Half-Yearly Financial Report 2014

2014

Half-Yearly Financial Report as at 30 June

DVB Bank SE | Half-Yearly Financial Report 2014

2Contents

Further information 30 – 32

30 DVB worldwide

32 Financial calendar

32 Imprint

03 Key figures at a glance

Interim management report 04 – 09

05 Report on assets, liabilities, financial position, and profit or loss

08 Report on forecasts and other statements on expected developments

09 Report on opportunities and risks

09 Report on major related party transactions

Interim financial statements 10 – 28

11 Condensed income statement

11 Earnings per share

11 Condensed statement of comprehensive income

12 Statement of financial position

13 Condensed statement of changes in equity

13 Condensed cash flow statement

14 Segment report

15 Notes

Review report 29

Legal notice

Further information

Symbols


3Key figures at a glance

€ mn

1 Jan 2014– 30 Jun 2014

1 Jan 2013– 30 Jun 2013

%

Earnings data

Net interest income 105.0 116.2 –9.6

Allowance for credit losses –27.9 –28.4 –1.8

Net interest income after allowance for credit losses 77.1 87.8 –12.2

Net fee and commission income 51.0 55.7 –8.4

Results from investments in companies accounted for using the equity method 0.3 –0.5 –

Net other operating income/expenses 2.3 6.5 –64.6

Net income 130.7 149.5 –12.6

General administrative expenses –91.7 –86.2 6.4

Consolidated net income before IAS 39 and taxes 39.0 63.3 –38.4

Net result from financial instruments in accordance with IAS 39 2.4 3.1 –22.6

Consolidated net income before taxes 41.4 66.4 –37.7

Key financial indicators (%)

Return on equity before taxes 6,5 11.0 –4.5 pp

Cost/income ratio 57.0 47.6 9.4 pp

€ mn 30 Jun 2014 31 Dec 2013 %

Key items from the statement of financial position

Business volume 24,454.2 24,576.3 –0.5

Customer lending volume 20,341.4 20,757.6 –2.0

Total assets 23,249.4 23,363.1 –0.5

Loans and advances to customers 18,659.3 18,896.9 –1.3

Deposits from customers 6,558.0 6,113.6 7.3

Securitised liabilities 11,167.0 11,134.5 0.3

Subordinated liabilities 359.1 363.7 –1.3

Equity 1,400.7 1,398.9 0.1

Total capital in accordance with the Capital Requirement Regulation

Common equity tier 1 1,144.0 – –

Additional tier 1 0.0 – –

Tier 2 capital 97.0

Total 1,241.0 – –

Capital ratios – Basel III (%)

Tier 1 ratio 19.4 – –

Total capital ratio 21.1 – –

1 Jan 2014– 30 Jun 2014

1 Jan 2013– 30 Jun 2013

%

Staff by business division

Transport Finance/Investment Management 308 307 0.3

Service areas 216 200 8.0

LogPay Financial Services 51 49 4.1

Total active staff 575 556 3.4

Ratings 2014 2013 2012

Standard & Poor‘s

Long-term counterparty credit rating A+ A+ A+

Short-term credit rating A-1 A-1 A-1

Outlook stable stable stable

Fitch Ratings1)

Long-term issuer default rating A+ A+ A+

Short-term issuer default rating F1+ F1+ F1+

1) Within the scope of the German Co-operative Financial Services Network’s rating

INTERIM MANAGEMENT REPOR T INTERIM F INANCIAL STATEMENTS RE VIE W REPORT FURTHER INFORMATION

Interim management report

05 Report on assets, liabilities, financial position, and profit or loss

08 Report on forecasts and other statements on expected developments

09 Report on opportunities and risks

09 Report on major related party transactions

€ mn175

150

125

100

75

50

25

0

–25

109.5

59.0

41.3

–1.3

2010

112.2

74.9

53.5

6.2

2011

112.5

70.8

54.6

43.9

2012

116.2

66.4

55.7

6.5

2013

105.0

51.0

41.4

2.3

2014

Net interest income Net fee and commission income Net other operating income/expenses Consolidated income before taxes

Development of income (as at 30 June)


5


The individual items of the half-yearly financial statements developed as follows:

At €130.7 million, total income for the first six months of 2014 (comprising net interest income after allowance for credit losses, net fee and commission income, results from investments accounted for using the equity method, and net other operating income/expenses), was down by 12.6% year-on-year (H1 2013: €149.5 million).

At €105.0 million, net interest income decreased by 9.6% year-on-year (H1 2013: €116.2 million).

Income from the lending business was down 1.6%, to €381.1 million (H1 2013: €387.3 million). DVB originated 78 new Transport Finance transactions in the period, with an aggregate volume of €2.2 billion (H1 2013: 71 new transactions with a total volume of €1.8 billion). Interest income from finance leases totalled €8.2 million (H1 2013: €12.7 million), whilst current income from operating leases decreased by 40.1%, to €41.1 million (H1 2013: €68.6 million). Given the reasons set out above, total interest income thus declined by 7.9%, from €471.9 million to €434.7 million.

Interest expenses also fell, by 7.3%, to €329.7 million (H1 2013: €355.7 million), given the massive additional liquidity supply on the capital markets and the resulting lower funding costs. How-ever, this did not offset the decline in interest income.

During the first half of 2014, DVB’s performance in providing financing solutions and advisory services to its clients in the international transport sector was lower than in the same period of the previous year. Consolidated net income before taxes was down 37.7%, to €41.4 million (H1 2013: €66.4 million).

The flooding of international capital markets with liquidity by central banks – which DVB considers an unhealthy development – significantly burdened the Bank’s results, in two ways: firstly, there was a marked increase in competition between banks and other providers of capital in transport finance. Secondly, the liquidity glut led clients to repay loans early, to a significant and unexpected extent – for DVB as well as others in the sector. It was not possible to fully replace these repayments with additional new business, and if so, only with a time lag. Furthermore, the repayments further increased the Bank’s already high liquidity reserves, thus additionally burdening net interest income.

The risk situation appears to be stabilising further. As a result, net allowance for credit losses as at 30 June 2014 decreased slightly. Nonetheless, DVB envisages allowance for credit losses for the full year 2014 to be in line with the level of the two previous years, as planned.

Report on assets, liabilities, financial position, and profit or loss

The present interim management report and condensed consolidated financial statements of DVB Group as at 30 June 2014 were subject to a review pursuant to section 37w (5) of the German Securities Trading Act (WpHG). The half-yearly financial report comprises the condensed interim financial statements and the interim management report of DVB Group.

