DVB has reported a consolidated net loss before taxes of €506.3 million in the first six months of 2017 compared to a net income of €14.1 million in the year-ago period. The net figure was dominated by a significant increase in allowance for credit losses, to €445.3 million, largely required for legacy exposures in the Shipping Finance portfolio, and for financings in the Offshore Finance portfolio. Due to the continued narrowing of spreads for euro/US dollar cross-currency swaps, the net result from financial instruments in accordance with IAS 39 fell to €-67.9 million.
Ralf Bedranowsky, CEO and Chairman of DVB Bank SE's Board of Managing Directors, reports that new business in aviation finance showed “stable, though subdued development, reflecting high liquidity and intensifying competition”.
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 down 8.3%, from €56.5 million to €51.8 million. Fee and commission income declined by 5.4%, to €56.5 million (previous year: €59.7 million); fee and commission expenses were up 46.9%, from €3.2 million to €4.7 million.
DVB says that it plans to sustain the positive business development in aviation finance as well as in land transport finance, and strengthen the earnings power of these businesses.