HSH Nordbank AG continues on course - satisfactory 9-month result
Hamburg/Kiel, November 27, 2003 - In the first nine months of 2003, HSH Nordbank maintained its position in a still difficult market environment. The merger of Hamburgische Landesbank and LB Kiel, HSH Nordbank today presented its figures for the first 9 months of 2003. The operating profit before risk provisioning and evaluations rose by 5.8% compared to three quarters of the previous year’s result to 856.8 million Euro. The result after risk provisioning showed an even higher improvement, by 16.1% to 512.6 million Euro. Total assets, on the other hand, were down slightly at 171.0 billion Euro (minus 3.3%): Group assets fell by 2.0% to 177.9 billion Euro. The decline here was principally due to the significantly weaker US dollar. The same applied to the loan portfolio, which fell by 1.1% to 212.5 billion Euro.
„HSH Nordbank achieved a satisfactory result in the first nine months of 2003”, said Alexander Stuhlmann, Chairman of the Board, at today’s press conference in Hamburg. “This strengthens our conviction that we are following the right course to have HSH Nordbank ready for the capital market once maintenance obligation and guarantee obligation are abolished in 2005.”
Operating income increases
In the first three quarters of 2003, operating income showed a 4.1% rise from the proportional result for last year to 1,330.2 million Euro.
Once again, the main source of income was net interest income; but the weak US dollar meant that this only rose slightly from last year's proportional level – by 0.9% or nearly 10 million Euro to 1,075.5 million Euro. The moderate expansion of business and better margins on new business had a positive effect, likewise a higher investment benefit deriving silent participations.
Net commission income was up from the previous year’s pro rata figure by 3.6% at 134.0 million Euro. Here it should be borne in mind that since July 2002 the income from securities transactions has been shown in the balance sheet of our transaction bank subsidiary PLUSBANK. Also, the Bank's own income from securities business declined. These two negative factors were more than compensated by a substantial increase in other service business.
At 52.8 million Euro, net trading income was the same as the corresponding figure for last year.
Other operating income in the first 9 months of 2003 rose by 38.3 million Euro to 67.9 million Euro. Here, however, it must be considered that this item was influenced to a significant degree, both in the year under review and in the previous year, by special factors.
Cost-income ratio improved to 35.6 %
The Bank’s administrative expenses went up slightly from last year's result – here, there was an increase of 1.3% to 473.4 million Euro. Of this figure, 225.3 million Euro was accounted for by personnel expenses (-1.1%) and 248.1 million Euro by operating expenses (+3.5%). As at September 30, 2003, HSH Nordbank had a workforce of 3,792 (31.12.2002: 4.014) in the Bank, while total Group staff was 4,596 (31.12.2002: 4.788). Operating expenses increased owing to the higher administration and consulting expenses caused by the merger.
Thanks to an over-proportional rise in income and only a slight increase in administration expenses, the Bank’s cost-income ratio for the first 9 months of 2003 reached the very good level of 35.6%. This is equivalent to an improvement of 1.0 percentage points.
The operating result before risk provisioning and evaluations amounted to 856.8 million Euro (3/4 of 2002 figure: 810.2 million Euro).
Risk provisioning down a little
After the first 9 months, the item risk provisioning at 344.2 million Euro is 6.6% lower than last year's corresponding figure at 344.2 million Euro. The previous year’s result was influenced by extraordinary income due to the sale of investments. Thus actual risk provisioning was significantly lower. “This reduction notwithstanding, risk provisioning is still at a high level by our standards”, said Stuhlmann.
The result after risk provisioning and evaluations rose by 16.1% to 512.6 million Euro.
Despite higher income tax payments (+13 million €) and higher partial profit transfer (+ 37 million Euro), net income was 13.0% higher at 181.7 million Euro than compared to three quarters of the previous year’s result (160.8 million Euro).
ROE improved
The return on equity (ROE) rose by 0.5% to 10.9% (Group: 11.8%) based on capital now 472 million Euro higher thanks to the successful capital measure Resparc II. The regulatory core capital on September 30, 2003, totalled 6.4 billion Euro, producing a core capital ratio of 6.6%.
Key figures of HSH Nordbank (Bank)
| HSH Nordbank (in € m) | 9/2003 | 3/4 2002 | Change over half the previous year's result | |
|---|---|---|---|---|
| Total assets* | 170,956 | 176,853 | -3.3 | |
| Business volume* | 214,168 | 215,676 | -0.7 | |
| Loan volume* | 212,467 | 214,852 | -1.1 | |
| Equity capital* | 6,242 | 5,770 | +8.2 | |
| TIER I capital* | 6,433 | 5,962 | +7.9 | |
| Operating income | 1,330.2 | 1,277.6 | +4.1 | |
| thereof net interest income | 1,075.5 | 1,065.8 | +0.9 | |
| thereof net commission income | 134.0 | 129.4 | +3.6 | |
| thereof net trading income | 52.8 | 52.9 | -0.1 | |
| thereof other operating income and expenses | 67.9 | 29.6 | +129.4 | |
| Administrative expenses | 473.4 | 467.4 | +1.3 | |
| thereof personnel expenses | 225.3 | 227.9 | -1.1 | |
| thereof operating expenses | 248.1 | 239.6 | +3.5 | |
| Operating profit before risk provisions and evaluations | 856.8 | 810.2 | +5.8 | |
| Risk provisions/evaluations | 344.2 | 368.5 | -6.6 | |
| Operating profit after risk provisions and evaluations | 512.6 | 441.7 | +16.1 | |
| Net income | 181.7 | 160.8 | +13.0 | |
| Staff* | 3,792 | 4,014 | -5.5 | |
| Cost-income ratio* | 35.6 % | 36.6 % | ||
| Return on equity* (RoE) | 10.9 % | 10.4 % | ||
| TIER I capital ratio* | 6.6 % | 6.3 % | ||
The information contained in this press release does not constitute an offer for the sale of any type of HSH Nordbank AG securities. Securities of HSH Nordbank AG may not be sold in the United States without registration pursuant to US securities legislation, unless such a sale takes place on the basis of relevant exceptional provisions.
This press information can contain forward-looking statements. These statements are based on our beliefs and assumptions, on information currently available to us which we consider reliable. Forward-looking statements include all statements which are not historical facts, including information concerning future growth prospects and future economic developments.
Such forward-looking statements are based on assumptions relating to future events and are subject to uncertainties, risks and other factors, a large number we cannot influence. Thus actual events can differ considerably from the forward-looking statements made. We make no warranty for the correctness or completeness of these statements or the actual occurrence of the statements made. Furthermore, we assume no obligation for updating the forward-looking statements after this information has been published.
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