PRESS RELEASES 2009

08/28/2009

DZ BANK Group: Successful performance in the first half-year 2009

– earnings before taxes increase by 30 per cent to EUR 643m

– “Programme 2011“ is being implemented as planned

– core capital increase is being initiated

In a challenging economic environment, the DZ BANK Group achieved earnings before taxes of EUR 643m for the first six months of fiscal 2009. This represents an increase of around 30 per cent on the previous year (H1 2008: EUR 496m). Operating earnings in the DZ BANK Group rose sharply to EUR 2,229m in the first half-year compared to EUR 1,836m in the year-earlier period. “Our joint successes with the local cooperative banks in nearly all of the DZ BANK Group’s business segments provide impressive confirmation of how the cooperative organisation is shouldering the financial crisis and of how it is strengthening its market position“, said Wolfgang Kirsch, Chief Executive Officer of DZ BANK AG. According to Kirsch, “given that the market environment is still susceptible to fluctuations, we do not expect that the positive earnings development in the first half-year can be maintained at the same level in the second half-year“.

DZ BANK Group: Results as per 30 June 2009 (according to IFRS)

The challenging economic environment in the first half-year 2009 is also reflected in the figures of the DZ BANK Group. However, this is being offset by the positive operating developments, especially with respect to net fee and commission income and net trading income.

Net interest income
declined by 4.8 per cent on the year-earlier period to EUR 1,324m. While the customer business is allowing for an improvement in margins, the development of interest rates on the capital market and the increased need for own funds weighed on the DZ BANK Group’s net interest income.

Risk provisioning in the lending business increased to EUR -373m compared to EUR -105m in the year-earlier period. “We see the first signs that the bottom has been reached following the sharp downturn in the global economy and even see a recovery in trade as well as on the money and capital markets. However, we must continue to expect rising insolvency figures and therefore greater risks of loan losses. For this purpose we have set up loan loss provisions. DZ BANK is strong enough to shoulder the economic burdens and to continue to take its opportunities on the market,“ explained Kirsch.

While net fee and commission income in the DZ BANK Group was up 2.8 per cent to EUR 447m, it increased by as much as 34.3 per cent to EUR 137m in DZ BANK AG mainly on the back of a high volume of bond issues under the lead management of DZ BANK AG. According to Kirsch, “we are seeing successful initiatives in joint sales with the local cooperative banks at nearly all of the companies of the DZ BANK Group”.

Net trading income reached EUR 689m and therefore significantly exceeded the comparable figure for the previous year of EUR 64m. The major part of this figure of EUR 680m (H1 2008: EUR 20m) was generated in DZ BANK AG. Here, the lively customer business of DZ BANK AG in capital markets products – especially in certificates and interest rate products – made a significant contribution. DZ BANK was able to significantly improve its market position. It was able to expand its business in bonds and interest rate derivatives with the local cooperative banks, institutional customers and corporate customers.

Net income on investments came in at EUR -318m compared to EUR -180m in the first half-year 2008. Included in this figure are necessary writedowns of EUR 169m on ABS securities.

Net income from the insurance business, which is accounted for entirely by the insurance subsidiary R+V in the DZ BANK Group, amounted to EUR 118m compared to EUR 152m in the year-earlier period. Premium income from the insurance business increased by 15.8 per cent to EUR 5,105m. The slow recovery on the capital markets had a positive impact on net investment income, which surged from EUR 437m to EUR 1,058m. Insurance benefits rose to EUR 5,203m (H1 2008: EUR 3,900m) mainly due to higher allocations to technical provisions at personal insurance companies.

Administrative expenses dipped slightly by 1.8 per cent to EUR 1,213m. The cost income ratio improved markedly from 67.3 per cent in the first half-year 2008 to 54.4 per cent.

Earnings before taxes rose to EUR 643m compared to EUR 496m in the year-earlier period.

The core capital ratio (tier I ratio) amounted to 8.6 per cent as per 30 June 2009 (31 December 2008: 7.4 per cent).


Outlook

“Even though we can not give a reliable forecast for the end of the year due to the ongoing uncertain economic environment, we anticipate positive business developments for the entire DZ BANK Group provided that market conditions stabilise“, said Kirsch. Kirsch stated that the DZ BANK Group owed its good start to the concerted actions in the Cooperative Financial Services Network and therefore joint marketing with the local cooperative banks. According to Kirsch, “the Cooperative Financial Services Network has proven that it is a reliable and competent local financial partner from which the DZ BANK Group also benefits”. Kirsch stated that the aim was to strengthen the DZ BANK Group’s focus on the local cooperative banks with the result that the Cooperative Financial Services Network would become the leading financial services provider in Germany by 2015. DZ BANK would prepare itself for this with “Programme 2011”. “The market initiatives in the SME business, transaction banking and private banking as well as the planned savings in non-staff costs and personnel expenses in the amount of EUR 110 – 130m are being backed up with measures. The implementation of the programme is now in full swing“, said Kirsch.

As already announced, following the capital measures initiated in the first half-year including the successful placing of EUR 500m of tier 1 capital and the BVR guarantee to relieve the burden on equity capital, DZ BANK also plans to strengthen its core capital by up to EUR 400m in the second half-year 2009.

Half-year results as per 30.06 of the DZ BANK Group 2009 vs. 2008 according to IFRS

In EURm01.01.-30.06.200901.01.-30.06.2008Change
in %
Net interest income1,3241,391-4.8
Risk provisioning in the
lending business
-373-105>100.0
Net fee and commission
income
4474352.8
Net trading income68964>100.0
Net income on investments-318-18076.7
Other net gains and losses
on the valuation of
financial instruments
-78-93-16.1
Net income from the
insurance business
118152-22.4
Administrative expenses-1,213-1,235-1.8
Other net operating income4767-29.9
Total profit before tax64349629.6
Cost income ratio54.467.3-12.9%-Punkte

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Contact:

Ilja-Kristin Seewald, Head of Department, Press, Internal Communication and Public Affairs
Tel.: +49-69-7447-42894

Uwe Wulf, Spokesperson
Tel.: +49-69-7447-6125