Commission and interest income increases Helaba’s profits

Helaba

The bank set aside 162 million euros for bad loans, 21 percent less than in the previous year.

(Photo: dpa)

Frankfurt The Landesbank Hessen-Thüringen (Helaba) earned more last year thanks to rising commission and interest income. The pre-tax profit climbed eleven percent to 633 million euros, as the institute announced on Thursday.

With its profit, however, Helaba is lagging behind the development of other major banks, which increased their profit more strongly in 2022 – mainly thanks to the interest rate hike by the European Central Bank (ECB).

Other institutes also performed better in the public sector. The largest state bank, LBBW in Stuttgart, achieved an operating pre-tax profit of EUR 901 million. Including the real estate bank Berlin Hyp, which LBBW bought in 2022, profit before taxes even rose to almost 1.9 billion euros.

BayernLB Munich had achieved pre-tax earnings of more than one billion euros last year, as CFO Markus Wiegelmann recently told the “Börsen-Zeitung”. Bayern will not present their detailed figures until April 5th.

According to his own statements, Helaba boss Thomas Groß is nevertheless satisfied with the performance of his bank. “We achieved a very encouraging result in 2022 in a geopolitical and macroeconomic environment marked by uncertainty.”

There are also numerous challenges in the current year. “These include the uncertain geopolitical situation, the unclear development of energy prices, the ongoing supply chain problems, the shortage of skilled workers and the persistently high inflation and the associated cost pressure,” said Groß.

Nevertheless, Helaba is confident about the year. You expect a pre-tax result between 500 and 700 million euros.

Helaba has trouble with the financial regulator

Helaba has set aside 6.8 million euros for a fine imposed by the ECB. During the corona pandemic, the bank made unauthorized interventions in the risk models with which it measures the risks arising from price fluctuations on the capital market. This was announced by the ECB, which oversees the largest banks in the euro zone, in mid-February.

As a result of these interventions, Helaba reported too low a risk to the ECB for three quarters. This is a problem because a bank’s capital requirements depend on the riskiness of the transactions and investments it makes. The higher the risk, the higher the capital requirement. Helaba has already stated that it did not intentionally violate the regulations and assumed that these interventions were permitted.

It is not the first time that Helaba has had to take clear criticism from the supervisory authority. At the beginning of 2018, the ECB complained that the board of directors of the money house, which had 36 members at the time, was too large. In the meantime, 27 people belong to the supervisory body. In 2017, the Landesbank stopped the planned renewal of its core banking system because the ECB had identified deficiencies in Helaba’s IT and these had to be remedied first.

More: LBBW benefits from Berlin-Hyp takeover and reports billions in profit

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