HSH Nordbank Q1 results 'positive'

German lender HSH Nordbank reported that it had generated a consolidated net profit of EUR 81mln for the the first three months of 2008 compared to EUR 389mln in the same period in 2007. The operating profit declined to EUR 39mln compared to EUR 426mln over the same period in 2007. The statement said the results were in line with expectations and added that the decline was due to several factors. In particular, the company noted that strong Q1 2007 results were based on the release of loan loss provisions and the sale of equity investments. Whereas in the first three months of 2008, the bank had made EUR 189mln writedowns on the credit investment portfolio. As a result, loan loss provisions totalled EUR 49mln.

Net interest income before loan loss provisions, however, increased by EUR 95mln or 29% on the previous year to EUR 425mln. After loan loss provisions, net interest income was down by just under 9% on the previous year to EUR 376mln. When adjusted for the reversal of impairments in the previous year, net interest income after loan loss provisions in Q1 2008 clearly exceeded the level of Q1 2007.

Net trading income and net income from financial investments were also affected by the financial crisis in Q1 2008. Net trading income amounted to EUR 179 mln compared to EUR 31mln in the first quarter of 2007, while net income from financial investments totalled EUR 1mln compared to EUR 142mln in Q1 2007. However, total assets at 31 March 2008, stood at EUR 203.9bn, which remains almost unchanged from EUR 204.9bn at year-end 2007.