Germany's Deutsche Postbank AG reported a 19 percent drop in first-quarter net profit Thursday as the bank continued to suffer from the global financial market crisis, writing down euro48 million (US$74 million) on risky assets.
Net profit in the January-March period fell to euro116 million (US$179 million), down from euro144 million a year ago. Still, the numbers beat market expectations, with analysts polled by Dow Jones Newswires predicting a result of just euro99 million (US$153 million).
Postbank, Germany's largest retail bank, said it wrote down impairment charges of around euro48 million (US$74 million) in the first quarter, far less than most of its European peers.
As a result, its earnings from financial investments fell to euro1 million (US$1.54 million) from euro79 million in the first quarter of 2007.
Despite the slower start into the year, Deutsche Postbank said it sees itself on track to reach its pretax profit target of between euro1.1 billion (US$1.7 billion) and euro1.2 billion (US$1.85 billion) in 2008.
"Despite the effects of the continued turbulence on the capital markets, Deutsche Postbank is reporting positive results and further growth in its operating business in the first three months," the bank said. "Postbank successfully demonstrated its sales strength and its ability to record growth in the face of intense competition."
The bank said in the first three months, the bank increased the number of free checking accounts sold by 133,000 or 13.7 percent. At the end of the quarter, the bank managed nearly five million private checking accounts for its customers.
That strategic focus on value-oriented volume growth in Postbank's savings business, announced late last year, also started to bear fruit, the bank said. The volume of traditional savings deposits increased by around euro500 million (US$775 million), now totaling euro44.4 billion (US$68.82 billion).
The bank said it also recorded the highest volume of new private loans since the launch of its "Privatkredit" product, with a year-on-year increase of almost 73 percent to euro380 million (US$589 million). At euro2.46 billion ($3.81 billion), the total private lending volume at March 31 was 7.4 percent higher than at the end of 2007.
The news sent Postbank shares up nearly 3 percent to euro59.50 (US$92,23) in Frankfurt trading.
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