Stable trend continued in 3rd quarter 2012

  • Operational profit up 23%, total profit of EUR 11.9 million is 29% higher compared to the same period in 2011 
  • Slight increase in operating revenues due to higher commission and slight decrease in interest income 
  • Total costs almost the same as 3rd quarter 2011 and 3% lower than the previous quarter 
  • Joint venture with dwpbank in the field of retail securities processing in September positively received by the market 
  • Solvability (BIS ratio) remains strong at 21%

The third quarter was a continuation for KAS BANK of the carefully chosen path of limited revenue growth and healthy profit growth embarked on in the first half of 2012. Although the outlook for sales is not entirely favourable due to the very low interest rates and the continuing disappointing volumes on the exchanges, the 4% increase in commission on the institutional portfolio again is a nice step in the direction of further recovery of revenues.

Coupled with this, despite higher non-recurring costs in 2012 as a result of the cooperation with dwpbank, the costs have remained the same as in 2011 and fell slightly compared to the previous quarter. This, particularly, explains the higher operating profit. The strong growth in total income, which is almost 20% lower than last year at the six month figures, is a direct result of fluctuations in market values in the investment portfolio. In the third quarter of 2011 this caused a negative result while in 2012 the result is positive. The risk profile of the investment portfolio also remains low, with the government exposure to GIIPS countries being nil.

The joint venture with dwpbank in retail securities processing has led to a positive market reaction. The logic of pooling back office functions of financial institutions, which are under strong pressure from both new and highly specialised regulations as well as relatively high cost levels, has led to broad interest in reducing both risks and costs by outsourcing. This trend can also be observed in the investment accounting of banks, insurers and pension funds, where increasing complexity of instruments, reporting and risk management is leading to outsourcing to specialists.

The tier 1 ratio of the bank amounted to 19% and thereby, even after the allocation of an extra buffer, far exceeds the requirements of both Basel 2 and Basel 3.