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Helaba reiterates bleak FY'17 forecast as 9-month profit dips YOY

Sparkassen- und Giroverband Hessen-Thüringen unit Landesbank Hessen-Thüringen Girozentrale, known as Helaba, said it continues to expect an overall decline in full-year 2017 earnings as it posted a year-over-year drop in nine-month profit.

The German lender reported consolidated net profit under International Financial Reporting Standards of €249 million for the nine months ended Sept. 30, down from €266 million in the year-ago period. Herbert Hans Grüntker, chairman of Helaba's board of managing directors, said the bank remains optimistic that it will be able to exceed its planned target for 2017 "in view of the fact that trading conditions remain challenging and will do so for the foreseeable future."

Net interest income fell 10.7% on a yearly basis to €815 million from €913 million due to the persistent zero and negative interest rate environment. Net fee and commission income came in at €263 million, compared to the year-ago €255 million. Net trading income rose year over year to €227 million from €79 million.

Provisions for losses on loans and advances totaled €19 million, down 86.4% from the year-ago €140 million.

The net loss from hedge accounting and derivatives amounted to €87 million, compared to a net income of €63 million a year earlier.

Pretax return on equity stood at 6.5%, compared to the year-ago 7.3%.

Helaba's fully loaded common equity Tier 1 ratio stood at 15.1% as of Sept. 30, compared to 13.8% at the end of 2016.