Westdeutsche ImmobilienBank AG (WestImmo) underlines its special position in the commercial property finance market with the presentation of its 2009 annual results. The bank has generated profits continually in recent years, particularly throughout the period of the economic and financial market crisis. This is also the case for 2009.
In the year which was overshadowed by the global economic crisis, WestImmo achieved a consolidated IFRS surplus for the year of about 83.4 million (previous year 96.7 million).
Operationally, the WestImmo business model proved particularly sustainable and future-proof. The bank's interest income achieved growth in double figures to 198.7 million (previous year 179.1 million). Commission income rose to 32.4 million (previous year 25.9 million), an increase of 25%. The determining factor here was that WestImmo has increasingly assumed the arranger and agent functions in the syndicate business. The bank placed a total of around 1.5 billion of an arrangement volume of 2.6 billion with bank partners, giving it top position among the syndicating banks in Europe.
The bank's operating profit reached a record high after several years' continuous growth at approximately 147.7 million (previous year 141.8 million).
"We have achieved good results that I am happy with, particularly in view of the difficult market situation in 2009. Above all, the growth in our operating income reflects our greater acquisition power," said Peter Knopp, chairman of the WestImmo board, at the annual accounts press conference. "Our working business model and our conservative risk policy enable us to concentrate fully on our customer business, which is a great advantage on the markets at this particular time."
The administration expenses of WestImmo were 9% above the previous year's level due to higher expenses from participating interests and rose to 87.7 million. The net income from investments totalled -10.2 million (previous year 5.0 million). Valuation measures were the principal negative factor here.
Trading profit fell to 4.3 million from 17.4 million in the previous year. The cause is a reduced profit from the valuation of financial instruments and interest rate hedging derivatives.
Provision for risks in the budget
The bank used its higher operating earnings power to set up strong buffers against credit and market risks with a provision for risks of 66.2 million (previous year 27.3 million). For this reason pre-tax profit fell to 74.8 million (previous year 121.2 million). Return on equity reached an acceptable level at just 8% (previous year 13.5%), particularly when compared with the competition. The difference from the previous year is because market conditions required valuation adjustments to the portfolio by the bank in line with its conservative business model. Due to the strict cost and process management, the cost-income ratio was within the bank's target range of under 40% at 37.7% (previous year 35.5%).
New business well above previous year's level
The strong competitive position of WestImmo was manifested in new business. The bank increased its lending commitments in commercial property financing to 6.2 billion , which is 13% above the previous year's result (5.5 billion). Only 12.5% of total new business related to loan extensions. The wide regional spread of the new business with strong growth in Germany and Europe strengthens the resilience of the lending portfolio as a whole and contributes to the sustainable growth of the earning power. 50% of the 2009 new business volume was for commercial property financing in Europe excluding Germany. The business grew very strongly in Central Europe (12%, previous year 8%) and the UK (16%, previous year 7%). The volume of commercial property financed in Germany totalled 1.6 billion and therefore made up 26% of the new business volume (previous year 22%). The market and brand position of WestImmo rose appreciably at the world's top property locations.
Cooperation with savings banks intensifies