Despite the double burden of integrating BHW and the 850 Deutsche Post retail outlets, Postbank made good progress in fiscal 2006. Business with customers grew in almost all areas, resulting in the Bonn-based bank achieving the best result in its history in 2006: pre-tax profits were up 31.6 percent on the figure for the previous year at €941 million.
Prof. Wulf von Schimmelmann, Chairman of the Postbank Management Board, commented to journalists in Frankfurt on Monday, "In 2006 we successfully managed a Herculean task which was not easy. Not only did we shoulder the integration, but also continued to develop our business almost 'by the way', improving our results in line with planning."
2007 target: One million new customers
In 2006, Postbank again increased the number of new customers. With a figure of 962,000, it clearly exceeded its own target of 700,000. For the current fiscal year, the Bank is aiming to break the barrier of one million new customers.
Postbank opened a total of 470,000 new checking accounts, thus managing a total of 4.7 million private checking accounts as of the end of the year. In respect to mortgage loans, with the acquisition of BHW, Postbank considerably improved its position, moving up to the top of the market. The portfolio of mortgage loans grew by almost 15 percent, considerably faster than the overall market. At year-end, it reached €62.3 billion. The volume of internally brokered new business totaled €10.8 billion.
The Bank increased new business with private loans by 31 percent to over €1.35 billion. As of year-end, the portfolio of installment loans was €2.4 billion, 14.3 percent higher than in the previous year.
Postbank also benefited from increased pension provisions in Germany. In new life assurance business, it improved the sum insured by 21.3 percent to €3.13 billion. A key factor here was the Riester pension, where premiums increased by 157 percent from €440 million to €1.13 billion.
"A step ahead of the competition"
Von Schimmelmann expressed confidence that Postbank would reach its medium-term financial targets. In 2008, it intends to achieve a return on equity before taxes exceeding 20 percent and a cost-income ratio in the classical banking business of under 63 percent. In addition, it wants to improve the core capital ratio to 7.5 percent in 2009.
"We have good reason to be confident about the future. After all, over recent years we have established a competitive edge from which we can now benefit, while other banks have only recently rediscovered retail customers," stated von Schimmelmann. "In certain matters we are one key step ahead of the competition." The Postbank CEO also rejected the idea of price competition: "Customers are well aware where there needs are met on a sustained basis, both in terms of price and quality. Bargain hunters can be attracted by appealing offers, but turning them into long-term clients at sensible business conditions requires a cost structure which makes this possible. Otherwise, the next bargain by a different bank could be more attractive and the customer is gone again. We will not become involved in price wars."
Regarding his departure from Postbank on June 30, von Schimmelmann said: "I am in the very fortunate position of being able to determine the time I leave myself. I have always considered it desirable to go when things are good and not when everyone would find it better that one was already good." According to von Schimmelmann, the changeover to Dr. Wolfgang Klein as the new Chairman of the Postbank Management Board can take place calmly: "The house is in order. With his team Wolfgang Klein will ignite the next stage of the rocket. And it is quite clear to me that it must and will be ignited."
