New promotional business increases to € 8.6 billion; buoyant issuing activities; net interest income and operating result slightly above the previous year; cost-income ratio improves to 16.4 %
The favourable business performance of Landwirtschaftliche Rentenbank, Frankfurt/Main, continued in the first half of 2006. According to the semi-annual report published today, the promotional bank for agriculture and rural areas showed an increase in new business for promotional loans and a slightly improved profitability. In particular, the bank's new business in standard promotional loans for agriculture and rural areas experienced an increase. Special loans for the promotion of special purposes reached the high level of the previous year, despite a calmer demand for loans in the sector of renewable energies. In total, new promotional business including prolongations and interest rate adjustments amounted to € 8.6 billion (7). Thereof, € 3 billion (1.8) accounted for standard promotional loans for agriculture and rural areas, € 1.2 billion (1.2) for special loans for specific promotional purposes and assistance measures and € 2.2 billion (2.6) for securitised lending. Due to buoyant new business, the portfolio of medium and long-term loans in the balance sheet grew by 6.6 % to € 35.3 billion (33.1).
In the first half of 2006, both net interest income as well as the operating result also exceeded the previous year's figures. Net interest and commission income climbed to € 111.7 million (109.9). Administrative expenses slightly decreased to € 18.5 million (18.7) and therefore contributed to the improved cost-income ratio of 16.4 % (17). At € 94.1 million (91.5), the operating result (before risk provisions and net valuation adjustments) exceeded the level reached in the first half of 2005 by 2.8 %. Despite a probable increase in administration expenses in the second half of 2006, the Board of Managing Directors expects that the positive earnings development will continue in the next few months and that the result of the previous year can be achieved again in the current year.
In addition, the bank reported that total assets amounted to € 96.5 billion (87.6) by the end of June 2006. In accordance with the bank's particular business structure, amounts due from banks make up the largest item on the asset side of the balance sheet. Compared to the first half of 2005, this item increased by 9.5 % to € 72.5 billion (66.2). Due to new business in securitised lending, the securities portfolio grew to € 22 billion (19.7) by the end of June 2006.
The buoyant issuing business led to a clear increase in securitised liabilities in the balance sheet. With an amount of € 65.2 billion (58.5), this item exceeded the corresponding figure at the end of June 2005 by 11.5 %. Liabilities to banks increased to € 23.9 billion (21.8). In order to refinance its lending business, Rentenbank raised new medium and long-term funds for an amount of € 7.5 billion (6.8) in the first half of 2006. Thereof, € 4.3 billion (3.9) were drawn from the Euro Medium Term Note Programme (EMTN) and € 2.2 billion (1.7) by issuing global bonds registered with the SEC. At 30.06.2006 the bank's total capital in the balance sheet (including subordinated liabilities) was reported at € 2.8 billion (2.6).
Forward-Looking Statements
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