Consolidated net income before taxes, as at 30 June

€ mn90

75

60

45

30

15

0

59.0

2010

74.9

2011

70.8

2012

66.4

2013

41.4

2014


6


General administrative expenses rose by 6.4%, to €91.7 million. Due to the increasing regulatory requirements, which DVB has to comply with to the same extent as much larger financial insti-tutions, we hired numerous new staff members to reinforce our service teams. Hence, together with its LogPay Financial Services subsidiary, DVB employed a total of 575 staff (in active employ-ment) as at 30 June 2014, an increase of 19 compared to the end of the first half of 2013 (556 employees). Accordingly, staff expenses increased by 2.2%, to €54.8 million. Non-staff expenses (including amortisation, depreciation and impairment) also rose, by 13.2%, to €36.9 million.

Accordingly, consolidated net income before IAS 39 and taxes amounted to €39.0 million (H1 2013: €63.3 million).

Compared to the same period of the previous year, the net result from financial instruments in accordance with IAS 39 (comprising the trading result, the hedge result, the result from the appli-cation of the fair value option, the result from derivatives entered into without intention to trade, and the result from investment securities) was almost stable, at €2.4 million (H1 2013: €3.1 million).

Consolidated net income after taxes reduced by 45.3%, to €31.7 million (H1 2013: €57.9 million).

Net allowance for credit losses declined slightly, by €0.5 million to €–27.9 million in the first half of 2014 (H1 2013: €–28.4 million). Specifically, new allowances recognised for credit losses amounted to €49.1 million (of which €32.8 million was accounted for by Shipping Finance), whilst €25.2 million was reversed (Shipping Finance: €16.7 million).

Total allowance for credit losses (comprising specific allowance for credit losses, portfolio-based allowances for credit losses, and provisions) rose to €207.5 million, up 1.8% from year-end 2013 (€203.8 million).

Accordingly, net interest income after allowance for credit losses declined by 12.2%, from €87.8 million to €77.1 million.

Net fee and commission income, which primarily includes fees and commissions from new Transport Finance business, from Investment Management as well as asset management and advisory fees, was down 8.4% year-on-year, to €51.0 million (H1 2013: €55.7 million).

Net other operating income/expenses declined from €6.5 million to €2.3 million. The previous year’s item included a non-recurring effect of €3.8 million in income from the deconsolidation of equity investments.


Allowance for credit losses by business division, as at 30 June 2014 (€ mn)

Additions

Reversals

Direct write-offs

Recoveries on loans and advances

previously written off

Total

Shipping Finance –26.5 10.7 –5.5 0.5 –20.8

Aviation Finance –4.3 1.7 – 0.1 –2.5

Offshore Finance – – – – –

Land Transport Finance –0.1 1.2 – – 1.1

Investment Management –0.4 0.4 – – 0.0

ITF Suisse –0.1 0.2 – 0.0 0.1

Business no longer in line with DVB’s strategy –8.4 – – 1.0 –7.4

Other – – –0.1 0.0 –0.1

Total specific allowance for credit losses –39.8 14.2 –5.6 1.6 –29.6

Shipping Finance –6.3 6.0 – – –0.3

Aviation Finance –1.9 3.6 – – 1.7

Offshore Finance –0.6 0.4 – – –0.2

Land Transport Finance –0.1 0.1 – – 0.0

Investment Management – – – – –

ITF Suisse –0.4 0.9 – – 0.5

Business no longer in line with DVB’s strategy – – – – –

Other – – – – –

Total portfolio-based allowance for credit losses –9.3 11.0 0.0 0.0 1.7

Total allowance as at 30 June 2014 –49.1 25.2 –5.6 1.6 –27.9

Total allowance as at 30 June 2013 –51.3 29.1 –6.6 0.4 –28.4


7



DVB reported a marginal change in total assets, by 0.9% to €23.2 billion as at the reporting date of 30 June 2014 (31 Dec 2013: €23.4 billion). The nominal volume of customer lending (the aggregate of loans and advances to customers, guarantees and indemnities, irrevocable loan commitments, and derivatives) was down 2.4%, to €20.3 billion. In US dollar terms, customer lending was down 3.1%, to US$27.7 billion.

Customer lending as at 30 June 2014 is broken down amongst the divisions as shown in the following chart:

DVB’s key financial indicators developed as follows:

Return on equity before taxes (ROE) was 6.5% – down 4.5 per-centage points (H1 2013: 11.0%). The cost/income ratio (CIR) rose by 9.4 percentage points, to 57.0% (H1 2013: 47.6%).

The ROE is calculated as follows: consolidated net income before taxes (excluding consolidated net income attributable to non-controlling interests) of €41.4 million is divided by the pro-rata total of the weighted capital of €1,280.0 million (€640.0 million for the period), which comprises the issued share capital, capital reserve and retained earnings – before consolidated net income for the period, and excluding existing actuarial gains and losses, the fund for general banking risks and non-controlling interests.

The CIR is calculated by dividing general administrative expenses of €91.7 million by €161.0 million (the total of net interest income, net fee and commission income, results from investments accounted for using the equity method, net other operating income/expenses, and the net result from financial instruments in accordance with IAS 39).

DVB has calculated its capital ratios in accordance with the Basel III framework since the beginning of 2014. As at 30 June 2014 both the tier 1 ratio (19.4%) and the total capital ratio (21.1%) were at a high level.

€ bn US$ bn30 Jun 2014 31 Dec 2013 Change

(%)30 Jun 2014 31 Dec 2013 Change

(%)

Shipping Finance 8.9 9.2 –3.3 12.1 12.7 –4.7

Aviation Finance 6.2 6.4 –3.1 8.4 8.9 –5.6

Offshore Finance 2.0 2.0 0.0 2.8 2.8 0.0

Land Transport Finance 1.7 1.6 6.3 2.4 2.2 9.1

Investment Management 0.5 0.5 0.0 0.6 0.6 0.0

ITF Suisse 0.8 0.8 0.0 1.1 1.1 0.0

Business no longer in line with DVB’s strategy 0.2 0.3 –33.3 0.3 0.3 0.0

Total 20.3 20.8 –2.4 27.7 28.6 –3.1

Development of customer lending

Shipping Finance 43.8% (–0.5 pp)

Aviation Finance 30.5% (–0.3 pp)

Offshore Finance 9.9% (+0.3 pp)

Land Transport Finance 8.4% (+0.7 pp)

ITF Suisse 3.9% (+0.1 pp)

Investment Management 2.5% (+0.1 pp)

Business no longer in line with DVB’s strategy 1.0% (–0.4 pp)

Distribution of customer lending by business division (30 June 2014)


8


Report on forecasts and other statements on expected developments

There are no new insights that would indicate any material changes to the forecasts regarding the development of transport markets, the Transport Finance and Investment Management portfolios, or to the financial outlook as set out in the group management report on pages 59–61, 78–81, 93–95, 107–109, 115, 119, 123, 125 and 176–178 of the Annual Report 2013.

