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Net other expenses/income
Net other expenses/income declined by €148 million to €91 million in
the year under review compared with last year, primarily on account
of the expenses for the bank levy of €101 million imposed for the first
time in Germany in 2011.
Operating costs
Operating costs rose by €178 million, or 5.2%, to €3,611 million in
the year under review compared with last year. In the process, payroll
costs rose by 3.6% to €1,819 million partly on account of an increase
in expenses for pensions and other administrative expenses by 9.2%,
to €1,593 million, while amortisation, depreciation and impairment
losses on intangible and tangible assets fell by 8.7% to €199 million.
The increase of €134 million in other operating costs can be attributed
in part to the bank levy for Austria (€48 million) and the UK (€19 million)
included for the first time in 2011. There was also a rise in IT
expenses to ensure that we are equipped for the continual increase
in statutory and regulatory requirements.
Overall, the expenses of companies included in the scope of consolidation
for the first time have also resulted in an increase in total
operating costs. Adjusted for currency and consolidation effects and
for the expenses for the bank levy, total operating costs rose by only
2.3%.
Operating profit (before net write-downs of loans and
provisions for guarantees and commitments)
Operating profit declined by 29.6%, or €924 million, to €2,201 million
in the year under review, partly as a result of the charges contained in
this figure from the expenses for the bank levies to be paid in Germany,
Austria and the UK (whole of 2011: €168 million) as well as the fall in
net trading income. The cost-income ratio (ratio of operating expenses
to operating income) amounted to 62.1% for 2011 after 52.3% in the
previous year and is thus still at a very good level despite the decline in
operating income.
Net write-downs of loans and provisions for guarantees
and commitments and net operating profit
In the year under review, net write-downs of loans and provisions for
guarantees and commitments had significantly improved in a much
healthier lending environment than last year and at €266 million were
significantly lower than the provisioning requirements of the same
period last year (€632 million). Within this amount, additions of
€1,625 million are largely offset by releases and recoveries from
write-offs of loans and receivables of €1,359 million. The largest
individual item in the additions relates to a loan exposure totalling
€297 million in connection with the construction of an offshore wind
farm.
All the divisions were able to benefit from the favourable development
overall in net write-downs of loans and provisions for guarantees and
commitments, particularly the CIB division (decline of €187 million
compared with last year) and F&SME division (decline of €52 million
compared with last year) and the other/consolidation segment which
posts a net reversal of €81 million (2010: net addition of €45 million).
In spite of the positive development of net write-downs of loans and
provisions for guarantees and commitments, the net operating profit
fell by €558 million, or 22.4%, to €1,935 million as a result of the
charges relating to bank levies.
Provisions for risks and charges
In the 2011 financial year, additions to provisions for risks and charges
totalled €251 million after €442 million last year. The largest part of
the additions to provisions related to various litigation risks in the year
under review, which are described in the Risk Report of the Management’s
Discussion and Analysis under the operational risk section. The
largest individual item included last year resulted from an obligation in
connection with the completion of an offshore wind farm.
Restructuring costs
In the year under review, we set up provisions of €108 million for
restructuring costs partly in connection with staff cutbacks. This
figure also includes restructuring costs relating to changes in the
strategic orientation of the CIB division, notably the abandonment of
the cash-equities operations for Western Europe and equity research
as well as a cost optimisation programme in the divisions’ central
Corporate Center functions and selected competence lines.
Net income from investments
In 2011, net income from investments amounted to €39 million after
a loss of €132 million in the previous year. In the reporting period,
net income from investments mainly results from gains of €147 million
on disposal which were largely generated with available-for-sale
financial instruments (€112 million). This figure also includes a gain
totalling €45 million generated in the second quarter of 2011 from
the partial sale of our shareholdings in UniCredit Global Information
Services and UniCredit Business Partners to UniCredit S.p.A.
HypoVereinsbank · 2011 Annual Report 33