DVB posts consolidated net income before IAS 39 and taxes of €157.2 million - a 9.7% increase

DVB increased total income before allowance for credit losses by 5.1%, to €411.9 million (previous year: €391.9 million). Total income after allowance for credit losses amounted to €341.2 million, which corresponds to a rise of 2.6%.

Wolfgang F. Driese, CEO and Chairman of the Board of Managing Directors, assessed DVB’s consolidated results:

“Once again, DVB posted a very good result, in testing times – a confirmation of our business model, our market position, and the expertise of our staff.

85% of the financings on our books are performing satisfactorily. We expect asset values and charter rates in those shipping segments particularly badly affected – dry bulk carriers, container carriers and crude oil tankers – to bottom out in 2013. This leads us to expect better conditions for 2014, the extent of which will depend upon global economic momentum.

And even though the business environment during 2013 will be at least as difficult as in the previous year, we are planning for consolidated net income (before IAS 39 and taxes) to be in line with the results posted for 2012. From our point of view, this would once again constitute a successful performance."

DVB concluded 158 new Transport Finance transactions with an aggregate volume of €4.6 billion and an improved average interest margin of 352 basis points (2011: 184 new transactions, €5.6 billion, 313 basis points).

Net interest income after allowance for credit losses declined by 20.0%, to €159.3 million (2011: €199.1 million) in spite of successful new business origination; the decline was attributable to higher risk costs. Allowance for credit losses amounted to €–70.7 million (2011: €–59.2 million).

Net fee and commission income, which largely consists of commissions from lending business, asset management and advisory services, grew by 12.5%, from €116.2 million to a record high of €130.7 million.

Net other operating income/expenses increased from €17.3 million to €42.7 million. In June 2012, DVB sold a 60% stake in TES Holdings Ltd, the British aero engine specialist, to two renowned Japanese investors. The two new partners – Mitsubishi Corporation, and Development Bank of Japan, Inc. – acquired 35 % and 25 , respectively. DVB remains the largest shareholder, with a share of 40.

General administrative expenses were down 2.9%, to €184.0 million, mainly due to the deconsolidation of TES. Staff expenses of €101.5 million were down 6.9% year-on-year (2011: €109.0 million), whilst at €77.9 million, non-staff expenses were up 3.0% (2011: €75.6 million). Consolidated net income before IAS 39 and taxes rose by 9.7%, from €143.3 million to €157.2 million.

Burdened by still volatile net result from financial instruments in accordance with IAS 39 (down from €4.4 million to €–15.8 million), consolidated net income before taxes decreased by 4.3% to €141.4 million (2011: €147.7 million). Consolidated net income after taxes totalled €124.9 million, an increase of 13.1% (2011: €110.4 million).

The key strategic indicators reflected the successful development of business: the return on equity before taxes was 12.9% (previous year: 14.0%), and the cost/income ratio was improved to 46.5% (previous year: 47.8%).

DVB’s total assets rose by 8.2%, from €22.0 billion to €23.8 billion. DVB’s nominal customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, irrevocable loan commitments, and derivatives) increased by 2.3%, to €22.2 billion (previous year: €21.7 billion).

DVB’s capital ratios, determined in accordance with Basel II (following the confirmation of profits in the financial statements) developed as follows: the tier 1 ratio was 20.3% (2011: 19.7%) and the total capital ratio 23.6% (2011: 21.8%).

The Board of Managing Directors and the Supervisory Board will propose to DVB Bank SE’s Annual General Meeting, which will be held on 13 June 2013, to pay an unchanged dividend of €0.60 per notional no-par value share. In this way, DVB will provide its shareholders with an adequate dividend yield of 2.47%, whilst further strengthening the Bank’s liable capital.