Deutsche Post Annual Report 2008 - 21 Profit / loss from discontinued operations

21 Profit/loss from discontinued operations

The income and expenses of the Deutsche Postbank Group are presented separately as a discontinued operation in accordance with IFRS 5:

Profit/loss from discontinued operations

€m

Income from banking transactions (revenue)

10,335

11,226

Other operating income

477

–998

Total operating income

10,812

10,228

Expenses from banking transactions
(materials expense)

–7,061

–8,270

Staff costs

–1,311

–1,337

Depreciation, amortisation and impairment losses

–161

–179

Other operating expenses

–1,219

–1,313

Total operating expenses

–9,752

–11,099

Profit/loss from operating activities (EBIT)

1,060

–871

Net finance costs

–65

–73

Profit/loss before taxes
from discontinued operations

995

–944

Attributable tax expense

–137

150

Profit/loss after taxes
from discontinued operations

858

–794

Reversal of negative goodwill
(arising from increase in equity investment)

+81

Profit/loss from discontinued operations

858

–713

In financial year 2008, the crisis on the financial markets impacted net trading income, net income from investment securities and the allowance for losses on loans and advances. Amongst other things, the Deutsche Postbank Group recognised write-downs amounting in total to €423 million as a result of its exposure to Lehman Brothers, the US investment bank under chapter 11 protection, and to Icelandic banks. In addition, earnings were affected by valuation allowances of €97 million (previous year: €18 million) on equity and retail funds, and of €156 million (previous year: €112 million) on structured credit products. Charges of €786 million were also determined in relation to the remeasurement of embedded derivatives from the structured credit substitution business.