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TheStreet Open House

Helaba Reports Earnings Of EUR 512 Million, Exceeding Previous Year's Result

The bank is reacting to growing costs due to increasing regulation - capital and liquidity costs, the bank levy as well as higher structural banking costs - as well as the accelerating pressure of competition with a programme of process and resource optimisation (Helaba PRO). Brenner: "Helaba has a stable and future-oriented business model. At the same time, however, we do not live blissfully on a desert island either. More than ever, we will have to fight to remain a sought-after partner for our customers in the future. The aim of this programme is to make comprehensive improvements to bank-wide business processes and, as a result, we envisage noticeable savings in administration costs for the company as a whole.

Outlook

From a business perspective, Helaba's CEO sees the emphasis in 2013 very much on renewal. Internally, it will be a year of integration and investment. The expansion of the core region and the tapping of further market potential in customer and S-Group business represent huge opportunities which Helaba will take advantage of. The integration of the S-Group Bank as well as process and cost optimisation measures that have been initiated will, however, require significant capital expenditure.

Brenner: "With a view to new business and the development of earnings, the first quarter of 2013 began successfully. But it would be presumptuous to extrapolate this trend onto the whole year. The economic outlook is too uncertain for that and, more importantly, it is impossible to calculate the precise effects of regulation on the structural costs for banks. Should the current low interest rate phase continue, we anticipate that earnings from operating business will remain on the same level as previous years. Overall, we are thus cautiously optimistic for 2013 as a whole.

    Balance Sheet (IFRS) for the Helaba Group as of 31 December 2012*
                                     31.12.2012    31.12.2011               Change
                                         in EUR        in EUR        in EUR
                                        million       million       million          in %
    Loans and advances to
     banks incl. cash reserve            32,161        15,646        16,515        >100.0
    Loans and advances to customers      90,821        84,041         6,780           8.1
    Impairments on receivables           -1,205        -1,256            51           4.1
    Assets held for trading              37,954        37,960            -6             -
    Positive market value of
     derivatives not held for trading     6,992         4,285         2,707          63.2
    Financial investments, incl.
     companies accounted for using the
     equity method                       28,003        18,805         9,198          48.9
    Other assets                          4,575         4,504            71           1.6
    Total assets                        199,301       163,985        35,316          21.5
    Liabilities due to banks             39,275        31,533         7,742          24.6
    Liabilities due to customers         47,611        41,907         5,704          13.6
    Securitised liabilities              57,168        37,243        19,925          53.5
    Liabilities held for trading         36,148        37,198        -1,050          -2.8
    Negative market value of
     derivatives not held for trading     4,982         3,916         1,066          27.2
    Reserves/other liabilities            2,937         2,228           709          31.8
    Subordinate capital                   4,363         4,466          -103          -2.3
    Shareholders' equity                  6,817         5,494         1,323          24.1
    Total liabilities                   199,301       163,985        35,316          21.5
    Income Statement
                                                        2012    2011       Change
                                                      in EUR  in EUR  in EUR
                                                     million million million     in %

    Net interest income                                1,145   1,067     78       7.3
    Provisions for loans and advances                   -238    -273     35      12.8

    Net interest income after provisions for

    loans and advances
                                                         907     794    113      14.2
    Net commission income                                263     254      9       3.5
    Net trading income                                   411     -44    455    >100.0
    Result of hedges/derivatives                        -111     292   -403   >-100.0
    Result from financial investments
     (incl. result from companies
      accounted for using the equity method)             -13     -16      3      18.8
    Other operating result                               236     209     27      12.9
    General administrative expenses                   -1,181    -997   -184     -18.5
    Earnings before tax                                  512     492     20       4.1
    Taxes on income                                     -194     -95    -99   >-100.0
    Consolidated net income                              318     397    -79     -19.9
    Ratings of Helaba
                                    Moody's Investors                   Standard & Poor's
                                         Service        FitchRatings          Corp.
    Long-term liabilities                     A2             A+*               A*
    Short-term liabilities                   P-1            F1+*             A-1*
    Public Pfandbriefe                       Aaa            AAA                -
    Mortgage Pfandbriefe                       -            AAA                -
    Financial strength/ individual rating     D+             a+*               -

    * Joint group rating of the Sparkassen-Finanzgruppe Hessen-Thüringen

Financial ratios

                                        2012        2011
                                     in per cent in per cent
    Cost-income ratio*                  61.2        56.6
    Return on equity (before taxes)*     8.4         9.2
    Total capital ratio**               16.3        15.3
    Tier-1 capital ratio**              11.6        10.1

*   Including bank levy

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