German Postbank says net profit climbed nearly four-fold
The German Postbank, which has the country's largest retail network, said on Wednesday that second quarter net profit was nearly four times that of a year earlier, while remaining cautious about the full-year outlook.
The net profit of 57 million euros (75 million dollars), up from 15 million in the second quarter of 2009, fell below an average analyst forecast of 65 million euros compiled by Dow Jones Newswires.
The bank earned bigger profits from core credit activities while reducing losses on financial market operations, a statement said.
Provisions against potential losses climbed however by 46 percent to 175 million euros, which was "within the framework of forecasts" by the bank itself, it added.
Postbank passed European bank stress tests that measured core capital against a hypthetical scenario that included a moderate economic recession and heavy losses on loans and government bonds, but was considered too close to the limit for comfort.
The bank has set a target of raising its so-called tier one ratio to 9.5 percent of core capital to total assets by 2012, from 7.3 percent on June 30.
For all of 2010, Postbank expects "slight growth" in earnings from credits and commissions on banking transactions.
While charges linked to the financial crisis should continue to diminish, Postbank might still have to reduce the value of some assets, it said.
The taking over of 277 Deutsche Post branches are estimated to cost between 60 and 70 million euros meanwhile, of which the bank will book 30 million in the second half of the year, it added.
© 2010 AFP