Westimmo sees 47% drop in new business in 2010

Westdeutsche ImmobilienBank (Westimmo) saw its new business volumes plunge 47% to EUR 3.3 bn in 2010 from EUR 6.2 bn the year before. The German lender blamed the fall on market conditions and a European Commission order to financial group WestLB to sell the Westimmo real estate financing unit.

Nevertheless, Westimmo reported on Tuesday that it increased its pre-tax earnings to EUR 99.2 mln in 2010, an increase of some 17% on the previous year - even though the 2010 financial year was overshadowed by the European Commission decision. Consolidated net income at Westimmo grew 14% to EUR 94.8 mln.

To date WestLB has not been able to secure an acceptable offer for Westimmo.

'In spite of the ongoing sale process we have been able to post a sharp improvement in our earnings and key income ratios and achieve what is a satisfactory volume of new business in light of these difficult conditions', said Peter Knopp, chairman of Westimmo.

'Westimmo has yet again demonstrated that it is a profitable bank. Given the background of the difficult market and refinancing conditions in 2010 and the particular challenge presented by the sale process, Westimmo’s business model has proved to be both sound and sustainably viable', Knopp continued.

The lender said that the sale process imposed by the European Commission and the negative effect this had on Westimmo’s refinancing situation had a significant impact on the development of new business, particularly in the second half of 2010.

Of the total EUR 3.3 bn in new lending volume, 22% came from Germany, which was once again the most important single market in Westimmo’s commercial investor business. Another 52% was distributed among the other European core markets, essentially the UK, Poland, France and Benelux. Business in North America accounted for 19%, while another 7% came from the Asian markets.