Postbank reports further improved profit
During the year under review, the division generated revenue of €10,426 million, which exceeded the previous year’s figure of €9,593 million by 8.7%. In the banking business, income from interest, fees and commissions and net trading income are equivalent to an industrial company’s revenue.
The division also increased its profit from operating activities (EBIT) again. At €1,076 million, it surpassed the previous year’s total of €1,004 million by 7.2%. This contained the net effect from the disposal of Postbank’s insurance companies, after allowing for transaction costs, for provisioning in the investment portfolio, impairment losses in connection with the sub-prime crisis, extraordinary effects in administrative expenses as well as non-recurring effects in net interest income, which, on balance, reduced EBIT by €25 million.
Postbank raised its balance sheet-related revenues and net fee and commission income by 3.3% year-on-year, from €4,117 million to €4,253 million. The balance sheet-related revenues – net interest income, net trading income and net income from investment securities – increased by 4.2%, from €2,710 million to €2,824 million. Despite an inhospitable interest rate climate, net interest income rose by 4.0% year-on-year to €2,240 million. At €294 million, net income from investment securities was 0.7% up on the previous year. Net trading income climbed by 9.8% to €290 million.
Net fee and commission income also increased, rising by 1.6% to €1,429 million. The portion of total income attributable to net fee and commission income fell slightly, from 34.2% to 33.6%.
At 0.3%, the allowance for losses on loans and advances rose less sharply than the volume of customer loans. Administrative expenses edged up by 1.6% to €2,856 million.
Net other operating income and expenses amounted to €–55 million (previous year: €–27 million). Postbank’s return on equity (ROE) before taxes improved from 18.9% to 19.3%. The cost/income ratio also developed favourably, falling from 66.7% to 64.8% in the traditional banking business. Including transaction banking, which is dominated by industrial processing, it came to 67.2% (previous year: 68.3%). As at 31 December 2007 the tier 1 ratio, calculated in accordance with the Solvabilitätsverordnung (German solvency regulation) but excluding the initial restrictions pursuant to Section 339 of the solvency regulation, came to 6.9% at 31 December 2007 compared with the previous year (6.6% according to own calculations).
Deutsche Postbank AG provides details of its business development in 2007 in its own annual report, published on 5 March 2008.