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03.08.2012 Quartalszahlen/Bilanz
HVB Group: good profit before tax of around €1.6 billion in the first half of 2012 despite difficult market conditions
  • Earnings under pressure due to interest rates and customer uncertainty
  • No increase in costs
  • Low loan-loss provisions, beginning to normalise
  • Net consolidated profit amounts to €912 million
  • Core Tier 1 ratio improves to 16.6%

Today, UniCredit Bank AG (also referred to as HypoVereinsbank) presents its figures for the first half of 2012. To download the complete Half-yearly Financial Report at 30 June 2012, please visit HVB's Investor Relations website at www.hvb.de/ir .

Performance in the period from 1 January to 30 June 2012

Results of HVB Group

In a still difficult capital market environment in the first half of 2012, HVB Group generated a good profit before tax of €1.6 billion. At €912 million, the consolidated profit was €408 million, or 30.9%, below the excellent year-ago figure, which was generated in far more favourable conditions.

The earnings performance in the first half of 2012 results from a decline of €575 million, or 29.0%, in net operating profit to €1,411 million, which can be attributed to both lower operating income and to more normal and thus higher net write-downs of loans and provisions for guarantees and commitments. The decline of €274 million in operating income to €3,459 million was caused by a decrease in net interest (down €317 million to €1,796 million) as a result of low interest rates, lower dividend income (down €39 million to €62 million) and a reduction in net fees and commissions (down €94 million to €596 million). This trend could not be offset by the rise of €159 million in net trading income to €946 million. The high net trading income in the first half of 2012 can be attributed particularly to the positive effects of €327 million year-on-year arising from the reversal of the credit value adjustments that it had become necessary to take in the second half of 2011.

Operating costs (€1,783 million) remained stable on account of consistent cost management. At 51.5% for the first half of 2012 (first half of 2011: 47.8%), the cost-income ratio was still at a very good level by both national and international standards.

Dr Theodor Weimer, Board Spokesman of HypoVereinsbank:

"With a profit of €1.6 billion before tax, we achieved a good result in absolute terms in the first half of 2012 in what are still difficult and volatile market conditions. It is particularly pleasing that we have already almost earned the dividend paid of €1 billion. Thanks to our cost discipline, our operating costs in the first half of 2012 were no higher than last year – which, when adjusted for inflation, signifies a reduction in our costs."

Divisions

The Corporate & Investment Banking division generated a profit before tax of €1,093 million in the difficult market conditions of the first half of 2012 (equivalent period last year: €1,555 million). The division achieved net trading income of €835 million, thus surpassing the year-ago figure by €55 million. At €47 million in the first half of 2012, the profit before tax of the Family & SME division was €39 million lower than the same period last year. The Private Banking division posted a profit before tax of €28 million in the first half of 2012 (first half of 2011: €56 million).

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% after the first half of 2012, slightly higher than the 15.6% reported at year-end 2011. This remains an excellent level by both national and international standards. At €23.3 billion, the shareholders’ equity shown in the balance sheet remained constant compared with year-end 2011. At the same time, the dividend payment of €1.0 billion resolved by the Annual General Meeting was offset by the consolidated profit of €0.9 billion generated in the first half of 2012 and the increase of €0.1 billion in the available-for-sale reserve. With total assets up by 1.7% compared with year-end 2011 to €392.1 billion, the leverage ratio (ratio of total assets to shareholders’ equity shown in the balance sheet) amounted to 16.8x at mid-year 2012 after 16.5x at year-end 2011.

HVB Group again enjoyed a very comfortable liquidity base and a solid financing structure at all times in the reporting period. The Bank did not participate in the ECB’s second long-term refinancing operation either and has also placed a large part of its excess liquidity with Deutsche Bundesbank. The funding risk remained low on account of the diversification in the 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:

"Continuing volatility and growing concern about the stability of the eurozone will again have a significant impact on the financial services sector in the second half of the year. In this setting, even individual items of bad news can cause significant market distortions and have sustained adverse effects on the real economy. The risks arising from the unresolved debt crisis also remain high for our domestic market, Germany. Rapidly and flexibly adapting to changing market conditions will be paramount for bank management again in the second half of the year. We will therefore continue to proceed with caution in the coming months. However, we assume that we will be able to slightly surpass last year's result and in the process will continue to rely on our strengths: a diversified business model, an excellent capital base and secure liquidity."

HypoVereinsbank
Arabellastraße 12
81925 München
Germany
http://www.hypovereinsbank.de