OLB after nine months on track to achieve new record results

EQS-Media / 28.11.2024 / 09:00 CET/CEST

PRESS RELEASE

Oldenburg, 28 November 2024

OLB after nine months on track to achieve new record results

• EUR 255 million result before taxes
• Return on equity after taxes at 16.7%
• Operating income increases by 17.4%
• Risk provisioning at anticipated level of EUR 48.7 million
• Supervision by the ECB as a significant institution

OLB delivers a new record result after nine months of the 2024 fiscal year: following the rapid migration of Degussa Bank[1], OLB generated a result before taxes of EUR 255.0 million (m) (9M 2023: EUR 223.0m) under IFRS accounting standards for the nine months ended 30 September 2024. Net profit increased by around 30% year-on-year to EUR 195.4m (9M 2023: EUR 151.0m), partly as a result of the takeover. The return on equity after taxes was 16.7% (9M 2023: 13.5%). Excluding the net positive effects relating to the acquisition of Degussa Bank, the normalised RoE amounted to 15.7%[2]. The cost-income ratio was 50.5%[3] (9M 2023: 42.6%), normalised 45.7%[4].

“We are very pleased with our operational resilience and this exceptional result achieved after nine months. Despite challenging economic conditions, we anticipate a new record profit, along with robust return and efficiency ratios, for the fiscal year. This means we are reliably on track to achieve our ambitious targets for the transformation year 2024,” says Stefan Barth, CEO of OLB. The positive effects of the migration of Degussa Bank are already evident in the business development: the increase by around 300,000 to around one million customers nationwide has led to a significant growth in the volume of loans and deposits.

Multi-dimensional growth in customer business

The loan volume was expanded to EUR 25.0 billion (bn) (31 December 2023: EUR 19.7bn), of which EUR 5.1bn was contributed by Degussa Bank. In the Private & Business Customers segment, private mortgage loans remained a strong growth driver and reached a portfolio volume of EUR 8.3bn as of 30 September 2024 (31. December 2023: EUR 8.0bn). In particular, the cooperation with the Tulp mortgage platform in the Netherlands has seen remarkable success again. The Tulp portfolio volume has more than doubled year-on-year, surpassing EUR 1bn. In the Corporates & Diversified Lending segment, the positive development continued, specifically in the areas of Football Finance and International Diversified Lending. In total, the loan volume in this segment increased to EUR 10.0bn (31 December 2023: EUR 9.8bn).

The deposit volume, which continues to be an important and strong source of refinancing, rose to EUR 21.7bn (31 December 2023: EUR 16.9bn), of which EUR 4.6bn was contributed by Degussa Bank.

Operating income increased by 17.4% year-on-year to EUR 545.1m (9M 2023: EUR 464.4m), in particular due to continued growth in the lending and deposit business. Net interest income rose to EUR 437.1m (9M 2023: EUR 372.8m), of which EUR 28.4m were related to the Degussa Bank customers’ business. In addition to the Degussa Bank contribution of EUR 7.1m, the increase in net commission income to EUR 99.7m (9M 2023: EUR 88.6m) was driven by the expansion of the securities business as a result of the favourable stock markets.

In addition to investments in strategic future projects such as the transition to supervision by the European Central Bank (ECB), further regulatory requirements and process optimisation, the integration of Degussa Bank was the main reason for the increase in operating expenses to EUR 275.2m (9M 2023: EUR 197.9m). All relevant measures to realise the cost synergies from the Degussa Bank transaction have been implemented, meaning that the effects will be reflected in the result from the fourth quarter onwards. EUR 131.6m (9M 2023: EUR 104.0m) of operating expenses were attributable to personnel expenses; the year-on-year increase was primarily due to the transfer of around 300 employees (~230 full-time equivalents) from Degussa Bank.

Risk provisioning at the expected level in a challenging environment

Risk provisioning in the lending business of EUR 48.7m (9M 2023: EUR 31.7m) for the nine months ended 30 September 2024 was at the anticipated level. This included Degussa Bank's pro-rata risk costs from the lending business in the amount of EUR 5.1m and from the initial application of IFRS 9 in the amount of EUR 11.5m. Excluding these effects from Degussa Bank's business, risk provisioning was roughly at the level of the previous year.

