Based on net profit, the corporate segment achieved EUR 22.2 m which accounts for 41% of the Investkredit Group’s total result. The increase compared to 2003 is mainly due to an improvement in net interest income. Improvements in credit risk provisions (net) and the trading result also made a substantial contribution to the higher segment profit.
| FACTORS OF INCREASED EARNINGS IN 2004 | ||
| in EUR m | 2003 | 2004 |
| Net interest income | 60.3 | 66.7 |
| Credit risk provisions (net) | -7.5 | -7.2 |
| Other operating income | -0.7 | 3.8 |
| General administrative expenses | -32.4 | -34.8 |
| Balance of other income and expenses | 1.5 | -1.7 |
| Pre-tax profit | 21.1 | 26.7 |
| After-tax profit | 17.3 | 25.8 |
| Segment profit | 16.2 | 22.2 |
| Segment assets | 6,036 | 7,154 |
| Risk-earnings ratio | 12.4 % | 10.9 % |
| Cost-income ratio | 51.9 % | 49.4 % |
| Return on assets | 0.29 % | 0.39 % |
| Return on equity – segment profit | 8.8 % | 12.7 % |
Business expansion and the stronger concentration on the Central European part of the core market were key to the improvement in net interest income. The interest margin could be kept at 1.01%. Despite a rise in expenses, the cost-income ratio improved to below 50%. An important earnings target – to raise the return on equity to a double-digit percentage figure – was achieved with an RoE of 12.7% in 2004.
