Postbank Reports Fourth-Quarter Loss on Equity Sales
Deutsche Postbank AG reported a fourth-quarter loss after losing money selling equity investments.
The loss was 710 million euros ($893 million), compared with a profit of 166 million euros a year earlier, Bonn-based Postbank said in a statement today. The median estimate of 12 analysts surveyed by Bloomberg News was for a loss of 702 million euros.
Chief Executive Officer Wolfgang Klein sold all the bank’s equity investments in 2008 to reduce risks, leading to losses of 581 million euros. Almost $29 trillion was wiped off the market value of stocks worldwide last year as the Standard & Poor’s 500 Index had its steepest drop since the Great Depression.
“Difficult conditions on the capital markets are expected to persist in 2009 and the economy also appears likely to cool down further,” the company said. Profit levels at many financial companies will probably “remain below that seen in recent years.”
Postbank dropped 1.1 percent as of 9:19 a.m. in Frankfurt trading. The stock has declined about 87 percent in the past year, cutting the lender’s value to 1.89 billion euros.
Target Retained
Postbank’s Tier 1 capital ratio, used to measure a bank’s ability to absorb loan losses, was 7.4 percent at the end of December. That compares with a ratio of 10.1 percent at Deutsche Bank AG and Commerzbank AG, Germany’s biggest lenders.
The bank retained a medium-term target of a return on equity after tax of 13 percent to 15 percent. The lender will focus more on retail and corporate customers, scale back capital-markets risks and cut costs, it said.
Postbank had impairments of 74 million euros in the fourth quarter stemming from the September bankruptcy of Lehman Brothers Holdings Inc., the collapse of the Icelandic banking system, its structured credit portfolio and equities and mutual funds.
The world’s largest financial-services companies have racked up more than $1 trillion of losses and writedowns on credit-related assets in the worst financial crisis since the Great Depression, according to Bloomberg data.
Bank Rescues
Banks across Europe were forced into state rescues after the collapse of Lehman Brothers froze credit markets. Germany pushed a 480 billion-euro bank rescue plan through parliament in October, offering lenders capital infusions, debt guarantees and an option to buy toxic assets. Postbank, which hasn’t been bailed out, has said it’s interested in handing over its structured credit portfolio to the state.
Postbank aims to boost interest income and fees and commissions, while income from trading and investment securities should play “a significantly smaller role.”
Net interest income rose 23 percent to 738 million euros in the fourth quarter while net fee and commission income dropped 4 percent to 360 million euros.
Frankfurt-based Deutsche Bank has agreed to acquire 22.9 percent of Postbank from mail carrier Deutsche Post AG for about 1.1 billion euros in stock and increase that holding in the years ahead. Deutsche Bank earlier this month reported a record 4.8 billion-euro net loss for the fourth quarter and its first annual deficit in more than 50 years.
