In 2006, HSH Nordbank's Real Estate division raised its operating profit after risk provisioning by 12 percent to € 260 million year on year. Combined net interest income and net commission income increased to € 478 million (previous year € 470 million). Net interest income grew from € 337 million to € 340 million, while net commission income was up from € 133 million to € 138 million. The pre-tax return on equity came to 19.6 percent (previous year: 21.3 percent).
"In 2006, we noticeably consolidated our market position as a potent provider of real estate finance, especially for cross-border transactions," explained Peter Rieck, head of HSH Nordbank's Real Estate segment. "Business involving real estate finance deals will prove to be highly competitive again in 2007. It is our aim to provide investors inside and outside Germany with finance and advisory services, increasingly so for major and highly visible real estate transactions," stressed Mr. Rieck. "We want to take advantage of the improved conditions on the real estate markets in Germany and abroad in order to expand our interest and commission business further in 2007." Among its real estate clients in Germany and the rest of the world HSH Nordbank numbers investors in commercial and residential real estate, real estate companies, project developers and residential property companies.
In the real estate sector HSH Nordbank generated € 16.1 billion in new loan commitments, which was up approx. 60 percent on the previous year's figure of € 10.1 billion. Business involving investors in Germany rose to € 3.2 billion (previous year: € 2.8 billion). As in the previous year, most of the Real Estate division's new business came from outside Germany. New business in the United Kingdom made the biggest gain, almost doubling to € 3.1 billion (previous year: € 1.5 billion). The sustained high level of interest shown by international investors in the Nordic region was reflected in a sharp rise in new business in Copenhagen and Stockholm to € 2.6 billion (previous year: € 1.6 billion). Business in North America was underpinned by the persistently upbeat U.S. economy, with new commitments more than doubling to € 2.2 billion (previous year: € 1 billion). Moreover, finance deals in Paris and Amsterdam showed substantial gains. HSH Nordbank's entire portfolio of business with real estate clients was valued at 27.9 billion at the end of 2006, up from € 22.8 billion at the end of 2005. Foreign finance deals in metropolitan areas of Europe and the U.S. accounted for nearly 50 %. At the end of 2005, foreign operations accounted for € 8.4 billion or 37 percent of the real estate loan portfolio. The real estate loan portfolio is thus broadly diversified in regional terms.
Source: HSH Nordbank