During the first semester of 2004, Bouwfonds’ net profit raised approximately 70% to € 151 million. This positive development was driven by the continuing favourable interest environment for mortgages, higher margins and volumes in property finance and the realisation of profit on a commercial development project in Belgium. This appears from the first half 2004 results of ABN AMRO, the parent company of Bouwfonds.
Revenues improved by 34.7% to € 330 million, driven by a strong increase in net interest revenue on the back of higher margins on mortgages. Other revenu went up significantly due to an increased contribution from property development. Operating expenses were up by 14.5% to € 126 million, due to higher administrative expenses and to higher staff costs, following an increase in FTEs to support the growth of the business. The operating result improved by 51.1% to € 204 million and the efficiency ratio improved 6.7 percentage points to 38.2%.
Compared to the first quarter, revenues increased by 8.9% to € 172 million, primarily driven by an increase in other revenues. Other revenues were positively impacted by a favourable one-off resulting from the realisation of profit on a commercial development project in Belgium. Net commissions increased as a result of strong insurance income following the introduction of a new insurance product.
Operating expenses went up by 13.6% to € 67 million, due to higher administrative expenses. Consequently, the operating result improved by 6.1% to € 105 million.
Net profit increased by 18.8% to € 82 million, due to a one-off tax credit in Germany. This was partly offset by higher provisions due to a lack of recoveries as reported in the previous quarter. Due to the favourable one-offs in the second quarter, the appropriate run rate off the remainder of the year is likely to be around the net profit of the first year.
Source: ABN AMRO