Business developed positively in the core business areas.
(Photo: imago stock&people)
Munich BayernLB benefited greatly from the high demand for financing in the first half of the year. Because customers had a high financing requirement during the phase of great uncertainty, the Landesbank’s net interest and commission income increased significantly.
“It pays off that we are in intensive contact with our customers, especially in these times of crisis,” said CEO Stephan Winkelmeier, assessing this development. Adjusted for special effects from the previous year, net interest income rose by five percent, and commissions even rose by 16 percent.
The group thus raised its forecast for the annual result before taxes to EUR 500 million. So far, the Landesbank, which is three-quarters owned by the Free State of Bavaria and one-quarter by the Bavarian savings banks, was expecting a range of 300 to 500 million euros.
In the first half of the year, 277 million euros have already been achieved. This is significantly less than the 485 million euros from the same period last year. However, the result at that time was strongly influenced by special effects.
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The end of the real estate boom, which many experts are now predicting, is not yet having an impact on BayernLB. There are also no signs of consequences for the future.
“We expect the good business development to continue in the second half of the year,” said CFO Markus Wiegelmann to the Handelsblatt. The challenges for customers are still great. With their consistently good credit rating, they can usually cope well with the rise in interest rates.
For BayernLB, however, the many imponderables around the world also mean that forecasts can only be made with reservations. Due to the Russian war of aggression in Ukraine and the associated significant impact on the global economy, the plans have so far been subject to reservations. BayernLB had already closed its representative office in Moscow when the war broke out, and new business in Russia, Belarus and Ukraine was discontinued.
Further real estate sales planned
The online bank DKB contributed far less to BayernLB’s profit than usual. In the past, the Munich-based company’s biggest profit maker only achieved pre-tax earnings of 119 million euros in the first half of the year, after 273 million euros in the same period last year.
The reasons for this included the new challenges posed by the turnaround in interest rates when investing own funds and the increased administrative workload caused by more employees. In addition, the group is currently investing heavily in technical equipment.
Operationally, however, business at Germany’s second largest online bank behind ING continues to run well. The number of customers grew by 5.2 million after 4.8 million a year ago. The volume of credit also increased, and the number of credit cards issued and securities accounts is also growing steadily.
BayernLB plans to continue selling its own real estate. After buildings were already sold in the first half of the year, further properties are to follow by the end of the year.
The Landesbank had only postponed its sales plans for the head office in March due to the many uncertainties. “I am assuming that we will be able to generate special income in the hundreds of millions in the second half of the year, including from the sale of buildings,” says Chief Financial Officer Wiegelmann.
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