02.05.2006
DVB achieves outstanding results in 2005
The consolidated financial statements of DVB Bank AG - prepared in accordance with International Financial Reporting Standards (IFRS) for the first time - reflect a successful business year for DVB: at €54.3 million, net profit posted a 60.7% increased compared to the previous year´s figure (2004: €33.8 million), which had already been an excellent result.
A proposal will be made to the Annual General Meeting to increase the dividend by €0.25, to €2.25 per share (2004: €2.00 per share). This represents a dividend yield of 1.24% based on the year-end share price of €182.00.
Mr. Wolfgang F. Driese, Chairman and CEO of the Board of Managing Directors of DVB Bank AG, summarised the Bank's results: "This outstanding result is a resounding vindication of DVB Bank's unique competitive position, which we leverage to the benefit of our clients. One factor underlying the Bank's strength is new business generated in: despite growing competition, DVB has taken a leading role in more than 70% of tailor-made structured financing transactions in Transport Finance. The impressive earnings growth seen in 2005, two years after the Bank's successful strategic realignment, clearly demonstrates the profit potential we have explored in the international transport finance markets. Asset lending remains our core business: extending long-term collateralised finance to the transport sector. In line with our business concept, we will continue to add financial services to our product range, to offer our transport finance clients the convenience of "one-stop shopping". Having explored further targeted business segments - with our Aviation Financial Consultancy and Securitisation teams - we also expanded the range of specialist asset lending desks, with a Cruise Finance Unit established in 2005. Moreover, we established a Floating Production Group, specialising in the financing of floating offshore production systems, which commenced operations on the 1st of January this year. Looking ahead, we are determined to continue "Setting the Pace in Transport Finance", with further new financial products. The capital increase conducted last year, together with the upgrading of our long-term ratings by Standard and Poor's in August 2005 and Moody's Investor Services in February of this year, further support our goal to become the top provider of transport finance worldwide."
Individual operating result items developed as follows: net interest income excluding loan losses totalled €113.3 million, up 18.6% on the previous year´s figure of €95.5 million. The interest margins on transactions concluded by DVB remained at a high level during 2005. Whilst the average margin for new ship financings was down slightly, to 139 basis points (2004: 144 bp), the average margin achieved on new aviation financings was boosted once again, to 216 basis points (2004: 206 bp). Net impairment losses on loans and advances totalled €14.9 million (2004: €25.5 million).
Net fee and commission income was up by 34.1%, from €45.1 million to €60.5 million. This includes loan commissions from syndicated Transport Finance exposures, as well as advisory fees generated by the Banks Corporate Finance activities.
Following an extended cost-cutting phase, administrative expenses rose again slightly during 2005. This predominantly reflected investments in new business segments, together with the related expansion in staff capacity. Additional provisions for variable bonus payments also contributed to the increase; these were required, given the compensation structure for exceeding earnings targets. General administrative expenditure was up by 17.6%, from €88.7 million to €104.3 million. Staff expenses increased by 20.2%, from €46.0 million to €55.3 million, whilst other administrative expenses were up 18.5%, from €37.9 million to €44.9 million.
DVB Bank AG reported total assets of €10.9 billion (2004: €9.3 billion). DVB´s nominal customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, and irrevocable loan commitments) totalled €10.78 billion. The 32.1% increase compared to the previous year´s figure of €8.16 billion was due to increased new business, but also a result of the stronger US dollar. The euro/US dollar exchange rate is relevant, given that almost three-quarters of the Bank´s overall portfolio is denominated in US dollars - 80.4% of the Shipping portfolio, and as much as 95.9% of the Aviation portfolio.
With €5.73 billion (2004: €4.29 billion), Shipping Finance accounted for the largest share (53.2%) of customer lending. Customer lending in Aviation Finance totalled €2.99 billion (2004: €2.20 billion), accounting for 27.7% of the overall portfolio. At €0.96 billion (2004: €0.90 billion), Land Transport accounted for a portfolio share of 8.9%, whilst Transport Infrastructure reached a share of 5.9%, having increased customer lending to €0.64 billion (2004: €0.52 billion). The Bank has consistently reduced its non-transport finance exposure since October 2000, within the scope of the D-Marketing unit, to a low level of residual business. This was further reduced, from €0.25 billion to €0.19 billion, during the period under review.
