Net income up 55 per cent / equity ratio of the real estate bank rises to 15.5 per cent
Mainz, 2 September 2013. In the 1st half of 2013 Westdeutsche ImmobilienBank AG (WestImmo) improved its results from ordinary activities by 55 per cent and recorded pre-tax net income of €19.7m compared with €12.7m in the same period last year. The Managing Board of the real estate bank expressed its satisfaction with the figures, especially given that WestImmo had posted the sharp increase in net income to 30 June 2013 despite a drop in interest-bearing portfolios. “This shows that WestImmo is at heart a healthy bank that can continue to achieve positive results despite the suspension of new business enforced on it”, said CEO Claus-Jürgen Cohausz.
The decline in the loan book stems from the order given by the European Commission to restructure the former WestLB group, which has prohibited WestImmo from taking on any new business since 1 July 2012. Even so, net interest income remained almost stable at €70.8m (previous year: €72.2m). By contrast, general administrative expenses fell to €31.3m (previous year: €33.6m), largely due to the reduced headcount. Risk provisions fell by around one third to €23.3m (previous year: €34.9m).
The smaller loan book and the sale of the subsidiary WIB Japan Real Estate Finance K.K. to Erste Abwicklungsanstalt (EAA) had a positive effect on the equity ratio of the real estate bank, which rose to 15.5 per cent on 30 June 2013. The balance sheet total dropped 19.1 per cent to €15.2bn in the first half, essentially on the back of the fall in credit and loan portfolios. Following the sale of the last significant shareholding, the bank will in future be presenting accounts conforming to the German Commercial Code (HGB) alone and will no longer publish consolidated financial statements to IFRS requirements.
The business activities of the bank at present are determined by the need to control the risks and earnings potential of the loan portfolio and to comply with all regulatory requirements on a pfandbrief bank. Although WestImmo is not taking on any new business, it continues to offer renewals to its customers as part of its active cover pool management. In the 1st half of 2013 the bank renewed expiring loans to the tune of some €0.5bn (31.12.2012: €1.2bn).
Outlook for the 2nd half of 2013
In view of the declining loan book, WestImmo expects to see income in the 2nd half of 2013 fall from the figure for the 1st half and risk provisions remain at the previous year’s level. The implementation of regulatory requirements (introduction of Basel III, new MaRisk and SEPA requirements) will lead to high one-off expenses, which will have a negative impact on administrative expenses in the 2nd half of 2013. Nevertheless, the Managing Board anticipates an at least balanced result for 2013 as a whole.
“We welcome the efforts of our owner, the EAA, to sell WestImmo as an entity in order to enable the business to be continued”, Cohausz said when presenting the half-year results. WestImmo was therefore doing all it could to maintain the attractiveness of the bank and - insofar as possible - to remain available to its customers as a reliable and competent financing partner.
Table: Key P&L ratios (HGB)
Please direct any queries to: Frank Heid. Phone 06131 9280-7386
WestImmo is a bank specialising in the financing of commercial real estate in Germany and abroad. In Germany the bank has offices in Münster and Düsseldorf as well as its head office in Mainz. WestImmo is a fully owned subsidiary of Erste Abwicklungsanstalt AöR (EAA), based in Düsseldorf. The latter acquired the shares in WestImmo-Anteile from Portigon AG (WestLB AG until July 2012) in August 2012.