2006 was one of the most important years in Postbank’s history. Our acquisitions of BHW and 850 Deutsche Post retail outlets have created a sales organization that is unparalleled in Germany. The result is a financial institution that offers a unique combination of size and local customer focus.
The early sales successes of Postbank Finanzberatung AG, which was established in July and brings together the entire Mobile Sales organization of BHW and Postbank, and our retail outlets already prove that we are moving in the right strategic direction. The acquisition of over 900,000 new customers was a great achievement, particularly in view of the fact that our resources were heavily tied up with integration activities over the past year. Our goal for 2007 is to break the barrier of acquiring more than one million new customers in a year.
We reaped immediate benefits in 2006 from the outstanding expertise and market position of BHW – one of Germany’s leading lender of private mortgages. With total mortgage lending amounting to €62.3 billion, the extended Postbank is now Germany’s number one provider in this important segment. And Postbank was already the market leader for checking and savings products. However, we also achieved significant growth in the other areas of our service offer, including consumer loans, investment funds and private pension provision. I am all the more delighted about this in view of the exceptional effort required to join together with two other companies, each of which employed almost as many people as Postbank used to on its own.
In the Transaction Banking segment, our assumption of HypoVereinsbank’s payment transactions at the beginning of the current year again demonstrated the outstanding role we are playing in the increasing consolidation of back-office processes in the banking sector. With a market share of over 20%, we have already achieved a leading position in this field.
The Corporate Banking segment again exceeded the strong results it recorded in the previous year. The positive contributions made by the two mainstays of this business division, Payment Solutions and Selective Finance, strengthened consolidated earnings.
The positive development of our operating business is reflected in extremely strong earnings growth in the year under review: despite the additional costs of integration, we were able to boost pre-tax profit to €941 million, an increase of 31.6% on last year’s pro forma figure. We also recorded significant improvements in our two most important performance targets: in the year under review, there was a substantial rise in return on equity (RoE) before taxes, which climbed 4.0 percentage points to 18.9%, while the cost/income ratio in the traditional banking business (excluding Transaction Banking) fell an encouraging 6.8 percentage points to 66.7%. This success is due both to the continuation of strict cost management on the basis of highly efficient, IT-assisted processes, as well as to the constant income growth in our customer business. I firmly believe that this will allow us to achieve above-average earnings growth in the long term, even in the face of intensified competition and a challenging interest rate environment for a bank with a high volume of deposits.
Postbank’s successful performance has also been reflected in its share price, which again increased substantially in the year under review, reaching €63.97 by the end of the year – a rise of 31%.
On September 18, Postbank shares were included in the DAX® index of Germany’s 30 most important listed companies. We view this as a lasting endorsement of our business model and, at the same time, an incentive to push ahead with our strategy.
I would like to take this opportunity to thank all our staff, who have achieved the extraordinary in combining our day-to-day business with the work of integration. Their hard work was crucial to our success.
In the current fiscal year, we will concentrate fully on infusing our new strength into customer business. Once we have completed our key integration measures, we intend to turn all our attention to customers and markets and ensure that the Postbank “sales machine” is running at full capacity.
I want to thank you, our shareholders, for your confidence. I would be delighted for your continued support on our path to becoming Germany’s No. 1 financial services provider for private customers and a service partner for corporate customers.
Wulf von Schimmelmann
Chairman of the Management Board
