11.03.2010
DVB Group once again posts solid results for 2009
DVB's clearly-defined business model, with a unique focus on global Transport Finance, once again proved its mettle throughout 2009 – despite the global turbulence on financial and transport markets. Based on preliminary, unaudited figures, the Bank posted solid consolidated net income (after taxes) of EUR76.1 million, a 27.7% decline from the previous year's figure of EUR105.2 million.
Wolfgang F. Driese, CEO and Chairman of the Board of Managing Directors, assessed DVB’s consolidated results:
"Today we are presenting a solid set of consolidated results 2009, in spite of manifold burdens. The cyclical nature of transport markets is a phenomenon which we have been familiar with for a long time. The collapse in global trade – an immediate consequence of the crisis affecting financial markets and the economy – was however unprecedented in both scope and velocity. During the first months of 2009 the crisis was exacerbated by the retreat of various banks from financing; this affected the shipping sector in particular. Even though we are noting signs of stabilisation in some transport market segments, in our view the industry has not yet recovered to a sustainable trend. We succeeded in fully remedying the impact of money market distortions on DVB during the financial year under review, thanks to the cooperation of our clients – for which we are very grateful indeed – and to measures taken by our Treasury.
Our agenda for 2010 includes a focus on pro-active risk management based on stress scenarios which allow for preventive action, to be taken jointly with clients, and designed to offer sustainable solutions. We continue to strive for moderate growth, with interest rate margins in line with the previous year. We also want to maintain commission income and cost structures at 2009 levels. We have recognised, however, that it is still too early for any relief in terms of allowance for credit losses. Assuming the absence of special burdens such as money market distortions, we look forward to being able to generate consolidated results for 2010 which will exceed our figures for 2009."
Specifically, 2009 results comprised the following components:
Net interest income was up slightly, to EUR194.3 million – a positive development, given the difficult market environment in 2009. Against this background, the Bank originated new business in large-sized structured Transport Finance exposures on a selective basis. New business volume amounted to EUR3.0 billion. DVB's interest rate margins for new transactions were able to include the clearly higher funding costs prevailing throughout 2009: hence, the interest margin on new business rose to an average of 343 basis points (up 157 year-on-year), thus also ensuring an adequate risk/return relationship.
The tense situation on international transport markets, particularly in maritime shipping, burdened DVB's portfolios. Even though the Bank's risk management teams responded with a variety of measures, allowance for credit losses had to be increased to EUR72.2 million (2008: EUR16.5 million).
Whilst the commission rates on new business were higher year-on-year, commission income in absolute terms did not match the previous year's record figure, on account of lower new business volumes. Net fee and commission income declined by 7.3%, to EUR97.8 million (2008: EUR105.5 million).
Two non-recurring negative effects, which together accounted for a burden of EUR28.2 million, need to be taken into account when assessing the decrease in consolidated net profit. Firstly, DVB incurred additional refinancing costs of EUR20.8 million (2008: EUR28.0 million) on account of prevailing money market distortions. However, the Bank succeeded in virtually neutralising these effects by the end of the year, through a variety of measures. Secondly, DVB recognised an additional EUR7.4 million write-down on a bond issued by an Icelandic bank, following a EUR35.8 million write-down the year before. DVB's motivation to invest in such a bond issue was to maintain a liquidity reserve for payments.
General administrative expenses of EUR156.5 million were unchanged year-on-year. Staff expenses declined slightly by 2.1 %, to EUR89.4 million (2008: EUR91.3 million). At EUR62.7 million, non-staff expenses were up 4.3 % on the previous year (2008: EUR60.1 million).
At EUR19.1 billion, the volume of business in 2009 was down 9.0% on the previous year (2008: EUR21.0 billion). DVB's total assets also declined slightly, to EUR17.3 billion on the reporting date (31 Dec 2008: EUR17.4 billion). The Bank's nominal customer lending for regulatory purposes (the aggregate of loans and advances to customers, guarantees and indemnities, derivatives, and irrevocable loan commitments) decreased by 6.5 %, to EUR17.3 billion (2008: EUR18.5 billion). Since the euro strengthened versus the US dollar towards the end of 2009, DVB’s customer lending in US dollar terms showed a lower rate of decline than in euro terms (down 3.9% to USD24.9 billion).
The core capital ratio in accordance with Basel II was 14.2 % (2008: 13.9 %), and the total capital ratio 18.0 % (2008: 18.2 %).
The key strategic indicators which DVB Group uses to manage its business reflected the challenging environment: return on equity before taxes was 9.4% (2008: 13.1%), and the cost/income ratio stood at 49.6% (2008: 57.4%).
The Board of Managing Directors and Supervisory Board will propose to DVB Bank SE’s Annual General Meeting, which will be held on 9 June 2010, to pay an unchanged dividend of EUR0.60 per notional no-par value share. With this proposal, the Bank's executive bodies also wish to express their confidence in DVB's performance going forward.
DVB Bank Group: Consolidated income statement (as at 31 December 2009)
DVB Bank Group: Consolidated balance sheet (as at 31 December 2009)
Note to Editors:
DVB Bank SE, headquartered in Frankfurt/Main, Germany, is the leading specialist in the international Transport Finance business. The Bank offers integrated financing solutions and advisory services in respect of Shipping Finance, Aviation Finance, and Land Transport Finance. The Bank operates out of offices in Frankfurt/Main, Hamburg, London, Cardiff, Rotterdam, Bergen/Oslo, Piraeus, Zurich, Singapore, Tokyo, New York and Curaçao. DVB Bank SE is listed at the Frankfurt Stock Exchange (ISIN: DE0008045501).
