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Press release, Hanover, 31 October 2008 Deutsche Hypo presents nine-monthly figures In a turbulent environment, in which dramatic events on the global financial markets have led to extreme market distortions of historical proportions, Deutsche Hypo’s operative business has developed as expected during the first nine months of the current financial year. The volume of new mortgage business amounted to over €1.6 billion (-23.4%). Although this amount was below the exceptionally high result of the previous year (€2.1 billion), it is still in line with our plans for the first nine months. The portfolio increased by €637 million to around €9.2 billion. During the period under review, capital market transactions amounted to €1.6 billion (-52.5%) and in view of the problematic market environment, this represents the result of the cautious investment policy that we continue to adopt. The refinancing transaction suffered from market-wide stagnation, however, as demand over the past few weeks almost ceased completely. Nevertheless, Deutsche Hypo was able to issue €3.4 billion during the first nine months of the current financial year, €1.6 billion of which was related to Pfandbrief products, which also means that the liquidity of the Bank remains assured. During the period under review, the Bank’s profit situation was greatly affected by the escalation of the crisis on the financial market. The value of some securities of the fixed assets was greatly affected. The involvement of Deutsche Hypo in an Icelandic bank to the tune of €35 million could no longer be classed as being sustainable in the long term, with the result that the value of this amount had to be adjusted by 75%. The bank published this measure in a separate ad-hoc report on 29 October 2008. Deutsche Hypo’s profit situation on 30 September 2008 was presented in detail as follows: • The positive trend in net interest and commission income fortunately continued, and at €90.1 million, the Bank gained almost 10 percent. The reason underlying the rise in interest-rate profits of 84.7% (+ 6.4%) lay in the increase in the lending portfolio and the increase in average margins, whilst the rise in commission income, at €5.4 million (+ 52.9%), was primarily driven by earnings achieved as a result of the Bank’s foreign real estate financing business. • The risk result increased by €13.7 million to €35.0 million. Of this amount, €23.5 million was spent on precautionary measures in the liquidity reserve, which will be considered however as temporary fluctuations in value and then as non-sustainable reduction in value. One positive development is the pleasing development within the risk provision in the credit business. By the usual conservative estimation, this decreased by 13% to €11.5 million. • Some securities of the fixed assets were extremely negatively affected by the aforementioned market distortions. All in all, all new estimates in the asset ledger, which we have classed as no longer retaining their value over the long term, led to a value consumption to the value of €42.8 million, which corresponds to the information shown on the investment result. • The pre-tax amount on 30 September 2008 therefore dropped by €33.4 million to €1.7 million compared to the same period last year. Outlook When looking back at the entire financial year 2008, on the basis of the current state of affairs, the bank is not assuming that there will be a significant improvement on the financial markets until the end of the year. Present circumstances, which have a negative effect on the bank's profits, will remain unchanged. In addition, following the deadline of 30 September 2008, the repercussions of any shocks that should occur that put a strain on the markets will affect us too. In the first instance, the development of this can be seen in Iceland. On the basis of present circumstances, Deutsche Hypo assumes that the bank will be forced to bear the negative consequences. From today’s perspective, this starting point makes it impossible to provide a serious and reliable forecast for the year as a whole. We are standing by our decision, which we already made in the six-monthly financial report, which was to refrain from forecasting concrete results and dividends forecast for the 2008 financial year. For further information please contact: Markus Nitsche Head of Marketing and Corporate Communications Georgsplatz 8 30159 Hannover Telefon: +49 511 3045-580 Telefax: +49 511 3045-589 E-Mail: Markus.Nitsche@Deutsche-Hypo.de |
