The leading specialist in international transport finance

Transcription

1 The leading specialist in international transport finance Group Interim Report as at 30 June 2006

2

3 DVB Group overview 8 mn % Earnings data 1 Jan Jan 2005 (in accordance with IFRS) 30 June June 2005 Income Net interest income after loan losses Net interest income Impairment losses on loans and advances Net fee and commission income Net trading income Hedge result Net income from investment securities Net other operating income General administrative expenses Result from operating activities Balance sheet data 30 June Dec 2005 (in accordance with IFRS) Total assets 10, , Loans and advances to customers 8, , Deposits from customers 3, , Securitised liabilities 3, , Subordinated liabilities Equity Own funds according to the 30 June Dec 2005 German Banking Act (KWG) Total 1, , Core capital (Tier I) Supplementary capital (Tier II) Capital ratios according 30 June Dec 2005 percentage to the German Banking Act (%) points Core capital ratio Total capital ratio Key financial indicators (%) 1 Jan Jan 2005 percentage 30 June June 2005 points Return on equity (before taxes) (RoE) IFRS German GAAP Cost/income ratio (CIR) IFRS German GAAP Employees 30 June June 2005 Total Active thereof in Transport Finance / Corporate Finance

4 Letter to Shareholders Dear Shareholders, DVB made significant progress during the first half of 2006 in its quest to become the best international Transport Finance house. Not only did we benefit from our clients growing need for customised financing solutions tailored to their specific requirements: our performance was supported by continued strong momentum in global transport markets. A sustained ability to structure complex transactions was once again proof of our expertise, which helped us achieve yet another outstanding result. Result from operating activities as at 30 June ( mn)* 60.7 We significantly boosted income (comprising net interest income after loan losses, net fee and commission income, net income from financial instruments in accordance with IAS 39, and net other operating income/expenses), by 43.6%, to million during the first half of Specifically, net interest income after loan losses rose by 27.8%, from million to million. Net interest income was up 11.8%, to million, driven by brisk new Transport Finance business: 102 new transactions with an aggregate volume of billion, keeping the average interest margin generated at a high level of 153 basis points. Impairment losses on loans and advances amounted to an insignificant 30.5 million, recognised for the D-Marketing portfolio. Net fee and commission income rose by 3.3% to million. This includes loan commissions from new syndicated Transport Finance exposures, as well as advisory fees generated by the Bank s Corporate Finance activities. Net income from financial instruments in accordance with IAS 39 (comprising net trading income, the hedge result and net income from investment securities) rose from 32.6 million to million. Given stronger emphasis on the fair-value measurement of derivatives and other financial instruments under IFRS (compared to German commercial law), interest rate and exchange rate volatility impacts net trading income as well as the hedge result. Net trading income for the first half of 2006 totalled 39.6 million (H1 2005: 39.7 million), whilst the hedge result amounted to 38.6 million ( million) General administrative expenses rose by 7.9% to million. Staff expenses increased by 13.0%, to million, whilst other administrative expenses remained virtually unchanged. The increase in staff expenses was mainly driven by two factors: firstly, the Bank hired additional Transport Finance and Corporate Finance experts to boost its worldwide business activities, increasing the number of active employees in DVB to 365 (up 8.3% H1 2005: 337). Secondly, additional provisions were recognised for variable bonus payments, given the expected exceeding of earnings targets and the related compensation structure * until 2004 based on German GAAP; since 2005 in accordance with IFRS/IAS The result from operating activities more than doubled, from million to million. At billion, total assets were only slightly higher than at the year-end 2005 ( billion). 2