The bank's capital and liquidity position remain comfortable. Alongside with the increase in risk-weighted assets to EUR 12.7bn (31 December 2023: EUR 10.0bn), common equity tier 1 capital (according to German GAAP) increased to around EUR 1.7bn (31 December 2023: EUR 1.4bn). The common equity tier 1 ratio at 13.2% (31 December 2023: 14.5%) was well above the company's own minimum target level of at least 12.25% and above the capital requirements.

Outlook

“The strong capital formation from our own resources will enable us to continue our dynamic development in the future and generate attractive returns. We remain on our sustainable growth path,” says Dr Rainer Polster, CFO of OLB. From 1 January 2025, OLB will be directly supervised by the ECB as a significant financial institution.

Income Statement OLB[5]

million EUR

9M 2023

9M 2024

Δ in %

Net interest income

372.8

437.1

17.2

Net commission income

88.6

99.7

12.5

Trading result

6.0

10.0

67.4

Result from hedging relationships

-13.5

-2.8

-78.9

Other income

9.4

3.5

-62.6

Result from non-trading portfolio

1.1

-2.3

n/a

Operating income

464.4

545.1

17.4

Personnel expenses

-104.0

-131.6

26.6

Non-personnel expenses

-76.3

-121.0

58.5

Depreciation, amortisation and impairments of intangible and tangible fixed assets

-16.9

-18.1

7.3

Other expenses

-0.8

-4.4

>100.0

Operating expenses

-197.9

-275.2

39.0

Operating result

266.5

269.9

1.3

Expenses from bank levy and deposit protection

-11.5

-4.2

-63.4

Risk provisioning in the lending business

-31.7

-48.7

53.9

Result from restructurings

-0.3

-7.0

>100.0

Result from non-trading portfolio (non-operative)

0.0

45.1

n/a

Result before taxes

223.0

255.0

14.4

Income tax

-72.0

-59.6

-17.3

Result after taxes (profit)

151.0

195.4

29.5

Key performance indicators

9M 2023

9M 2024

Δ in ppt

Return on Equity after taxes (RoE)

13.5%

16.7%

3.2

Normalised RoE

15.7%

n/a

Cost-Income-Ratio (incl. Regulatory expenses)

45.1%

51.3%

6.2

Cost-Income-Ratio (excl. Regulatory expenses)

42.6%

50.5%

7.9

Normalised Cost-Income-Ratio

38.8%

45.7%

6.9

Net interest margin

2.68%

2.58%

-0.1

Selected balance sheet items OLB Group

million EUR

12/31/2023

09/30/2024

Receivables from customers

19,724.6

25,049.9

Liabilities to customers

16,917.6

21,705.2

Equity

1,681.0

1,825.5

Balance sheet total

25,878.6

32,334.0

Capital and liquidity[6]

million EUR

12/31/2023

09/30/2024

Common Equity Tier 1 capital (CET1)

1,444.9

1,675.3

Additional Tier 1 capital (AT1)

101.3

151.3

Tier 1 capital

1,546.2

1,826.6

Total capital

1,664.1

2,292.4

Risk-weighted assets

9,975.3

12,670.0

Common Equity Tier 1 capital ratio

14.5%

13.2%

Tier 1 capital ratio

15.5%

14.4%

Total capital ratio

16.7%

18.1%

Liquidity ratios

12/31/2023

09/30/2024

Liquidity coverage ratio (LCR)

147%

159%

Net stable funding ratio (NSFR)

114%

118%

About the OLB

OLB is a widely diversified universal bank with a nationwide presence and more than 150 years of experience in the core region of north-west Germany. Under the OLB and Bankhaus Neelmeyer brands, the Bank advises its approximately 1 million customers in the Private & Business Customers and Corporate & Diversified Lending segments in person and via digital channels. OLB has total assets of more than EUR 30 billion, making it a significant financial institution in Europe.

You can also visit us at www.olb.de and www.neelmeyer.de as well as on Facebook, Instagram and YouTube.

