CORPORATE NEWS

Oldenburg, 28 November 2024

OLB after nine months on track to achieve new record results

• EUR 255 million result before taxes
• Return on equity after taxes at 16.7%
• Operating income increases by 17.4%
• Risk provisioning at anticipated level of EUR 48.7 million
• Supervision by the ECB as a significant institution

OLB delivers a new record result after nine months of the 2024 fiscal year: following the rapid migration of Degussa Bank[1], OLB generated a result before taxes of EUR 255.0 million (m) (9M 2023: EUR 223.0m) under IFRS accounting standards for the nine months ended 30 September 2024. Net profit increased by around 30% year-on-year to EUR 195.4m (9M 2023: EUR 151.0m), partly as a result of the takeover. The return on equity after taxes was 16.7% (9M 2023: 13.5%). Excluding the net positive effects relating to the acquisition of Degussa Bank, the normalised RoE amounted to 15.7%[2]. The cost-income ratio was 50.5%[3] (9M 2023: 42.6%), normalised 45.7%[4].

“We are very pleased with our operational resilience and this exceptional result achieved after nine months. Despite challenging economic conditions, we anticipate a new record profit, along with robust return and efficiency ratios, for the fiscal year. This means we are reliably on track to achieve our ambitious targets for the transformation year 2024,” says Stefan Barth, CEO of OLB. The positive effects of the migration of Degussa Bank are already evident in the business development: the increase by around 300,000 to around one million customers nationwide has led to a significant growth in the volume of loans and deposits.

Multi-dimensional growth in customer business

The loan volume was expanded to EUR 25.0 billion (bn) (31 December 2023: EUR 19.7bn), of which EUR 5.1bn was contributed by Degussa Bank. In the Private & Business Customers segment, private mortgage loans remained a strong growth driver and reached a portfolio volume of EUR 8.3bn as of 30 September 2024 (31. December 2023: EUR 8.0bn). In particular, the cooperation with the Tulp mortgage platform in the Netherlands has seen remarkable success again. The Tulp portfolio volume has more than doubled year-on-year, surpassing EUR 1bn. In the Corporates & Diversified Lending segment, the positive development continued, specifically in the areas of Football Finance and International Diversified Lending. In total, the loan volume in this segment increased to EUR 10.0bn (31 December 2023: EUR 9.8bn).

The deposit volume, which continues to be an important and strong source of refinancing, rose to EUR 21.7bn (31 December 2023: EUR 16.9bn), of which EUR 4.6bn was contributed by Degussa Bank.

Operating income increased by 17.4% year-on-year to EUR 545.1m (9M 2023: EUR 464.4m), in particular due to continued growth in the lending and deposit business. Net interest income rose to EUR 437.1m (9M 2023: EUR 372.8m), of which EUR 28.4m were related to the Degussa Bank customers’ business. In addition to the Degussa Bank contribution of EUR 7.1m, the increase in net commission income to EUR 99.7m (9M 2023: EUR 88.6m) was driven by the expansion of the securities business as a result of the favourable stock markets.

In addition to investments in strategic future projects such as the transition to supervision by the European Central Bank (ECB), further regulatory requirements and process optimisation, the integration of Degussa Bank was the main reason for the increase in operating expenses to EUR 275.2m (9M 2023: EUR 197.9m). All relevant measures to realise the cost synergies from the Degussa Bank transaction have been implemented, meaning that the effects will be reflected in the result from the fourth quarter onwards. EUR 131.6m (9M 2023: EUR 104.0m) of operating expenses were attributable to personnel expenses; the year-on-year increase was primarily due to the transfer of around 300 employees (~230 full-time equivalents) from Degussa Bank.

Risk provisioning at the expected level in a challenging environment

Risk provisioning in the lending business of EUR 48.7m (9M 2023: EUR 31.7m) for the nine months ended 30 September 2024 was at the anticipated level. This included Degussa Bank's pro-rata risk costs from the lending business in the amount of EUR 5.1m and from the initial application of IFRS 9 in the amount of EUR 11.5m. Excluding these effects from Degussa Bank's business, risk provisioning was roughly at the level of the previous year.

The bank's capital and liquidity position remain comfortable. Alongside with the increase in risk-weighted assets to EUR 12.7bn (31 December 2023: EUR 10.0bn), common equity tier 1 capital (according to German GAAP) increased to around EUR 1.7bn (31 December 2023: EUR 1.4bn). The common equity tier 1 ratio at 13.2% (31 December 2023: 14.5%) was well above the company's own minimum target level of at least 12.25% and above the capital requirements.

Outlook

“The strong capital formation from our own resources will enable us to continue our dynamic development in the future and generate attractive returns. We remain on our sustainable growth path,” says Dr Rainer Polster, CFO of OLB. From 1 January 2025, OLB will be directly supervised by the ECB as a significant financial institution.

Income Statement OLB[5]

Selected balance sheet items OLB Group

Capital and liquidity[6]

About the OLB

OLB is a widely diversified universal bank with a nationwide presence and more than 150 years of experience in the core region of north-west Germany. Under the OLB and Bankhaus Neelmeyer brands, the Bank advises its approximately 1 million customers in the Private & Business Customers and Corporate & Diversified Lending segments in person and via digital channels. OLB has total assets of more than EUR 30 billion, making it a significant financial institution in Europe.

You can also visit us at www.olb.de and www.neelmeyer.de as well as on Facebook, Instagram and YouTube.

Disclaimer

This information does not constitute an offer to purchase or subscribe for the securities referred to herein nor an invitation to make such an offer. The opinions expressed herein reflect our current judgements, which are subject to change without notice. This information should not be considered a substitute for personalised advice tailored to an investor's specific situation and investment objectives.

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^[1] Degussa Bank contributed five months (May to September 2024) to OLB's IFRS consolidated net income. The comparative figures for the previous year 2023 show the OLB results without Degussa Bank's contribution

^[2] Normalised RoE (annualised) based on average IFRS shareholders’ equity deducted by accrued dividends and excluding EUR 12.2m net one-off effect related to Degussa Bank acquisition

^[3] Cost-Income-Ratio (annualised) excluding EUR 4.2m expenses from bank levy and deposit protection

^[4] Normalised CIR (annualised) excluding EUR 4.2m expenses from bank levy and deposit protection and Degussa Bank acquisition-related one-off expenses (EUR 26.2m in 9M 2024)

^[5] All figures subject to rounding

^[6] Regulatory capital position, therefore based on German GAAP (HGB), adjusted by accrued retention