8 million to € 23.2 million (-7.2%). The level of problematic commitments was markedly reduced during the year under review, relieving the burden on the risk result for lending activities. The provisions made for risk provide sufficient cover for all discernible risks. As a result of the favourable manner in which business developed, the result for normal business activity rose by € 2.9 million to € 51.5 million (+6.0%). At € 39.1 million, net income for the year was significantly higher than in 2005 (+19.6%). Alongside the positive development of business over the year, a further contributory factor was the change to Section 37 of the German Corporate Income Tax Act (KStG) enabling Deutsche Hypo to capitalise its corporate income tax credit as at 31 December 2006 at present value. This resulted in a marked reduction in the tax burden. Outlook In terms of real estate business, we expect a generally positive development in our target markets due to the good market environment. Looking to capital market business, our conservative expectation is that this area of business will make the same contribution to the overall result as in 2006. Developments in our two core areas of business should lead to a slight increase in net interest and commission income. Based on the current situation and taking into account the additional result components for 2007, the Board of Managing Directors expects the pre-tax result for 2007 to at least match that achieved in 2006. 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 |
