Statement re Dresdner Bank Lower Tier II Bonds
26 Febrero 2009 - 2:31AM
UK Regulatory
TIDM97HF TIDM97HF
Dresdner Bank AG:
Dresdner Bank's preliminary results impacted massively by financial crisis
26.02.2009
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* High value adjustments and loan impairment losses at Investment
Banking
* Additional impact of one-time tax effect
* Private & Corporate Clients business profitable
The worsening financial crisis massively affected Dresdner Bank's results last
year. The total impact in 2008, which was due primarily to value adjustments
and the need for loan impairments, amounted to EUR6.2 billion. In addition,
write-downs of deferred tax assets in the amount of approximately EUR1.3 billion
were incurred in relation to the takeover of Dresdner Bank by Commerzbank.
According to the preliminary, unaudited figures, Dresdner Bank closed 2008 with
a loss of EUR6.3 billion, despite the positive result recorded by the Private &
Corporate Clients business.
Dresdner Bank's total operating income in 2008 was down by a good 87 per cent
year-on-year to EUR0.7 billion. This was due to value adjustments, which mainly
related to portfolios of structured credit products, monoliner hedges and
structured investment vehicles. Net interest and current income amounted to EUR
2.8 billion (previous year: EUR3.1 billion). On a like-for-like basis, the
traditional interest-driven business recorded year-on-year growth of around 6
per cent. Net fee and commission income fell by slightly less than 24 per cent
to EUR2.2 billion (previous year: EUR2.9 billion). This was due primarily to
declining income from the securities business. Because of the value adjustments
mentioned above, net trading income fell to EUR-4.3 billion (previous year: EUR-0.5
billion).
At EUR4.5 billion, administrative expenses were down approximately 5 per cent
year-on-year. Total staff costs fell by around 8 per cent to EUR2.7 billion.
Non-staff operating costs recorded a decline of around 4 percent to EUR1.8
billion. Loan impairment losses amounted to EUR1.7 billion, after net reversals
of EUR132 million in the previous year. The increase is primarily due to the need
for additional value adjustments on LBO finance transactions in the fourth
quarter.
The operating loss for 2008 amounted to EUR5.6 billion, after an operating profit
of EUR710 million in the previous year. At EUR3.9 billion, the operating loss for
Q4 2008 widened by slightly less than EUR3.5 billion year-on-year.
In the non-operating area, Dresdner Bank generated positive net income from
financial investments of EUR936 million (previous year: EUR183 million). This was
due in particular to the sale of equity investments in the course of the
acquisition of Dresdner Bank by Commerzbank. Dresdner Bank's tax expense
amounted to over EUR1.5 billion despite the negative result for 2008. This was
due to the fact that - as a result of the change in ownership - loss
carryforwards at Dresdner Bank AG can no longer be utilised, leading to
deferred tax assets having to be written off.
The Private & Corporate Clients division generated an operating profit of EUR537
million despite the market turbulence (previous year: EUR862 million). The
decline was due in particular to lower income from the securities business,
which led to a EUR354 million drop in net fee and commission income to EUR1.5
billion. The deposits business turned in a positive performance, with net
inflows of more than EUR8 billion in the second half of 2008.
Investment Banking was hit increasingly hard by the financial market crisis in
the course of 2008. This resulted in an operating loss of EUR6.3 billion
(previous year: loss of EUR665 million). Net trading income fell by EUR4.2 billion
to EUR-4.6 billion as a result of market factors and value adjustments. Despite
the difficult market environment, income growth was generated in Fixed Income
and in selected business areas of the Global Banking unit.
Due to the massive impact on earnings, the Dresdner Bank Group's equity
declined from EUR10.6 billion to EUR2.8 billion. Dresdner Bank's total assets fell
by 15.8 per cent to EUR421.0 billion.
The Dresdner Bank Group's core capital ratio as at 31 December 2008 was around
4.0 per cent, and the total capital ratio was around 8.4 per cent, with
risk-weighted assets amounting to EUR114.9 billion. After adjustment for the
transfer of CDOs agreed with Allianz and the silent partner's stake by Allianz
in the amount of EUR750 million, the Dresdner Bank Group's pro forma core capital
ratio would be 4.8 per cent.
Based on the preliminary figures, Dresdner Bank AG's loss for the period
amounted to EUR6.2 billion. It is to be expected that a net accumulated loss will
be reported even after the reversal of all reserves. This will lead to a loss
participation on the part of the outstanding hybrid capital and profit
participation certificates.
Preliminary 2008 results
Change Change
Q4 Q4
(in EUR million) 2008 2007 2008 2007
EUR per EUR per
million cent million cent
Net interest and
current income 2,813 3,061 -248 -8.1 771 675 96 14.2
Net fee and
commission income 2,180 2,866 -686 -23.9 447 670 -223 -33.3
Net trading income -4,313 -481 -3,832 > 100 -2,786 -867 -1,919 > 100
Other operating
income 13 - 13 13 - 13
Total operating
income 693 5,446 -4,753 -87.3 -1,555 478 -2,033
Administrative
expenses 4,539 4,849 -310 -6.4 965 1,075 -110 -10.2%
Other operating
expenses 81 19 62 > 100 26 12 14 > 100
Total operating
expenses 4,620 4,868 -248 -5.1 991 1,087 -96 -8.8%
Loan impairment
losses 1,671 -132 1,803 1,334 -208 1,542
Operating loss/profit -5,598 710 -6,308 -3,880 -401 -3,479 > 100
Net income from
financial investments 936 183 753 > 100 1,096 -33 1,129
Net income from
intangible assets -39 - -39 -39 - -39
Restructuring charges 0 50 -50 -100 -17 34 -51
Loss/profit before
tax -4,701 843 -5,544 -2,806 -468 -2,338 > 100
Tax expense 1,535 373 1,162 > 100 1,108 -32 1,140
Loss/profit after tax -6,236 470 -6,706 -3,914 -436 -3,478 > 100
Profit attributable
to minority interests 62 60 2 3.3 14 12 2 16.7
Loss/profit -6,298 410 -6,708 -3,928 -448 -3,480 > 100
Indices
Core capital ratio 1) 4.0 % 9.1 %
Total capital ratio
1) 8.4 % 13.8 %
Risk-weighted assets
1) 114,896 123,115 -8,219 -6.7
Employees (FTEs) 23,295 26,309 -3,014 -11.5
1) 2008 according to Basel II, 2007 according to Basel I
Frankfurt, 26th of February 2009
The Board of Directors
Dresdner Bank AG
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Language: English
Issuer: Dresdner Bank AG
Juergen-Ponto-Platz 1
60301 Frankfurt
Germany
Telephone: +49 (0)69 / 263-50750
Fax: +49 (0)69 / 263-15839
E-Mail: Martin.Halusa@Dresdner-Bank.com
Internet: www.dresdner-bank.de
ISIN: GB0004955547, Primary Capital Undated Floating Rate Note issued by
Dresdner Kleinwort Group Limited
END
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