The FINANCIAL — In the first half of 2011, Deutsche Postbank AG continued the strong development in its customer business that it enjoyed in the previous year.
The Bank recorded healthy growth in terms of its operating result and net interest income in particular. Business with private and corporate clients constitutes Postbank’s main earnings component. At €579 million, earnings before taxes in the Retail Banking segment were up more than 39% on the previous year. Meanwhile, the Bank generated €200 million in the Corporate Banking segment, 38% more than in the first six months of 2010. This development was driven in particular by the significant reduction in the allowance for losses on loans and advances for commercial real estate finance accompanied by the strong performance in terms of income from customer business.
Despite impairments on Greek bonds in the amount of €186 million in the second quarter and – mainly staff driven – further extraordinary expenses of €96 million in the first quarter, the Bonn-based bank generated pre-tax earnings of €144 million in the first half of 2011 (previous year: €225 million). Adjusted for extraordinary factors, the Bank’s operating result amounted to €463 million, a good 10% higher than in the previous year (€420 million).
This impressive development serves to confirm the approach adopted by the Bank in 2009 with its “Postbank4Future” strategy program. “We are focusing on our strengths and reaching our customers with simple and affordable products that cover all the main demand scenarios. This allowed us to reinforce our leading market position in the area of consumer banking in the first half of the year – and even expand it in key areas,” commented Postbank CEO Stefan Jütte. In particular, the Bank recorded significant year-on-year growth and increased its market share in new business involving private mortgage lending and home savings.
The Bank also made good progress in the reduction of capital market-specific holdings and risks, cutting its investment securities by 14% or a good €8 billion in the first half of 2011. The structured credit portfolio has been streamlined to an even greater extent since the end of 2010, falling by 35% to €2.4 billion on the back of active management. One encouraging development is the fact that the negative impact on earnings as a result of this portfolio has now been essentially eliminated. This was a key factor in the substantial rise in the Tier 1 capital ratio, which improved to 9.8% as of June 30, 2011, up 1.7 percentage points as against year-end 2010. This meant that the Bank achieved its target of a Tier 1 capital ratio of 9.5% by the end of 2012 considerably earlier than planned.
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