- Profit before tax increases by 43% to €995 million
- Consolidated profit after tax jumps by 48% to €681 million
- Net trading, hedging and fair value income up by 17% year-on-year
- Cost-income ratio continues to improve to 44.2% despite slight rise in operating costs
- All divisions record profits higher than last year
- HVB continues to show an excellent capital base, a good leverage ratio and a solid financing structure
Today, UniCredit Bank AG (also referred to as HypoVereinsbank) presents its figures for the first quarter of 2011. To download the complete Interim Report at 31 March 2011, please visit the Investor Relations homepage at
Dr Theodor Weimer, Board Spokesman of HypoVereinsbank:
"So far this year, we've succeeded in repeating the exceptionally good performance of 2010. In the first three months of 2011, HVB Group achieved a profit before tax of almost €1 billion. It's particularly pleasing that all the divisions contributed to this good result with profits and higher earnings."
Performance in the first quarter of 2011
HVB Group's results
In a still challenging capital market environment, HVB Group achieved a very good profit before tax of €995 million in the first quarter of 2011, exceeding the total for the equivalent period last year by a large €301 million or 43.4%. The Bank generated a consolidated profit of €681 million after tax, which is 48% higher than the year-ago figure of €460 million.
This sharp rise in profits can be attributed in part to the strong performance of the Bank's commercial operations, with operating income increasing by 5.6% to €2.01 billion. The higher revenues were generated primarily in net trading income which, at €514 million, was 17% higher than the total at the same point last year. The Bank also achieved higher contributions to profits than last year in net interest (up €23 million or 2.3%) and dividends (up €50 million). The Bank almost matched the good figure recorded for net fees and commissions in the first quarter of 2010 (down 1.6% year-on-year).
Despite the 3.4% rise in operating costs to €888 million, the cost-income ratio improved to 44.2% in the first quarter of 2011 (first quarter of 2010: 45.1%), which is an excellent level by both national and international standards. With the decline of 66% year-on-year in net write-downs of loans and provisions for guarantees and commitments to €127 million, the net operating profit rose by a large €323 million to €995 million, despite the charges from the bank levy included in the total.
Operating performance of HVB Group in the first quarter of 2011:
- The Corporate & Investment Banking division (CIB) improved its profit before tax by €329 million to €885 million, partly thanks to a significant increase in the operating profit as well as much lower net write-downs of loans and provisions for guarantees and commitments.
- The successful reorganisation served to sustainably strengthen the business model of the Family & SME division (F&SME; formerly known as the Retail division), helping it to increase its operating profit by 13.3% and its profit before tax by €57 million to €43 million in the first quarter of 2011.
- The Private Banking division (PB) increased its profit before tax by 14.8% to €31 million, similarly as a result of a higher operating profit.
Capital and liquidity
HVB Group continues to have an excellent capital base. The core Tier 1 ratio in accordance with Basel II amounted to 16.6% at 31 March 2011 after 15.9% at year-end 2010, which is still an excellent level by both national and international standards. The shareholders’ equity shown in the balance sheet totalled €24.3 billion at 31 March 2011. With total assets down by 6% compared with year-end 2010 to €350.5 billion, the leverage ratio (calculated as the ratio of total assets to shareholders’ equity shown in the balance sheet) improved from 15.7x at the end of December 2010 to 14.4x at 31 March 2011.
HVB Group enjoyed an adequate liquidity base and a solid financing structure at all times during the first quarter of 2011. The funding risk remained low on account of the diversification in its products, markets and investor groups, meaning that adequate funding of the Bank's lending operations was ensured at all times. The Pfandbriefs of HVB Group continued to represent an important source of funding thanks to their very good credit rating and liquidity.
Dr Theodor Weimer:
"The excellent start to 2011 reaffirms our growth strategy, which encompasses all market segments and sales divisions. We continue to benefit from the positive economic development, particularly in our home market of Germany. At the same time, we face a persistently challenging environment due to the impact of the debt crisis in the eurozone, the uncertainty on financial markets and the bank levy. Nonetheless, we're very optimistic about our performance this year as a whole."