HSH Nordbank closed out the first half of 2009 better than planned. The net income before taxes came to EUR -530 million.
HSH Nordbank closed out the first half of 2009 better than planned. The net income before taxes came to EUR -530 million (previous year: EUR 155 million). The result is attributable to consistently good earnings in the client units. HSH Nordbank"s total income increased to EUR 1,299 million in the first half (previous year: EUR 712 million). On the other hand, loan-loss provisioning was significantly increased in the second quarter, by EUR 771 million to a figure now of EUR 1,195 million (previous year: EUR 130 million), which"s negative effects were offset by valuation gains in the trading result. ?It is evident that the measures to stabilize the Bank and to strategically realign it are taking hold. Not least thanks to the support of the federal states as well as the magnificent work done by our staff we are well on our way. In close collaboration with our shareholders, we shall direct the Bank into a secure future and will not disappoint the confidence that has been placed in us,? said Dirk Jens Nonnenmacher, CEO of HSH Nordbank. Furthermore, the result includes restructuring costs amounting to EUR 72 million as well as spending on guarantees provided by the Financial Markets Stabilization Fund (SoFFin) and provision by the federal states of Hamburg and Schleswig-Holstein of the guarantee facility totaling EUR 150 million.
Total income substantially increased
At EUR 1,006 million, net interest and commission income was well up on the previous year"s figure of EUR 919 million. The increase was due mainly to wider margins in the lending business and positive results from the very steep yield and liquidity curves evident on the market.In the context of strategic realignment the Bank concentrated its capacity on its new core areas of business and largely refrained from accepting new business. Instead, the Bank is helping its existing clients to overcome the crisis by postponing instalments of a considerable size.
The international financial markets calmed down perceptibly during the first half of the year. This was also reflected in HSH Nordbank"s trading and investment results.
Proactive reduction of the credit investment portfolio (CIP) to the present figure of about EUR 19 billion (on June 30, 2009) exerted positive effect on the trading result.
Whereas the previous year"s trading result still involved expenses of EUR 52 million, the Bank recorded income of EUR 516 million for the first six months of 2009. Revaluation results led to an income of about EUR 690 million (previous year: a loss of EUR 65 million). This also includes a positive contribution to income in the amount of about EUR 232 million as a result of revaluing own liabilities.
By contrast, the net income from financial investments dropped to a negative figure of EUR 313 million (previous year: a negative figure of EUR 141 million). This figure contains writedowns on the remaining CIP volume in the amount of EUR 242 million (previous year: EUR 155 million) as well as on equity holdings in the amount of EUR 74 million (zero in the previous year).
Savings measures showing further benefit
The efficiency-enhancement and cost-reduction measures launched in the previous year and continued in the first half of 2009 showed a beneficial effect in terms of administrative expenses. The decline by EUR 54 million to EUR 436 million (previous year: EUR 490 million) breaks down into EUR 35 million pertaining to non-personnel expenses and EUR 19 million to personnel expenses. The reduction in non-personnel expenses is attributable among other factors to the reduced spending on advertising, fees and travel expenses. It has already been agreed to cut 520 jobs on the basis of a workforce accord signed in April 2009 that ensures job-shedding in a way that minimizes social hardship. Of that total, 304 jobs were shed in Germany and 216 at foreign branches as well as subsidiaries.