Bouwfonds 2nd quarter 2005 results (NL)

Total operating income was flat at €208 mln. The marked increase in interest income was due to the reclassification of net commissions and results from financial transactions to the net interest income line. Other operating income increased 11.1% (compared to second quarter 2004), which is a reflection of improved results in the residential property development activities.

Total operating expenses were 14.3% higher at €96 mln, due to the expensing of exercised stock options and higher insurance and advertising costs in the second quarter. The operating result decreased by 8.9%, and the efficiency ratio increased by 5.6 percentage points. Net profit declined by 7.5% to €74 mln.

First half 2005 compared with first half 2004
Total operating income improved by 30.5% to €415 mln as Bouwfonds continued its strong performance driven by good results of its property development and finance activities and the high level of mortgage refinancing in the Netherlands. Net interest income increased 23.1% to €240 mln, driven by further growth of residential mortgages and property finance and an increase in mortgage prepayment penalties. Other revenue rose 52.7% to €171 mln, reflecting higher income in property development, partly due to the acquisition of MAB. In the Netherlands, the market for residential property has been favourable. As a result, the number of homes sold and under construction was higher, leading to improved results. This improvement was however partly offset by lower income from commercial property development, reflecting difficult circumstances in especially the Dutch office market.

Total operating expenses were up 44.0% to €180 million, mostly due to higher staff costs related to organic expansion of the business and the acquisition of MAB and the Staal Bankiers portfolio in the second half of 2004.

The operating result improved by 21.8% to €235 million, and the efficiency ratio increased by 4.1 percentage points to 43.4%.

The number of FTEs (as compared with 30 June 2004) increased by 35.0% to 2,075, mainly as a result of the consolidation of the acquisitions of MAB and the Staal Bankiers portfolio and a joint venture in the asset management business. In addition, a reclassification of temporary staff also contributed to the growth in FTEs.

Source: ABN AMRO

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