Download (2.2 MB) - Volksbank AG
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DEVELOPMENT OF EARNINGS<br />
AND OF THE BUSINESS<br />
Results improved again<br />
The Investkredit Group had its best ever result in<br />
the year under review. Increases in volumes and<br />
earnings in all three segments were responsible for<br />
this success. Improved exploitation of the opportunities<br />
for business in the Central European core<br />
market raised total assets to EUR 21.4 bn.<br />
Return on equity improved again to 14.6%.<br />
180<br />
150<br />
120<br />
90<br />
60<br />
30<br />
0<br />
FACTORS OF INCREASED EARNINGS IN 2004<br />
in EUR m 2003 2004<br />
Net interest income 118.0 158.7<br />
Credit risk provisions (net) -8.5 -9.1<br />
Other operating income 15.8 21.0<br />
General administrative expenses<br />
Balance of other income<br />
-62.8 -75.2<br />
and expenses 9.8 3.6<br />
Pre-tax profit for the year 7<strong>2.2</strong> 98.8<br />
After-tax profit for the year 60.0 83.6<br />
Net profit 40.8 54.1<br />
DEVELOPMENT OF NET INTEREST INCOME 2000 – 2004<br />
2000<br />
0.97%<br />
2001 2002<br />
Net interest income Interest margin<br />
MAN<strong>AG</strong>EMENT REPORT / DEVELOPMENT OF EARNINGS AND OF THE BUSINESS<br />
Noticeable improvement in net interest<br />
income<br />
Net interest income is the main component contributing<br />
to the Investkredit Bank Group’s improved<br />
results. Business expansion – above all into European<br />
markets – has been the deciding factor.<br />
Results improved in all three segments – corporates,<br />
local government and real estate. Net interest<br />
income has accordingly risen by EUR 40.6 m or<br />
34% to EUR 158.7 m. The interest margin – net<br />
interest income in relation to<br />
average total assets – improved<br />
from 0.79% to 0.84%. The<br />
improvement in the interest<br />
margin is especially due to disproportionately<br />
high growth in the real estate segment.<br />
This in turn can be explained by a significant<br />
increase in rental earnings and favourable refinancing<br />
conditions.<br />
Improvement in credit risk provisions<br />
(net) due to consistent risk management<br />
Consistent credit risk management and a drop<br />
in the number of insolvencies amongst the<br />
Investkredit Group’s customers brought about<br />
0.85% 0.79%<br />
2003<br />
2004<br />
1.8%<br />
1.5%<br />
1.2%<br />
0.9%<br />
0.6%<br />
0.3%<br />
0%<br />
21<br />
BUSINESS EXPANSION BROUGHT<br />
ABOUT IMPROVEMENT IN<br />
NET INTEREST INCOME<br />
Net interest income in EUR m Interest margin in%<br />
0.98%<br />
76<br />
97<br />
105<br />
118<br />
159<br />
0.84%
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