Helaba reports strong growth in Group earnings and achieves its best result to date

In the Group's operating activities, the normalisation of the interest rate environ­ment led to a rise in net interest income to € 1,840 million (previous year: € 1,417 million). Both net fee and commission income and the result from investment property made consistently high contributions to net earnings. Net fee and commission income rose slightly to € 536 million (previous year: € 533 million), while the result from investment property was unchanged at € 207 million. In addition to the strong growth in the Group's operating activities, the result from fair value measurement also rose sharply to € 207 million (previous year: € 111 million) and thereby contributed to an altogether encouraging result. At € 1,711 million, general and administrative expenses were only marginally above the previous year's level of € 1,652 million. This rise was chiefly due to an inflation-driven increase in external costs as well as to capital expenditure on modernising the Group's IT infrastructure. In contrast, personnel expenses remained on approximately the same level as 2022.

The Group recorded net additions to loan loss provisions of € -448 million (previous year: € -162 million). A burden of around € -556 million in the Real Estate segment resulted from changes in conditions on property markets. These contrasted with reversals of loan loss provisions in other segments. Helaba's total risk provisioning additionally includes comfortable post-model adjustments (incl. exceptional circumstances) in an amount of € 388 million (31 December 2022: € 483 million).

Thomas Groß looks to the future with a sense of optimism: "Economic conditions in Germany and the rest of the world are better than current sentiment would suggest. Alongside encouraging signs of an improvement in early indicators, declining levels of inflation, in particular, are having a lasting positive impact on the economy. Nevertheless, it goes without saying that heightened geopolitical tensions and the fallout of the recent turnaround in monetary policy, as well as the prevailing situation on property markets, remain a challenge. In this respect, we will continue to support our customers in overcoming these challenges and in benefitting from the overall positive trend. Beyond the economic cycle, we regard it as our mission to act as a partner for companies and individuals in embracing digitalisation and the transformation of the economy towards sustainability. We are confident of achieving a pre-tax result in 2024 on the same level as last year. In the medium term, Helaba still anticipates generating a sustained pre-tax profit level of more than € 750 million."

As a result of a slight increase in the Group's capital base and a decline in its risk-weighted assets, there was a marked rise in the CET1 ratio to 14.7 percent (previous year: 13.5 percent).

Return on equity grew to 7.2 percent (previous year: 6.7 percent).

The cost/income ratio improved to 59.4 percent (previous year: 67.5 percent).

Other income fell to € 103 million from € 183 million in the previous year, which was mainly attributable to extraordinary depreciation on real estate held as inventory.

After tax, the consolidated net profit rose to € 466 million (previous year: € 431 million).

Total Group assets declined to € 202.1 billion (31 December 2022: € 211.5 billion). This reduction was largely the result of a lower level of cash in hand and sight deposits at central banks and credit institutions.

The Real Estate segment posted a net loss before tax of € -241 million (previous year: net profit of € 286 million), reflecting developments on property markets. Compared to the previous year, net interest income was virtually unchanged at € 442 million (previous year: € 429 million). At € -556 million, additions to loan loss provisions were substantially high-er (previous year: € -33 million).

Net earnings before tax in the Corporates & Markets segment decreased to € 409 million (previous year: € 447 million). Net interest income in this segment, at € 527 million, was higher than the previous year's figure of € 500 million. Rising interest rates in the division of Savings Banks & SME were the principal driver of this sharp growth. The result from fair value measurement, in contrast, fell to € 188 million (previous year: € 219 million) due to negative valuation effects. Reversals of loan loss provisions amounted to € 13 million (previous year: € 3 million).

The segment of Retail & Asset Management benefited enormously from a considerable rise in net interest income to € 410 million (previous year: € 242 million) as well as from fair value gains of Frankfurter Sparkasse's special funds. The result from investment property remains at the previous year's level (€ 207 million) and is mainly due to GWH. Overall, this segment's net earnings before tax came in at € 368 million, representing a considerable improvement on the previous year's result of € 194 million.

WIBank achieved net earnings before tax of € 57 million. WIBank performs essential development funding activities for the German state of Hesse. In addition to the promotional loan business, which generates a corresponding net interest income, as a service provider WIBank is also responsible for fulfilling additional tasks mandated by the State of Hesse and other public sector authorities.

Net earnings before tax in the Other segment (incl. consolidation) were significantly higher than in 2022, reaching € 129 million (previous year: € -336 million). Among other things, this segment benefited from greater net interest income, partial reversals of post-model adjustments as well as a lower bank levy.