This half-yearly financial report contains forward-looking statements, including statements concerning the future development of DVB.

As usual, any assessments and forecasts contained herein will always be subject to the risk of erroneous perception or judgement errors, and may thus turn out to be incorrect. By their very nature, any deliberations regarding developments or events in the future are based on conjecture rather than precise predictions. Actual future developments may there-fore diverge from expectations, not least as a result of fluctuations in capital market prices, exchange rates or interest rates, or similar causes of uncertainty; or due to fundamental changes in the economic environment.

Although we believe the forward-looking statements to be realistic, DVB cannot accept any responsibility that they will actually materialise, for the reasons outlined above.


9


Report on opportunities and risks

No risks which would jeopardise DVB’s continued existence are expected to materialise during the remainder of the 2014 financial year. Please refer to the report on opportunities and risks on pages 152–174 of the Annual Report 2013, which contains detailed information regarding risk management principles and organi-sation, DVB’s risk-bearing capacity and risk capital, and on the different types of risk.

Opportunities available to DVB as well as risks that DVB is exposed to during the second half of 2014 are outlined below.

DVB considers the economic outlook for 2014 to be generally more positive than in the previous year: global gross domestic product growth is expected to accelerate from 3.0% in 2013 to 3.7% in 2014 and 3.9% in 2015. This momentum, however, is not evenly distributed across the globe.

Whilst the US economy continues to steadily pick up steam, the euro zone will likely continue to face uneven economic develop-ment. The momentum of US economic growth is driven primarily by domestic demand, partially supported by the less restrictive ‘fiscal brake’ following the US budget agreement. Even though the euro zone is expected to see a slow acceleration of economic growth, recovery in the crisis-ridden countries is likely to be mixed and rather weak. Domestic demand will be burdened by the high level of public-sector and private debt, and by fragmen-tation of financial markets. Exports are expected to continue contributing to growth, however.

China’s economic growth is expected to remain strong, at around 7.5% (2014) and 7.3% (2015). Various political measures designed to slow down credit growth and to increase the cost of capital will take effect here – a controlled economic slowdown designed to prevent the economy from overheating.

2014 is so far proving to be another challenging year for trade and transport markets. Despite increasing signs of a bottoming out in the shipping markets, passing the trough may well take some more time. DVB has demonstrated in recent years that it is able to deal with different market cycles – this is where the Bank’s unique expertise lies.

Trend outlook and summary

As in the previous years, DVB envisages profit contributions to increase during the second half of the year, including Investment Management income, which is hard to project. The manifold regulatory requirements will continue to impact DVB’s cost structure, and will continue to burden the Bank’s employees. As a result, it cannot be ruled out that DVB’s results will fall short of the previous year.

Report on major related party transactions

Full reference is made in this respect to the information provided on page 239, note 63.4 of the Annual Report 2013. As part of DVB’s funding operations, the Bank’s securitised liabilities vis-à-vis DZ BANK AG were virtually unchanged as at 30 June 2014, at €8,159.1 million (31 Dec 2013: €8,333.4 million). At the report-ing date, the Bank had nine securities repurchase agreements in place with a remaining term of less than one year, where

DZ BANK AG is the borrower. These transactions have been recognised in loans to banks, in an aggregate amount of €1,407.2 million. Other than this, there were no material changes to related party transactions during the first half of 2014 which might have materially affected the financial position or financial performance of DVB Group.

Interim financial statements

11 Condensed income statement

11 Earnings per share1)

11 Condensed statement of comprehensive income

12 Statement of financial position

13 Condensed statement of changes in equity

13 Condensed cash flow statement

14 Segment report1)

15 – 28 Notes

1) These tables are part of the Notes.

€ mn180

160

140

120

100

80

60

40

20

0

2010 2011 2012 2013 2014

Shipping Finance Aviation Finance Offshore Finance Land Transport Finance Total Transport Finance

1) Before IAS 39 and before allocation of general costs

Transport Finance results1) as at 30 June

59.1 60.9

29.0

46.642.9

52.155.7 57.2 56.7 54.3

12.214.0 18.3

29.7 21.5

8.3 10.8 9.9 10.614.1

131.7

141.4

114.4

143.6

132.8


11

INTERIM MANAGEMENT REPORT INTERIM FINANCIAL STATEMENTS RE VIE W REPORT FURTHER INFORMATION

Condensed income statement

€ mn

Note

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Jun 2013

%

Condensed income statement

Net interest income (3) 105.0 116.2 –9.6

Allowance for credit losses (4) –27.9 –28.4 –1.8

Net interest income after allowance for credit losses 77.1 87.8 –12.2

Net fee and commission income (5) 51.0 55.7 –8.4

Results from investments in companies accounted for using the equity method 0.3 –0.5 –

General administrative expenses (6) –91.7 –86.2 6.4

Net other operating income/expenses (7) 2.3 6.5 –64.6

Consolidated net income before IAS 39 and taxes 39.0 63.3 –38.4

Net result from financial instruments in accordance with IAS 39 (8) 2.4 3.1 –22.6

Consolidated net income before taxes 41.4 66.4 –37.7

Income taxes –9.7 –8.5 14.2

Consolidated net income 31.7 57.9 –45.3

thereof: consolidated net income attributable to non-controlling interests 0.0 0.1 –

thereof: consolidated net income attributable to shareholders of DVB Bank SE 31.7 57.8 –45.2

Earnings per share

Average number of ordinary shares issued 45,621,519 46,083,415 –1.0

Basic earnings per share 0.69 1.25 –44.8

Diluted earnings per share 0.69 1.25 –44.8

Condensed statement of comprehensive income

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Jun 2013

%

Consolidated net income 31.7 57.9 –45.3

Items of other comprehensive income

that are recognised subsequently in profit or loss –1.5 –3.4 –55.9

Revaluation of AfS financial instruments 1.6 3.2 –50.0

thereof: changes in fair value 3.3 3.4 –2.9

thereof: reclassifications to the income statement –1.7 –0.2 –

Cash flow hedges –4.7 –5.0 –6.0

thereof: changes in fair value –0.5 –3.3 –84.8

thereof: reclassifications to the income statement –4.2 –1.7 –

Net investment hedges –3.7 –2.2 68.2

thereof: changes in fair value –2.7 –2.5 8.0

thereof: reclassifications to the income statement –1.0 0.3 –

Currency translation 3.1 –0.4 –

Deferred taxes 2.2 1.0 –

Items of other comprehensive income

that are not recognised subsequently in profit or loss –0.2 0.0 –

Revaluation of defined benefit plans –0.3 – –

Deferred taxes 0.1 0.0 –

Total comprehensive income 30.0 54.5 –45.0

thereof: total comprehensive income attributable to non-controlling interests 0.0 0.1 –

thereof: total comprehensive income attributable to shareholders of DVB Bank SE 30.0 54.4 –44.9


