- Pre-tax profit of €1.6 billion, consolidated profit after tax around €1.1 billion
- All business segments with positive contributions to earnings
- Pleasing increase in net fees and commissions
- Net interest still under pressure due to the general economic environment
- Year-on-year reduction of 1.3% in operating costs
- Core Tier 1 ratio at record high of 20.7%
Today, UniCredit Bank AG (also referred to as HypoVereinsbank) presents its figures for the first three quarters of 2013. To download the complete Interim Report at 30 September 2013, please visit HVB's Investor Relations website at
Performance in the period from 1 January to 30 September 2013
Results of HVB Group
In a persistently challenging economic and financial environment, HVB Group generated a good profit before tax of €1,569 million in the first three quarters of 2013. Although last year’s profit before tax of €2,050 million was not achieved, it should be taken into account in this context that it benefited from a non-recurring item of €395 million in net trading income resulting from the reversal of credit value adjustments. On a normalised basis, the strong year-ago total was nearly matched. Consolidated profit after tax amounted to €1,076 million in the reporting period (2012: €1,220 million).
The decline in reported profit before tax can be attributed to a fall of €521 million in net interest to €2,196 million combined with the still extremely low interest rate levels and the decline in net trading income to €903 million caused by the non-recurrence of the one-off income item. In contrast, net fees and commissions developed extremely well, rising by 5.1% over the equivalent period last year.
Operating costs were reduced by a pleasing 1.3% to €2,655 million compared with the first three quarters of 2012, despite an inflation rate of 1.5% and higher regulatory costs. The cost-income ratio of 62.4% in the reporting period (2012 excluding the non-recurring effect in net trading income: 59.9%) remained at a very good level for a universal bank by both national and international standards. At €140 million, net write-downs of loans and provisions for guarantees and commitments have remained at a historically low level.
Dr Theodor Weimer, Board Spokesman of HypoVereinsbank:
"We have again generated a good pre-tax profit of around €1.6 billion in the first nine months of the 2013 financial year despite the historically low interest rate environment, which has also had a marked impact on us. The result once more highlights the stability of our diversified business model and our solid market position. Our high cost discipline, successful risk management and pleasing rise in net fees and commissions all contributed to the good result. All in all, we are confident that we will again match last year's pre-tax profit for the year as a whole, adjusted for non-recurring effects, despite a challenging market environment."
The Commercial Banking (CB) business segment recorded a profit before tax of €232 million, down €172 million on the year-ago figure. Within this total, operating income fell by €93 million to €1,822 million, primarily on account of a decline in both net interest and net fees and commissions. Operating costs rose slightly by 2.7% to €1,521 million. At €81 million, net write-downs of loans and provisions for guarantees and commitments continues to be at a low level (2012: €73 million).
The Corporate & Investment Banking (CIB) business segment recorded operating income of €1,995 million (2012: €2,538 million). The year-on-year decline of €543 million results mainly from a decrease of €446 million in net interest. In addition, net trading income fell by €216 million as last year’s non-recurring item of €395 million from credit value adjustments is no longer included in 2013. Net fees and commissions developed very well in the CIB business segment, rising €66 million to €181 million compared with last year. There was a substantial decline to €193 million in net write-downs of loans and provisions for guarantees and commitments (2012: €500 million). The profit before tax of the CIB business segment amounted to €879 million after €1,217 million last year. Without the non-recurring item named above, profit before tax would have been €57 million higher than the adjusted year-ago total.
The Asset Gathering business segment (consisting of the DAB Bank subsidiary) generated a profit before tax of €15 million after €21 million last year. The decline in profit is primarily due to lower net interest, which was down by €11 million and only partly compensated by the rise of €6 million in net fees and commissions.
Capital and liquidity
HVB Group has had an excellent capital base for years. The core Tier 1 ratio increased again to 20.7% at 30 September 2013 (year-end 2012: 17.4%), which is not only an excellent level by both national and international standards but also shows that HVB Group is extremely well prepared for the upcoming stress test by the ECB. The shareholders’ equity shown in the balance sheet fell by €1.5 billion compared with year-end 2012 to €21.8 billion as a result of the dividend payment totalling €2,462 million as resolved in the second quarter of 2013 by the Shareholders’ Meeting. This was only partially offset by the consolidated profit (attributable to the shareholder of UniCredit Bank AG) of €1,045 million generated in the first nine months of 2013.
With total assets down by 9.5% compared with year-end 2012 to €315.4 billion, the leverage ratio (ratio of total assets to shareholders’ equity shown in the balance sheet) nevertheless amounted to 14.5x at 30 September 2013 after 15.0x at year-end 2012.
HVB Group again enjoyed a very comfortable liquidity base and a solid financing structure at all times in the reporting period. In this context, it is worth mentioning that HVB Group has placed a large part of its excess liquidity with Deutsche Bundesbank. The funding risk remained low on account of the diversification in products, markets and investor groups, meaning that adequate funding of lending activities was ensured at all times. Pfandbriefs continued to represent an important source of funding thanks to their very good credit rating and liquidity.