2014 Interim Statement – Nine-Month Results
Transcription
2014 Interim Statement – Nine-Month Results
Interim Statement – Nine-Month Results 2014 Substantial events and deals DVB Bank posts stable results for the first nine months of 2014 DVB continued to provide financing solutions and advisory services to its clients in the international transport sector during the first nine months of 2014, but results fell short of the previous year: consolidated net income before taxes was down 24.5%, to €72.6 million (9m 2013: €96.2 million). The strong fluctuation in net income from financial instruments in accordance with IAS 39 was a key factor contributing to this decline. The flooding of international capital markets with liquidity by central banks significantly burdened DVB‘s results, in two ways: firstly, there was a marked increase in competition between banks and other providers of capital in transport finance. Secondly, market liquidity led clients to repay loans early, to a significant and unexpected extent. It was not possible to fully replace these repayments by additional new business, or only with a time lag. These repayments increased the Bank‘s liquidity reserves and burdened net interest income. On a positive note, DVB‘s risk situation appears to be stabilising: net allowance for credit losses was down by a significant 36.7%. Nonetheless, DVB envisages allowance for credit losses for the full year 2014 to be in line with the level of two previous years, as planned. The individual items developed as follows: At €217.3 million, total income for the first nine months of 2014 (comprising net interest income after allowance for credit losses, net fee and commission income, results from investments accounted for using the equity method, and net other operating income/expenses), was up 7.1% year-on-year (9m 2013: €202.8 million). DVB concluded a total of 122 new transactions during the period ending 30 September 2014, with an aggregate volume of €4.0 billion (9m 2013: 101 transactions with a volume of €2.7 billion). Net allowance for credit losses totalled €28.5 million (9m 2013: €45.0 million). Specifically, new allowances recognised for credit losses amounted to €66.9 million (of which €46.2 million was accounted for by Shipping Finance), whilst €41.6 million was reversed (Shipping Finance: €29.2 million). Net interest income after allowance for credit losses of €134.0 million was up slightly year-on-year (9m 2013: €129.0 million). Accordingly, total allowance for credit losses (comprising specific allowance for credit losses, portfolio-based allowances for credit losses, and provisions) rose to €223.0 million, up 9.4% from year-end 2013 (€203.8 million). Net fee and commission income of €73.2 million (9m 2013: €79.0 million) was down 7.3% on the previous year‘s figure; the net figure primarily includes fees and commissions from new Transport Finance business, and asset management and advisory fees. Consolidated net income before taxes, as at 30 September € mn 150 125 119.1 106.4 104.3 100 96.2 75 72.6 50 25 0 2010 2011 2012 2013 2014 DVB Bank Group | Interim Management Statement – Nine-Month Results 2014 2 Substantial events and deals Net other operating income/expenses rose from €–3.8 million to €2.2 million. atility levels on foreign exchange and interest rate markets. During the first nine months of 2014, the net figure was negative, at €–8.2 million, after a positive balance of €19.1 million during the same period of 2013. General administrative expenses increased by 8.6%, to €136.5 million. Due to the increasing regulatory requirements, which DVB has to comply with to the same extent as large financial institutions, the Bank hired new staff members to reinforce its service units. Together with its LogPay Financial Services subsidiary, DVB employed a total of 577 staff as at 30 September 2014, an increase of 18 compared to the end of the first nine months of 2013. Hence, staff expenses rose by 3.4%, to €81.1 million, whilst non-staff expenses (including depreciation, amortisation, impairment and write-ups) were up by €8.1 million to €55.4 million. At €72.6 million, consolidated net income before taxes was 24.5% lower than in the same period of 2013 (9m 2013: €96.2 million), whilst consolidated net income after taxes was down 29.0%, to €58.1 million (9m 2013: €81.8 million). Compared to the 2013 year-end, DVB‘s total assets as at 30 September 2014 increased marginally, from €23.4 billion to €23.5 billion, reflecting the renewed strength of the US dollar. DVB‘s nominal volume of customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, irrevocable loan commitments, and derivatives) totalled €22.0 billion in euro terms (+5.8%). In US dollar terms, customer lending declined to US$27.7 billion, down 3.1%, in spite of higher new business. Consolidated net income before IAS 39 and taxes improved by 4.8%, from €77.1 million in the previous year to €80.8 million. The net result from financial instruments in accordance with IAS 39 (comprising the trading result, the hedge result, the result from the application of the fair value option, the result from derivatives entered into without intention to trade, and the result from investment securities) continued to reflect the vol- The distribution of customer lending (in euro terms) amongst the Bank‘s business divisions is shown in the following graph: