Postbank Luxembourg Delivers 'Excellent' Results

by Carla Johnson, Investors Offshore.com

07 April 2008

Despite the turbulence in the capital markets in 2007, Deutsche Postbank International S.A. (PBI) in Luxembourg succeeded in generating 'excellent' earnings last year, according to the bank.

Profit before taxes grew by 1.7% to EUR72.7mn in comparison with the previous year. The bank also boosted its core business areas.

Interest income grew year-on-year by 29.5% to EUR74.2mn. Net fee and commission income rose by 29.2% to EUR14.6mn.

Effects from the turbulent capital markets on the income statement were described as "only slight", but these led to a decline in financial and other income of EUR4.0mn. This figure amounted to EUR7.3mn in the previous year.

Provisions for losses on loans fell by 30.9% to EUR4.7mn, at the same time as a significant increase in the bank's loan portfolio.

Administrative expenses amounted to EUR22.3mn, compared to EUR18.3 mn in the previous year, due to an expansion in personnel necessary for the bank's growing business in personal financial advice, and in products for hedging interest and currency risks.

PBI went on to reveal that it has expanded its core business area of advisory and support services for private clients.

At the beginning of November 2007, the company launched three new Postbank Vermögensmanagement Plus sectoral funds. Within the first two months, around EUR200 million in cash inflow was generated.

PBI also posted growth in its second core business, the corporate client business. The principal area of growth was in interest and currency management for clients from SMEs.

PBI also posted an increase in new loans business with corporate clients. In total, the customer credit portfolio climbed by over 40% to EUR2.6bn.

With total assets amounting to EUR16.3bn (as at December 31st, 2007; previous year: EUR17.4bn), PBI is one of the largest banks in Luxembourg. The bank has equity of EUR671mn.

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