HVB Group 2012 half-year results

Transcription

1 HVB Group 2012 half-year results Dr Theodor Weimer, Board Spokesman of HypoVereinsbank and Country Chairman Germany of UniCredit Peter Hofbauer, Chief Financial Officer of HypoVereinsbank Munich, 3 August 2012

2 Good result generated in first half of 2012 in difficult market conditions profit before tax almost 1.6 billion Income Statement Change 1-6/ /2011 m m % Net interest 1,796 2,113 (317) (15.0) Dividends and other income from equity investments (39) (38.6) Net fees and commissions (94) (13.6) Net trading income Net other expenses/income Operating income 3,459 3,733 (274) (7.3) Operating costs (1,783) (1,783) Operating profit 1,676 1,950 (274) (14.1) Net write-downs of loans and provisions for guarantees and commitments (265) 36 (301) Net operating profit 1,411 1,986 (575) (29.0) Provisions for risks and charges 76 (174) Restructuring costs Net income from investments (38) (35.2) Profit before tax 1,557 1,920 (363) (19) Income tax for the period (645) (600) (45) Profit after tax 912 1,320 (408) (30.9) Impairment on goodwill Consolidated profit 912 1,320 (408) (30.9) 2

3 Consistently strong capital base Key performance indicators 1-6/ /2011 Cost-income ratio (%) %-P Return on equity before tax (%) * (3.2)%-P Key capital ratios compliant with Basel II 30/6/ /12/2011 Core Tier 1 ratio (%) %-P Tier 1 ratio (%) %-P Risk-weighted assets ( bn) (6.0)% Selected balance sheet figures 30/6/ /12/2011 Total assets ( bn) % Shareholders' equity ( bn) (0.1)% Leverage ratio ** 16.8x 16.5x + 0.3x Cost-income ratio at a very good level Core Tier 1 ratio still at an excellent level; increase due to the reduction in risk-weighted assets Total assets slightly higher; cash and cash balances rise to 23.3 billion on a very comfortable liquidity base Shareholders' equity unchanged: dividend payment of 1.0 billion mainly offset by consolidated profit of 0.9 billion generated in the first half of * Return on equity calculated on the basis of average shareholders' equity according to IFRS and projected profit before tax at 30 June 2012 for the year as a whole ** Ratio of total assets (unadjusted) to shareholders' equity compliant with IFRS

4 Highlights in the first half of 2012 Good half-yearly pre-tax profit of 1.56 billion in absolute terms in difficult markets in second quarter of 2012 But profit positively impacted by non-recurrent CVA effect ( 327 million) in the first quarter of 2012 Dividend payment of 1 billion for 2011 almost earned again in first half of 2012 Earnings under pressure due to interest rates and customer uncertainty No increase in costs! Low net write-downs of loans (cost of risk 40 BPS), beginning to normalise Strong balance sheet structure figures 4

5 Corporate & Investment Banking division (CIB) Profit before tax Key statements on first half of /2012 1,093 Good profit before tax of 1.1 billion despite difficult market conditions 1-6/2011 1,555 Decline in net interest and hence operating income caused by low interest rates Operating income Emerging normalisation of risk requirement resulted in an increase in net write-downs of loans 1-6/2012 2,216 Moderate rise of 1.8% in operating costs despite inflation of around 2% 1-6/2011 2,434 Consistently strong cost-income ratio of 36.4% 5

6 Family & SME division (F&SME) Profit before tax 1-6/ Key statements on first half of 2012 Decrease in pre-tax profit due to lower operating income resulting from the difficult market conditions 1-6/ Net fees and commissions almost at last year's level: sales of innovative investment products despite general reticence on the part of investors Operating income Major revitalisation in real estate financing and sharp increase in deposits 1-6/ Awards: "Beste Filialbank 2010, 2011, 2012" "Bester Baufinanzierer" 1-6/ Financial partners: first location to be opened in Gütersloh in June

