With a pre-tax profit in excess of €1 billion, Postbank has surpassed this magic threshold for the first time. On Friday, Dr. Klein, Chairman of the Board of Management, told journalists in Frankfurt: “This means success, particularly in this challenging environment. It impressively demonstrates the strength and robustness of our business model.” The main factors behind the result are: strong business, rising income and virtually constant costs.

In 2007, in the words of its Chairman, Postbank took another significant step towards becoming “number 1 for liquidity and financial management”. Klein emphasized that this success is particularly impressive against the background of the considerable turmoil on the international financial markets. We were not totally unaffected by the turbulence on the financial markets. As Klein pointed out, “As a result of our conservative investment approach, we have kept the impact on our earnings within narrow boundaries”. In 2007, the write-downs resulting from the subprime crisis amounted to €112 million.

For the next few years, Postbank has set firm targets: by 2010, it intends to significantly increase its pre-tax profit to between €1.40 billion and €1.45 billion, and its profit from ordinary activities after tax to between €980 million and €1.015 billion. By 2010, the cost/income ratio in the traditional banking business is thus expected to fall to below 58 percent.

Klein is convinced that this will be achieved: “With Next Step, we have put ourselves on the right track: customer focus, increased quality, expansion of sales and concentration on strengths are the keywords. And we will continue rigorously with our cost management, as retail banking cannot be successfully structured otherwise.” According to Klein, Postbank has a platform that is unique. “The figures for 2007 are clear evidence of this. For this reason, we will play a key role in the consolidation of the German banking sector.”

A Million New Customers Gained
In its core business with private customers, Postbank further extended its position as a leading retail bank in Germany. Almost all its core products gained market share, in some cases to a significant extent. “With attractive products and conditions, we have continued our success story of several years’ standing in an increasingly difficult sector”, says Klein.

In 2007, Postbank gained a million new customers in gross terms. Following internal regrouping, the total number of active customers at the end of 2007 was virtually constant at 14.5 million. With “Next Step”, the Bonn-based bank now intends to focus even more strongly on its regular customers, amounting to around 4.6 million who already conduct their banking transactions mainly via Postbank. Klein particularly wants to increase customer satisfaction in this area: “Quality and service are thus the keywords we want to make our daily mantra.”

In particular, Postbank gained a large number of new customers with its strongest product, the charge-free current account. With around 587,000 newly opened private current accounts, it increased its new business by some 25 percent. At the end of 2007, the bank managed 4.9 million private current accounts compared with 4.7 million in the previous year.

A total of 3.78 million online accounts were held, up 17.8 percent on the previous year. Of these, 2.8 million were online, 590,000 online securities accounts and 390,000 "SparCard direkt" accounts. The number of accounts cleared for telephone banking rose from 3.4 million in the previous year to 3.7 million.

With its second traditionally strong product, Postbank performed well against tough competition for savings. Including the overnight account, the savings volume at Postbank rose by 4.3 percent to just under €44 billion. A particular success was the Postbank “Quartal-Sparen” launched in April 2006, which accounted for a volume of €10.0 billion at the end of 2007. Including home savings deposits, almost unchanged at €16.6 billion, the savings deposits of Postbank increased by 2.9 percent to €60.5 billion.

Due to the market environment, Postbank achieved mixed results in self-brokered new mortgage business. Excluding extensions, sales fell from €10.8 billion year-on-year to €9.8 billion. Including extensions, new business amounted to €12.1 billion, compared with €12.5 billion the year before. Residential construction loan portfolios at Postbank increased overall from €62.3 billion to €68.0 billion (+9.1). Excluding portfolio acquisitions, they were up 8.8 percent to €58.2 billion.

In terms of private loans, Postbank performed strongly in a stagnating overall market. The new business volume, including the BHW brand, totaled €1.4 billion, up 3.7 percent from the previous year. The portfolio grew by 17.1 percent to €2.9 billion. Market share rose from 1.7 to 1.9 percent.

The number of securities accounts managed by Postbank increased by 5.1 percent to 965,000. At the same time, the securities account volume grew by 9.5 percent to €11.5 billion.

The Postbank retirement provision account also performed in a very pleasing fashion. It has been successfully positioned on the market with over 60,000 newly opened accounts and gross cash inflows of €160 million with holdings at €235 million.

In the fiercely competitive credit card market, Postbank again increased its figures significantly by almost 9 percent to 1.1 million cards.

Corporate Customers: Seizing the Initiative
In 2007, Postbank's business with its approximately 30,000 corporate customers also generated a positive performance. The campaign to attract SMEs is starting to bear fruit. The new business volume with corporate customer loans increased to around €900 million, more than three times the figure of the previous year. This strategically planned growth remains in line with Postbank's proven risk-conscious lending policy.

Commercial real estate financing constitutes a key pillar of corporate banking. This market segment accounts for 65 percent of the total credit volume and 40 percent of income. New business in this segment of around €3.8 billion, comfortably surpassed the figure for the previous year. The credit portfolio was increased from €5.2 billion to more than €7.6 billion. Overall, at €11.3 billion, the volume of commercial real estate financing broke the €10 billion barrier for the first time, after posting a figure of €8.5 billion the previous year.

Transaction Banking: Market Share Increased
In 2007, Postbank handled around 7.2 billion payment transactions, compared with approximately 6.2 billion in 2006. This increase is largely attributable to our new customer, HVB. Consequently, Postbank increased its market share from 16 percent to over 20 percent in 2007. As expected, paper-based payment transactions continue to decline, and only achieved a share of 2.3 percent of the total volume, with 0.17 billion transactions in the year under review.

Postbank intends to tap into additional growth potential in the euro zone against the backdrop of the creation of a single European payments area (SEPA). The market share here is currently 5 percent. For this reason, the Bonn-based bank is planning to build up a joint Europe-wide range of products and services with one or more partners in the form of cooperations, participations or joint ventures.