WestImmo's pre-tax earnings up 15.5% in 2008

German lender WestImmo saw its pre-tax earnings increase by 15.5% year-on-year to EUR 121.2 mln in 2008. The bank, which specialises in commercial real estate financing in Europe, US and the Asia-Pacific region, said on Wednesday that net profit rose by 5% to a record EUR 97 mln in 2008.

'Our business model has proved to be both resilient and viable in what has been an extremely difficult year for real estate banks in particular', said Peter Knopp, chairman of the Managing Board of WestImmo. 'WestImmo has thus demonstrated its reliability as a partner to customers even in turbulent times such as these.'

The earnings increase was driven primarily by the higher net interest income and the significant jump in net fee and commission income. Net interest income came in at EUR 179 mln, up 14.6% on the year-earlier figure. Net fee and commission income climbed 40.4% to reach EUR 26 mln. This reflected the fact that WestImmo took on the role of agent or arranger in a greater proportion of syndicated financing operations.

The bank financed real estate for a total of EUR 6 bn in 2008, down from EUR 9.6 bn a year before. Of the approved funding, 91% was earmarked for commercial real estate and 9% for housing construction. Germany represented around 22% of the total new business in 2008, while France accounted for 12% and the states of Central and Eastern Europe for 8%. The difficult market climate led WestImmo to reduce its exposure to the UK and Spain which accounted for 7% and 3% respectively.

In 2009, WestImmo has so far focused solely on financing commercial real estate, having suspended its private construction financing business. The bank expects the volume of new business recorded this year to be roughly the same as last year of EUR 6 bn.