Development of customer lending € bn US$ bn 30 Sep 2014 31 Dec 2013 % 30 Sep 2014 31 Dec 2013 % Shipping Finance 9.7 9.2 5.4 12.2 12.7 –3.9 Aviation Finance 6.7 6.4 4.7 8.4 8.9 –5.6 Offshore Finance 2.1 2.0 5.0 2.6 2.8 –7.1 Land Transport Finance 1.9 1.6 18.8 2.4 2.2 9.1 Investment Management 0.5 0.5 – 0.7 0.6 16.7 ITF Suisse 0.9 0.8 12.5 1.1 1.1 – Business no longer in line with DVB's strategy 0.2 0.3 –33.3 0.3 0.3 – 22.0 20.8 5.8 27.7 28.6 –3.1 Total Distribution of customer lending by business division, as at 30 September 2014 Shipping Finance 44.1% (–0.2 pp) Aviation Finance 30.5% (–0.3 pp) Offshore Finance 9.5% (–0.1 pp) Land Transport Finance 8.6% (+0.9 pp) ITF Suisse 4.1% (+0.3 pp) Investment Management 2.3% (–0.1 pp) Business no longer in line with the Bank‘s strategy 0.9% (–0.5 pp) DVB Bank Group | Interim Management Statement – Nine-Month Results 2014 3 Substantial events and deals DVB‘s key financial indicators developed as follows: Earnings forecast Return on equity before taxes stood at 7.6% (9m 2013: 10.6%). The cost/income ratio was up by 10.3 percentage points, to 57.4% (9m 2013: 47.1%). The market environment remains difficult in some areas of maritime shipping. Despite the persistent negative business framework in certain market segments, the Bank expects to originate high-volume new business during the fourth quarter, in order to reduce its high liquidity stock. Considering these factors, DVB anticipates satisfactory full-year results – which will, however, not quite match the previous year‘s level. DVB has calculated its capital ratios in accordance with the Basel III framework since the beginning of 2014. As at 30 September 2014 both the tier 1 ratio (18.0%) and the total capital ratio (21.1%) were at a high level. Frankfurt/Main, November 2014 THE BOARD OF MANAGING DIRECTORS DVB Bank Group | Interim Management Statement – Nine-Month Results 2014 4 Condensed income statement (IFRS) € mn 1 Jan 2014 – 30 Sep 2014 1 Jan 2013 – 30 Sep 2013 % Net interest income 162.5 174.0 –6.6 Allowance for credit losses –28.5 –45.0 –36.7 Net interest income after allowance for credit losses 134.0 129.0 3.9 73.2 79.0 –7.3 Net fee and commission income Results from investments in companies accounted for using the equity method General administrative expenses Net other operating income/expenses 7.9 –1.4 – –136.5 –125.7 8.6 2.2 –3.8 – Consolidated net income before IAS 39 and taxes 80.8 77.1 4.8 Net result from financial instruments in accordance with IAS 39 –8.2 19.1 – Consolidated net income before taxes 72.6 96.2 –24.5 –14.5 –14.4 0.7 58.1 81.8 –29.0 Income taxes Consolidated net income thereof: consolidated net income attributable to non-controlling interests 0.0 0.1 – 58.1 81.7 28.9 1 Jan 2014 – 30 Sep 2014 1 Jan 2013 – 30 Sep 2013 % Basic earnings per share 1.27 1.77 –28.2 Diluted earnings per share 1.27 1.77 –28.2 1 Jan 2014 – 30 Sep 2014 1 Jan 2013 – 30 Sep 2013 pp thereof: consolidated net income attributable to shareholders of DVB Bank SE Earnings per share (€) Key ratios in accordance with IFRS (%) Cost/income ratio 57.4 47.1 10.3 Return on equity before taxes 7.6 10.6 –3.0 Return on equity after taxes 6.1 9.0 –2.9 DVB Bank Group | Interim Management Statement – Nine-Month Results 2014 5 Statement of financial position (IFRS) Assets (€ mn) Cash and balances with the central bank Loans and advances to banks Loans and advances to customers Allowance for credit losses Positive fair values of derivative hedging instruments Trading assets Investment securities 30 Sep 2014 31 Dec 2013 % –93.6 131.6 2,040.5 1,840.4 212.3 – 19,932.5 18,896.9 5.5 –222.9 –203.7 9.4 392.5 590.0 –33.5 82.0 345.0 –76.2 335.8 496.5 –32.4 Investments in companies accounted for using the equity method 283.3 226.6 25.0 Intangible assets 100.8 101.4 –0.6 Property and equipment 464.7 459.2 1.2 66.9 49.3 35.7 Income tax assets Other assets 69.2 149.1 –53.6 23,476.8 23,363.1 0.5 30 Sep 2014 31 Dec 2013 % Deposits from other banks 2,738.0 3,783.6 –27.6 Deposits from customers 6,874.6 6,113.6 12.4 Securitised liabilities 11,123.4 11,134.5 –0.1 –26.2 Total Liabilities and equity (€ mn) Negative fair values of derivative hedging instruments 211.5 286.7 Trading liabilities 460.1 107.1 – 55.6 62.5 –11.0 Provisions Income tax liabilities 37.3 32.0 16.6 Other liabilities 77.6 80.5 –3.6 32.6 Subordinated liabilities 482.1 363.7 1,416.6 1,398.9 1.3 Issued share capital 116.6 116.7 –0.1 Capital reserve 320.8 321.3 –0.2 Retained earnings 916.6 918.7 –0.2 82.4 82.4 – 7.6 7.7 –1.3 Equity thereof: fund for general banking risks Revaluation reserve Reserve from cash flow hedges –11.2 6.1 – Reserve from net investment hedges –10.2 2.4 – Currency translation reserve 18.1 –2.9 – Distributable profit 58.1 27.9 – 0.2 1.0 –80.0 23,476.8 23,363.1 0.5 30 Sep 2014 31 Dec 2013 % 22.0 20.8 5.8 30 Sep 2014 31 Dec 2013 pp Tier 1 ratio 18.0 n/a – Total capital ratio 21.1 n/a – Non-controlling interests Total Customer lending volume (€ bn) Nominal customer lending volume Capital ratios – Basel III (%) DVB Bank Group | Interim Management Statement – Nine-Month Results 2014 6 Imprint DVB Bank SE Platz der Republik 6 60325 Frankfurt/Main, Germany [email protected] www.dvbbank.com Elisabeth Winter Head of Group Corporate Communications Phone +49 69 9750 4329 [email protected] Scanning this QR code with your smartphone will forward you directly to DVB’s website.