In the first four months of this year, the BHW Group has started well with double-digit growth in new business. The financial services provider sold far more contracts in its core business divisions than in the same period the previous year. Demand for home finance was particularly brisk with more mortgage loans and instant Bauspar loans acquired in April (€ 648 million) than in any other month in the company's 75 year history.

After the concerted effort to consolidate and refocus its mortgage bank subsidiary AHBR, earnings growth in the first quarter was positive once more.

Further growth by the core business divisions

In its two core divisions, Private Home Finance and Private Asset Accumulation, BHW succeeded in increasing its sales by around 18.4 per cent to € 8.5 billion in the first four months.

In the Private Home Finance segment, an increase of 18.7 per cent to € 3.5 billion was achieved in Bauspar contracts with fully paid-up fees. The strong demand for home finance is evident in the figure for home finance loans accepted where volume rose by 18.5 per cent to approx. € 2.0 billion.

In the Private Asset Accumulation segment, sales rose by 16.9 per cent to € 1.1 billion. Traditional insurance products such as life assurance products and pension plans performed particularly well with policies being arranged for a sum assured of € 255.0 million, an increase of 35.3 per cent. A clear rise in investor confidence was evident in fund business. Investment volume rose by 62.2 per cent compared with the same period in the previous year.

Satisfactory growth in profits

Despite the difficult economic market and interest rate situation, the BHW Group closed the first quarter satisfactorily with an operating profit of € 39.2 million. Net interest income reached € 186.5 million while the partial operating profit stood at € 50.1 million. The quarterly profit after tax is reported at € 26.6 million.

The quarterly results cannot be compared with previous years due to the massive changes to AHBR's strategic focus and attention was drawn to this fact by the Management Board Chairman Reinhard Wagner at the balance sheet press conference in April. While the Group subsidiary contributed up to 50 per cent of Group profits in the past, it is expected to contribute far less in the current year and over the next few years.

Total assets reached € 110.6 billion and are therefore only 2.6 per cent lower than at the end of 2002 despite the fundamental repositioning of AHBR's lending business.

Outlook

The sales success of the first few months demonstrates the BHW Group's outstanding strategic position in home finance and in the growth market of private provisioning. On this basis and continuing growth in new business the company expects a satisfactory profit for the year as a whole of at least € 100 million. This should also then be reflected in the price of BHW shares.