- Result from normal operations increases by 10 %
- Significant rise in new commercial real estate business
- Cost-income ratio continues to improve
Deutsche Hypothekenbank improved its result from normal operations by 9.8 % to € 31.4 million in the first half of 2013 (2012: € 28.6 million). “Deutsche Hypo succeeded in enjoying a good start into 2013. We were able to keep our income on the high level of the previous year. At the same time, our cost discipline had a very positive impact on the results”, said Thomas S. Bürkle, Chairman of the Board of Managing Directors at Deutsche Hypo. “The improvement in earnings gives us a tailwind for the second half of 2013.”
New business in Germany expands significantly
The positive development of operating income has also been confirmed in this year: Net interest income, which leaped over € 200 million for the first time in the annual year 2012, already amounted to € 103.1 million in the first half of the year (2012: € 103.9 million). Furthermore, net commission income rose to € 4.6 million (2012: € 4.1 million).
At mid-year, Deutsche Hypo has been able to significantly expand its new business in commercial real estate finance. The new business volume (without prolongations) rose from this period in the previous year by just under € 400 million to € 1,665 million (2012: € 1,272 million). The rise is due to a significant increase in financing in Germany. Foreign new business volumes remained roughly steady at € 340 million (2012: € 361 million). For the full year 2013, Deutsche Hypo expects a new business volume of just under € 3 billion and an increase from the previous year when new business totalled € 2,513 million.
Administrative expenses fall by 6 %
Administrative expenses decreased by 6.3 % to € 35.4 million in the first half of 2013 (2012: € 37.8 million). The cost-income ratio fell to 34.1 % as a result (2012: 36.1 %). The positive developments on the cost side represent the first successful steps in the bank’s cost optimisation programme that was started last year.
After considering the allocation to the funds for general banking risks in the previous year, Deutsche Hypo’s risk result improved by 4.0 % or € 1.4 million in the first six months of 2013. The half-year figure totalled € -34.0 million (2012: € -35.4 million). The quality of the commercial real estate finance portfolio increased again when measured by indicators such as the average rating of the exposures.
The funding volume totalled € 2,184 million in the first half of 2013 (2012: € 1,817 million) and thus rose by 20.2 %. By far the largest share was attributable to Mortgage Pfandbriefe. Two benchmark issues stood out in particular, each with a volume of € 500 million, and with a high demand from German and international investors.
Outlook for the total year 2013
Bürkle expects that Deutsche Hypo’s positive performance will also continue in the second half of 2013: “We have further solidified our market position in commercial real estate finance and have a well-filled deal pipeline in Germany and abroad. At present there are many signs that our core market of Germany and our European target markets of the UK, France, Benelux and Poland will continue to be stable. We are therefore confident that we will be able to maintain our good position on the market and even improve our solid 2012 earnings this year.”