HVB Group has presented its interim report at June 30, 2005. Overall, HVB Group recorded good financial performance in the second quarter 2005, despite unfavorable conditions in the capital markets.
A particularly pleasing aspect was the increase in the two most important revenue components: net interest income increased noticeably compared to the first quarter, and net commission income slightly exceeded even the high level recorded in the first three months. Administrative expenses edged up only slightly; loan-loss provisions recorded a very stable trend. The decline in the operating profit is thus virtually exclusively attributable to the lower trading result compared to the first quarter. Compared to its ambitious guidance for full-year 2005, HVB Group was on track at the mid-year mark. In a difficult macroeconomic environment, it succeeded in boosting its operating profit, pre-tax and net profit very significantly on a year-on-year basis.
Dieter Rampl, Board Spokesman of HVB Group: "Despite a still sluggish economy, we are fully on track in our key income components. All in all, I am very confident after the first six months of the present fiscal year that we will realize our envisaged annual target."
Compared to the first quarter (1,404 million), net interest income improved significantly in the second quarter, by 6.3% to 1,493 million. At the half-year mark, net interest income stood at 2,897 million, which corresponds to a year-on-year increase of 5.7% (2,741 million).
Net commission income stood at 764 million in the second quarter and thus slightly surpassed (+0,9%) the excellent result recorded in the first three months (757 million).
The trading result came to 101 million, falling short of the high level recorded in the first quarter (322 million). After the first six months, the trading result amounted to 423 million and was thus 5.8% below the prior-year figure (449 million).
The balance of other operating income and expenses increased to Euro 3 million in the second quarter compared to the result of the first three months (-Euro 12 million).
Total operating revenues declined 4.5%, to 2,361 million, compared to the previous quarter (2.471 million). On a year-on-year basis, they increased 3.4%, from 4,674 million to 4,832 million.
At 1,623 million, administrative expenses rose only slightly, by 1.4%, in the second quarter (Q1/05: 1,600 million).
For fiscal 2005 as a whole, HVB Group continues to expect loan-loss provisions of approximately 1.3 billion - which translates into a pro-rata figure of 649 million for the first six months. This corresponds to a pronounced decline of 27.5% compared to the prior-year level (895 million). In the second quarter, loan-loss provisions came to 326 million and were thus virtually unchanged versus the previous quarter (323 million).
At 412 million, the operating profit in the second quarter declined by 24.8% versus the above-average result generated in the first three months (548 million). At 960 million after six months, the operating profit was boosted substantially compared to the prior-year level (666 million). This means that the sustained operating improvement recorded in fiscal 2004 continued in mid-2005, too.
In the second quarter, net income from investments of 30 million included the disposal gain for the participation in Rhön-Klinikum (36 million) and amounted to 84 million at the end of June.
The pre-tax profit stood at 406 million in the second quarter and thus remained 28.1% below the result of the first quarter (565 million).
HVB Group generated a profit of 230 million in the second quarter, which fell 31.5% short of the strong performance of the previous quarter (336 million).
Return on equity before taxes of HVB Group increased from 9.0% (at June 30, 2004, after adjustment for goodwill amortization) to 13.5%; return on equity after taxes climbed from 5.4% (at June 30, 2004, after adjustment for goodwill amortization) to 9.7%.
Source: HVB Group