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Press release, Hanover, 2 September 2008 Deutsche Hypo's H1 results: A solid performance in line with expectations During the first six months of the current financial year the Bank has been able to hold its own despite the ongoing distortions on the market and a changing competitive environment. The satisfactory development of business overall during the first half of 2008 is a gratifying result in light of the continuing crisis on the financial markets. Thanks to the Deutsche Hypo business model, which is less susceptible to fluctuation, the negative fall-out from the crisis was manageable. New mortgage business, totalling just over € 1 billion, developed as forecast. Of this total, € 715 million related to new foreign business and € 333 million to new domestic lending. Comparisons with the previous year's figures must take into account the fact that the new business figures for the first half of 2007 were untypically high due to a major portfolio financing arrangement and were almost 20% higher than during the half-year under review. Basically, business has progressed as planned in this segment. The mortgage portfolio has grown by 4% or € 326 million since the beginning of the year to around € 8.9 billion. With regard to new capital market business, Deutsche Hypo continued to pursue its selective and reticent investment policy in view of the ongoing volatility on the capital markets. At just under € 1 billion, the volume of new business was around a third as high as during the first half of 2007. With regard to refinancing, it was domestic demand in particular that dominated issuing activity. This reliable level of domestic sales meant that the Bank was able to procure liquidity without any problems. Overall, Deutsche Hypo's issues during the first half-year totalled € 2.5 billion, with € 1.0 billion relating to Pfandbrief products. The Bank’s income developed as follows over the first six months of the current financial year: • Net interest and commission income was up 9 % to € 59.2 million (previous year: € 54.5 million). Both of the Bank's areas of business were able to make a positive contribution to this result. • Administrative expenses, at € 17.8 million, were almost unchanged year-on-year (€ 17.6 million). • The cost/income ratio was cut to 30.0%, and thus down on the already low result of 32.4% recorded during the same period of the previous year. • The further fall in the risk provisioning charge for lending business was a welcome development. At € 4.3 million, it was 46% down on the previous year's figure of € 7.9 million. Due to the ongoing impact of the financial market crisis, there was a year-on-year rise of € 6.6 million in provisioning measures related to the liquidity reserve. With regard to its investment result, the Bank reported a negative balance of € 5.2 million. This was attributable to writedowns on securities held as fixed assets, with regard to which the Bank was forced to expect a long-term impairment loss. On balance, the Bank recorded a pre-tax result of € 22.3 million (previous year: € 26.1 million). Deutsche Hypo: The future centre of excellence for commercial real estate finance within NORD/LB Group. In addition to the Bank's achievement in holding its own in what was a difficult market environment, the first half-year was also marked by the central project of setting up the centre of excellence for commercial real estate finance, the role to be assumed by Deutsche Hypo in its capacity as a bank within NORD/LB Group. This project was successfully driven forward. Following many months of hard work by the employees of both the commercial real estate finance segment of NORD/LB and Deutsche Hypo, the Bank is now close to the finish line. The aim is to present the "new" Deutsche Hypo to the market at this year's EXPO REAL real estate trade fair at the beginning of October. By pooling the joint resources of Deutsche Hypo and NORD/LB in this area of business, Deutsche Hypo will be able to present itself as a strategically well positioned and highly competitive real estate bank. Outlook The financial markets continue to be dominated by uncertainty. It is therefore not possible to make reliable statements on the future course of business development. For this reason the Board of Managing Directors of Deutsche Hypo is refraining from making any specific forecast at the current time with regard to the Bank's result for the 2008 financial year as a whole. 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 |
