DGAP-News: IKB Deutsche Industriebank AG: 6-month figures for the 2011/12 financial year
ID: 91254
(firmenpresse) - DGAP-News: IKB Deutsche Industriebank AG / Key word(s): Half Year
Results
IKB Deutsche Industriebank AG: 6-month figures for the 2011/12
financial year
28.11.2011 / 08:00
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IKB Deutsche Industriebank:
6-month figures for the 2011/12 financial year
- Consolidated net loss rises to EUR 312 million as a result of
government debt crisis
- Extraordinary factors with a net impact of EUR 327 million
- Adjusted consolidated net result improves to a profit of EUR 15 million
- Tier 1 capital ratio of 10.7% even after latest valuation adjustments
on Greek exposures
- Higher margins in new lending business and growth in fee and commission
income
- EU conditions fulfilled as of 30 September
[Düsseldorf, 28 November 2011] At EUR 312 million, IKB Deutsche
Industriebank recorded a higher consolidated net loss in the first half of
the 2011/12 financial year (1 April to 30 September 2011) than in the
corresponding period of the previous year (consolidated net loss of EUR 246
million). This was primarily due to the intensification of the financial
crisis, which led in particular to a pronoun-ced widening of the risk
premiums for almost all state debtors in the eurozone. Adjusted for
extraordinary factors, a consolidated net profit of EUR 15 million was
generated in the period under review (previous year: consolidated net loss
of EUR 81 million).
The consolidated income statement for the first half of the 2011/12
financial year is as follows:
Table: IKB income statement for the first half of 2011/12
(1 April to 30 September 2011)
in EUR million 1 Apr-30 Sep 1 Apr-30 Sep Cha-Some totals may be subject to discrepancies due to rounding differences.
2011 2010* nge
Net interest income 75.8 69.8 6.0
Provisions for possible loan losses -30.4 37.7 -68.1
Net interest income (after provisions
for possible loan losses) 106.2 32.1 74.1
Net fee and commission income -30.8 -44.5 13.7
Net income from financial instruments
at fair value -272.6 -69.4 -203.2
Net income from investment securities -9.7 37.2 -46.9
Net income from investments accounted
for using the equity method 1.3 0.0 1.3
Administrative expenses 148.2 145.8 2.4
Personnel expenses 80.5 76.9 3.6
Other administrative expenses 67.7 68.9 -1.2
Other operating result 42.0 -63.9 105.9
Operating result -311.8 -254.3 -57.5
Tax income/expenses 0.2 -8.1 8.3
Consolidated net loss for the period -312.0 -246.2 -65.8
* Prior-year figures restated (see notes to the 6-month report for 2011/12
on changes in accordance with IAS 8)
Net interest income improved by EUR 6 million year-on-year to EUR 76
million.
There was a positive balance of provisions for possible loan losses of EUR
30 million (previous year: negative balance of EUR 38 million). This was
primarily attributable to the partial reversal of existing portfolio
allowances and specific valuation allowances due to the sustained positive
economic situation in Germany during the period under review and the
accompanying reduction in total holdings.
Net interest income after provisions for possible loan losses increased by
EUR 74 million year-on-year to EUR 106 million.
At EUR -31 million, net fee and commission income improved by EUR 14
million as against the same period of the previous year. Net fee and
commission income from operating credit and advisory business increased
while the guarantee commission payable to SoFFin declined to EUR 55 million
(previous year: EUR 64 million), although the latter still represented a
significant burden on net fee and commission income as a whole. Adjusted
for guarantee commission, net fee and commission income for the first half
of 2011/12 amounted to EUR 24 million, up EUR 5 million on the adjusted
prior-year figure.
Stable new lending business, rising margins and growing fee and commission
income led to a significant increase in net banking income (net interest
and fee and commission income less provisions for possible loan losses),
which totalled EUR 75 million after EUR -12 million in the previous year.
The expansion of the Bank's business model and its systematic focus on the
financing and consulting requirements of its traditional Mittelstand
clients are starting to bear fruit.
Net income from financial instruments at fair value amounted to
EUR -273 million, down EUR 203 million on the previous year. In particular,
this development reflects the remeasurement effects arising from the
European government debt crisis, which has led to the expansion of risk
premiums
and a reduction in long-term interest rates. Accordingly, net income from
financial instruments at fair value contains negative earnings
contributions of EUR -303 million primarily resulting from the
remeasurement of non-current assets and liabilities and derivatives. At the
same time, the expansion of the IKB spreads led to remeasurement gains on
certain IKB liabilities in the amount of EUR 71 million. Changes in the
fair value of portfolio investments impacted net income from financial
instruments at fair value by EUR 40 million.
Net income from investment securities declined by EUR 47 million
year-on-year to EUR -10 million. Portfolio investments in particular have
been affected by remeasurement losses due to negative changes in fair value
triggered by the crisis of confidence on the international capital markets;
by contrast, positive changes in fair value and disposals resulted in
positive net income from investment securities in the same period of the
previous year.
Administrative expenses were up EUR 2 million year-on-year at EUR 148
million and continue to be affected by the fulfilment of the EU conditions
and investments in the reorientation of the Bank's business model.
Personnel expenses rose by EUR 3 million to EUR 81 million; this was due in
particular to the increase in the average number of employees by 26 to
1,555 as a result of the expansion of the business model. In contrast,
other administrative expenses declined by EUR 1 million year-on-year to EUR
68 million.
The other operating result improved by EUR 106 million year-on-year to
EUR 42 million. This was primarily attributable to positive effects from
the mea-surement of liabilities in accordance with IAS 39.AG8, which
resulted from the need to adjust expectations of future business
development to reflect the financial and government debt crisis in
particular.
