Today, UniCredit Bank AG (also referred to as HypoVereinsbank) presents its figures for the first nine months of 2011. The complete Interim Report at 30 September 2011 will be published on the Investors Relations homepage at
Performance in the period from 1 January to 30 September 2011
Results of HVB Group
HVB Group continued to perform well in a clearly deteriorating capital market environment during the sovereign debt crisis, even if it could not maintain the earnings growth seen in the first half of 2011. All in all, HVB Group generated a very good profit before tax of €1,993 million after nine months, exceeding the total for the equivalent period last year by €307 million, or 18.2%. The consolidated profit after tax was up by 7.6% year-on-year to €1,226 million. In the third quarter, HVB Group attained a pre-tax profit of €73 million in spite of significant upheavals and uncertainty on the markets.
These higher profits can be attributed primarily to a rise in net operating profit, which increased by 28.5% to €2,211 million in the first nine months. With operating income remaining stable overall, the Bank benefited from lower net write-downs of loans and provisions for guarantees and commitments which, at €78 million at the end of September 2011, were significantly below the €664 million recorded one year ago.
Within operating income, which at €4,982 million matched the year-ago total of €4,997 million, net interest was up by €94 million or 3.1%. Net fees and commissions also performed very well, rising by €49 million or 5.1%. Despite the turmoil on the capital markets, net trading, hedging and fair value income delivered a substantial contribution of €639 million, even if this figure failed to match the good year-ago total of €749 million.
Net other income/expenses fell by €91 million to €83 million, notably on account of the expense for the German bank levy that has been included for the first time in 2011. Operating costs were up by 3.1% to €2,693 million on account of the expenses for the Austrian bank levy. In spite of this, HVB Group achieved a cost-income ratio of 54.1% (2010: 52.3%), which is still an excellent level by both national and international standards.
Dr Theodor Weimer, Board Spokesman of HypoVereinsbank:
"In the first nine months of 2011, HypoVereinsbank achieved a very remarkable profit before tax of almost €2 billion, thus exceeding last year's result again by around €300 million. Once more all divisions contributed to this performance. Even in the third quarter, which was marked by considerable uncertainty and heavy turmoil on the financial markets due to the European sovereign debt crisis, we succeeded in attaining a positive pre-tax profit of €73 million. This reaffirms the robust state of our customer-oriented business model."
Performance of the divisions
The Corporate & Investment Banking division (CIB) improved its profit before tax in the first nine months by €377 million to €1,706 million, or 28%, thanks particularly to the rise in operating income (up 5%) coupled with a slight decline in operating costs. Interest as well as fee and commission operations, dividends and trading-related income contributed to this development. As a result of the improved lending environment, there was a 83% decline in net write-downs of loans and provisions for guarantees and commitments enabling an increase of 28% to be achieved in the profit before tax – in spite of higher charges from provisions.
The Family & SME division (F&SME) and Private Banking are also well on track. F&SME generated a very good profit before tax of €145 million in the first nine months of 2011. The year-ago figure (2010: €60 million) was surpassed by €85 million. This increase was driven by the pleasing growth of 6% in operating income, which is mainly due to the pleasing development in net interest income and the significantly lower net write-downs of loans and provisions for guarantees and commitments (down 64%).
The Private Banking division increased its profit before tax by 12% to €77 million after the first nine months. In addition to a decline in operating costs, this was due to a slight rise in operating income.
Capital and liquidity
HVB Group also continues to have an excellent capital base. The core Tier 1 ratio in accordance with Basel II amounted to 16.9% at 30 September 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 €23.6 billion at 30 September 2011. With total assets up by 7.7% compared with year-end 2010 to €400.4 billion, the leverage ratio amounted to 17.0x at 30 September 2011 after 15.7x at the end of December 2010.
HVB Group enjoyed an adequate liquidity base and a solid financing structure at all times during the first three quarters of 2011. The funding risk remained low on account of the diversification in our products, markets and investor groups, meaning that adequate funding of our lending operations was ensured at all times. Pfandbriefs of HVB Group continued to represent an important source of funding thanks to their very good credit rating and liquidity.
Dr Theodor Weimer:
"After the turbulent third quarter, we expect an exceptionally challenging market environment also in the coming months. We nevertheless assume for the whole of 2011 that our profit before tax will match last year's level."