SNS Property Finance saw its net losses soar more than 50% to EUR 189 mln in the first half of 2010 following impairments linked to the winding down of its international real estate financing activities.
SNS Property Finance saw its net losses soar more than 50% to EUR 189 mln in the first half of 2010 following impairments linked to the winding down of its international real estate financing activities.
The Dutch real estate financier booked a loss of EUR 91 mln for the period from June to end-December 2009 and EUR 128 mln in the first half of 2009.
On Wednesday, parent company SNS Reaal warned that it expected impairments on property finance loans would remain 'at high levels' in the second half of the year.
SNS Reaal posted a net profit of EUR 29 mln for H1 this year. The performance was a marked improvement on the EUR 30 mln loss in the same period last year but analysts had anticipated a sharply higher net profit of about EUR 97 mln.
SNS Reaal said that its results were pressured by the losses at its property financing unit and an additional goodwill impairment of EUR 68 mln stemming from the acquisition by SNS Reaal of the property financing unit in 2006.
SNS Property Finance's net loss, excluding the goodwill impairment, for the first half of 2010 was entirely attributable to the international operations, where a net loss of EUR 151 mln was recorded. In contrast, the Dutch portfolio posted a net profit of EUR 30 mln.
SNS Reaal indicated in June last year that it intends to phase out its international property finance activities over the next three to four years to focus on the Dutch market.
In the first half of 2010, SNS Property Finance’s total outstanding loans, net of provisions, declined by 3.7% to EUR 12.7 bn. Compared to the end of June 2009 the decrease amounts to 8%. The total international outstanding loans declined with 10% and 17.4% compared to year-end 2009 and the end of June 2009 respectively.
The total outstanding loan portfolio at end-June 2010 consisted of EUR 7.5 bn of investment finance (- 2.6% in the first half of 2010) and EUR 5.2 bn of project finance (- 5.4% in the first half of 2010).
Total loan commitments declined from EUR 14.6 bn at year-end 2009 to EUR 13.8 bn.
'Reduction of the international exposure was realised through repayment of loans as well as the sale of a number of loans, most notably in the US. SNS Reaal is committed to further reduce the international loan book in the second half of 2010,' the bank said.