Contact details:

Your contact persons:

Oldenburgische Landesbank AG
Investor Relations
Theodor-Heuss-Allee 74
60486 Frankfurt am Main

investor.relations@olb.de

Sandra Büschken
Phone: +49 (0)69 756193-36
sandra.bueschken@olb.de

Marthe Schepker
Telefon: +49 (0)441 221-2742
marthe.schepker@olb.de

Matthias Obst
Phone: +49 (0) 69 756193-44
matthias.obst@olb.de

Oldenburgische Landesbank AG
Corporate Communications
Stau 15/17
26122 Oldenburg

ccir@olb.de

Britta Silchmüller
Phone: +49 (0)441 221-1213
britta.silchmueller@olb.de

Timo Cyriacks
Phone: +49 (0)441 221-1781
timo.cyriacks@olb.de

Disclaimer

This information does not constitute an offer to purchase or subscribe for the securities referred to herein nor an invitation to make such an offer. The opinions expressed herein reflect our current judgements, which are subject to change without notice. This information should not be considered a substitute for personalised advice tailored to an investor's specific situation and investment objectives.

The information contained in this announcement contains financial and similar information that has not been audited or reviewed and should be regarded as preliminary and subject to change. Similarly, this document does not constitute, in whole or in part, a prospectus or other stock exchange prospectus. The information contained in this document therefore only provides an overview and should not form the basis of any potential decision by an investor to buy or sell securities.

The information and analyses (collectively referred to as "Information") are only addressed to customers domiciled in the Federal Republic of Germany. In particular, this information is not addressed to U.S. persons or persons with permanent residence or citizenship in the USA, Australia, Canada, Great Britain or Japan and may not be passed on to these persons or imported into or distributed in these countries. This document and the information contained herein may only be used abroad in accordance with the applicable legal provisions. Any person who receives this information is obliged to inform themselves about the legal requirements applicable in the respective country and to comply with them.

This document has been prepared and published by Oldenburgische Landesbank AG, Oldenburg. The information has been carefully researched and is based on sources considered reliable by Oldenburgische Landesbank AG. However, the information may have become outdated or obsolete by the time you receive this document. Moreover, no guarantee can be given for the accuracy and completeness of the information. Oldenburgische Landesbank AG therefore assumes no liability for the content of this information.

This document also contains forward-looking statements and information based on management's estimates and assumptions, and on information currently available to the management of Oldenburgische Landesbank AG. Given the known and unknown risks inherent in Oldenburgische Landesbank AG's business, as well as uncertainties and other factors, future results, performance and outcomes may differ from those implied by the forward-looking statements. The forward-looking statements speak only as of the date of this document. Oldenburgische Landesbank AG expressly disclaims any obligation to update or revise any forward-looking statements to reflect any change in its expectations with respect thereto or any change in events, conditions or circumstances on which any forward-looking statement is based. Any person receiving this document should not place undue reliance on forward-looking statements or past performance.

This document contains certain financial measures that are not required by IFRS or German GAAP. These alternative financial measures are shown because Oldenburgische Landesbank AG believes that these and other measures are widely used in the markets in which it operates to evaluate operating performance and financial condition. They may not be comparable to other similarly titled measures used by other companies, and are not measures under IFRS, the German Commercial Code, or other generally accepted accounting standards.

[1] Degussa Bank contributed five months (May to September 2024) to OLB's IFRS consolidated net income. The comparative figures for the previous year 2023 show the OLB results without Degussa Bank's contribution

[2] Normalised RoE (annualised) based on average IFRS shareholders’ equity deducted by accrued dividends and excluding EUR 12.2m net one-off effect related to Degussa Bank acquisition

[3] Cost-Income-Ratio (annualised) excluding EUR 4.2m expenses from bank levy and deposit protection

[4] Normalised CIR (annualised) excluding EUR 4.2m expenses from bank levy and deposit protection and Degussa Bank acquisition-related one-off expenses (EUR 26.2m in 9M 2024)

[5] All figures subject to rounding

[6] Regulatory capital position, therefore based on German GAAP (HGB), adjusted by accrued retention

End of Media Release

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Language:

English

Company:

Oldenburgische Landesbank AG

Stau 15-17

26122 Oldenburg

Germany

Phone:

0441 - 221 - 0

E-mail:

olb@olb.de

Internet:

www.olb.de

EQS News ID:

2039749

End of News

EQS Media

2039749 28.11.2024 CET/CEST