H1 2007: Westdeutsche ImmobilienBank remains on growth path with strong increase in profit
Mainz (ots) -
- Profit before tax up by 47.3% to EUR80.2 million
- Cost-income ratio improves to 38.2%
- Sharp increase in international business
- Continued growth with the development of capital market products
and the opening of new international locations
Westdeutsche ImmobilienBank (WIB) closed the first half of 2007 with profit before tax of EUR80.2 million in accordance with International Financial Reporting Standards (IFRSs). This represents a rise of 47.3% as against the previous year (EUR54.5 million).
"This result means that we have exceeded the targets that we set ourselves for the first six months of the year. At the same time, we also developed new markets in our international business. We are thus continuing the successful development we recorded last year and remain on a growth path", said Hubert Beckmann, Chairman of the Managing Board of WIB, commenting on the Bank's half-year results.
The increase in profit is due to a significant improvement in operating income. Net interest income rose by 12% to EUR92.4 million (previous year: EUR82.5 million). WIB's stable risk situation and good portfolio quality as well as general market and economic trends enabled it to report a positive allowance for losses on loans and advances of EUR24.7 million (previous year: EUR-2.5 million). Net interest income after the allowance for losses on loans and advances increased to EUR117.1 million (previous year: EUR80.0 million). WIB's allowance for losses on loans and advances remains unaffected by the US subprime crisis, since the Bank was not directly or indirectly invested in this segment at any point.
Higher fee and commission income and lower fee and commission expense for arranging private construction finance led to an increase in net trading income to EUR3.5 million (previous year: EUR1.8 million). Administrative expenses rose by 5.9% to EUR41.8 million (previous year: EUR39.5 million). This is mainly due to higher expenses from the expansion of international business. At the end of the first half of the year, the number of employees was 510 (previous year: 503). Despite increased expenses, the cost-income ratio (CIR) improved to 38.2% (previous year: 41.0%).
Sharp increase in foreign business
With loan commitments of EUR3.8 billion in the first six months of 2007, WIB matched the high prior-year level. The Bank has significantly expanded its international business activities. New business accounted for by commercial real estate financing abroad increased by 20% to approximately EUR2.2 billion (previous year: EUR1.8 billion). In particular, business grew in the established Western European target countries as well as in the USA and Canada. WIB exceeded its forecasts in its newly developed Central European markets as well as in the Asia-Pacific countries. In addition, it increased sales of product to hedge interest rate and currency risks to its customers.
Strategic foundations laid: development of capital markets business and increased presence in target markets From a strategic perspective, the Bank has laid the foundations for its future development. In the second half of the year, WIB will focus on developing and expanding its capital markets business. On 1 August 2007, Peter Knopp joined WIB's Managing Board and took over the new capital markets function. The Bank is thus increasing its capital market-driven structuring and placement activities.
WIB established a subsidiary in Tokyo at the end of the first half of the year, which is scheduled to begin operating by the end of 2007. Based in this location, the Bank will increase its presence in the Asia-Pacific market. After opening a representative office in Warsaw at the beginning of the year, WIB expects to open another one in Prague in order to intensify its business activities in the Central, Eastern and South European markets.
"Our sales performance abroad confirms our strategy of generating sustainable growth by selectively expanding our locations and developing our country-specific knowledge. We will continue to leverage our expertise in our target markets as a growth factor in the second half of 2007. The Bank's half-yearly results - which substantially exceeded forecasts - cannot be extrapolated to the end of 2007. However, we expect a significant rise in profit as well as a year-on-year improvement in our return on equity and cost-income ratio at the end of 2007," said Beckmann.
You can download Westdeutsche ImmobilienBank's 2007 H1 report at http://www.westimmobank.com/interimreports
Contact: Westdeutsche ImmobilienBank AG Press and PR Große Bleiche 46 55116 Mainz Germany Tel. + 49 6131 9280-7385 Fax + 49 6131 9280-7209 e-mail: firstname.lastname@example.org