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Press release, Hanover, 26 March 2008 Deutsche Hypo achieves satisfactory performance in 2007 financial year At the balance sheet meeting that took place today, the Supervisory Board of Deutsche Hypothekenbank (Actien-Gesellschaft), Hanover/Berlin adopted the Annual Report for 2007 and decided to propose a dividend of €1.10 per unit share at the General Meeting scheduled to take place on 21 May 2008 in Berlin. The amount of the dividend reflects the share split that was approved at last year’s General Meeting, in accordance with which the Bank's share capital was reallocated at a ratio of 1:10 on 29 August 2007. As far as Deutsche Hypo is concerned, the 2007 financial year was marked by a pleasing expansion in all new business. Nevertheless, the Bank’s profits did not remain unaffected by the immediate effects of the global financial market crisis, even if the consequences for Deutsche Hypo remained comparatively moderate. A significant expansion of new business The figures for new business in the Bank’s two core areas of business remained pleasing, with the result that meant that in its commercial real estate financing division, Deutsche Hypo managed to achieve levels of new business that were the highest ever recorded in the history of Deutsche Hypo. They even exceeded the previous highest levels that were recorded last year. A total of around €2.7 billion in new lending was entered into, which represented an increase of over 23% when compared to the previous year. As far as new capital market business was concerned, the Bank achieved a slight increase in volume, which, at around €4.7 billion, was almost €500 million above the same figure in the previous year. Demand for issues from Deutsche Hypo remained stable Demand for issues with good counterparty risk typically rises during times of crisis, meaning that throughout the year under review, demand for issues from Deutsche Hypo remained stable, despite the tense situation on the financial markets. This is all the more remarkable in view of the fact that as a result of the global financial crisis, investors were hesitant in acquiring covered and uncovered bonds and the financial markets were less welcoming with regard to new issues. The total issue volume, at €6.5 billion, was below the previous year’s figure of €8.0 billion, with €2.7 billion relating to Pfandbrief products. Robust business model means that profit situation still satisfactory It goes without saying that even Deutsche Hypo did not remain unaffected by the severity and scope of the turbulence on the financial markets. Nevertheless, the Bank’s profits did not suffer excessive damage, but merely experienced a small “dent”. Compared to the same figures from the previous year, the key figures read as follows: • Net interest and commission income was up 2.6 % to €111.9 million. • The cost-income ratio also performed very well, decreasing from 33.0% to 31.9%. • The risk result, at €25.4 million, is 9.5% higher than in the previous year. • The risk provision for lending included within the risk result performed very well during the year under review. At €12.4 million, it was significantly lower than the figure from the previous year, which, at €18.7 million, was already low. • As a result of price reductions on national and international bond markets, Deutsche Hypo was obliged to carry out depreciations upon securities in its liquidity reserve and this in turn had a negative effect upon risk provisioning and therefore upon the Bank’s profits. As a consequence, the risk result of the liquidity reserve during the year under review amounted to €13.0 million (previous year: € 4.5 million). • These developments subsequently affected the result from ordinary business activity, which decreased by 4.3% to €49.3 million. Post-taxation profits were also down from €39.1 million to €36.7 million. Outlook Looking ahead to the current 2008 financial year, the Board of Managing Directors of Deutsche Hypo is currently of the opinion that the difficult market conditions of the first half year and, presumably, beyond, are not likely to improve and has therefore come to the conclusion that it will only be possible to build upon the good results that have been achieved in the past if the crisis on the financial and real estate markets does not escalate further. 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 |
