DVB announces loss for first nine months of 2016

DVB Bank has posted a consolidated net loss before taxes of €27.3 million for the first nine months of 2016 compared to a net income of €92.2 million in the prior-year period.

The bank attributed the performance to the fact that the allowance for credit losses rose to €156.9 million compared to €62.7 million in the previous year, which was largely required for legacy exposures in the shipping finance portfolio and the offshore finance portfolio. “Both have been suffering from the severe and prolonged crisis in their respective markets,” said Ralf Bedranowsky, CEO and Chairman of DVB Bank's Board of Managing Directors. He added however that the bank closed 102 transactions generating €4.2 billion in new business volume, while new business in aviation finance and land transport finance continued to develop successfully.

Net fee and commission income, which primarily includes fees and commissions from new transport finance business, asset management fees, and fees generated from corporate finance advisory mandates, was up 3.8%, from €76.9 million to €79.8 million, said the bank.

Net income from financial instruments in accordance with IAS 39, which is generally volatile, amounted to €13.8 million compared to €76.3 million in the previous year, which included substantial non-recurring income from the sale of investment securities, due to the disposal of the stake in Wizz Air Holdings. The one-off effect generated in the bank's aviation investment management activities was not repeated during the same reporting period in 2016.

DVB now expects a consolidated net loss before IAS 39 for 2016 that is anticipated to be in a low negative triple-digit million euro range. Likewise, DVB no longer anticipates being able to achieve the financial management indicators - return on equity (before taxes), cost/income ratio, and Economic Value Added - as forecast for the 2016 financial year in the 2015 Annual Report.

DVB's tier 1 and total capital ratios in accordance with the CRR will remain adequate. Furthermore, DVB's parent company, DZ BANK Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main, intends to strengthen DVB's capitalisation through appropriate measures, also against the background of stricter capital requirements for banks.

Furthermore, the Board of Managing Directors of DZ BANK AG, Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main, has notified the Board of Managing Directors of DVB Bank SE today that it intends to conduct a squeeze-out at DVB.