NORD/LB Norddeutsche Landesbank closed first quarter of 2018 with earnings before taxes of €68m. After taxes, the profit amounted to €43m. In the previous year, the result for the first quarter was influenced by special income in the securities sector and amounted to €295m before taxes and €248m after taxes.
NORD/LB’s Common Equity Tier 1 (CET 1) ratio continued to rise, reaching 12.8% as of 31 March 2018.
According to IFRS 9, net interest income in the first quarter of 2018 was €352m (comparative value Q1/2017, IAS 39: €406m). The decline in the interest result compared to the previous year is largely due to the reduction in the balance sheet total in recent years, in particular the repayment of the ship financing portfolio.
The net result of risk was mainly due to the reversal of loan loss provisions on the balance sheet of €25m (€101m). Due to the continuing ship crisis, however, the bank expects the formation of new loan loss provisions for the remainder of the year, as announced, so that the first quarter represents a temporary one-off effect in this respect.
Net fee and commission income amounted to €18m (€43m). The fair value result (including hedge accounting) was €3m (€114m).
The new item “net income from financial instruments not measured at fair value through profit or loss” in the course of the introduction of IFRS 9 amounted to minus €6m. Due to one-off effects in the securities business, the corresponding prior-year figure was still €224m, which was still largely reflected in Other operating income in the previous year.
Administrative expenses fell by 8% year-on-year to €291m (€318m). The other operating result was minus €35m (minus €75m) and also includes expenses for the bank levy of €50m. Income taxes reported under IFRS amounted to €25m (€47m).
Total assets and risk assets of the NORD/LB Group were further reduced and amounted to €159.7bn as of March 31, 2018 (year-end 2017: €165.4bn) and €45.7bn (€46.8bn, respectively).
The equity ratios of NORD/LB have improved again. The Common Equity Tier 1 capital ratio (CET 1 capital ratio) rose to 12.8% in the first quarter. At the end of 2017, it was 12.4% (adjusted value). The total capital ratio increased from 18.1 to 18.9%.
The ship financing portfolio of the bank amounted to €11.6bn as at 31 March 2018. At the end of 2017, it had amounted to €12.1bn. At the end of March, the total portfolio accounted for €7.9bn (end of 2017: €8.2bn) for loans bearing a problem (NPL). NORD/LB had announced that it would reduce this share to less than €5bn by the end of 2019 at the latest.