OLB continues its successful growth in the first nine months of 2023

PRESS-RELEASE

Oldenburg, November 8, 2023

OLB continues its successful growth in the first nine months of 2023

• Result before taxes increased by 13.8% to EUR 223.0 million[1]
• Cost-income ratio[2] improved to 38.8%
• Return on equity[3] of 14.7% in consistently high range
• Risk provisioning as expected at normalized level
• New record level for profit after taxes for fiscal year 2023 expected

Oldenburgische Landesbank AG ("OLB" or "Bank") continued its successful growth in the first nine months of 2023. As of September 30, 2023, result before taxes reached EUR 223.0 million (m), increased notably by 13.8% year on year (previous year: EUR 195.9m). After taxes, the profit increased by 7.6% to EUR 151.0m (previous year: EUR 140.3m).

“We are successfully continuing the positive trend of recent years and aim to increase our results for the full year”, says Stefan Barth, CEO of OLB. “This proves the strength and high profitability of our core business and the success of our strategy of diversified businesses."

Expansion of customer business

As part of its strategy, the Bank expanded its customer business in the Private & Business Customers as well as the Corporates & Diversified Lending segment. The total loan volume reached EUR 19.0 billion (bn) (previous year: EUR 18.1bn). The market-driven decrease in demand for private mortgage financing in Germany in the Private & Business Customers segment was compensated by OLB's strong business in the Netherlands through the cooperation with the mortgage platform Tulp. In the Corporates & Diversified Lending segment, the Bank achieved further loan growth in specialized markets such as Acquisition Finance (AQF), Football Finance, and International Diversified Lending.

Customer deposits increased to EUR 16.7bn (previous year: EUR 15.4bn) during the reporting period. This corresponds to a growth of about 8% and confirms the continuous focus on deposits as main funding source.

Overall, the Bank was able to improve its operating income by 11.1%, to EUR 464.4m (previous year: EUR 417.9m). Compared to the same period of the previous year, the net interest income increased significantly by 17.2% and reached EUR 372.8m (previous year: EUR 318.1m).

The Bank remains committed to its strict cost management. Personnel expenses slightly decreased to EUR 104.0m (previous year: EUR 105.6m). Overall, operating expenses totalled EUR 197.9m (previous year: EUR 185.2m), which included costs of EUR 17.9m for measures in connection with the planned integration of Degussa Bank, to realize expected synergies right after the closing of the acquisition. Excluding this cost effect, operating expenses decreased by 2.8% compared to the previous year.

OLB expects the approval of the acquisition of Degussa Bank by the supervisory authorities in the first quarter of 2024. As a result of the transaction, OLB will reach a balance sheet total of more than EUR 30bn and is expected to be supervised by the European Central Bank (ECB) going forward. The Bank is already preparing intensively for this development.

OLB's loan portfolio is well diversified and of consistently high quality. As expected, the risk provisioning requirement normalized after the rather low level of previous years to EUR 31.7m (previous year: EUR 19.4m). This corresponds to risk costs of 23 basis points (previous year: 15 basis points). The risk costs already reflect changes in the provisioning methodology for AQF that OLB has made in light of an ongoing BaFin/Bundesbank review and in anticipation of the upcoming potential transition to the ECB supervision. The ratio of non-performing loans was 1.5% (previous year: 1.4%).

Continued strong efficiency and profitability ratios

Adjusted for integration-related costs, the cost-income ratio improved to 38.8%. Including this one-off effect, the cost-income ratio was 42.6% (previous year: 44.3%). On a significantly higher capital base, return on equity after taxes, excluding the transaction costs and taking into account the bank levy only on a pro-rata basis, was 14.7%. Including these effects, it was 13.5% (previous year: 14.3%).

The Bank consciously managed its capital and liquidity resources at a high level. The liquidity coverage ratio stood at 177% (December 31, 2022: 174%), significantly above the minimum requirement of 100%. The common equity tier 1 ratio increased to 14.7% (December 31, 2022: 13.6%), intentionally exceeding the mid-term target of more than 12,25% due to the financing of the Degussa Bank merger. The Risk-weighted assets amounted to EUR 9.6bn (December 31, 2022: EUR 9.4bn). "Our profitability is also above the industry average, and our capital base is extremely robust," says Dr Rainer Polster, CFO of OLB, "providing a very solid foundation for our continued success."

New record result after taxes expected

OLB remains prepared for a possible initial public offering. The decision on whether and when an IPO would take place depends on market conditions and the decision of the Bank's shareholders.

For the full fiscal year 2023, OLB is confirming its expectation of a new record result of more than EUR 200m after taxes.

 

Income statement OLB Group[4]

EURm 01/01-09/30/2023 01/01-09/30/2022 Changes in % Net interest income 372.8 318.1 17.2 Net commission income 88.6 91.6 -3.2 Trading result 6.0 2.7 > 100.0 Result from hedging relationships -13.5 -9.3 45.7 Other income 9.4 2.1 > 100.0 Result from non-trading portfolio 1.1 12.6 -91.0 Operating income 464.4 417.9 11.1 Personnel expenses -104.0 -105.6 -1.6 Non-personnel expenses -76.3 -58.4 30.7 Depreciation, amortization and impairments of intangible and
tangible fixed assets -16.9 -20.8 -18.7 Other expenses -0.8 -0.5 67.9 Operating expenses -197.9 -185.2 6.9 Operating result 266.5 232.7 14.5 Expenses from bank levy and deposit protection -11.5 -17.6 -34.7 Risk provisioning in the lending business -31.7 -19.4 62.8 Result from restructurings -0.3 0.3 < -100.0 Result before taxes 223.0 195.9 13.8 Income tax -72.0 -55.6 29.5 Result after taxes (profit) 151.0 140.3 7.6         Return on Equity after taxes  13.5% (14.7%[5]) 14.3% -0.8 ppt Cost-income ratio 42.6% (38.8%[6]) 44.3% -1.7 ppt