The operating result was down EUR 58 million year-on-year at EUR -312
million. The adjusted operating result amounted to EUR 15 million (previous
year:
EUR -62 million).
Tax income totalled EUR 0.2 million. All in all, the unadjusted
consolidated net loss amounted to EUR 312 million, EUR 66 million higher
than the prior-year figure of EUR 246 million. A consolidated net profit of
EUR 15 million was generated after adjustment forextraordinary factors
(previous year: consolidated net loss of EUR 81 million).
Total assets amounted to EUR 31.7 billion as at 30 September 2011, up
slightly on the figure as at 31 March 2011. This meant that the Bank
complied with the limit of EUR 33.5 billion for total assets as at 30
September 2011 that was imposed as part of the EU conditions.
Following Bundesbank notification, the resolutions passed by the EU summit
on 26/27 October 2011 meant that it was necessary to recognize valuation
allowances on receivables from the Republic of Greece in accordance with
the German Commercial Code (HGB). After updating its ratios accordingly,
the IKB Group had a Tier 1 capital ratio of 10.7% and an overall capital
ratio of 14.3% as at 30 September 2011.
Outlook
30 September 2011 was the deadline for the fulfilment of the EU conditions.
IKB implemented the measures set out in the restructuring plan on time and
took all of the measures permitted by law to fulfil the EU conditions
during the implementation period. Accordingly, IKB assumes that the
conditions were met by the deadline. The final report to the European
Commission on the implementation of the conditions will be submitted in
early January 2012. The limitations and burdens imposed by the fulfilment
of the EU conditions will then be gradually lifted.
IKB significantly reduced its legal risks with the conclusion of the legal
disputes with Crédit Agricole Corporate and Investment Bank and Financial
Guaranty Insurance Corporation in September 2011.
With regard to one of the suits by investors due to alleged incorrect
capital market information prior to the crisis in 2007, the Company
considers its legal position to have been confirmed by the preliminary
remarks by the German Federal Court of Justice as part of a hearing on 15
November 2011 on the absence of tort claims. The Company continues to
assume that there are no justified claims for damages on the part of
investors in the aforementioned cases.
IKB considers itself to have a secure liquidity position. This comprises
the maturity of all the SoFFin bonds (current volume: EUR 7.3 billion). The
first SoFFin-guaranteed bond was repaid on schedule at the end of April
2011, and SoFFin guarantees amounting to a further EUR 1.3 billion were
returned ahead of schedule in July 2011. IKB is diversifying its
refinancing structure with the aid of collateralised financing and the
further expansion of its deposit and promissory note loan business with
corporate clients, private customers (IKB direkt) and institutional
investors.
IKB believes there are good prospects for a targeted and sustainable
expansion of its activities in the area of consulting, capital market,
hedging and credit products. Due to restructuring costs as well as start-up
costs for the new business activities, it will take some time before the
reorientation is reflected sustainably and positively in the income
statement. A positive trend in the diversification and growth of income
from new business is already emerging. At the same time, the government
debt crisis means that new business development is not meeting
expectations.
Following a temporary increase due to investments in infrastructure and the
cost of fulfilling the EU conditions, administrative costs within the Group
will continue to decline providing that the additional expenditure from
further regulatory initiatives remains within reasonable limits.
The potential sale of IKB by Lone Star could have a positive impact on the
Bank's continued business development; as such, the Board of Managing
Directors of IKB remains amenable to any such plan on the part of Lone
Star.
The current situation is dominated by uncertainty with regard to the
duration and severity of the government debt crisis in the euro member
states, economic development in the USA and the possibility of an economic
slowdown in Germany, all of which could lead to a high degree of earnings
volatility in IKB's business development.
One factor providing substantial uncertainty with regard to future business
development is thewave of banking regulation that is being implemented or
considered at present. In addition to significant implementation costs, it
is often unclear as to whether and when these measures will have a material
impact and what transitional periods will be provided. This uncertainty is
exacerbated by the fact that it is difficult to estimate the combined
impact of many such plans and the extent of their interaction with the
extensive changes to accounting provisions at a national and international
level.
The Board of Managing Directors of IKB is maintaining its target of
returning to operating profitability in the medium term. With the
government debt crisis in the eurozone currently overshadowing everything,
there will be a delay
in achieving this target. It is unclear as to how long the crisis will
continue.
The need to service compensation agreements with a total volume of
EUR 1,151.5 million and the value recovery rights of the hybrid investors
also means that the Group and IKB AG will probably not report any, or only
minimal, profit for several financial years to come.
Further details on developments in the first half of 2011/12 can be found
in the 6-month report 2011/12 at
www.ikb.de/content/en/ir/financial_reports/index.jsp.
Contact:
Dr. Jörg Chittka, tel.: +49 211 8221-4349;
Armin Baltzer, tel.: +49 211 8221-6236, e-mail: presse(at)ikb.de
End of Corporate News
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Language: English
Company: IKB Deutsche Industriebank AG
Wilhelm-Bötzkes-Straße 1
40474 Düsseldorf
Germany
Phone: +49 (0)211 8221-4511
Fax: +49 (0)211 8221-2511
E-mail: investor.relations(at)ikb.de
Internet: www.ikb.de
ISIN: DE0008063306
WKN: 806330
Listed: Regulierter Markt in Frankfurt (General Standard)
End of News DGAP News-Service
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147762 28.11.2011
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Datum: 28.11.2011 - 08:00 Uhr
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