DVB Group publishes results for the period ending on 30 September 2013: Consolidated net income before taxes of €96.2 million (down 7.8%), due to a non-recurring effect in the previous year

Frankfurt/Main, 14 November 2013 – DVB Bank SE (ISIN: DE0008045501) today published its results for the first nine months of 2013. DVB continued to successfully provide financing solutions and advisory services to its clients in the international transport sector during the first nine months of 2013, despite the prevailing difficult situation in individual submarkets of international maritime shipping. Consolidated net income before taxes of €96.2 million was 7.8% lower than in the previous year (9m 2012: €104.3 million). The year-on-year change was due to a non-recurring effect in the previous year; namely, the sale of a stake in British aero engine specialist TES Holdings Ltd.

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 2013 and provided an outlook on business developments during the remainder of the business year:

”Even though we see signs of vessel values and charter rates bottoming out in the troubled shipping sectors, the shipping finance business remains challenging in 2013, and will continue to do so into next year.

Against this background, we are satisfied with the Bank’s results as at 30 September 2013. Excluding last year’s non-recurring effect, we anticipate being able to once again present a solid set of full-year results.”

DVB concluded a total of 101 new transactions during the period ending 30 September 2013, with an aggregate volume of €2.7 billion (9m 2012: 93 transactions with a volume of €2.8 billion). Net interest income decreased by 6.0% to €174.0 million.

Net allowance for credit losses amounted to €45.0 million (9m 2012: €53.3 million). Specifically, new allowances recognised for credit losses amounted to €83.9 million (of which €65.3 million was accounted for by Shipping Finance), whilst €41.9 million was reversed (Shipping Finance: €30.0 million). DVB continues to anticipate allowance for credit losses for the full year 2013 to approximately remain in line with the previous year’s figure of €70.7 million. Net interest income after allowance for credit losses totalled €129.0 million (9m 2012: €131.9 million).

Accordingly, total allowance for credit losses (comprising specific allowance for credit losses, portfolio-based allowances for credit losses, and provisions) rose to €176.7 million, up 18.2% from year-end 2012 (€149.5 million).

Net fee and commission income of €79.0 million was down 13.0% on the previous year’s high level (9m 2012: €90.8 million). The net figure primarily includes fees and commissions from new Transport Finance business, and asset management and advisory fees.

Net other operating income/expenses reduced from €42.3 million to €-3.8 million. The significant decline was due to a non-recurring effect in the previous year: the net figure for the first half of 2012 included proceeds from the sale of a stake in British aero engine specialist TES Holdings Ltd.

General administrative expenses decreased by 8.3%, to €125.7 million. Staff expenses rose slightly, by 3.3%, to €78.4 million, whereas DVB lowered non-staff expenses (including depreciation, amortisation and write-downs) by €13.9 million, to €47.3 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 2013 the net figure was positive, at €19.1 million, after a negative balance of €21.3 million during the same period of 2012.

At €96.2 million, consolidated net income before taxes was 7.8% lower than in the same period of 2012 (9m 2012: €104.3 million), due to the non-recurring effect explained above, whilst consolidated net income after taxes was down 14.6%, to €81.8 million (9m 2012: €95.8 million).

DVB’s total assets decreased by 0.8%, from €23.8 billion to €23.6 billion. DVB’s nominal volume of customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, irrevocable loan commitments, and derivatives) totalled €20.8 billion in euro terms. In US dollar terms, it amounted to US$28.0 billion.

DVB’s key financial indicators developed as follows:

Return on equity before taxes stood at 10.6% (9m 2012: 12.7%). The cost/income ratio was up by 0.6 percentage points, to 47.1% (9m 2012: 46.5%). Calculated in accordance with Basel II, the tier 1 ratio declined slightly, by 0.6 percentage points, to 19.7% (31 December 2012: 20.3%).

At the same time, the total capital ratio was down by 1.7 percentage points, to 21.9% (31 December 2012: 23.6%).