DAB bank: €29.57 million profit before valuation effects at September 30, 2008 / Pretax profit for the first nine months at €1.48 million due to strict mark-to-market valuation of investment portfolio / Good start into the fourth quarter
Munich, October 27, 2008.
The DAB bank Group, which operates in Germany and Austria, earned a pretax profit of €1.48 million in the first nine months of 2008. The operating profit for the third quarter amounted to €7.03 million and for the first nine months, it came to €29.57 million.
However, since September 15, when U.S. investment bank Lehman Brothers filed for protection under Chapter 11, the crisis in the financial markets has worsened considerably, leading to a massive widening of credit spreads. The mark-to-market valuation of DAB bank's conservatively composed investment portfolio at September 30, 2008 reduced the value of the portfolio by €28.08 million. Therefore the pretax profit of the third quarter amounts to €-21.05 million.
The value of the bank's investment portfolio was strictly measured on the basis of current market values. Therefore DAB bank is not carrying any undisclosed liabilities as it enters the fourth quarter. Now as before, DAB bank is comfortably capitalized and possesses ample liquidity. DAB bank's equity ratio was 11.18% at September 30, 2008 (December 31, 2007: 10.90%), which is significantly higher than the minimum required regulatory ratio of 8%. Also at September 30, DAB bank's liquidity ratio, which is calculated in accordance with the German Liquidity Regulation, came to 3.98 (December 31, 2007: 4.88), also well above the minimum required regulatory ratio of 1.0.
DAB bank has had a good start into the fourth quarter. Since mid-September, there was a substantial increase in the trading activity of customers, along with the attendant positive effects on the commission income.