12


Statement of financial position

Assets (€ mn) Note 30 Jun 2014 31 Dec 2013 %

Cash and balances with the central bank 63.0 2,040.5 –96.9

Loans and advances to banks (9) 2,437.1 212.3 –

Loans and advances to customers (10) 18,659.3 18,896.9 –1.3

Allowance for credit losses (11) –207.4 –203.7 1.8

Positive fair values of derivative hedging instruments 783.8 590.0 32.8

Trading assets 240.4 345.0 –30.3

Investment securities (12) 401.5 496.5 –19.1

Investments in companies accounted for using the equity method (13) 238.1 226.6 5.1

Intangible assets (14) 100.8 101.4 –0.6

Property and equipment (15) 404.9 459.2 –11.8

Income tax assets 50.8 49.3 3.0

Other assets (16) 77.1 149.1 –48.3

Total 23,249.4 23,363.1 –0.5

Liabilities and equity (€ mn) Note 30 Jun 2014 31 Dec 2013 %

Deposits from other banks (17) 3,244.8 3,783.6 –14.2

Deposits from customers (18) 6,558.0 6,113.6 7.3

Securitised liabilities (19) 11,167.0 11,134.5 0.3

Negative fair values of derivative hedging instruments 219.4 286.7 –23.5

Trading liabilities 123.3 107.1 15.1

Provisions (20) 47.4 62.5 –24.2

Income tax liabilities 34.7 32.0 8.4

Other liabilities (21) 95.0 80.5 18.0

Subordinated liabilities (22) 359.1 363.7 –1.3

Equity (23) 1,400.7 1,398.9 0.1

Issued share capital 116.6 116.7 –0.1

Capital reserve 320.9 321.3 –0.1

Retained earnings 919.4 918.7 0.1

thereof: fund for general banking risks 82.4 82.4 0.0

Revaluation reserve 8.9 7.7 15.6

Reserve from cash flow hedges 2.9 6.1 –52.5

Reserve from net investment hedges –0.1 2.4 –

Currency translation reserve 0.2 –2.9 –

Distributable profit 31.7 27.9 13.6

Non-controlling interests 0.2 1.0 –80.0

Total 23,249.4 23,363.1 –0.5


13


Condensed statement of changes in equity

Condensed cash flow statement

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Jun 2013

%

Equity as at 1 Jan 1,398.9 1,328.9 5.3

Consolidated net income attributable to shareholders of DVB Bank SE 31.7 57.8 –45.2

Other comprehensive income –1.7 –3.4 –50.0

Dividend payment –27.9 –27.9 0.0

Changes in treasury shares –0.4 –1.8 –77.8

Changes in consolidated group and other changes 0.1 –0.2 –

Equity as at 30 Jun 1,400.7 1,353.4 3.5

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Jun 2013

%

Cash flow from operating activities –2,043.7 1,193.2 –

Cash flow from investing activities 99.7 49.4 –

Cash flow from financing activities –33.5 –15.9 –

Net change in cash and cash equivalents –1,977.5 1,226.7 –

Cash and cash equivalents at beginning of period 2,040.5 878.0 –

Cash and cash equivalents at end of period 63.0 2,104.7 –97.0


14


Segment report1)

Group

Shipping Finance

Aviation Finance

Offshore Finance

Land Transport

Finance

Investment Management

Treasury

Other

Recon- ciliation/

consolidation

€ mn 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013 6/2014 6/2013

Net interest

income 105.0 116.2 43.4 52.0 42.7 43.4 12.4 14.6 8.9 7.8 –12.1 –1.7 –12.4 5.5 5.9 3.8 16.2 –9.2

Allowance for

credit losses –27.9 –28.4 –21.8 –21.3 –0.9 –0.7 –0.2 1.2 1.2 0.0 0.0 –0.5 0.0 0.0 –7.1 –8.0 0.9 0.8

Net interest

income after

allowance for

credit losses 77.1 87.8 21.6 30.7 41.8 42.7 12.2 15.8 10.1 7.8 –12.1 –2.2 –12.4 5.5 –1.2 –4.2 17.1 –8.4

Net fee and

commission

income 51.0 55.7 17.3 18.3 12.5 14.1 9.3 13.9 4.0 2.8 –0.5 2.4 –0.1 –0.1 6.3 6.6 2.2 –2.3

Results from

investments

in companies

accounted for

using the

equity method 0.3 –0.5 – – – – – – – – 0.3 –0.4 – – – – 0.0 –0.1

Net other

operating

income/expenses 2.3 6.5 4.0 –2.4 –0.0 –0.1 –0.0 –0.0 –0.0 0.0 –0.2 7.5 0.0 0.0 2.1 1.2 –3.6 0.2

Net income 130.7 149.5 42.9 46.6 54.3 56.7 21.5 29.7 14.1 10.6 –12.5 7.3 –12.5 5.4 7.2 3.6 15.7 –10.6

Staff expenses –54.8 –53.6 –14.2 –15.4 –7.3 –7.8 –2.0 –2.0 –1.3 –1.3 –4.8 –5.6 –0.7 –0.6 –20.0 –16.8 –4.5 –4.0

Non-staff

expenses –34.7 –30.6 –4.2 –4.3 –1.9 –2.4 –0.6 –0.7 –0.3 –0.3 –1.8 –2.5 –0.2 –0.3 –16.8 –13.4 –8.9 –6.7

Depreciation,

amortisation,

impairment

and write-ups –2.2 –2.0 –0.0 –0.0 –0.0 –0.7 – 0.0 –0.0 0.0 –0.0 0.0 0.0 0.0 –0.0 –2.1 –1.9 –0.0 0.6

General

administrative

expenses –91.7 –86.2 –18.4 –19.7 –9.2 –10.9 –2.6 –2.7 –1.6 –1.6 –6.6 –8.1 –0.9 –0.9 –38.9 –32.1 –13.4 –10.1

Consolidated

net income

before IAS 39

and taxes 39.0 63.3 24.5 26.9 45.0 45.8 18.9 27.0 12.5 9.0 –19.1 –0.8 –13.4 4.5 –31.7 –28.5 2.3 –20.7

