- Result from normal operations increases by 10%
- Net interest and net commission income rises significantly
- Cost-income ratio continues to improve
Deutsche Hypothekenbank achieved a result from normal operations of EUR 34.5 million in the first half of 2014 (first half of 2013: EUR 31.4 million), an increase of 9.9%. “Deutsche Hypo was able to seamlessly link up to its good earnings in 2013. We are very satisfied with the start to 2014. Above all, the development of our net interest and net commission income was very positive,” said Andreas Pohl, Spokesperson for the Board of Managing Directors of Deutsche Hypo.
Germany as the focus of new business activities
Cumulatively, the net interest and net commission income improved by 5.6% to EUR 113.7 million in the first half of 2014. The focal point of the new business was again the core market of Germany, which accounted for 84.9% of it. In total, Deutsche Hypo’s new business volume amounted to EUR 1,513.5 million (2013: 1,665.1). “Our target for new business is between EUR 2.8 and 3.0 billion. So we are fully on course at the half-way point,” said Pohl. “We continue to be driven by high quality rather than volume in our new business.”
The Bank’s administrative expenses rose slightly in the first half of 2014, by 2.8%, to EUR 36.4 million (2013: 35.4). This increase is due in particular to a significantly higher allocation to pension provisions and a rise in regulatory requirements. These developments exceeded the success that was achieved with the implementation of the measures in the efficiency improvement programme running until 2016. Nonetheless, Deutsche Hypo’s cost-income ratio improved to 33.6% (2013: 34.1%).
Return on equity rises
The Bank’s risk result as of 30 June 2014 was EUR -37.8 million (2013: -34.0). This position takes into account, among others, effects from the change in provision reserves. The income from securities and participatory interests rose from EUR -2.8 million to EUR 0.3 million. The described developments led in total to a 9.9% improvement in the result of normal operations to EUR 34.5 million (2013: 31.4). The return on equity rose to 7.0% against the backdrop of the increase in income (2013: 5.7%).
Deutsche Hypo’s funding mix in the first half of 2014 consisted of private placements and a tap of EUR 250 million in the issued five-year Mortgage Pfandbrief to EUR 750 million. The decline in the funding volume to EUR 1,144.2 million (2013: 183.7) is due in particular to lower overcollateralization requirements.
Positive outlook for the entire year 2014
For the rest of the year 2014, Pohl is confident: “In the second half of the year, we expect to retain the momentum from the first half. Even if competition has increased noticeably and the regulatory requirements will continue to rise, we are optimistic about 2014 as a whole. We expect a result that reaches at least the good level of the previous year.”
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