7 Private Banking division (PB) Profit before tax 1-6/ Key statements on first half of 2012 Cautious customer activity results in a decline in net fees and commissions and thus in lower operating income 1-6/ Consistent expansion of cooperation with CIB Operating income Investments in the area of ultra high net worth individuals (in addition to Munich, now also in Hamburg, Düsseldorf and Frankfurt) 1-6/ Successful introduction of the flat rate model: DepotGlobal 1-6/ Further expansion of customer base in second quarter of

8 High net trading income unable to fully offset the marketinduced decline in net interest and net fees and commissions Net interest Net fees and commissions Net trading income (13.6)% (15.0)% 2, % 1,796 (18.7)% (4.4)% (18.7)% (4.4)% 1, (13.6)% (13.0)% (10.8)% (49.1)% (82.8)% /11 1-6/12 Q2 11 Q2 12 Q /11 1-6/12 Q2 11 Q2 12 Q /11 1-6/12 Q2 11 Q2 12 Q1 12 Net interest: The low level of absolute interest rates resulted in a substantial decline in interest margins particularly in deposit-taking operations. It was also very difficult to achieve adequate interest margins in lending operations for this reason. In addition, the income from special effects generated in the Multinational Corporates unit last year did not recur. Net fees and commissions: The greater restraint of investors on account of the difficult financial market environment adversely affected management, brokerage and consultancy services, which was compensated in part by the successful sales of innovative investment products. In addition, there was a decrease in fee and commission income from lending operations. Net trading income: The Rates & FX and Equities units contributed net earnings to the good net trading income. In addition, we generated income from the buy-back of hybrid equity instruments and supplementary capital. Net trading income benefited particularly from the reversal of the credit value adjustments that it had been necessary to take in

9 Operating costs fall on the back of consistent cost management in a quarterly comparison Operating costs Payroll costs Other administrative expenses + 2.5% 1,783 1, (1.4)% (1.3)% (1.9)% + 1.5% (0.1)% (3.4)% (3.1)% /11 1-6/12 Q2 11 Q2 12 Q /11 1-6/12 Q2 11 Q2 12 Q /11 1-6/12 Q2 11 Q2 12 Q1 12 Total operating costs: Operating costs are down on the back of consistent cost management; decrease compared with second quarter of 2011, fourth quarter of 2011 and first quarter of Unchanged to last year in a half-yearly comparison. Payroll costs: The rise of 23 million, or 2.5%, over the first half of 2011 is mainly attributable to higher costs for HVB's pension fund. Other administrative expenses: Decline as a result of strict cost discipline despite higher expenses for implementing stricter regulatory and statutory requirements and an inflation rate of around 2% in Germany. 9

10 Net write-downs of loans starting to normalise after historically low level last year Net write-downs of loans Cost of Risk * BPS % BPS (36) _ ** (163) 1-6/11 1-6/12 Q2 11 Q2 12 Q /6/ /6/ /3/2012 Net write-downs of loans: Expenses of 745 million from additions (first half of 2011: 750 million) are offset by releases and recoveries from write-offs of loans of 480 million (first half of 2011: 786 million). Cost of risk: Emerging normalisation of net write-downs of loans and provisions for guarantees and commitments is reflected in the rise in cost of risk to 40 BPS. 10 * Cost of risk defined as proportion of net write-downs of loans to average customer loans ** Not meaningful on account of the reversal of net write-downs of loans

11 Quarterly development of HVB Group Profit/(loss) before tax 1, " normalised Q1 result " Ø 2010: 471 Ø 2011: 404 Ø 2012: (378) Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q

