GERMANY - Dresdner Bank lost EUR517m in the fourth quarter last year, according to its preliminary results for 2001. It said its cost savings were taking effect but loan loss provisions were increased.
According to these figures, the Dresdner Bank Group will disclose a profit after taxes of EUR186m against the background of the developments on the international capital markets. The previous year Dresdner registered profits of EUR1.7bn.
The results of operations - aggregate net interest income, net commission income and net trading income - declined by 2% year-on-year. This includes extraordinary effects caused by the first-time application of IAS 39.
After adjustment for first-time consolidation and other extra-ordinary factors, administrative expenses increased year-on-year by 5%. This compares with an average annual increase in costs of 15% in the last five years. It shows that the cost-cutting measures introduced in May 2000 and further intensified in 2001 are starting to take effect.
By the end of 2001, roughly 4,000 jobs had been shed as part of the cost-cutting program, which – including the measures announced in May 2000 – will see a total reduction in the workforce of 7,800. 1,700 jobs were cut in the second half of 2001 alone. The number of German branch offices declined by 183 to 803 in 2001.
Loan loss provisions were lifted to total roughly EUR1.9bn. Loans to middle-market US companies extended in the mid-nineties play a major role here.
By Luke Clancy
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