5 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES DVB s nominal customer lending (the aggregate of loans disbursed, irrevocable loan commitments, and guarantees and indemnities) totalled billion up 2.7% (31 Dec 2005: billion). This figure reflected the recent appreciation of the euro versus the US dollar: DVB maintains its accounts in euros, whereas almost three-quarters of its aggregate customer lending volume is denominated in US dollars. Customer lending in US dollar terms showed a markedly higher increase of 10.7%, to US$14.07 billion, compared to the year-end 2005 (US$12.71 billion). As in previous years, to minimise the impact of exchange rate fluctuations as a source of uncertain business results, we have hedged projected US dollar net income from interest and commissions. The distribution of customer lending (in euro terms) amongst the Bank s business segments is as follows: with billion, Shipping accounts for 52.1% of the overall portfolio, followed by Aviation (33.27 billion 29.6%), Land Transport (30.92 billion 8.3%), Transport Infrastructure (30.65 billion 5.9%), and Corporate Finance & Capital Market Products (30.30 billion 2.7%). The growth rates against the year-end 2005 (in euro terms) were particularly impressive in Aviation (up 9.4%) and Corporate Finance & Capital Market Products (up 11.1%). The key financial indicators used in DVB s strategic management also developed very favourably indeed: Customer lending by business division 1.4% 2.7% 5.9% 8.3% 29.6% Shipping Aviation Land Transport Transport Infrastructure Corporate Finance & Capital Market Products D-Marketing 52.1% Measured according to IFRS, return on equity (before taxes) was 23.5% up by almost half of the previous year s figure (H1 2005: 15.9%). The cost /income ratio according to IFRS fell by 10.8 percentage points, to 47.9% (H1 2005: 58.7%). Based on German GAAP, return on equity for the first half of 2006 increased to 24.1% (H1 2005: 18.9%), whilst the cost/income ratio improved to 47.6% (56.3%). The core capital ratio remained virtually unchanged, at 6.7% (31 Dec 2005: 6.8%), whilst the total capital ratio rose to 10.8% (10.2%). Looking at the six-month results, in conjunction with new transactions already in the pipeline, you, our esteemed shareholders, can look forward to record results for the 2006 business year. Frankfurt/Main, August 2006 THE BOARD OF MANAGING DIRECTORS Customer lending by growth rates (8 bn) 30 June 31 Dec % Shipping Aviation Land Transport Transport Infrastructure Corporate Finance & Capital Market Products D-Marketing Total

6 Consolidated income statement 8 mn Note # 1 Jan Jan 2005 % 30 June June 2005 Net interest income Impairment losses on loans and advances Net interest income after loan losses Net fee and commission income Net income from financial instruments in accordance with IAS General administrative expenses Net other operating income Result from operating activities before tax Income tax expense Profit after tax Minority interest Net profit

7 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES Earnings per share 8 1 Jan Jan June June 2005 Net profit 46,137,266 27,172,035 Average number of no-par unit shares outstanding 3,896,912 3,034,462 Options outstanding at the balance sheet date 89, ,905 Earnings per share

8 Consolidated balance sheet Assets (8 mn) Note # 30 June Dec 2005 % Cash and balances with the central bank Loans and advances to banks Loans and advances to customers 3.2 8, , Allowance for losses on loans and advances Positive fair values of hedging derivatives Financial assets held for trading Investment securities Intangible assets Property and equipment Income tax assets Other assets Total assets 10, ,

9 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES Equity and liabilities (8 mn) Note # 30 June Dec 2005 % Deposits from other banks 3.8 2, , Deposits from customers 3.9 3, , Securitised liabilities , , Negative fair values of hedging derivatives Financial liabilities held for trading Provisions Income tax liabilities Other liabilities Subordinated liabilities Equity Issued share capital Capital reserve Retained earnings thereof: fund for general banking risks Revaluation reserve Hedging reserve cash flow hedges Currency translation reserve Net profit Distributable profit Minority interest Total equity and liabilities 10, ,

10 Consolidated statement of changes in equity 8 mn Equity Equity as at 31 Dec Changes during the period Revaluation of AfS financial instruments 0.5 Cash flow hedge 5.1 Net income attributable to minority interests 0.8 Net profit 46.1 Equity as at 30 June Consolidated cash flow statement 8 mn 1 Jan June 2006 Cash flow from operating activities 93.0 Cash flow from investing activities 27.5 Cash flow from financing activities 34.1 Net change in cash and cash equivalents 99.6 Cash and cash equivalents at beginning of period 48.9 Cash and cash equivalents at end of period

