German lender WestImmo, which is being taken over by peer Aareal Bank, reported a record net profit of €64 mln in 2014, up 22% on the previous year's figure of €50.3 mln.
German lender WestImmo, which is being taken over by peer Aareal Bank, reported a record net profit of €64 mln in 2014, up 22% on the previous year's figure of €50.3 mln.
The result from ordinary activities rose to €70.9 mln from €57.4 mln in 2013.
'The very good results were lifted not least by the continuing high quality of the loan portfolio and the associated low allowance for losses on loans and advances,' the bank said in a statement.
WestImmo, currently held by 'bad bank' Erste Abwicklungsanstalt (EAA), was required to cease new business activities more than two years ago due to restrictions imposed by the European Commission following a bailout of Westimmo's parent group, the former WestLB. WestImmo has since focused exclusively on managing its cover pools and on renewing existing loan commitments.
'The bank is profitable despite its limited business activities and the associated decline in its interest-bearing portfolios,' Westimmo noted.
Non-Pfandbrief activities
As part of plans to sell the unit, the commercial property lender transferred all the assets that were inconsistent with its strategy as a traditional Pfandbrief bank to EAA via a carve-out transaction, reducing its equity by €450 mln.
'The bank has emerged as a focused Pfandbrief bank with a low risk profile,' commented Claus-Jürgen Cohausz, managing board chairman of WestImmo.
Net interest income, including current income, amounted to €108.2 mln at the end of the financial year, down on the prior-year figure of €136.6 mln due to a €28.4 mln decrease in the loan portfolio.
The primary allowance for losses on loans and advances amounted to €19.5 mln, versus €33.3 mln the year before. Risk provisions were positive, amounting to €9.8 mln due to income from financial assets and investments. Administrative expenses declined by around 15.7% to €55.1 mln from €65.4 mln in 2013.
WestImmo extended real estate loans totalling €0.8 bn in 2014, compared with €1.2 bn in the year-earlier period. The bank’s total assets declined by €3.7 bn year-on-year to €10.1 bn as at 31 December 2014 (previous year: €13.8 bn).
In February this year, EAA agreed to sell its WestImmo shares to rival real estate lender WestImmo for an all-equity amount of €350 mln. The transaction is expected to close by mid-2015.