Contact for this press release:
Elisabeth Winter, Manager Investor Relations
Phone +49 69 9750-4329
Elisabeth.Winter@dvbbank.com
Wolfgang F. Driese, CEO and Chairman of the Board of Managing Directors, assessed DVB’s consolidated results:
"Today we are presenting a solid set of consolidated results 2009, in spite of manifold burdens. The cyclical nature of transport markets is a phenomenon which we have been familiar with for a long time. The collapse in global trade – an immediate consequence of the crisis affecting financial markets and the economy – was however unprecedented in both scope and velocity. During the first months of 2009 the crisis was exacerbated by the retreat of various banks from financing; this affected the shipping sector in particular. Even though we are noting signs of stabilisation in some transport market segments, in our view the industry has not yet recovered to a sustainable trend. We succeeded in fully remedying the impact of money market distortions on DVB during the financial year under review, thanks to the cooperation of our clients – for which we are very grateful indeed – and to measures taken by our Treasury.
Our agenda for 2010 includes a focus on pro-active risk management based on stress scenarios which allow for preventive action, to be taken jointly with clients, and designed to offer sustainable solutions. We continue to strive for moderate growth, with interest rate margins in line with the previous year. We also want to maintain commission income and cost structures at 2009 levels. We have recognised, however, that it is still too early for any relief in terms of allowance for credit losses. Assuming the absence of special burdens such as money market distortions, we look forward to being able to generate consolidated results for 2010 which will exceed our figures for 2009."
Specifically, 2009 results comprised the following components:
Net interest income was up slightly, to EUR194.3 million – a positive development, given the difficult market environment in 2009. Against this background, the Bank originated new business in large-sized structured Transport Finance exposures on a selective basis. New business volume amounted to EUR3.0 billion. DVB's interest rate margins for new transactions were able to include the clearly higher funding costs prevailing throughout 2009: hence, the interest margin on new business rose to an average of 343 basis points (up 157 year-on-year), thus also ensuring an adequate risk/return relationship.
The tense situation on international transport markets, particularly in maritime shipping, burdened DVB's portfolios. Even though the Bank's risk management teams responded with a variety of measures, allowance for credit losses had to be increased to EUR72.2 million (2008: EUR16.5 million).
Whilst the commission rates on new business were higher year-on-year, commission income in absolute terms did not match the previous year's record figure, on account of lower new business volumes. Net fee and commission income declined by 7.3%, to EUR97.8 million (2008: EUR105.5 million).
Two non-recurring negative effects, which together accounted for a burden of EUR28.2 million, need to be taken into account when assessing the decrease in consolidated net profit. Firstly, DVB incurred additional refinancing costs of EUR20.8 million (2008: EUR28.0 million) on account of prevailing money market distortions. However, the Bank succeeded in virtually neutralising these effects by the end of the year, through a variety of measures. Secondly, DVB recognised an additional EUR7.4 million write-down on a bond issued by an Icelandic bank, following a EUR35.8 million write-down the year before. DVB's motivation to invest in such a bond issue was to maintain a liquidity reserve for payments.
General administrative expenses of EUR156.5 million were unchanged year-on-year. Staff expenses declined slightly by 2.1 %, to EUR89.4 million (2008: EUR91.3 million). At EUR62.7 million, non-staff expenses were up 4.3 % on the previous year (2008: EUR60.1 million).
At EUR19.1 billion, the volume of business in 2009 was down 9.0% on the previous year (2008: EUR21.0 billion). DVB's total assets also declined slightly, to EUR17.3 billion on the reporting date (31 Dec 2008: EUR17.4 billion). The Bank's nominal customer lending for regulatory purposes (the aggregate of loans and advances to customers, guarantees and indemnities, derivatives, and irrevocable loan commitments) decreased by 6.5 %, to EUR17.3 billion (2008: EUR18.5 billion). Since the euro strengthened versus the US dollar towards the end of 2009, DVB’s customer lending in US dollar terms showed a lower rate of decline than in euro terms (down 3.9% to USD24.9 billion).
The core capital ratio in accordance with Basel II was 14.2 % (2008: 13.9 %), and the total capital ratio 18.0 % (2008: 18.2 %).
The key strategic indicators which DVB Group uses to manage its business reflected the challenging environment: return on equity before taxes was 9.4% (2008: 13.1%), and the cost/income ratio stood at 49.6% (2008: 57.4%).
The Board of Managing Directors and Supervisory Board will propose to DVB Bank SE’s Annual General Meeting, which will be held on 9 June 2010, to pay an unchanged dividend of EUR0.60 per notional no-par value share. With this proposal, the Bank's executive bodies also wish to express their confidence in DVB's performance going forward.
DVB Bank Group: Consolidated income statement (as at 31 December 2009)
DVB Bank Group: Consolidated balance sheet (as at 31 December 2009)
Note to Editors:
DVB Bank SE, headquartered in Frankfurt/Main, Germany, is the leading specialist in the international Transport Finance business. The Bank offers integrated financing solutions and advisory services in respect of Shipping Finance, Aviation Finance, and Land Transport Finance. The Bank operates out of offices in Frankfurt/Main, Hamburg, London, Cardiff, Rotterdam, Bergen/Oslo, Piraeus, Zurich, Singapore, Tokyo, New York and Curaçao. DVB Bank SE is listed at the Frankfurt Stock Exchange (ISIN: DE0008045501).
Contact for this press release:
Elisabeth Winter, Manager Investor Relations
Phone +49 69 9750-4329
Elisabeth.Winter@dvbbank.com