The tightening of the capital market crisis impacted Dresdner Bank's results in the first nine months of 2008. Value adjustments from trading activities amounted to 2.1 billion euros. In addition, loan impairment losses were required in the amount of 226 million euros. This caused the operating result to fall to minus 1.7 billion euros. After adjustment for the effects of the financial market crisis, Dresdner Bank generated a positive operating result from its ongoing business of around 600 million euros in the first three quarters of 2008.
Dresdner Bank's healthy core business is reflected in its net interest and current income, which increased both in the Private and Corporate Clients business and in Investment Banking. The Dresdner Bank Group's total net interest and current income at the end of September 2008 was around 2 billion euros.
The impact of the capital market crisis again made itself felt on net fee and commission income, which fell by 463 million to €1.7 billion euros.
The effects of the financial market crisis impacted net trading income in particular. In the first three quarters of 2008, the figure decreased by 1.9 billion euros year-on-year to minus 1.5 billion euros. The main reasons for the decline were value adjustments on collateralised debt obligations (CDOs) and US residential mortgage-backed securities (US RMBSs), as well as effects in connection with monoliners.
Overall, total operating income decreased to 2.2 billion euros.
Dresdner Bank in the third quarter of 2008
Dresdner Bank impacted by financial market crisis / Value adjustments in the trading book / Positive operating result for Private & Corporate Clients business / Core capital ratio remains solid at 8.1 percent / Product line "dresdner bank direct24" has 500,000 customers
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Costs, risk and capital
Total operating expenses fell in the first nine months of 2008 by 4.0 percent, to 3.6 billion euros. This related both to total staff costs and to non-staff operating costs. Loan impairment losses rose by 261 million to 337 million euros.
All in all, the Bank is reporting a loss of 2.4 billion euros, after a profit of 858 million a year ago. The positive effect on the result from the reclassification of assets amounted to 415 million euros.
After 9.3 percent at the end of June 2008 and 9.1 percent at year-end 2007, Dresdner Bank had a competitive core capital ratio of 8.1 per cent as at 30 September, despite the effects of the financial market crisis.
The Private & Corporate Clients (PCC) division was impacted by clients' markedly cautious approach to securities transactions due to the uncertainty on the capital markets. This led to a decrease in operating income of roughly 7 percent, to 2.5 billion euros. Costs were slightly lower, and the operating profit fell by 27 percent to 458 million euros. However, PCC generated a return on risk-adjusted capital (RoRAC) of 21.9 percent.
The number of customers increased by more than 100,000 to 6.6 million in the period from January to September 2008. The new "dresdner bank direct24" product line contributed significantly to this. At early November it was being used by more than 500,000 customers, around a quarter of whom are new customers. With its market-leading conditions, the product line has resulted in a deposit volume of 8.3 billion euros.
The operating income of the Investment Banking division was negative at 275 million euros, due to the high level of value adjustments in the trading book. At lower costs and an increased loan impairment loss the operating loss totalled to 2.2 billion euros. A number of the investment bank's core business areas increased their income despite the financial market crisis: Global Loans & Transaction Services, which comprises Cash Management and International Products, among other things, recorded growth of 33 million euros to 424 million. Fixed Income, Currencies & Commodities expanded its income by a third, to 844 million euros.
The figures shown in this press release refer only to the Dresdner Bank sub-group in accordance with IFRS. The figures for the Dresdner Bank sub-group according to IFRS are not identical to those published by Allianz for the banking segment, in which Allianz banking activities are summarised.
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.
All in all, the Bank is reporting a loss of 2.4 billion euros, after a profit of 858 million a year ago. The positive effect on the result from the reclassification of assets amounted to 415 million euros.
After 9.3 percent at the end of June 2008 and 9.1 percent at year-end 2007, Dresdner Bank had a competitive core capital ratio of 8.1 per cent as at 30 September, despite the effects of the financial market crisis.
The Private & Corporate Clients (PCC) division was impacted by clients' markedly cautious approach to securities transactions due to the uncertainty on the capital markets. This led to a decrease in operating income of roughly 7 percent, to 2.5 billion euros. Costs were slightly lower, and the operating profit fell by 27 percent to 458 million euros. However, PCC generated a return on risk-adjusted capital (RoRAC) of 21.9 percent.
The number of customers increased by more than 100,000 to 6.6 million in the period from January to September 2008. The new "dresdner bank direct24" product line contributed significantly to this. At early November it was being used by more than 500,000 customers, around a quarter of whom are new customers. With its market-leading conditions, the product line has resulted in a deposit volume of 8.3 billion euros.
The operating income of the Investment Banking division was negative at 275 million euros, due to the high level of value adjustments in the trading book. At lower costs and an increased loan impairment loss the operating loss totalled to 2.2 billion euros. A number of the investment bank's core business areas increased their income despite the financial market crisis: Global Loans & Transaction Services, which comprises Cash Management and International Products, among other things, recorded growth of 33 million euros to 424 million. Fixed Income, Currencies & Commodities expanded its income by a third, to 844 million euros.
The figures shown in this press release refer only to the Dresdner Bank sub-group in accordance with IFRS. The figures for the Dresdner Bank sub-group according to IFRS are not identical to those published by Allianz for the banking segment, in which Allianz banking activities are summarised.
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.
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