HSH Nordbank's Real Estate unit reported a 38% year-on-year improvement in operating profit after risk provisions to €112 million for the first half of 2006. Net interest and commission income advanced by around 19% to €235 million. While net interest income rose from €140 million to €155 million, net commission income surged from €59 million to €81 million. The return on equity before tax increased substantially year-on-year, from 15.3% to 17.6%.
"We made a good start to 2006 and in the first six months we reinforced our market position as a strong player in international real estate finance," said Peter Rieck, the HSH Nordbank Management Board member responsible for the Real Estate unit. "Real estate financing remains a fiercely competitive business, so it is very encouraging that we have successfully positioned ourselves as an advisory and financing partner for large, highly solicited transactions," Rieck added.
"The improvement in the domestic real estate market and generally good situation in the international markets drove the strong growth in our interest and commission business," said Bernhard Visker, Head of Real Estate at HSH Nordbank. The bank's real estate clients are primarily German and international investors in commercial and residential property, listed property companies, project developers, and housing companies.
New business doubles in the first half of 2006
HSH Nordbank registered new commitments of €6.5 billion in the first half of 2006, more than double the €3.2 billion recorded in the year-earlier period. The lion's share of new business was once again acquired abroad. Growing interest in the Nordic region among international investors resulted in a marked upturn in new business in Copenhagen and Stockholm, which rose to more than €1.6 billion (year earlier: €650 million). The robust US economy gave a significant boost to growth in North America, where new commitments were €1 billion (year earlier: €860 million). The financing operations in London, Paris, and Amsterdam also registered strong growth, while business with medium-sized investors, primarily within Germany, likewise performed well.
At end-June 2006, HSH Nordbank's total portfolio of business with real estate clients stood at €24.3 billion, compared with €21.7 billion in June 2005. International financing activities in large European and US cities accounted for €10 billion, or 41%. This represents a well diversified real estate lending portfolio: at end-2004, international business accounted for only €5.6 billion, or 26%.
Source: HSH Nordbank