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DVB Bank SE: 9-month figures

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Wolfang F. Driese

Wolfang F. Driese

DVB Bank publishes nine-month results for 2014: Consolidated net
income before taxes of EUR72.6 million (news with additional features)

13.11.2014 / 08:25 – Frankfurt/Main, 13 November 2014 – DVB Bank SE (ISIN: DE0008045501)

continued to provide financing solutions and advisory services to its
clients in the international transport sector during the first nine months of 2014, but results fell short of the previous year: consolidated net income before taxes was down 24.5%, to EUR72.6 million (9m 2013: EUR96.2 million). The strong fluctuation in net income from financial instruments in accordance with IAS 39 was a key factor contributing to this decline.

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 nine months of
2014 and provided an outlook on business developments during the remainder
of the business year:

“The flooding of international capital markets with liquidity by central
banks significantly burdened DVB’s results, in two ways: firstly, there was
a marked increase in competition between banks and other providers of
capital in transport finance. Secondly, market liquidity led clients to
repay loans early, to a significant and unexpected extent. It was not
possible to fully replace these repayments by additional new business, or
only with a time lag. These repayments increased the Bank’s liquidity
reserves and burdened net interest income.

On a positive note, DVB’s risk situation appears to be stabilising: net
allowance for credit losses was down by a significant 36.7%. Nonetheless,
we envisage allowance for credit losses for the full year 2014 to be in
line with the level of two previous years, as planned.

The market environment remains difficult in some areas of maritime
shipping. Despite the persistent negative business framework in certain
market segments, we expect to originate high-volume new business during the
fourth quarter, in order to reduce the high liquidity stock. Considering
these factors, we anticipate satisfactory full-year results – which will,
however, not quite match the previous year’s level.”

The individual components of the nine-month results developed as follows:

At EUR217.3 million, total income (comprising net interest income after
allowance for credit losses, net fee and commission income, results from
investments accounted for using the equity method, and net other operating
income/expenses), was up 7.1% year-on-year (9m 2013: EUR202.8 million).

DVB concluded a total of 122 new transactions during the period ending 30
September 2014, with an aggregate volume of EUR4.0 billion (9m 2013: 101
transactions with a volume of EUR2.7 billion). Net allowance for credit
losses amounted to EUR28.5 million (9m 2013: EUR45.0 million). Net interest
income after allowance for credit losses of EUR134.0 million was up
slightly year-on-year (9m 2013: EUR129.0 million).
Net fee and commission income of EUR73.2 million (9m 2013: EUR79.0 million)
was down 7.3% on the previous year’s figure; the net figure primarily
includes fees and commissions from new Transport Finance business, and
asset management and advisory fees.

Net other operating income/expenses rose from EUR-3.8 million to EUR2.2

General administrative expenses increased by 8.6%, to EUR136.5 million. Due
to the increasing regulatory requirements, which DVB has to comply with to
the same extent as large financial institutions, the Bank hired new staff
members to reinforce its service units. Together with its LogPay Financial
Services subsidiary, DVB employed a total of 577 staff as at 30 September
2014, an increase of 18 compared to the end of the first nine months of
2013. Hence, staff expenses rose by 3.4%, to EUR81.1 million, whilst
non-staff expenses (including depreciation, amortisation, impairment and
write-ups) were up by EUR8.1 million to EUR55.4 million.

Consolidated net income before IAS 39 and taxes improved by 4.8%, from
EUR77.1 million in the previous year to EUR80.8 million.

The 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 reflected the volatility levels on foreign exchange and interest
rate markets. During the first nine months of 2014, the net figure was
negative, at EUR-8.2 million, after a positive balance of EUR19.1 million
during the same period of 2013.

At EUR72.6 million, consolidated net income before taxes was 24.5% lower
than in the same period of 2013 (9m 2013: EUR96.2 million), whilst
consolidated net income after taxes was down 29.0%, to EUR58.1 million (9m
2013: EUR81.8 million).

Compared to the 2013 year-end, DVB’s total assets as at 30 September 2014
increased marginally, from EUR23.4 billion to EUR23.5 billion, reflecting
the renewed strength of the US dollar. DVB’s nominal volume of customer
lending (the aggregate of loans and advances to customers, guarantees and
indemnities, irrevocable loan commitments, and derivatives) totalled
EUR22.0 billion in euro terms (+5.8%). In US dollar terms, customer lending
declined to US$27.7 billion, down 3.1%, in spite of higher new business.

DVB’s key financial indicators developed as follows:

Return on equity before taxes stood at 7.6% (9m 2013: 10.6%). The
cost/income ratio was up by 10.3 percentage points, to 57.4% (9m 2013:
47.1%). DVB has calculated its capital ratios in accordance with the Basel
III framework since the beginning of 2014. As at 30 September 2014 both the
tier 1 ratio (18.0%) and the total capital ratio (21.1%) were at a high

You can find a video commentary on the nine-month results by Wolfgang F.
Driese, CEO and Chairman of the Board of Managing Directors of DVB Bank SE,
on our website: www.dvbbank.com.

Additional features:

Document: http://n.equitystory.com/c/fncls.ssp?u=QBFKIDMEQR
Document title: Nine-month results 2014_income statement and statement
of financial position


13.11.2014 Dissemination of a Corporate News, transmitted by DGAP – a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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