Postbank Group Interim Management Statement as of September 30, 2013

Transcription

1 Postbank Group Interim Management Statement as of September 30, 2013

2 Preliminary Remarks Macroeconomic Development Business Performance Preliminary Remarks This document is an interim management statement within the meaning of section 37x of the Wertpapierhandelsgesetz (WpHG German Securities Trading Act) in conjunction with section 37y of the WpHG and GAS 16, and contains consolidated figures in accordance with the IFRSs. Unless otherwise stated, the following comments represent a comparison between the figures as of September 30, 2013, and those for the corresponding prioryear period or, in the case of balance sheet disclosures, the figures as of December 31, Macroeconomic Development After a slow start to the year, the German economy put in a sound performance as the year progressed, as evidenced by the increase in industrial output, higher construction investments, and the improved trend in the Ifo Business Climate Index. By contrast, foreign trade provided little in the way of growth momentum due to the lackluster global economic environment. However, German gross domestic product (GDP) is likely to have risen again overall in the third quarter of 2013, following a 0.7 % increase in Q2. The German job market remained largely stable over the year. The European Central Bank (ECB) held its benchmark interest rate at 0.5 % in the period under review, continuing its highly expansionary monetary policy unchanged. The persistent low interest rate environment, declining interest margins, the weak performance of loan volumes, and sustained pressure to increase capital levels remained the dominant issues facing the European banking sector in the third quarter, along with the continued progression of regulatory measures. Business Performance Customer business Postbank s customer business made good progress. New installment loan business grew by around 25 % in the first three quarters of 2013 compared with the prior-year period, to approximately 1,570 million. Total installment loans also increased again to 4.9 billion as of September 30, 2013, up approximately 0.6 billion over the prior-year figure. The Bank also continued its previous year s strong performance in the checking account business, securing around 410,000 new private checking accounts in the first three quarters of 2013 (prior-year period: approximately 379,000). With a total of more than 5.2 million private checking accounts, Postbank is still by far the leading provider on the German market. The volume of savings deposits declined by around 1.1 billion compared to year-end 2012, to 53.2 billion. In the home savings business, which Postbank operates under the BHW brand, home savings deposits rose by around 200 million in the same period to approximately 18.3 billion. New mortgage lending business, including disbursed home savings loans, amounted to around 7.2 billion in the first three quarters, up 9.1 % on the prior-year figure. The private mortgage lending portfolio, including purchased third-party portfolios, amounted to 73.3 billion as of September 30, 2013, as against 74.0 billion at the prior year-end. Income statement Postbank generated net income of 358 million in the first three quarters of 2013 (previous year: 313 million). The profit before tax was 341 million, 58 million less than the same period of the previous year. 2

3 Business Performance Net interest income declined by 9.1 % or 187 million to 1,865 million. This was mainly due to the year-on-year decline in interest income from the holdings of investment securities that were scaled back as part of our de-risking strategy and the interest rate environment, which remains particularly unfavorable for deposit-rich banks such as Postbank. This item was also negatively impacted by the lack of net interest income from PB (USA) Holdings, Inc., which was sold to Deutsche Bank at the end of Net interest income was also reduced by the interest payments of 22 million on additional tax payments for DSL Holding AG i. A. (in liquidation). Net trading income improved from 71 million in the first three quarters of 2012 to 38 million in the period under review. The significant reduction in the portfolio of structured credit products in the past year had a positive effect on this item, since the measurement losses on embedded derivatives generated by the sold holdings were no longer recognized in net trading income. In addition, there was an improvement year-onyear in both the contribution from hedges of foreign currency liquidity, which evens out over the term of the instruments concerned, and the contribution by the fair value option used to manage interest rate risk at BHW Bausparkasse. Net income from investment securities amounted to 275 million (prior-year period: 27 million) and includes in particular deconsolidation and other effects in the amount of 262 million, mainly resulting from the sale of our U.S. subsidiaries to Deutsche Bank AG effective January 1, Net fee and commission income declined by 38 million or 4.3 % to 842 million. This is largely attributable to the discontinuation of processing fees for installment loans and the slight decline in income from the postal services provided at branches. The allowance for losses on loans and advances decreased by a further 56 million to 230 million. This reflects the positive trend in the customer business particularly our highly stable retail lending business and the favorable macroeconomic environment. The sale of PB Capital Corporation and the reversal of specific valuation allowances for commercial real estate finance also had a positive impact. Administrative expenses increased from 2,204 million in the first three quarters of 2012 to 2,385 million in the period under review, mainly due to the writedown of intangible assets in the amount of 180 million. Excluding this effect, administrative expenses would have remained on a level with the previous year. Total assets Postbank s total assets declined sharply to billion, compared with billion as of December 31, This decline is largely attributable to the sale and deconsolidation of PB (USA) Holdings, Inc. Group and active de-risking. The assets side of the balance sheet also shows that we have further scaled back our capital market investments and risk: the total volume of investment securities decreased by an additional 4.4 billion as against December 31, 2012, to 32.6 billion. Loans and advances to other banks declined from 27.6 billion at the end of 2012 to 23.6 billion due to the reduced money market portfolio. On the liabilities side, the amounts due to customers declined from billion at the end of 2012 to billion as of September 30, 2013, largely as a result of the development of deposits in the corporate banking business. We consciously discontinued low-margin business so as to reduce our total assets. Deposits from other banks rose by 1.3 billion to 18.6 billion over the same period. 3

