The business volume of the LBBW Group rose by €51 billion (plus 11.4 percent) in comparison to 31 December 2004 to €493 billion. Since the end of the year, the balance sheet total has grown by €30 billion (plus 7.7 percent) and was €421 billion as at 30 June 2005.
Operating result before risk provision/evaluation result rose slightly
The operating result before risk provision/valuation result as of 30 June 2005 was €874 million and thus rose pleasingly by €15 million (plus 1.7 percent). Net commission income also underwent a clear positive trend. In comparison to the first half of 2004, it rose by 15.5 percent (€33 million) to €244 million. This increase is largely due to a growth in loan and securities brokerage transactions. The item "Other operating profits" increased by 11.2 percent (plus €29 million) in comparison to the previous year to €290 million. "This figure also reflects successes in the leasing sector," Jaschinski emphasised.
The good net income from financial transactions in the first quarter of 2005 could not continue in the second quarter. Due to the slow capital market trend, the LBBW Group was unable to match the previous year's figure and posted €33 million. However, this profit factor in accordance with the German Commercial Code accounting practice does not include the whole commercial success. Thus, another €82 million of trading profit were earned, which are identified in the net interest income. The net interest revenue at €1,090 million thus remained practically at the same level as the previous year (€1,091 million). However, investors' cautious behaviour has had a negative impact on the net interest income of the LBBW Group on the wholeas is the case with other banks, too.
Administrative expenditure falling
Further consistent cost management has resulted in reducing administrative expenditure in the LBBW Group during the first half of 2005. It fell by 5.2 percent to €783 million. The human resources expenditure included in this item was kept at the same level as the previous year at €468 million (plus 0.9 percent or €4 million).
Pleasing annual net income before taxes
The risk provision/valuation result fell by 1.2 percent to €253 million. "Viewed over the year as a whole, we are once again expecting a clear reduction in credit risk provision," Jaschinski predicted. The background to this is that credit risk provision for the half-year was set at the proportionate planned value and the actual risk provision is well below this value. In addition, €65 million reserves were formed, impacting provision/valuation result, in order to be well protected for the second half-year. Accordingly, the LBBW Group posted pre-tax profits of €475 million, which means an increase of 3.5 percent (plus €16 million). "This result represents a successful interim position," the LBBW boss summarised.
LBBW Group in a good starting position
Landesbank Baden-Württemberg is on the right track. In spite of a difficult economic environment, the Group has achieved good half-year results. "We are within our target.. But whether this positive course will continue until the end of the year also depends on the development of the capital markets and risk provision," Dr Siegfried Jaschinski concluded.