Net result

from financial

instruments

in accordance

with IAS 39 2.4 3.1 –0.5 –0.3 0.0 0.0 0.1 0.1 0.0 0.0 2.4 17.4 0.2 –14.8 0.0 –0.0 0.2 0.7

Consolidated

net income

before taxes 41.4 66.4 24.0 26.6 45.0 45.8 19.0 27.1 12.5 9.0 –16.7 16.6 –13.2 –10.3 –31.7 –28.5 2.5 –20.0

Cost/income

ratio2) (%) 57.0 47.6 28.7 29.1 16.8 18.9 11.8 9.4 12.4 15.4 –65.0 32.1 – – – – – –

Return

on equity3) (%) 6.5 11.0 14.8 12.4 57.8 42.4 124.7 312.7 90.6 52.3 –12.9 14.7 – – – – – –

Lending

volume4) 23,998.3 25,116.0 8,865.9 9,363.9 6,168.9 6,485.3 2,045.0 2,432.4 1,748.7 1,599.3 466.2 498.3 3,629.2 3,532.6 1,074.5 1,204.2 – –

1) Before allocation of general costs2) Excluding allowance for credit losses3) Before taxes4) According to internal management


Notes 15


option to include joint ventures by way of proportionate consoli-dation is revoked. In future, joint ventures will be included in the consolidated financial statements by using the equity method only. IFRS 12 summarises all disclosures to be made in the notes with respect to subsidiaries, joint ventures, associates and uncon-solidated structured entities. The amended standards will be applied for the first time in the business year 2014. This has material consequences primarily for disclosures according to IFRS 12, which are to be disclosed in the consolidated financial statements as at 31 December 2014 for the first time. The change regarding the consolidation of joint ventures will have no impact as these are already included using the equity method. Essentially, the retrospective application of IFRS 10 will lead to a €4.1 million increase in loans and advances to customers, a €2.9 million decrease in property and equipment, and a €0.8 million decrease in total allowance for credit losses. Equity increased by €0.5 million as a result of first-time application.

The amendments to IAS 32 substantiate the existing rules for offsetting financial instruments and clarify the definition of the required legally enforceable right. The Group applies the amend-ments retrospectively from the business year 2014.

The amendments to IAS 39 – Financial Instruments: Recognition and Measurement regarding the novation of derivatives and continuation of hedge accounting provide relief with respect to accounting for hedges. Pursuant to the amendment, a designated hedging relationship is not required to be discontinued upon novation of a derivative when the novation meets certain criteria. Above all, novations have to be made in connection with the transition to a central counterparty and within the framework of legal or regulatory requirements. The Group applies the amendments retrospectively since 1 January 2014.

The application of the amended accounting standards IAS 32 and IAS 39 does not have any material consequences for DVB Bank SE’s consolidated interim financial statements.

The introduction of IFRIC 21 – Levies has clarified the interpreta-tion of IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, to the effect that levies imposed by governments are only recognised when the activities triggering payment of the levy take place. The application of IFRIC 21 has no material consequences for the consolidated financial statements.

General notes

1 Summary of material accounting policies applied

The present interim consolidated financial statements for the period ended on 30 June 2014 have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union. They also comply with the requirements for interim financial reporting set out in section 37w of the German Securities Trading Act (WpHG).

The present interim consolidated financial statements are pre-sented in the form of condensed interim financial statements in accordance with IAS 34. The accounting policies applied therein are in line with those applied for the consolidated financial state-ments as at 31 December 2013, with the following exceptions.

The following amendments to accounting standards and new interpretations have been taken into account for the first time in the interim financial statements:

• IFRS 10 – Consolidated Financial Statements• IFRS 11 – Joint Arrangements• IFRS 12 – Disclosure of Interests in Other Entities• IAS 27 – Separate Financial Statements• IAS 28 – Investments in Associates and Joint Ventures• Amendments to IFRS 10, IFRS 11 and IFRS 12 –

Transition Guidance• Amendments to IFRS 10, IFRS 11 and IFRS 12 –

Investment Entities• Amendments to IFRS 32 – Offsetting Financial

Assets and Financial Liabilities• Amendments to IAS 39 – Financial Instruments: Novation of

Derivatives and Continuation of Hedge Accounting• IFRIC 21 – Levies

IFRS 10, IFRS 11 and IFRS 12 replace the previous rules set out in IAS 27, IAS 31 and SIC-12 related to the determination of the scope of consolidation in IFRS consolidated financial statements. In this context, IFRS 10 is the central standard replacing the corresponding rules included in IAS 27 in connection with SIC-12. This creates a uniform concept of control which has to be applied to all companies, including special purpose entities. In future, IAS 27 will only include guidance on separate financial statements prepared under IFRS. IFRS 11 applies to the inclusion of joint ventures into consolidated financial statements and replaces the rules included in IAS 31 in connection with SIC-13. The previous


Notes 16


The following companies are no longer included in the scope of consolidation:

• Deucalion Capital V LLC, Majuro, Marshall Islands• Mount Bintang LLC, Majuro, Marshall Islands• Mount Bubu LLC, Majuro, Marshall Islands • Mount Lyderhorn LLC, Majuro, Marshall Islands• NedShip Scheepvaarthuis B.V., Rotterdam, Netherlands

The following companies accounted for using the equity method are no longer included in the scope of consolidation:

• Capital Equipment Management Holding GmbH, Hamburg, Germany

• Modex Energy Rentals LLC, Majuro, Marshall Islands• Mount Faber KS, Oslo, Norway• MS Olivia Schifffahrtsgesellschaft mbH & Co. KG, Hamburg,

Germany

The following companies are no longer included in the scope of consolidation due to the first-time application of IFRS 10:

• Best Shipping LLC, Majuro, Marshall Islands• Mile Shipping LLC, Majuro, Marshall Islands

In the period under review, DVB entered into 16 securities repur-chase agreements as lender. These agreements are genuine repurchase agreements, where the securities are carried in the balance sheet of the borrower and a corresponding receivable is reported only.

Currency translation differences related to companies with a different functional currency are recognised directly in equity, in the currency translation reserve. In total, 21 companies accounted for using the equity method have a different functional currency (31 Dec 2013: 23 companies).

To the extent that estimates are necessary for recognition and measurement, these were made in accordance with the relevant standards. The basis for these estimates is continuously reviewed and adjusted, if necessary, taking into account historical experi-ence as well as changed expectations with regard to future developments.

