Satisfied!

The 3rd quarter report is in and DVB Bank SE declares itself to be satisfied with the overall result. And they should be as the transportation and financial markets continue to struggle amidst a recession. On a positive note, “less pronounced competition allowed (the bank) to enter into numerous new exposures where returns once again adequately reflect the risk involved.” Nevertheless new business volume was down to EUR 2.02 billion compared to Q3 2008, which was EUR 5.12 billion. On the other hand, the average interest margin on new Transport Finance business increased from 178 bps to 335 bps.

By shifting to quarterly fixings and using interbank rates, DVB has continued to mitigate the impact of money market distortions reducing this additional cost burden to a mere EUR 1 million in this quarter, following EUR 17.3 million in the first quarter and EUR 2.3 million in the 2nd quarter. Nevertheless, ROE was severely impacted by these distortions declining 6.7% to 11.4% versus the comparable quarter from the prior year.

But, perhaps more importantly given the environment, DVB increased its capital ratios with its tier 1 ratio rising from 13.9% at year-end to 15.4% and the total capital ratio increasing to 19.8% from 18.2% also at year-end.

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