12 Slight improvement in the core Tier 1 ratio since year-end 2011 and thus still at excellent level Total risk-weighted assets bn (6.0)% (5.2)% Operational risk Market risk Credit risk The decline in total risk-weighted assets since year-end 2011 is caused by a reduction in risk-weighted assets arising from credit risk, mainly for derivative transactions, coupled with a fall in market risk. This was offset by a rise in the risk-weighted assets for operational risk. 31/12/ /3/ /6/2012 Tier 1 capital and capital ratios bn 20.6* in % Hybrid capital Core Tier 1 capital Tier 1 Core Tier 1 Core Tier 1 Ratio compliant with Basel II is up slightly to 16.6% (yearend 2011: 15.6%), putting it at an excellent level by both national and international standards. Including hybrid capital, the Tier 1 ratio is 16.9% (year-end 2011: 16.2%). The decline in Tier 1 capital to 20.3 billion (year-end 2011: 20.6 billion) can be attributed to a reduction of around 0.4 billion in hybrid capital resulting from terminations and buy-backs. 31/12/ /3/ /6/ * Difference due to rounding

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14 Operating divisions HVB Group CIB Family & SME Private Banking vs 1-6/2011 vs 1-6/2011 vs 1-6/ /2012 % 1-6/2012 % 1-6/2012 % Net interest 1,107 (197) (15.1) 547 (64) (10.5) 46 (6) (11.5) Dividends 54 (31) (36.5) Net fees and commissions 237 (72) (23.3) 284 (6) (2.1) 69 (13) (15.9) Net trading income (2) (100.0) (1) (1) Net other expenses/income (17) (7) (58.3) Operating income 2,216 (218) (9.0) 840 (78) (8.5) 118 (20) (14.5) Operating costs (806) (14) (805) (4) (82) (3) Operating profit 1,410 (232) (14.1) 35 (82) (70.1) 36 (23) (39.0) Net write-downs of loans and provisions for guarantees and commitments (384) (392) (14) + 6 (30.0) (1) + 2 (66.7) Net operating profit 1,026 (624) (37.8) 21 (76) (78.4) 35 (21) (37.5) Provisions for risks and charges (7) (8) Restructuring costs (1) (1) Net income from investments 13 (47) (78.3) >+100, Profit before tax 1,093 (462) (29.7) 47 (39) (45.3) 28 (28) (50.0) 14

15 Quarterly development Income Statement m Q Q Q Q Q Net interest ,080 Dividends and other income from equity investments Net fees and commissions Net trading income (449) (148) 273 Net other expenses/income Operating income 1,369 2, ,249 1,723 Operating costs (883) (900) (918) (910) (895) Operating profit/(loss) 486 1,190 (88) Net write-downs of loans and provisions for guarantees and commitments (175) (90) (188) (114) 163 Net operating profit/(loss) 311 1,100 (276) Provisions for risks and charges (107) (116) Restructuring costs 0 0 (75) (33) 0 Net income from investments (57) (12) 50 Profit/(loss) before tax 436 1,121 (378) Income tax for the period (254) (391) 123 (163) (286) Profit/(loss) after tax (255) (90) 639 Impairment on goodwill (4) 0 Consolidated profit/(loss) (255) (94)

16 Leverage ratio still at a low level Total assets bn + 1.7% + 2.6% /12/ /3/ /6/2012 The increase of 6.6 billion in total assets since year-end 2011 is chiefly attributabled to the rise of 19.1 billion in cash and cash balances as a result of higher deposits with central banks. This was offset by a decrease of 7.2 billion in financial assets at fair value through profit or loss and of 2.2 billion in held-to-maturity investments. On the liabilities side, the most significant increase was in customer deposits. Shareholders' equity bn (3.3)% Shareholders' equity is unchanged compared with year-end The dividend payment of 1.0 billion in the second quarter of 2012 was offset by the consolidated profit of 0.9 billion generated in the first half of 2012 and the rise of 0.1 billion in the available-for-sale reserve. 31/12/ /3/ /6/2012 Leverage ratio Total assets (unadjusted) to shareholders' equity 16.5x 15.9x 16.8x The rise in the leverage ratio since year-end 2011 results from the increase in total assets without any change in shareholders' equity. 31/12/ /3/ /6/