2 Group of consolidated companies

The group of consolidated companies changed as a result of the establishment of the following, fully consolidated companies:

• Hudson Services LLC, Majuro, Marshall Islands• LogPay Fuel Italia S.r.l., Bozen, Italy• LogPay Mobility Services GmbH, Eschborn, Germany

The following newly-established companies were included in the group of consolidated companies using the equity method:

• Modex Holding Ltd, Tortola, British Virgin Islands


Notes 17


5 Net fee and commission income

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Fee and commission income

from guarantees

and indemnities 2.1 1.8 16.7

from the lending business 42.7 44.6 –4.3

Other fee and

commission income 8.6 11.9 –27.7

Fee and


Fee and

commission expenses –2.4 –2.6 –7.7

Net fee and


6 General administrative expenses

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Staff expenses –54.8 –53.6 2.2

Non-staff expenses –34.7 –30.6 13.4

Depreciation, amortisation,

impairment and write-ups –2.2 –2.0 10.0

Total –91.7 –86.2 6.4

7 Net other operating income/expenses

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Other operating income 15.6 22.5 –30.7

Other operating expenses –13.3 –16.0 –16.9

Total 2.3 6.5 –64.6

3 Net interest income

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Interest income

from lending and money

market transactions 381.1 387.3 –1.6

from bonds and other

fixed-income securities 2.4 2.7 –11.1

from finance leases 8.2 12.7 –35.4

Current income

from operating leases 41.1 68.6 –40.1

from equity investments and

other investment securities 1.9 0.6 –

Interest income 434.7 471.9 –7.9

Interest expenses

for deposits –139.1 –151.1 –7.9

for securitised liabilities –131.7 –141.0 –6.6

for subordinated liabilities –7.4 –8.0 –7.5

from operating leases –51.5 –55.6 –7.4

Interest expenses –329.7 –355.7 –7.3

Net interest income 105.0 116.2 –9.6

4 Allowance for credit losses

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Additions –49.0 –51.3 –4.5

Reversals 25.1 29.1 –13.7

Direct write-offs –5.6 –6.6 –15.2

Recoveries on loans

and advances previously

written off 1.6 0.4 –

Total –27.9 –28.4 –1.8


Notes 18


8.2 Hegde result (hedge accounting)

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Result from derivative

hedging instruments 269.4 –84.6 –

Result from hedged items –272.9 81.2 –

Result from

remeasurement –3.5 –3.4 2.9

Ineffectiveness

of cash flow hedges –0.1 0.0 –

Total –3.6 –3.4 5.9

8.3 Result from the application of the fair value option

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Loans and advances

designated as at fair value

through profit or loss – – –

Securitised liabilities

and subordinated loans

designated as at fair value

through profit or loss – – –

Economic derivative

hedging instruments – – –

Total – – –

8 Net result from financial instruments in accordance with IAS 39

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Trading result 3.6 4.3 –16.3

Hedge result –3.6 –3.4 5.9

Result from the application

of the fair value option 0.0 – –

Result from derivatives

entered into without

intention to trade –0.3 1.6 –

Result from

investment securities 2.7 0.6 –

Total 2.4 3.1 –22.6

8.1 Trading result

€ mn

1 Jan 2014 – 30 Jun 2014

1 Jan 2013 – 30 Dec 2013

%

Trading result

from derivatives –0.3 –0.7 –57.1

from foreign

currency transactions 3.1 3.8 –18.4

from interest

and dividend payments 0.8 1.2 –33.3

Other 0.0 – –

Total 3.6 4.3 –16.3


Notes 19


9 Loans and advances to banks

€ mn 30 Jun 2014 31 Dec 2013 %

Loans and advances 291.5 199.1 46.4

thereof: payable on demand 86.4 199.1 –56.6

thereof: with a limited term 205.1 0.0 –

Money market transactions 2,145.6 13.1 –

thereof: payable on demand – – –

thereof: with a limited term 2,145.6 13.1 –

Other loans and

advances to banks 0.0 0.1 –

Total 2,437.1 212.3 –

German banks 2,093.6 19.0 –

Foreign banks 343.5 193.3 77.7

Total 2,437.1 212.3 –

Loans and advances to banks include receivables in the amount of €1,407.2 million in connection with securities repurchase agreements with terms of less than twelve months where DVB acts as lender and DZ BANK AG as borrower. The market value of the German government bond under these repurchase agree-ments amounts to €1,413.0 million.

11 Allowance for credit losses

Specific allowance Portfolio-based allowance Total€ mn 30 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013

Balance at 1 January 159.5 103.3 45.0 46.0 204.5 149.3

Additions 39.8 110.2 9.3 43.4 49.1 153.6

Utilisation –21.7 –25.0 – – –21.7 –25.0

Reversals –14.2 –24.9 –11.0 –44.4 –25.2 –69.3

Changes resulting

from exchange rate fluctuations 1.1 –4.9 –0.4 0.0 0.7 –4.9

Balance as at the reporting date 164.5 158.7 42.9 45.0 207.4 203.7

10 Loans and advances to customers

€ mn 30 Jun 2014 31 Dec 2013 %

Loans and advances 18,642.8 18,876.1 –1.2

thereof: payable on demand 206.4 113.3 82.2

thereof: with a limited term 18,436.4 18,762.8 –1.7

Other loans and

advances to customers 16.5 20.8 –20.7

Total 18,659.3 18,896.9 –1.3

German customers 841.8 869.0 –3.1

Foreign customers 17,817.5 18,027.9 –1.2

Total 18,659.3 18,896.9 –1.3

DVB does not hold any claims against any of the highly-indebted euro zone countries (Greece, Ireland, Portugal, Spain and Italy).

Loans and advances to clients domiciled in these countries are not exposed to any country-specific risks, especially due to the fact that the relevant claims are collateralised by the financed transport assets.


Notes 20


12 Investment securities

€ mn 30 Jun 2014 31 Dec 2013 %

Bonds and other

fixed-income securities 369.4 464.2 –20.4

thereof: bonds and notes 369.4 464.2 –20.4

Equities and other

non-fixed-income securities 10.7 10.8 –0.9

Equity investments 21.4 21.5 –0.5

Total 401.5 496.5 –19.1

DVB does not hold any investment securities issued by any of the highly-indebted euro zone countries (Greece, Ireland, Portugal, Spain and Italy).

