Deutsche Hypo achieves result of
€ 43.5 million

  • Coronavirus pandemic has impact on the entire sector
  • New business volume falls despite strong fourth quarter
  • Administrative expenses fall as a result of cost savings programme
  • Allocation to general loan loss provisions


Deutsche Hypothekenbank achieved a satisfactory result from normal operations of € 43.5 million in the financial year 2020 (2019: 55.1). The profit to be surrendered came to € 47.5 million (2019: 54.2). The Bank’s business performance was strongly influenced by the coronavirus pandemic.

“COVID-19 had an impact on the entire real estate sector. Individual asset classes were heavily affected by officially imposed lockdowns and underperformed as a result”, Andreas Rehfus, Member of the Board of Managing Directors of Deutsche Hypo, explained as the preliminary financial figures were published. “At Deutsche Hypo, these crisis-related restrictions have not had any direct impact on risk provisioning to date. The share of non-performing loans remains at a historically low level. This affirms our strategy of maintaining a conservative approach to the Bank’s loan portfolio with a focus on quality.”

New business volume affected by coronavirus pandemic

Deutsche Hypo achieved new loan commitments of € 2.3 billion in total. Despite falling short of the previous year’s level of € 3.0 billion due to the coronavirus pandemic, the Bank substantially increased new business in the second half of the year as the economy recovered.

Almost 70 % of the commitment volume, or € 1,582.7 million (2019: 1,786.6), was attributable to Germany. In foreign markets, new loan commitments fell to € 739.0 million (2019: 1,221.6); € 328.2 million (2019: 542.1) was attributable to Benelux, while France accounted for € 164.9 million (2019: 40.0). The volume of new business in the UK, a market in which Deutsche Hypo was particularly cautious, again declined sharply to € 103.9 million (2019: 290.4). At € 1,205.0 million (2019: 1,362.4), office properties accounted for more than 50 % of new business. Logistics properties, which have benefited from developments linked to the coronavirus pandemic, increased slightly to € 295.6 million (2019: 261.3). By contrast, hotel properties saw a sharp decline to € 117.0 million (2019: 289.8). Deutsche Hypo also acted cautiously with regard to retail properties. Accordingly, the volume of new business dropped to € 236.3 million (2019: 391.9). Residential financing totalled € 461.1 million (2019: 639.6).

Result aided by cost-reduction programme and risk result

Net interest and commission income at the overall Bank level in the amount of € 161.2 million was below the previous year’s level of € 183.4 million, which was positively influenced by one-off effects. The lower volume of new business and the slight reduction in the portfolio of real estate financing on average during the year led to declining income with largely stable margins in the core business area. Administrative expenses of € 76.2 million were substantially below expenses in the previous year of € 81.2 million. This is mainly a result of systematic cost management. Due to the lower income as compared to the previous year, Deutsche Hypo achieved a slight overall increase in the cost-income ratio (CIR) to 49.3 % (2019: 44.2 %).

The risk result from an overall Bank perspective in the amount of € -33.5 million (2019: € -41.6 million) was defined by a precautionary allocation to general loan loss provisions in the core business area. The increased uncertainties as a result of the pandemic have not yet led to an increase in specific loan loss provisions for commercial real estate financing at Deutsche Hypo.

Funding on the capital market at competitive conditions

Deutsche Hypo’s funding during the year was carried out in line with its requirements and at competitive conditions. In February 2020, a mortgage Pfandbrief was issued in the benchmark format, which was oversubscribed by a factor of 1.5. In reporting year 2020, Deutsche Hypo issued own securities in the amount of € 1,537.3 million (2019: 2,235.2).

Integration into NORD/LB

“As announced in December 2020, the integration of Deutsche Hypo into NORD/LB will take place on 1 July 2021. Therefore, these will be the Bank’s last financial statements, as planned,” Christian Veit, Member of the Board of Managing Directors of Deutsche Hypo, emphasised. “For the commercial real estate business – which will be continued under the brand of Deutsche Hypo in the NORD/LB – we expect substantially higher new business volume relative to the previous year, assuming that economic activity recovers and the economic and industry environment stabilise. When it comes to lending, we will also continue to have high expectations for quality and profitability from loans.”

The full Annual Report 2020 will be published on 28 April 2021.