• Consolidated profit for the period increases to €52.6 million
• Net interest income improves by 14% 
• Net fee and commission income more than doubled
• Growth recorded in Central and Eastern Europe, Asia and the USA
• Significant expansion of savings banks business

Mainz, 1 September 2008 – In the first half of 2008, Westdeutsche ImmobilienBank AG (WestImmo) generated consolidated profit for the period of €52.6 million. This exceeded the figure for the prior-year period by 26% (previous year: €41.6 million). Net interest income rose sharply to €87.5 million (previous year: €76.6 million). A rise in agent and arranger activities in the syndication business led to net fee and commission income more than doubling to €18.8 million (previous year: €9.1 million).

Net trading income increased by €8.8 million to €9.2 million due to remeasurement gains on financial instruments. Net income from non-current financial assets also developed positively and amounted to €1.5 million, after €-5.8 million in the previous year.

Profit before tax of €63.5 million exceeded forecasts. However, this did not quite match the previous year's figure of €76.1 million, which contained the reversal of allowances for losses on loans and advances. At €-10 million (previous year: €+28.7 million), the allowance for losses on loans and advances in the first half of 2008 was at the planned level with. Like all other market players, WestImmo has been impacted by the financial market crisis, which led to an overall change in the financial market environment. The Bank was not affected by the subprime market as it had neither direct nor indirect investments in this segment.

Peter Knopp, Chairman of the Managing Board of WestImmo: "Although the situation on the financial and capital markets is still very tight and there is no end to this difficult period in sight, WestImmo is continuing its positive development. Our concentration on our core competencies, the expansion of our market activities in selected target markets and the strict optimisation of our processes have proven their worth more than ever in this context."

Administrative expenses increased by 8% to €40.9 million (previous year: €38 million) due to the expansion of the Bank's international business and the implementation of various projects. However, revenue increased substantially faster, so that the cost-income ratio improved from 38.9% to 35.7%.

The return on equity before taxes stood at 13.9% (previous year: 17.1%), while the figure after taxes improved to 11.4% (previous year: 11.2%). Total assets amounted to €23.8 billion, on a par with the prior-year level.

New business

The global economic slowdown is also having a significant impact on the real estate markets. WestImmo has adjusted to the changed market environment and responded to the situation by pursuing a conservative risk policy.

The Bank committed €3.3 billion in new business (previous year: €3.8 billion) despite the deterioration in the financial market environment. 68% (€2.2 billion) of this relates to the commercial real estate business abroad, repeating the high percentage of the previous year in the first six months of 2008. The Bank recorded growth in Central and Eastern Europe, Japan and the USA in particular. The weak markets in Great Britain, Spain and France dampened the Bank's activities in these countries. National commercial financing fell to €0.8 billion (previous year: €1.2 billion). Private residential financing in Germany was more or less constant year-on-year at €0.3 billion.

"WestImmo is focused world-wide on prime commercial real estate in good locations. We picked the perfect time to enter the markets in Central and Eastern Europe and Asia. This international presence on the ground is paying off. Our highly diversified lending business means we are able to react quickly and exploit real estate cycles. To do this, we also improved our internal processes for managing new business and enhanced our measures to optimise our loan portfolio", said Peter Knopp.

WestImmo successfully structured consortium finance deals and placed them on the capital markets in the first half of 2008 using appropriate exit channels.

Significant expansion of savings banks business

"Cooperation with the savings banks was also encouraging", emphasised Peter Knopp. New business with these institutions almost doubled in the first half of the year to €130 million. Business brokered for the savings banks was in line with the prior-year period with €85 million. The measures launched in the first half of 2008 to expand the refinancing offering and enable the saving banks to participate in WestImmo loan transactions as part of package syndications, attracted considerable attention. They are already producing results that will be realised in the second half of 2008.

Outlook

Peter Knopp: "Forecasts for 2008 remain difficult due to the market situation. However, although the ongoing effects of the financial market crisis on the economy of the individual countries cannot be foreseen, we expect WestImmo’s performance to be in line with forecasts at the end of the year. The Bank is confident of meeting its target for full-year 2008."