13 Investments in companies accounted for using the equity method

€ mn 30 Jun 2014 31 Dec 2013 %

Investments in associates 116.4 100.7 15.6

Interests in joint ventures 121.7 125.9 –3.3

Total 238.1 226.6 5.1

14 Intangible assets

€ mn 30 Jun 2014 31 Dec 2013 %

Goodwill 95.0 95.0 0.0

Other intangible assets 5.8 6.4 –9.4

Total 100.8 101.4 –0.6

15 Property and equipment

€ mn 30 Jun 2014 31 Dec 2013 %

Land and buildings 0.0 3.8 –

Operating and

office equipment 7.1 4.9 44.9

Assets held

under operating leases 170.6 215.3 –20.8

Other property and equipment 227.2 235.2 –3.4

Total 404.9 459.2 –11.8

16 Other assets

€ mn 30 Jun 2014 31 Dec 2013 %

Receivables from

taxes not related to income 1.9 4.8 –60.4

Advance payments

and prepaid expenses 1.9 1.4 35.7

Miscellaneous other assets 73.3 142.9 –48.7

Total 77.1 149.1 –48.3

In July 2010, DVB provided a US$175 million pre-delivery pay-ment loan for the construction of ”Dalian Deepwater”, a sixth-generation drillship, to Dalian Deepwater Developer Ltd, St Helier, Jersey, Channel Islands, a newly-established special purpose vehicle. In December 2012 and September 2013, addi-tional amounts of US$25 million and US$6 million were provided. The company mentioned has been included in DVB’s consoli-dated financial statements in accordance with IFRS 10.

In July 2010, Dalian Deepwater Developer entered into a purchase agreement with a group of shipyards for delivery of a turnkey drillship. The shipyard company is building this sixth-generation drillship in its shipyard in Dalian, China.

The shipyard company did not deliver the ship as agreed by 15 April 2013. In addition, serious technical problems occurred during ship construction. The shipyard revised the estimated delivery date for the ship (31 March 2014).


Notes 21


17 Deposits from other banks

€ mn 30 Jun 2014 31 Dec 2013 %

Loans and advances 2,914.4 3,621.4 –19.5


thereof: with a limited term 2,333.9 3,072.6 –24.0

Money market transactions 330.4 162.2 –


thereof: with a limited term 330.4 162.2 –

Total 3,244.8 3,783.6 –14.2

German banks 2,972.3 3,480.3 –14.6

Foreign banks 272.5 303.3 –10.2

Total 3,244.8 3,783.6 –14.2

18 Deposits from customers

€ mn 30 Jun 2014 31 Dec 2013 %

Loans and advances 6,494.9 6,071.3 7.0


thereof: with a limited term 6,153.1 5,750.5 7.0

Money market transactions 55.3 34.4 60.8


thereof: with a limited term 55.3 34.4 60.8

Other deposits

from customers 7.8 7.9 –1.3

Total 6,558.0 6,113.6 7.3

German customers 6,151.9 5,772.7 6.6

Foreign customers 406.1 340.9 19.1

Total 6,558.0 6,113.6 7.3

As a result of the substantial delay and the uncertainty surround-ing the delivery date for the ship and the associated negative consequences for marketing the ship, Dalian Deepwater Devel-oper terminated the agreement on the purchase of the drillship on 5 August 2013. The termination of the purchase agreement was made primarily on the basis of an unilateral breach of con-tract under English law on the part of the shipyard as well as on the basis of a contractual termination.

On 5 September 2013, the legal counsel of Dalian Deepwater Developer filed a motion to initiate arbitration proceedings at the London Court of International Arbitration. This motion was fol-lowed by a letter from the Company lawyers of Dalian Deepwater Developer to the shipyard in which the reasons for the termination of the purchase agreement were set out, and a claim for damages was made for an amount of US$215.6 million, which was due to be paid not later than 30 September 2013.

At the end of November 2013, the shipyard offered payment of a first instalment plus interest accrued in a total amount of US$117 million. On 27 December 2013, Dalian Deepwater Devel-oper accepted the offer, confirming that the claim for damages had not been settled completely. On 14 January 2014, the shipyard made a down-payment to Dalian Deepwater Developer in the amount of US$110 million, followed by a further down-payment of US$6.9 million on 17 January 2014.

On 7 February 2014, the shipyard filed a written defence and counterclaim rejecting any obligations in addition to the payments already made. As at 30 June 2014, the lawyers commissioned by Dalian Deepwater Developer were confident of a favourable outcome of the arbitration proceedings concerning the company. With reference to the probabilities confirmed by the lawyers, the claim for damages had a discounted value of US$155.0 million as at 30 June 2014. The discount rate used was 6.32%, based on a term of 18 months for the arbitration proceedings.


Notes 22


21 Other liabilities

€ mn 30 Jun 2014 31 Dec 2013 %

Other tax liabilities 1.1 2.0 –45.0

Miscellaneous other liabilities 93.9 78.5 19.6

Total 95.0 80.5 18.0

22 Subordinated liabilities

€ mn 30 Jun 2014 31 Dec 2013 %

Subordinated

promissory note loans 226.1 231.9 –2.5

Subordinated bearer bonds 133.0 131.8 0.9

Other subordinated capital 0.0 0.0 –

Total 359.1 363.7 –1.3

23 Equity

Net retained profit of DVB Bank SE for the business year 2013 amounted to €27.880.422,00. On 12 June 2014, the Annual General Meeting of DVB Bank SE resolved to pay dividends in the amount of €27.880.422,00 from this net retained profit (€0.60 for each no-par value share entitled to dividends). The portion of dividends paid from net retained profit attributable to treasury shares held by DVB on the date of the Annual General Meeting was transferred to retained earnings.

19 Securitised liabilities

€ mn 30 Jun 2014 31 Dec 2013 %

Ship covered bonds 701.9 695.8 0.9

Bearer bonds 10,465.1 10,438.7 0.3

Total 11,167.0 11,134.5 0.3

During the first half of 2014, the Bank issued bearer bonds with a nominal value of €150.0 million and a term of four to six years. Bearer bonds were due in the nominal amount of €246.5 million. €8,159.1 million of securitised liabilities related to transactions with the DZ BANK Group.

20 Provisions

€ mn 30 Jun 2014 31 Dec 2013 %

Provisions for

pension obligations 20.4 19.7 3.6

Provisions for early

and partial retirement plans 1.1 1.0 10.0

Other provisions 25.9 41.8 –38.0

Total 47.4 62.5 –24.2


Notes 23


Notes to financial instruments

24 Classes and categories of financial instruments

The carrying amounts and fair values of financial assets and financial liabilities are allocated to the classes and categories (or subcategories) of financial instruments as indicated in the tables below:

Changes in fair value were induced by changes in yield curves, exchange rate fluctuations, and changes in credit quality.

