PRESS RELEASES 2010

08/26/2010

DZ BANK Group: Successful H1 2010

– Profit before tax reaches EUR 616 million
– Further successes at the operating level in the Customer and Product divisions
– Private Banking unit launched
– Profit before tax of more than EUR 1 billion targeted

The DZ BANK Group looks back on a successful overall performance for H1 2010 with a profit before tax of EUR 616 million (H1 2009: EUR 603 million). “The DZ BANK Group’s systematic orientation to the Cooperative Financial Services Network has thus proven its worth again in an economic environment that remains prone to volatility. Our extensive initiatives in the Private Client and Corporate Customer segments as well as in Transaction Banking are biting. Jointly with the local cooperative banks we have scored handsome sales successes in the customer and product divisions,” said Wolfgang Kirsch, CEO of DZ BANK.

Assuming that the strains in the financial markets continue to ease in the second half of FY 2010, the DZ BANK Group believes it will be able to outstrip its year-earlier earnings performance. “Our operating successes should then return increasingly to the fore again, especially as our home market Germany is the main motor driving the acceleration of growth in Europe. To this extent, we are confident that we shall be able to report a profit before tax of more than EUR 1 billion,” said Wolfgang Kirsch. The projects that DZ BANK and WGZ BANK are pursuing jointly in Private Banking, in the SME business and in securities processing are proceeding according to plan.


DZ BANK Group: earnings as of 30 June 2010 (IFRS)

Net interest income declined slightly in the DZ BANK Group, down 5.7 per cent on the year-earlier period to EUR 1,249 million (H1 2009: EUR 1,324 million). While interest operations charted a positive trend, especially at DZ BANK AG itself and at DVB Bank and TeamBank, net interest net income declined at Bausparkasse Schwäbisch Hall and VR Leasing.

Thanks to an easier economic setting it was possible to reduce impairment losses on loans and advances by a significant 63.5 per cent to –EUR 136 million (H1 2009: -EUR 373 million).

Net fee and commission net income rose a strong 21.5 per cent in H1 2010 to EUR 543 million (H1 2009: EUR 447 million) due to higher transaction volumes and an increase in assets under management in the DZ BANK Group. The positive development of business at Union Investment played an important part in this. In particular, the continued recovery in the capital markets led to an increase in the average volume of assets under management, which in turn led to higher revenues in this segment.

Gains and losses on trading activities were influenced by fears about the viability of the national debt of some European countries, which led to disruption in the European bond markets. At EUR 528 million, the DZ BANK Group’s gains on trading activities in H1 2010 were 23.4 per cent lower than the EUR 689 million reported in H1 2009. The previous year's figure was characterised by the effects of the reversal of impairment losses as well as by writedowns on asset-backed securities, especially at DZ BANK AG. At EUR 2.2 billion, sales of AKZENT Invest certificates were around 15 per cent higher than in the year-earlier half year.

Gains and losses on investments came in at –EUR 306 million (H1 2009: -EUR 318 million).

Net income from insurance activities, which is earned in the DZ BANK Group exclusively by R+V Versicherung, rose by 26.3 per cent from EUR 118 million to EUR 149 million due mainly to increased premium income as well as improved investment income.

Administrative expenses rose slightly, up 1.7 per cent from EUR 1,213 million to EUR 1,234 million. The cost-income ratio in the DZ BANK Group was 62.1 per cent (H1 2009: 55.4 per cent).

Profit before tax increased to EUR 616 million, up from EUR 603 million in the year-earlier half year.

The Tier 1 capital ratio as of 30 June 2010 was 10.1 per cent. “We feel well equipped to strengthen the Tier 1 capital further from our own profitability as well as by way of our continued systematic capital management within the DZ BANK Group. This will pave the way to ensuring compliance with increasingly stringent regulatory capital adequacy,” said Kirsch.


Outlook

Wolfgang Kirsch: “Our key principle ‘Verbund First’ is proving its worth. Against the background of the financial crisis the cooperative organisation has seen its reputation enhanced among large sections of the population. We seek to translate this sympathy into durable customer relations and as the Cooperative Financial Services Network we aim to occupy pole position as regards quality and customer satisfaction across all product divisions. The DZ BANK Group will continue to make its contribution to achieving this goal and will systematically maintain its orientation to the local cooperative banks.” The move to lend the cooperative banks support for their advisory services for high net worth private clients in the Private Banking business on a basis of subsidiarity out of DZ PRIVATBANK’s German locations is also a part of this. The first locations to be equipped for this are Hannover, Munich and Stuttgart. “In this way, we are jointly developing another important and high-growth market”, said Kirsch. In the SME business, too, DZ BANK and WGZ BANK are also stepping up their joint efforts. As of 1 September the two banks’ SME advisory services in the areas of management succession, acquisitions and divestitures are to be pooled in the joint enterprise “VR Unternehmerberatung.”

Provided that the strains in the financial markets continue to ease in H2, the DZ BANK Group expects that it will be able to outstrip its year-earlier earnings. According to current projections, it may be assumed that the Group’s operating successes will become even more apparent in H2.


DZ BANK Group H1 results as of 30.06.2010 compared to H1 2009 (IFRS)

In Euro m01.01.-30.06.201001.01.-30.06.2009Change
in %
Net interest income1,2491,324-5.7
Impairment losses on loans and advances-136-373-63.5
Fee and commission net income54344721.5
Gains and losses on trading activities528689-23.4
Gains and losses on investments-306-318-3.8
Other gains and losses on measurement of financial instruments-162-118 *37.3
Net income from insurance activities14911826.3
Administrative expenses-1,234-1,2131.7
Other net operating income-1547> 100.0
Profit before tax6166032.2
Cost-income ratio62.155.4+6.7% points

* Amount adjusted

__________________________

Contact:

Martin Roth, Head of Division, Communication & Marketing
Tel.: +49 69 7447-42750
E-mail: martin.roth@dzbank.de

Ilja-Kristin Seewald, Head of Department, Press, Internal Communication and Public Affairs
Tel.: +49 69 7447-42894
E-mail: ilja-kristin.seewald@dzbank.de