4 Business Performance Recognized capital was down 318 million as against December 31, 2012, to 5,662 million. This change is mainly attributable to the new requirements for the recognition of pension obligations. The Tier 1 capital ratio declined from 12.0 % at the end of 2012 to 10.0 % as of September 30, This change is mainly due to the sale of Deutsche Postbank Funding LLCs I to IV and Deutsche Postbank Funding Trusts I to IV, which until December 31, 2012 had been included in the calculation of the Tier 1 ratio as hybrid capital. By contrast, the Core Tier 1 capital ratio, which does not take into account hybrid capital instruments, rose from 9.0 % at the end of 2012 to 10.0 % as of September 30, This success is largely thanks to our de-risking strategy. Outlook Based on its encouraging performance in the first three quarters of 2013, we firmly believe that Postbank will achieve clearly positive results in the current fiscal year. However, as already anticipated in the Group Management Report as of December 31, 2012, the 2013 results will fail to match those of the previous year, primarily due to higher integration-related expenses. 4

5 Key Group Figures Key Group Figures (IFRSs) as of September 30, 2013 Income statement Jan. 1 Sept. 30, 2013 Jan. 1 Sept. 30, Net interest income 1,865 2,052 Allowance for losses on loans and advances Net interest income after allowance for losses on loans and advances 1,635 1,766 Net fee and commission income Net trading income Net income from investment securities Administrative expenses 2,385 2,204 Other income/other expenses 12 1 Profit before tax Income tax Profit from ordinary activities after tax Non-controlling interests 0 0 Consolidated net profit Balance sheet extract Sept. 30, 2013 Dec. 31, Total assets 165, ,962 Cash reserve 987 2,054 Loans and advances to other banks 23,610 27,646 Loans and advances to customers 102, ,266 Allowance for losses on loans and advances 1,599 1,745 Trading assets 1,974 5,135 Investment securities 32,609 37,027 Deposits from other banks 18,584 17,334 Due to customers 123, ,732 Debt securities in issue 7,392 9,436 Trading liabilities 1,918 5,953 Hedging derivatives 566 1,002 Provisions 1,722 2,974 Subordinated debt 4,521 3,196 Equity 5,662 5,980 a) Issued capital b) Share premium 2,010 2,010 c) Retained earnings 2,743 3,132 d) Consolidated net profit Non-controlling interests Figures adjusted 5

6 Key Group Figures Other key figures Jan. 1 Sept. 30, 2013 Jan. 1 Sept. 30, 2012 Cost/income ratio % Return on equity before taxes % Earnings per share Headcount (FTEs) thousand Sept. 30, 2013 Dec. 31, 2012 Risk-weighted assets bn Tier 1 capital ratio % Long-term ratings Sept. 30, 2013 Dec. 31, 2012 Fitch A + / outlook stable A + / outlook stable Moody s A 2 / outlook stable A 2 / outlook stable Standard & Poor s 2 / A + / outlook negative 1 Based on million shares 2 The S&P rating was discontinued as of December 31,

7 Contacts Published by Deutsche Postbank AG Head Office Investor Relations Friedrich-Ebert-Allee Bonn, Germany Postfach Bonn, Germany Phone: Investor Relations Phone: Design and layout EGGERT GROUP, Düsseldorf Coordination/editing Postbank Investor Relations Translation Deutsche Post Corporate Language Services et al. This Interim Management Statement contains forward-looking statements that relate to macroeconomic developments (in particular the development of money and capital market rates), the business and the net assets, financial position and results of operations of the Postbank Group. Forward-looking statements by definition do not depict the past and are in some instances indicated by words such as believe, anticipate, predict, plan, estimate, aim, expect, assume and similar expressions. Forward-looking statements are based on the Company s current plans, estimates, projections, and forecasts and are therefore subject to risks and uncertainties that could cause actual development or the actual results or performance to differ materially from the development, results or performance expressly or implicitly assumed in these forward-looking statements. Readers of this Interim Management Statement are expressly cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Interim Management Statement. Deutsche Postbank AG does not intend and does not undertake any obligation to revise these forwardlooking statements. The English version of the Interim Management Statement constitutes a translation of the original German version. Only the German version is legally binding.