11 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES Notes 1. Summary of material accounting policies applied The present interim financial statements for the period ended on 30 June 2006 have been prepared in accordance with International Financial Reporting Standards, as published by the European Union. They also comply with the requirements of German Accounting Standard No. 6 as laid down by the German Accounting Standards Board for interim reports. The accounting policies applied for the present interim financial statements are in line with those applied for the consolidated financial statements as at 31 December Selected notes to the consolidated income statement 2.1 Net interest income 8 mn 1 Jan Jan 2005 % 30 June June 2005 Interest income from lending and money market transactions bonds and other fixed-income securities operating leases Current income from equities and other non-fixed-income securities equity investments and other investment securities Total interest income Interest expenses for deposits securitised liabilities subordinated liabilities operating leases Total interest expense Net interest income

12 2.2 Impairment losses on loans and advances 8 mn 1 Jan Jan 2005 % 30 June June 2005 Additions Reversals Direct write-offs Recoveries on loans and advances previously written off Total Net fee and commission income 8 mn 1 Jan Jan 2005 % 30 June June 2005 Fee and commission income from payment transactions guarantees and indemnitities lending business Other fee and commission income Total fee and commission income Fee and commission expenses Total fee and commission expenses Net fee and commission income

13 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES 2.4 Net income from financial instruments in accordance with IAS 39 8 mn 1 Jan Jan 2005 % 30 June June 2005 Net trading income Hedge result Net income from investment securities Net income from financial instruments in accordance with IAS Net trading income 8 mn 1 Jan Jan 2005 % 30 June June 2005 Net trading income from derivative financial instruments Result from derivates Result from foreign currency transactions Result from interest and dividend payments Result from the application of the fair value option Advances and loans designated as at fair value through profit or loss Securitised liabilities and subordinated loans designated as at fair value through profit or loss Total

14 2.4.2 Hedge result 8 mn 1 Jan Jan 2005 % 30 June June 2005 Result from re-measurement Result from derivates Result from hedged items (income) Total Realised result (expense) Total General administrative expenses 8 mn 1 Jan Jan 2005 % 30 June June 2005 Staff expenses Operating expenses Depreciation, amortisation, impairment and write-ups Total Net other operating income 8 mn 1 Jan Jan 2005 % 30 June June 2005 Other operating income Other operating expenses Net other operating income

15 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES 2.7 Segment reporting 8 mn Group Shipping Aviation Land Transport Corporate Others/ Transport Infrastructure Finance Overheads & Capital Reconciliation Market Products 6/2006 6/2005 6/2006 6/2005 6/2006 6/2005 6/2006 6/2005 6/2006 6/2005 6/2006 6/2005 6/2006 6/2005 Net interest income after loan losses Net interest income Impairment losses on loans and advances Net fee and commission income Net income from financial instruments in accordance with IAS Net other operating income Income General administrative expenses Staff expenses Operating expenses incl. depreciation/ amortisation/impairment Result from operating activities before tax Income taxes Minority interest Net profit Risk-weighted assets (average) 1) 10, , , , , , Capital (weighted) Cost/income ratio 2) 47.9% 58.7% 22.5% 22.2% 11.1% 14.1% 15.4% 29.6% 16.0% 16.6% 58.4% 38.2% Return on equity (before taxes) 23.5% 15.9% 26.2% 36.3% 42.8% 20.2% 26.0% 19.5% 30.2% 34.1% 68.0% 248.6% 1) Owing to DVB s business focus, the risk-weighted assets are considered representative for the assets of the individual segments in accordance with principle I of the German Banking Act (Grundsatz I KWG). 2) excl. impairment of losses on loans and advances 13

16 3. Selected notes to the consolidated balance sheet 3.1 Loans and advances to banks Loans and advances payable on demand with a limited term Money market transactions payable on demand with a limited term Other loans and advances to banks Total German banks Foreign banks Total Loans and advances to customers Loans and advances 8, , payable on demand with a limited term 8, , Other loans and advances to customers Total 8, , German customers 1, , Foreign customers 7, , Total 8, ,

17 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES 3.3 Allowance for losses on loans and advances 8 mn Specific valuation Portfolio Total allowance impairment 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec Balance at the beginning of the period Effects from first-time adoption of IAS Additions Reversals thereof amounts utilised thereof amounts released Changes in consolidated group Changes resulting from exchange rate fluctuations Balance as at the reporting date Investment securities Bonds and other fixed-income securities Equities and other non-fixes-income securities Equity investments Shares in unconsolidated, affiliated companies Total