The core capital ratio remained stable, at 6.8% (2004: 6.7%), whilst the total capital ratio decreased slightly, to 10.2% (2004: 10.7%).
The first-time preparation of consolidated financial statements in accordance with IFRS resulted in material measurement differences compared to generally accepted accounting principles under the German Commercial Code, affecting the management indicators return on equity (before taxes) and cost/income ratio. According to IFRS, return on equity (before taxes) was 15.9% (2004: 12.7% - adjusted to IFRS), whilst the cost/income ratio increased slightly, to 58.7% (2004: 56.8% - adjusted to IFRS). In contrast, when applying German GAAP, both indicators developed in line with projections (and the Bank´s strategy) with RoE up 1.4 percentage points to 17.1%, and thus clearly approaching the long-term target level of 20%. The cost/income ratio under German GAAP improved by 4.2 percentage points, to 53.6%, also getting progressively closer to the long-term 50% target level.
Note to Editors:
DVB Bank AG, based in Frankfurt/Main, is an international advisory bank and finance house that specialises in the global transport market. DVB offers integrated financing solutions and advisory services in respect of Shipping, Aviation, Land Transport, and Transport Infrastructure. The Bank operates out of offices in Frankfurt/Main, Hamburg, London, New York, Rotterdam, Hong Kong, Singapore, Tokyo, Bergen, Piraeus, and Curaçao. DVB Bank AG is listed on the Frankfurt Stock Exchange (ISIN: DE 0008045501).
Contact:
Prof. Dr. Borislav Bjelicic, Phone +49 69 9750-4390, Fax +49 69 9750-4333, DVB Bank Aktiengesellschaft, Corporate Communications, Friedrich-Ebert-Anlage 2-14, 60325 Frankfurt/Main, Germany, borislav.bjelicic@dvbbank.com, www.dvbbank.com
A proposal will be made to the Annual General Meeting to increase the dividend by €0.25, to €2.25 per share (2004: €2.00 per share). This represents a dividend yield of 1.24% based on the year-end share price of €182.00.
Mr. Wolfgang F. Driese, Chairman and CEO of the Board of Managing Directors of DVB Bank AG, summarised the Bank's results: "This outstanding result is a resounding vindication of DVB Bank's unique competitive position, which we leverage to the benefit of our clients. One factor underlying the Bank's strength is new business generated in: despite growing competition, DVB has taken a leading role in more than 70% of tailor-made structured financing transactions in Transport Finance. The impressive earnings growth seen in 2005, two years after the Bank's successful strategic realignment, clearly demonstrates the profit potential we have explored in the international transport finance markets. Asset lending remains our core business: extending long-term collateralised finance to the transport sector. In line with our business concept, we will continue to add financial services to our product range, to offer our transport finance clients the convenience of "one-stop shopping". Having explored further targeted business segments - with our Aviation Financial Consultancy and Securitisation teams - we also expanded the range of specialist asset lending desks, with a Cruise Finance Unit established in 2005. Moreover, we established a Floating Production Group, specialising in the financing of floating offshore production systems, which commenced operations on the 1st of January this year. Looking ahead, we are determined to continue "Setting the Pace in Transport Finance", with further new financial products. The capital increase conducted last year, together with the upgrading of our long-term ratings by Standard and Poor's in August 2005 and Moody's Investor Services in February of this year, further support our goal to become the top provider of transport finance worldwide."
Individual operating result items developed as follows: net interest income excluding loan losses totalled €113.3 million, up 18.6% on the previous year´s figure of €95.5 million. The interest margins on transactions concluded by DVB remained at a high level during 2005. Whilst the average margin for new ship financings was down slightly, to 139 basis points (2004: 144 bp), the average margin achieved on new aviation financings was boosted once again, to 216 basis points (2004: 206 bp). Net impairment losses on loans and advances totalled €14.9 million (2004: €25.5 million).
