HVB Group has presented its quarterly financial report at March 31, 2009. In a challenging macroeconomic environment, HVB Group generated a profit before tax of 94 million and net profit of 62 million in the first quarter of 2009. This is a considerable improvement compared with the first quarter of the previous year, for which a loss before tax of -318 million and a net loss of - 282 million were reported. The improvement versus the first quarter of 2008 results from a strong increase in total revenues of 579 million, or approximately 80%, to 1,306 million, which is mainly due to a substantial increase in net interest income of 290 million and a significant improvement in net trading income of 386 million.
The positive trend in earnings was largely generated in the Markets & Investment Banking division. Thanks to the strong rise in net interest income and the improvement in net trading income, the division achieved a significant turnaround in total revenues (+674 million to 356 million) and operating profit (+702 million to 96 million). However, despite the pronounced improvement in operating performance, Markets & Investment Banking posted a loss before tax of -76 million due to burdens resulting from restructuring measures implemented within the context of its strategic reorganisation and net write-downs on loans and provisions for guarantees and commitments.
One pleasing aspect in the first quarter of 2009 was the sustained profitability of the Corporates & Commercial Real Estate Financing division, which was reflected in an increase in total revenues and operating profit. Profit before tax stood at 150 million. However, it was below the result of the corresponding quarter of the previous year, the reason being higher net write-downs of loans and provisions for guarantees and commitment. Despite the difficult market environment, the Retail and Wealth Management divisions both generated a profit before tax in the first quarter of 2009. In particular, distinct cautiousness on the part of investors resulted in a decline in earnings versus the first quarter of 2008, which was characterised by a significantly more favourable market environment.
HVB Group's capital position remains excellent, which is still of great importance in the current environment. In the first quarter of 2009, its tier 1 ratio compliant with Basel II rose to 14.6%, up from 14.3% at the end of 2008, and is thus excellent by both national and international standards. The liquidity ratio of HVB AG of 1.25 at March 31, 2009, was significantly above the level recorded at the end of 2008 (1.19).
Dr Theodor Weimer, Board Spokesman of HypoVereinsbank: "Against the background of difficult underlying conditions, HypoVereinsbank stood its ground well in the first quarter of 2009, generating clearly positive operating performance. In this context, the strong recovery in operating profit in the Markets & Investment Banking division is pleasing. Although the financial markets showed at least some temporary signs of stabilisation in the first quarter of 2009, we expect the market environment to remain challenging. Given the global imbalances and additional uncertainties, a reliable forecast of HypoVereinsbank future earnings trends in full-year 2009 is not possible at this juncture. Overall, however, we are confident that the strength and resilience of our business model and our strong capital position will enable us to remain a reliable business partner for our customers and investors."
Source: UniCredit Group