18 3.5 Intangible assets Goodwill Other intangible assets Total Property and equipment Land and buildings Investment property Operating and office equipment Assets held under operating leases Other property and equipment Total Other assets Current tax receivables Advance payments and prepaid expenses Miscellaneous other assets Total

19 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES 3.8 Deposits from other banks Loans and advances 1, payable on demand with a limited term 1, Money market transactions 1, , payable on demand with a limited term 1, , Other deposits from other banks Total 2, , German banks 1, , Foreign banks Total 2, , Deposits from customers Loans and advances 3, , payable on demand with a limited term 3, , Money market transactions payable on demand with a limited term Other deposits from customers Total 3, , German customers 2, , Foreign customers Total 3, ,

20 3.10 Securitised liabilities Commercial paper Bearer bonds 2, , Total 3, , Provisions Provisions for pensions and similar obligations Other provisions Total Other liabilities Other tax liabilities Miscellaneous other liabilities Total Subordinated liabilities Subordinated promissory note loans Subordinated bearer bonds Total

21 LETTER TO SHAREHOLDERS INTERIM FINANCIAL STATEMENTS NOTES 3.14 Derivatives Fair values Fair values positive negative positive negative positive negative Interest rate products Currency-related products Total Off-balance sheet commitments Contingent liabilities from guarantees Irrevocable loan commitments 1, , Total 2, , Executive bodies and offices held by members of the Board of Managing Directors, or members of the Supervisory Board For details, please refer to the current information shown on our website: Investor Relations Corporate Governance Boards and Offices held on Boards. 19

22 DVB s offices Frankfurt/Main Registered office/head office DVB Bank AG Friedrich-Ebert-Anlage Frankfurt/Main, Germany Phone +49 (0) Fax +49 (0) London DVB Bank AG London Branch 80 Cheapside London EC2V 6EE, UK Phone +44 (0) /9700 Aviation: Fax +44 (0) Shipping: Fax +44 (0) Rotterdam DVB Bank N.V. Parklaan BB Rotterdam The Netherlands Phone +31 (0) Fax +31 (0) New York DVB Bank AG New York Representative Office 609 Fifth Avenue New York, NY , USA Phone Aviation and Land Transport: Fax /37 Shipping: Fax Bergen DVB Bank N.V. Nordic Branch Strandgaten Bergen, Norway Phone Fax Hamburg DVB Bank AG Shipping Department Ballindamm Hamburg, Germany Phone +49 (0) Fax +49 (0) Piraeus DVB Bank AG Representative Office Greece The Chandris Building 95, Akti Miaouli Piraeus, Greece Phone Fax Curaçao DVB Bank America N.V. Zeelandia Office Park Kaya W.F.G. Mensing 14 Curaçao, Netherlands Antilles Phone Fax Hong Kong DVB Bank N.V. Representative Office Far East Unit C, 19/F, Entertainment Building 30 Queen's Road Central Hong Kong, China Phone Fax Singapore DVB Group Merchant Bank (Asia) Ltd. 77 Robinson Road # SIA Building Singapore Phone Fax Tokyo International Transport Finance Ltd. Tokyo Branch Akasaka Habitation Building 8F Akasaka Minato-Ku Tokyo , Japan Phone +81(0) Fax +81(0) DVB Capital Markets LLC 609 Fifth Avenue New York, NY , USA Phone Fax info@dvbbank.com 20

23 Published by DVB Bank Aktiengesellschaft Corporate Communications Elisabeth Winter Manager Investor Relations Friedrich-Ebert-Anlage Frankfurt/Main, Germany Phone +49 (0) Fax +49(0) elisabeth.winter@dvbbank.com Financial Calendar 2006/2007 mid-november 2006 Publication of the third quarterly report for 2006 December 2006 Publication of the Declaration of Compliance 2006/ June 2007 Annual General Meeting The Group Interim Report 2006 is published in English and German. Design concept and realisation: GolinHarris B&L GmbH, Frankfurt/Main, Germany Typesetting and graphics: Studio Oberländer, Frankfurt/Main, Germany Printing: Frotscher Druck, Darmstadt, Germany

24