Depfa shares slip after profit fall

DEPFA Bank, the Dublin-headquartered German financial services provider, has reported an 11% fall in annual net profit for 2005 to €475 million.

The 2004 figure of €534m did, however, include a one-off profit of €50m.

Back in November, though, Depfa which has based its headquarters in Dublin's International Financial Services Centre (IFSC) since 2001 and is listed on the Frankfurt Stock Exchange confidently claimed that it was "on the right road" to meeting its full year net profit target of 500m, despite stagnant third-quarter profits.

The bank recorded a loss of €115m on its trading activities, compared to a profit of €41m the previous year. Total revenue for the year came in at €814m, with fourth quarter revenue reaching €178m.

Net profit for the fourth quarter came in at €98m, following a deduction of taxes totalling €20m.

Analysts had expected the quarterly profit to reach around €126m.

Depfa provides a number of financial services global markets, budget finance, public infrastructure project finance, client product services to the public sector. It lends to public sector authorities and profits from refinancing the loans at cheaper rates.

The bank's current guise came into being a year after the relocation of its head office to Dublin, when Depfa Deutsche Pfandbriefbank AG split in two. The other half, Aareal Bank AG, now comprises of the former company's real estate business.

The company is remaining upbeat in the light of yesterday's results announcement despite its share price falling, at one stage yesterday, by 5.4%.

Commenting yesterday, Depfa chief executive Gerhard Bruckermann said: "We're very confident that 2006 will be a good year for us and that we can stay on the path of double-digit growth beyond this year."

Mr Bruckermann added that the company could still reach its long-term forecast of €600m net profit if it achieves a "very strong" trading income of around €100m.