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NordLB posts 26% YOY rise in Q1 profit

Norddeutsche Landesbank Girozentrale's first-quarter consolidated profit rose to €54 million from the adjusted €43 million in the same period in 2018.

Net interest income fell year over year to €258 million from €353 million, while net commission income rose over the period to €34 million from €17 million. Profit at fair value, including hedge fund accounting, increased to €43 million from the year-ago €3 million.

The German banking group booked gains from risk provisioning of €38 million, largely due to the elimination of net valuation allowance following the reduction of its ship financing portfolio, compared with the year-ago €28 million.

The group's administrative expenses fell to €265 million from €291 million a year ago, as staff expenses and other administrative expenses declined year over year. Expenses for restructuring and reorganization in the quarter amounted to €10 million.

NordLB's total assets stood at €148.19 billion at March-end, down from €154.01 billion as of 2018-end. The group noted that under its reorganization strategy, its total assets will further decline to roughly €95 billion, while administrative costs will drop to €625 million by 2024. The group's full-time staff headcount is also expected to fall between 2,800 and 3,000 over the next five years.

CEO Thomas Bürkle noted that the bank is on track in implementing the capital measures under its €3.6 billion recapitalization plan.

As of March 31, the group's common equity Tier 1 ratio was 6.75%, compared with 6.76% at Dec. 31, 2018. The group's leverage ratio was flat at 2.1% over the period.