Net fee and commission income was up by 34.1%, from €45.1 million to €60.5 million. This includes loan commissions from syndicated Transport Finance exposures, as well as advisory fees generated by the Banks Corporate Finance activities.
Following an extended cost-cutting phase, administrative expenses rose again slightly during 2005. This predominantly reflected investments in new business segments, together with the related expansion in staff capacity. Additional provisions for variable bonus payments also contributed to the increase; these were required, given the compensation structure for exceeding earnings targets. General administrative expenditure was up by 17.6%, from €88.7 million to €104.3 million. Staff expenses increased by 20.2%, from €46.0 million to €55.3 million, whilst other administrative expenses were up 18.5%, from €37.9 million to €44.9 million.
DVB Bank AG reported total assets of €10.9 billion (2004: €9.3 billion). DVB´s nominal customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, and irrevocable loan commitments) totalled €10.78 billion. The 32.1% increase compared to the previous year´s figure of €8.16 billion was due to increased new business, but also a result of the stronger US dollar. The euro/US dollar exchange rate is relevant, given that almost three-quarters of the Bank´s overall portfolio is denominated in US dollars - 80.4% of the Shipping portfolio, and as much as 95.9% of the Aviation portfolio.
With €5.73 billion (2004: €4.29 billion), Shipping Finance accounted for the largest share (53.2%) of customer lending. Customer lending in Aviation Finance totalled €2.99 billion (2004: €2.20 billion), accounting for 27.7% of the overall portfolio. At €0.96 billion (2004: €0.90 billion), Land Transport accounted for a portfolio share of 8.9%, whilst Transport Infrastructure reached a share of 5.9%, having increased customer lending to €0.64 billion (2004: €0.52 billion). The Bank has consistently reduced its non-transport finance exposure since October 2000, within the scope of the D-Marketing unit, to a low level of residual business. This was further reduced, from €0.25 billion to €0.19 billion, during the period under review.
The core capital ratio remained stable, at 6.8% (2004: 6.7%), whilst the total capital ratio decreased slightly, to 10.2% (2004: 10.7%).
The first-time preparation of consolidated financial statements in accordance with IFRS resulted in material measurement differences compared to generally accepted accounting principles under the German Commercial Code, affecting the management indicators return on equity (before taxes) and cost/income ratio. According to IFRS, return on equity (before taxes) was 15.9% (2004: 12.7% - adjusted to IFRS), whilst the cost/income ratio increased slightly, to 58.7% (2004: 56.8% - adjusted to IFRS). In contrast, when applying German GAAP, both indicators developed in line with projections (and the Bank´s strategy) with RoE up 1.4 percentage points to 17.1%, and thus clearly approaching the long-term target level of 20%. The cost/income ratio under German GAAP improved by 4.2 percentage points, to 53.6%, also getting progressively closer to the long-term 50% target level.
Note to Editors:
DVB Bank AG, based in Frankfurt/Main, is an international advisory bank and finance house that specialises in the global transport market. DVB offers integrated financing solutions and advisory services in respect of Shipping, Aviation, Land Transport, and Transport Infrastructure. The Bank operates out of offices in Frankfurt/Main, Hamburg, London, New York, Rotterdam, Hong Kong, Singapore, Tokyo, Bergen, Piraeus, and Curaçao. DVB Bank AG is listed on the Frankfurt Stock Exchange (ISIN: DE 0008045501).
Contact:
Prof. Dr. Borislav Bjelicic, Phone +49 69 9750-4390, Fax +49 69 9750-4333, DVB Bank Aktiengesellschaft, Corporate Communications, Friedrich-Ebert-Anlage 2-14, 60325 Frankfurt/Main, Germany, borislav.bjelicic@dvbbank.com, www.dvbbank.com