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DVB Group publishes its half-yearly financial report …

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Wolfang F. Driese with Dagfinn Lunde on his right

Wolfang F. Driese with Dagfinn Lunde on his right

DVB Group publishes its half-yearly financial report  for 2013: Consolidated net income before taxes of  €66.4 million (down 6.2%), due to a non-recurring  effect in the previous year

Frankfurt/Main, 13 August 2013 – DVB Bank SE (ISIN: DE0008045501) today presented its results for the first six months of 2013. Consolidated net income before taxes for the first half of the year was 6.2% lower than in the previous year (H1 2012: €70.8 million). The year-on-year change was due to a non-recurring effect in the first half of 2012: namely, the sale of a stake in British aero engine specialist TES Holdings Ltd, Bridgend, Wales, to two Japanese investors. Nonetheless, net interest income rose by 3.3%, and net fee and commission income was up 2.0%.

Wolfgang F. Driese, CEO and Chairman of the Board of Managing Directors of DVB Bank SE, commented on the Bank’s results for the first half of 2013 and provided an outlook on business developments during the remainder of the business year:

”The six-month results are within our expectations; considering the still-challenging environment shaped by sluggish global economic growth and excess supply in some segments of the shipping industry, we are satisfied with it. Yet we do not see any relief in terms of the risk situation this year. Thanks to the stable business performance of vast parts of our financing and advisory businesses, we envisage a sound result for the full year 2013, comparable to last year’s.”

Interest income from the lending business was up 6.1%, to €387.3 million (H1 2012: €365.0 million). DVB originated 71 new transactions in its four Transport Finance divisions, with an aggregate volume of €1.8 billion
(H1 2012: 63 new transactions with a total volume of €2.2 billion). The average interest margin on new business narrowed to 312 basis points
(H1 2012: 356 basis points). This mirrored a reduction in one of the Bank’s cost components: funding costs. Interest expenses fell by 5.2%, to
€355.7 million (H1 2012: €375.3 million), mainly on account of lower funding costs. Net interest income of €116.2 million increased by 3.3% year-on-
year (H1 2012: €112.5 million).

Net allowance for credit losses amounted to €–28.4 million in the first half of 2013 (H1 2012: €–27.3 million). Specifically, new allowances recognised for credit losses amounted to €51.3 million (of which €41.1 million was accounted for by Shipping Finance), whilst €29.1 million was reversed (Shipping Finance: €21.3 million). Net interest income after allowance for credit losses increased by 3.1%, to €87.8 million.

Net fee and commission income, which primarily includes fees and commissions from new Transport Finance business, and asset management and advisory fees, grew to €55.7 million, up 2.0% year-on-year
(H1 2012: €54.6 million).

Net other operating income/expenses declined from €43.9 million to
€6.5 million. The significant decline was due to a non-recurring effect in the previous year: the net figure for the first half of 2012 included proceeds from the sale of a stake in DVB’s subsidiary TES.

General administrative expenses decreased by 7.1%, to €86.2 million. Staff expenses rose by 2.5%, to €53.6 million. DVB lowered non-staff expenses (including depreciation, amortisation and write-downs) by 19.5%, to €32.6 million.

Net result from financial instruments in accordance with IAS 39 (comprising the trading result, the hedge result, the result from the application of the fair value option, the result from derivatives entered into without intention to trade, and the result from investment securities) once again especially reflected the high volatility levels on foreign exchange and interest rate markets. During the first half of 2013 the net figure was positive, at
€3.1 million, after a negative balance of €20.3 million during the same period of 2012.

Reflecting the non-recurring effect in the year 2012, consolidated net income before taxes was down 6.2% year-on-year, to €66.4 million
(H1 2012: €70.8 million), whilst consolidated net income after taxes went down 11.3%, to €57.9 million (H1 2012: €65.3 million).

DVB reported a 3.4% increase in total assets to €24.6 billion on the reporting date of 30 June 2013 (31 Dec 2012: €23.8 billion). The nominal volume of customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, irrevocable loan commitments, and derivatives) was down 2.7%, to €21.6 billion. In US dollar terms, customer lending decreased by 3.4%, to US$28.2 billion.

DVB’s key financial indicators developed as follows:

Return on equity before taxes (ROE) was 11.0% – down 1.8 percentage points (H1 2012: 12.8%). The cost/income ratio (CIR) declined by
1.0 percentage point, to 47.6% (H1 2012: 48.6%).

Calculated in accordance with Basel II, DVB’s tier 1 ratio changed slightly, to 19.8% (31 December 2012: 20.3%), due to the stronger US dollar exchange rate. The total capital ratio in accordance with Basel II decreased to 22.9% (31 December 2012: 23.6%).

DVB Bank SE, headquartered in Frankfurt/Main, Germany, is the leading specialist in the international Transport Finance business. The Bank offers integrated financing solutions and advisory services in respect of Shipping Finance, Aviation Finance, Offshore Finance and Land Transport Finance. DVB is present at all key international financial centres and transport hubs: at its Frankfurt/Main head office, as well as various European locations (Athens, Bergen, Hamburg, London, Oslo, Rotterdam and Zurich), plus offices in the Americas (New York City and Curaçao) and in Asia (Singapore and Tokyo). DVB Bank SE is listed at the Frankfurt Stock Exchange (ISIN: DE0008045501)

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