 

Selected balance sheet figures OLB Group

EURm 09/30/2023 12/31/2022 09/30/2022 Receivables from customers 18,961.8 18,008.9 18,086.1 Liabilities to customers 16,659.9 16,192.5 15,432.4 Equity 1,629.4 1,517.4 1,502.3 Total assets 25,046.2 24,081.6 24,671.7

 

 Capital[7] and liquidity

EURm 09/30/2023 12/31/2022 09/30/2022 Common Equity Tier 1 capital (CET1) 1,408.7 1,275.2 1,269.5 Tier 1 capital 1,509.9 1,416.4 1,411.1 Share capital and reserves 1,637.5 1,557.4 1,553.7 Risk assets 9,595.7 9,362.8 9,710.8 Common Equity Tier 1 capital ratio 14.7% 13.6% 13.1% Tier 1 capital ratio 15.7% 15.1% 14.5% Aggregate capital ratio 17.1% 16.6% 16.0%

 

  09/30/2023 12/31/2022 09/30/2022 Liquidity coverage ratio (LCR) 177% 174% 147% Net stable funding ratio (NSFR) 118% 118% 114%

 

About OLB

Oldenburgische Landesbank AG is a profitable and growing universal bank for private and corporate customers in Germany and neighbouring European countries. Under its OLB Bank and Bankhaus Neelmeyer brands, OLB advises its approximately 660,000 customers in person and via digital channels in its Private & Business Customers and Corporates & Diversified Lending segments. The Bank has approximately EUR 25 bn of total assets.

Feel free to visit us at www.olb.de and www.neelmeyer.de as well as on Facebook, Instagram and YouTube.
 

Contacts:	Your contact persons:
Oldenburgische Landesbank AG     Investor Relations Theodor-Heuss-Allee 108 60486 Frankfurt am Main / Germany   Phone +49 (0)69 756193-0 investor.relations@olb.de	Sandra Büschken Phone +49 (0)69 756193-36     sandra.bueschken@olb.de   Marthe Schepker Phone +49 (0)441 221-2742 marthe.schepker@olb.de
Oldenburgische Landesbank AG     Corporate Communications Stau 15/17 26122 Oldenburg / Germany   Phone +49 (0)441 221-1413 pressestelle@olb.de	Britta Silchmüller Phone +49 (0)441 221-1213 britta.silchmueller@olb.de   Timo Cyriacks Phone +49 (0)441 221-1781 timo.cyriacks@olb.de

Disclaimer

This information does not contain any offer to acquire or subscribe for securities, nor should it be construed as an invitation to do so. The opinions expressed herein reflect our current assessment, which is subject to change even without prior notification. This information cannot be regarded as a substitute for individual advice tailored to the investor's respective situation and investment objectives.

Likewise, this document does not, either in whole or in part, constitute a sales prospectus or any other stock exchange prospectus. The information contained in this document therefore merely provides an overview and should not form the basis of an investor's potential decision to purchase or sell the securities.

The information and assessments (collectively referred to as "information") are intended solely for clients with their registered office in the Federal Republic of Germany. In particular, this information is not addressed to US citizens or US residents and US persons or Australian, Canadian, British or Japanese citizens or residents and must not be distributed to such persons or introduced into or disseminated in such countries. This document including the information contained therein may be used abroad only in accordance with the relevant applicable law. Any persons receiving this information shall be obliged to familiarise themselves with and observe the legal provisions applicable in their respective country.

This document has been prepared and published by Oldenburgische Landesbank AG, Oldenburg. The information has been carefully researched and is based on sources deemed to be reliable by Oldenburgische Landesbank AG. However, the information may no longer be up-to-date and may be obsolete by the time you receive this document. Furthermore, it cannot be ensured that the information is correct and complete. Oldenburgische Landesbank AG therefore assumes no liability for the contents of the information.

In addition, this document contains various forward-looking statements and information based on the management's beliefs and on assumptions and information currently available to the management of Oldenburgische Landesbank AG. Considering the known and unknown risks associated with the business of Oldenburgische Landesbank AG as well as uncertainties and other factors, the future results, performances and outcomes may differ from those deduced from such forward-looking or historical statements. The forward-looking statements speak only as of the date of this document. Oldenburgische Landesbank AG expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements to reflect any change in its expectations with regard thereto or any changes in events, conditions or circumstances on which any forward-looking statements are based. Any persons receiving this document should not give undue influence to such historical statements and should not rely on such forward-looking statements. The Q3 financial information in this document has been derived from the management accounts of Oldenburgische Landesbank AG. Such financial information is unaudited and preliminary. All such information is subject to change without notice.

This document also contains certain financial measures that are not recognized under IFRS or German GAAP (“HGB”). These alternative performance measures are presented because Oldenburgische Landesbank AG believes that they and similar measures are widely used in the markets in which it operates as a means of evaluating its operating performance and financing structure. They may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS, HGB or other generally accepted accounting principles.

 

^[1] Figures – unless otherwise stated – according to IFRS for the first nine months 2023

^[2] Without EUR 17.9m expenses related to Degussa Bank integration

^[3] Without EUR 17.9m expenses related to Degussa Bank integration and taking into account the bank levy in the total amount of
   EUR 8.1m (paid in full in January) on a pro-rata basis

^[4] Rounding differences may occur

^[5] Without EUR 17.9m expenses related to Degussa Bank integration and taking into account the bank levy in the total amount of
   EUR 8.1m (paid in full in January 2023) on a pro-rata basis

^[6] Without EUR 17.9m expenses related to Degussa Bank integration

^[7] Based on German GAAP (HGB)