05. März 2010 
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Berlin Hyp reports a powerful boost to profits despite the financial market crisis
Despite the weak economy, Berlin Hyp continued its positive development in the financial year 2009 and considerably improved profitability. Pre-tax profits increased by 36.6 % on last year to € 78.3 million. At € 58.9 million, net income for the year was up 31.8 % on the previous year’s income and also exceeded the figure of € 55.1 million for 2007. This is primarily attributable to the stable development of business despite the economic crisis and a significant reduction in risk provisioning.
“In view of this successful result, we feel more than confirmed in our conservative business policy. To date, we have steered Berlin Hyp soundly and stably through the most serious recession in post-war history,” commented Jan Bettink, Chairman of the Board of Management of Berlin Hyp.
Stable net interest and commission income
Net interest and commission income was € 221.8 million (€ 227.2 million), almost reaching the previous year’s level. This primarily resulted from the stable development of net interest income, which remained constant at € 214 million (2008: € 214.4 million). The effects of the global recession in particular made themselves felt at Berlin Hyp in the context of commission business. The low level of new business meant that net commission income fell to € 7.8 million in the expired financial year (2008: € 12.8 million).
Total operating expenditure increased slightly by 3.1 % to € 76.6 million. As a result of this, the cost-income ratio increased to 35.1 %, which nevertheless still compared very favourably with the rest of the sector (33.0 %). The reason for the higher costs was above all increased staff expenditure of € 41.2 million (€ 38.2 million), primarily resulting from higher expenditure for retirement and the increased number of employees. Other operating expenditure amounted to € 30.3 million, representing an increase on the figure of € 28.8 million for the previous year, which is primarily attributable to renovation work on the buildings in Berlin. Depreciations on tangible assets were reduced by € 2.2 million to € 5.1 million.
Convincing result in a crisis year
Pre-tax profits after risk provisioning rose in the difficult year 2009 by more than one third to € 78.3 million. After tax, the net income for the year was € 58.9 million, up 31.8 % when compared with profits for the previous year.
“Together with LBB, we have established ourselves as the leading providers in the German real estate finance market. The realised volume of new lending is pleasing against the backdrop of the financial crisis,” explained Jan Bettink. Berlin Hyp consistently pursued its real estate new lending business and continued to apply strict risk and earnings criteria. Despite lower transaction volumes as a result of the recession, Berlin Hyp concluded new business activities with a total volume of € 4.8 billion, including prolongations, in the completed financial year (2008: € 6.0 billion). The structure of new business in the expired financial year was similar to that in the previous year. Office and commercial buildings and residential real estate continue to account for the largest volumes. Investors remain by far the largest group of customers. According to region, new lending abroad increased. This includes numerous activities of German customers in Europe outside Germany. The number of properties located abroad comprised 14 % of the total mortgages, as strategically planned. In total, Berlin Hyp placed refinancing funds with a total volume of more than € 3.1 billion under favourable conditions. This means that the Bank has a deliberately generous amount of liquidity.
Outlook – quality over quantity
Berlin Hyp’s economic outlook is cautiously optimistic. Berlin Hyp assumes that there will only be a turnaround in the real estate markets in one to two years’ time and anticipates that the transaction volumes on the real estate markets will also remain at the current level in 2010.
“In view of this successful result, we feel more than confirmed in our conservative business policy. To date, we have steered Berlin Hyp soundly and stably through the most serious recession in post-war history,” commented Jan Bettink, Chairman of the Board of Management of Berlin Hyp.
Stable net interest and commission income
Net interest and commission income was € 221.8 million (€ 227.2 million), almost reaching the previous year’s level. This primarily resulted from the stable development of net interest income, which remained constant at € 214 million (2008: € 214.4 million). The effects of the global recession in particular made themselves felt at Berlin Hyp in the context of commission business. The low level of new business meant that net commission income fell to € 7.8 million in the expired financial year (2008: € 12.8 million).
Total operating expenditure increased slightly by 3.1 % to € 76.6 million. As a result of this, the cost-income ratio increased to 35.1 %, which nevertheless still compared very favourably with the rest of the sector (33.0 %). The reason for the higher costs was above all increased staff expenditure of € 41.2 million (€ 38.2 million), primarily resulting from higher expenditure for retirement and the increased number of employees. Other operating expenditure amounted to € 30.3 million, representing an increase on the figure of € 28.8 million for the previous year, which is primarily attributable to renovation work on the buildings in Berlin. Depreciations on tangible assets were reduced by € 2.2 million to € 5.1 million.
Convincing result in a crisis year
Pre-tax profits after risk provisioning rose in the difficult year 2009 by more than one third to € 78.3 million. After tax, the net income for the year was € 58.9 million, up 31.8 % when compared with profits for the previous year.
“Together with LBB, we have established ourselves as the leading providers in the German real estate finance market. The realised volume of new lending is pleasing against the backdrop of the financial crisis,” explained Jan Bettink. Berlin Hyp consistently pursued its real estate new lending business and continued to apply strict risk and earnings criteria. Despite lower transaction volumes as a result of the recession, Berlin Hyp concluded new business activities with a total volume of € 4.8 billion, including prolongations, in the completed financial year (2008: € 6.0 billion). The structure of new business in the expired financial year was similar to that in the previous year. Office and commercial buildings and residential real estate continue to account for the largest volumes. Investors remain by far the largest group of customers. According to region, new lending abroad increased. This includes numerous activities of German customers in Europe outside Germany. The number of properties located abroad comprised 14 % of the total mortgages, as strategically planned. In total, Berlin Hyp placed refinancing funds with a total volume of more than € 3.1 billion under favourable conditions. This means that the Bank has a deliberately generous amount of liquidity.
Outlook – quality over quantity
Berlin Hyp’s economic outlook is cautiously optimistic. Berlin Hyp assumes that there will only be a turnaround in the real estate markets in one to two years’ time and anticipates that the transaction volumes on the real estate markets will also remain at the current level in 2010.
