Banking industry
BayernLB defies crisis with rising profits
Many German companies are in poor shape. The financial sector, on the other hand, is doing better, and the Bavarian State Bank is also earning well. A direct bank subsidiary helped.
BayernLB reports rising profits despite the poor economy. In the first nine months, the Landesbank achieved a net profit of over one billion euros, an increase of 16 percent year-on-year. The bank, which is owned by the Free State and the Bavarian savings banks, continues to benefit from increased interest rates. Pre-tax profit increased by 4.5 percent to 1.35 billion euros, as CEO Stephan Winkelmeier and his board colleagues announced.
This means that BayernLB has its target for this year in sight after just nine months: pre-tax profit at the same level as the previous year of 1.4 billion euros. Winkelmeier is known for cautious forecasts, which BayernLB has exceeded several times in recent years.
The largest and most profitable company in the Landesbank Group is the Berlin online bank DKB, which alone contributed 882 million euros in pre-tax profit. However, the economic crisis has not left BayernLB unscathed either.
This can be seen most clearly in the risk provisions for loans that are potentially at risk of default: the Landesbank set aside 263 million euros for this in the first nine months – almost ten times as much as in the same period last year. The majority of this came from the real estate business. The combination of rising interest costs and falling real estate prices has brought many project developers into financial difficulties in recent years.
dpa
Source: Stern
