Operating income from the three market segments Corporates, Retail Clients and Financial Markets rose to EUR 1.074 billion in the first quarter 2009. The pro-rata figure of the previous year amounted to EUR 769 million. The segment Corporates, in which the corporate customer business is concentrated, made a major contribution to this result together with the customer-driven capital market business. Thanks to its operating strength, LBBW was able to more than offset the charges from the still difficult environment in the financial markets, which summed up to EUR 150 million in the first quarter 2009.
Operating income in the segment Financial Markets rose from EUR 192 million to EUR 382 million in the first quarter 2009. In the business segment Corporates operating income climbed from EUR 416 million to EUR 556 million. “This reflects LBBW’s strength as principal banker to the SMEs. In the first three months of this year, we were able to boost our lending volume in the corporate customer segment in the core market Baden-Württemberg by 5 percent to EUR 28.3 billion”, explains
Dr Jaschinski. Merely in the business segment Retail Clients (retail banking business, wealth management and business with savings banks), income was below the reference figure of the previous year. It amounted to EUR 137 million (previous year: EUR 162 million). This development is mainly due to the increased competitive pressure and the declining securities business. In this segment, deposits rose by 7 percent to EUR 13.4 billion. “This is a clear mark of confidence of our customers in the solidity and performance of our bank”, says Dr Jaschinski.
Marked increase in profit in the first quarter 2009
In the first three months of 2009, LBBW achieved a net interest income totalling EUR 459 million. The rise in the net fee and commission income to EUR 234 million is largely due to the positive trend in brokerage business. The net trading income amounted to EUR 187 million as at 31 March 2009 (previous year: minus EUR 514 million). Interest-rate and money market trading posted a clearly positive result in the first months of the year due to spread widenings and interest rate cuts in the Euro-zone.
The administrative expenses remained stable at EUR 453 million (previous year: 447 million). The net income/loss from investment securities, whose pro-rata figure of the previous year amounted to minus EUR 245 million, only shows a loss of EUR 9 million. This marked improvement is due to lower valuation adjustments of securities.
The operating result of LBBW Group amounted to EUR 361 million as at 31 March 2009 (previous year: minus EUR 615 million). The consolidated net profit after taxes shows a clear rise after the first quarter 2009; it amounts to 236 million EUR (previous year: minus EUR 514 million). Total assets of LBBW Group amounted to EUR 460 billion as at 31 March.
“The very pleasant development of the first quarter shows that LBBW has a business model generating strong earnings on a sustained basis due to its consistent orientation towards the customer business. The positive trend in the operating segments also continued in April. Nevertheless, we will have to face further challenges in 2009 due to the cyclical weakness”, explains Dr Jaschinski.