With a profit before tax of €2.05 billion after the first nine months of 2012, HVB Group has already surpassed the profit before tax for the whole of 2011 (€1.6 billion), and continues to have an excellent capital base, liquidity and funding
- Pre-tax profit of €493 million in Q3 2012 after €73 million in Q3 2011/li>
- Consolidated profit of €1.2 billion after nine months
- Positive results from all divisions
- Significant rise in net trading income to €1.1 billion
- Slight decline in operating costs to €2.7 billion
- Excellent core Tier 1 ratio improved further to 17.5%
Today, UniCredit Bank AG (also referred to as HypoVereinsbank below) presents its figures for the third quarter of 2012. To download the complete Interim Report at 30 September 2012, please visit the Investor Relations website at www.hvb.de/ir.
Performance in the period from 1 January to 30 September 2012
Results of HVB Group
With a profit before tax of €2.05 billion after the first nine months of 2012, HVB has already managed to surpass the profit before tax for the whole of 2011 (€1.6 billion) in a persistently challenging capital market environment. This represents an increase of €57 million, or 2.9%, compared with the year-ago figure posted after nine months. At €1,220 million, net consolidated profit remained at the same level as last year after nine months. Positive trends from changes in provisions affecting income and from net income from investments contributed to this performance.
Net operating profit declined by €438 million, or 19.8%, to €1,773 million. This is partly attributable to a rise in net write-downs of loans and provisions for guarantees and commitments towards normal levels, up by €346 million to €424 million. At €4,888 million, operating income also failed to quite match the good figure last year (€4,982 million). This decline can be attributed primarily to net interest which fell on account of low interest rates (down €432 million to €2,675 million) and the decrease in net fees and commissions (down €133 million to €883 million) due to persistent and in some cases even greater customer reticence. However, this trend was partially offset by the rise of €484 million in net trading income to €1,123 million.
At €2,691 million, operating costs were slightly lower than the figure posted last year (€2,693 million) on account of consistent cost management. At 55.1% for the first nine months of 2012 (first nine months of 2011: 54.1%), the cost-income ratio remained at a very good level by both national and international standards.
Dr Theodor Weimer, Board Spokesman of HypoVereinsbank:
"HypoVereinsbank has yet again succeeded in achieving a respectable result after three quarters of 2012, already surpassing the pre-tax profit posted for the 2011 financial year despite volatile capital markets and persistent uncertainty among customers. HVB's strong balance sheet figures also reflect the general stability of the Bank. We have succeeded in enhancing our already excellent capital base, while the cost-income ratio and return on equity are once again at a very good level. Successful cost management has also made a substantial contribution to our good results. As announced last week, we are looking to boost our earnings power and continue expanding by regionalising our German banking activities, granting greater entrepreneurial responsibility to the regions and establishing three business segments known as Unternehmer Bank, Private Clients Bank and Corporate & Investment Banking as of 2013."
The Corporate & Investment Banking division (CIB) generated a profit before tax of €1,516 million, which is €101 million lower than the high year-ago figure despite a slight rise in operating income due in part to the positive effects from the reversal of credit value adjustments. This can be primarily attributed to the higher net write-downs of loans and provisions for guarantees and commitments. The Family & SME (F&SME) and Private Banking (PB) divisions also failed to quite match the re¬sults recorded in 2011 on account of lower operating income due to low interest rates and reticence on the part of investors. The profit before tax fell from €127 million in 2011 to €71 million in the F&SME division and from €78 million in 2011 to €49 million in the PB division.
Capital and liquidity
HVB Group continues to have an excellent capital base. The core Tier 1 ratio in accordance with Basel II (ratio of core capital excluding hybrid capital instruments to the total amount of credit risk-weighted assets and equivalent risk-weighted assets for market risk and operational risk) increased to 17.5% as per 30 September 2012 (year-end 2011: 15.6%) and thus remains at an excellent level by both national and international standards.
The shareholders’ equity shown in the balance sheet increased by €0.3 billion to €23.6 billion compared with year-end 2011. At the same time, the dividend payment of €1.0 billion in the second quarter of 2012 as resolved by the Annual General Meeting was more than compensated by the consolidated profit of €1.2 billion gen¬erated in the first nine months of 2012 and the increase of €0.1 billion in the available-for-sale reserve. With total assets up by 3.6% com¬pared with year-end 2011 to €399.4 billion, the leverage ratio (ratio of total assets to shareholders’ equity shown in the balance sheet) amounted to 16.9x at the end of the third quarter of 2012 after 16.5x at year-end 2011.
HVB Group enjoyed a very comfortable liquidity base and a solid financing structure at all times in the reporting period. The Bank did not participate in either of the ECB's three year-refinancing operations 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 our products, markets and investor groups, meaning that adequate funding of our lending operations was ensured at all times. HVB Group’s Pfandbriefs continued to represent an important source of funding thanks to their very good credit rating and liquidity.
Dr Theodor Weimer:
"We assume that the current uncertainty in the global economy and the sovereign debt crisis in several eurozone countries will persist in the fourth quarter of this year. High regulatory requirements and not least also the financial burden from the bank levy will continue to impact bank results."
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