30 Jun 2014 31 Dec 2013 € mn

Carrying amount

Fair value Carrying amount

Fair value

Financial assets held for trading 240.4 240.4 345.0 345.0

thereof: trading assets 240.4 240.4 345.0 345.0

Financial assets designated as at fair value through profit or loss – – – –

thereof: loans and advances to banks – – – –

thereof: loans and advances to customers – – – –

thereof: investment securities – – – –

Derivative hedging instruments 783.8 783.8 590.0 590.0

thereof: positive fair values of derivative hedging instruments 783.8 783.8 590.0 590.0

Available-for-sale financial assets 357.8 357.8 420.5 420.5

thereof: investment securities 357.8 357.8 420.5 420.5

Financial assets measured at fair value 1,382.0 1,382.0 1,355.5 1,355.5

Loans and receivables 20,669.2 21,000.9 20,616.8 20,913.0

thereof: cash and balances with the central bank 63.0 63.0 2,040.5 2,040.5

thereof: loans and advances to banks 2,437.1 2,437.1 212.3 212.3

thereof: loans and advances to customers 18,155.5 18,485.9 18,318.1 18,612.6


Available-for-sale financial assets 30.2 30.2 30.1 30.1


Other assets 34.4 34.4 21.4 21.4

Financial assets measured at amortised cost 20,733.8 21,065.5 20,668.3 20,964.5

Finance leases 296.4 280.7 375.1 358.7

thereof: loans and advances to customers 296.4 280.7 375.1 358.7

Other financial assets 296.4 280.7 375.1 358.7

Some investment securities available for sale are measured at cost since it is impossible to identify market prices for these instruments, nor can fair values be reliably estimated for them. During the first half of 2014, gains from the disposal of investment securities measured at cost were recognised in profit or loss in the amount of €0.0 million (31 Dec 2013: €0.0 million).


Notes 24


30 Jun 2014 31 Dec 2013 € mn

Carrying amount

Fair value Carrying amount

Fair value

Financial liabilities held for trading 123.3 123.3 107.1 107.1

thereof: trading liabilities 123.3 123.3 107.1 107.1

thereof: other liabilities – – – –

Fair value option – – – –

thereof: deposits from other banks – – – –

thereof: deposits from customers – – – –

thereof: securitised liabilities – – – –

thereof: subordinated liabilities – – – –

Derivative hedging instruments 219.4 219.4 286.7 286.7

thereof: negative fair values of derivative hedging instruments 219.4 219.4 286.7 286.7

Financial liabilities measured at fair value 342.7 342.7 393.8 393.8

Deposits from other banks 3,244.8 3,237.3 3,783.6 3,764.6

Deposits from customers 6,558.0 6,502.0 6,113.6 6,166.2

Securitised liabilities 11,167.0 11,491.6 11,134.5 11,323.3

Other liabilities 48.3 48.3 26.3 26.3

Subordinated liabilities 359.1 395.9 363.7 394.3

Financial liabilities measured at amortised cost 21,377.2 21,675.0 21,421.7 21,674.7

Finance leases – – – –

thereof: deposits from customers – – – –

Other financial liabilities – – – –

25 Derivatives

Market values %30 Jun 2014 31 Dec 2013

€ mn positive negative positive negative positive negative

Interest rate products 839.9 307.9 649.8 381.1 29.3 –19.2

Currency-related products 184.3 34.8 285.2 12.7 –35.4 –

Other products – – – – – –

Total 1,024.2 342.7 935.0 393.8 9.5 –13.0


Notes 25


To the extent that the measurement models use inputs that are largely not observable on the market, the resulting fair values are allocated to Level 3.

The fair value of over-the-counter derivative financial instruments is measured using the net risk exposure, using the exception provided in IFRS 13.48. In a second step, credit risk exposure from derivative financial instruments is recorded after determining the net risk exposure. Credit valuation adjustments (CVA) and debit valuation adjustments (DVA) are applied to derivative financial instruments, whereby the instruments at hand are largely non-optional. A semi-analytical approach is applied to determine CVA/DVA, calculating the relevant values using eco-nomic loss rates as well as probabilities of default matching the terms of the instruments.

In the period under review, there were no reclassifications between the individual levels.

26 Determination of fair values of financial instruments

The fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing and inde-pendent parties in an arm’s length transaction.

The fair value of financial instruments which are listed on an active market is determined on the basis of market prices. The fair values of the financial instruments are allocated to Level 1.

The fair value of financial instruments which are not listed on an active market is determined on the basis of accepted valuation models used uniformly throughout all classes and allocated to Level 2. Non-derivative financial instruments as well as derivative financial instruments with no option components are measured using the Discounted Cash Flow Method.

The basis for deriving the discount rate is the use of currency- specific swap curves. Derivative financial instruments with option characteristics are measured using accepted option pricing models (Black-Scholes-/Black-76-Model). The valuation models use parameters that largely can be observed on the market.

Determination of fair values of financial instruments (€ mn)

Level 1 Level 2 Level 330 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013

Loans and advances to banks – – – – – –

Loans and advances to customers – – – – – –

Trading assets – – 240.4 345.0 – –

Positive fair values of

derivative hedging instruments – – 783.8 590.0 – –

Investment securities 357.8 420.5 – – – –

Financial assets measured at fair value 357.8 420.5 1,024.2 935.0 – –

Deposits from other banks – – – – – –

Deposits from customers – – – – – –

Trading liabilities – – 123.3 107.1 – –

Negative fair values of

derivative hedging instruments – – 219.4 286.7 – –

Subordinated liabilities – – – – – –

Financial liabilities measured at fair value – – 342.7 393.8 – –


Notes 26


Determination of fair values of the financial instruments measured at amortised cost (€ mn)

Level 1 Level 2 Level 330 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013

Loans and receivables – – 63.0 2,040.5 20,937.8 18,872.5

thereof: cash and balances

with the central bank – – 63.0 2,040.5 – –

thereof: loans and advances to banks – – – – 2,437.1 212.3

thereof: loans and advances to customers – – – – 18,485.9 18,612.6

thereof: investment securities – – – – 14.8 47.6

Financial assets available for sale – – – – 30.2 30.1

thereof: investment securities – – – – 30.2 30.1

Other assets – – – – 34.4 21.4

Financial assets measured

at amortised cost – – 63.0 2,040.5 21,002.4 18,924.0

Finance leases – – – – 280.7 358.7

thereof: loans and advances to customers – – – – 280.7 358.7

Other financial assets – – – – 280.7 358.7

Deposits from other banks – – 3,237.3 3,764.6 – –

Deposits from customers – – 6,502.0 6,166.2 – –

Securitised liabilities – – 11,491.6 11,323.3 – –

Other liabilities – – – – 48.3 26.3

Subordinated liabilities – – 395.9 394.3 – –

Financial liabilities measured

at amortised cost – – 21,626.8 21,648.4 48.3 26.3

Finance leases – – – – – –

thereof: deposits from customers – – – – – –

Other financial liabilities – – – – – –


Notes 27


27 Financial assets and liabilities not offset

Amounts with unrecognised offsetting agreements

Gross amount of financial instruments

not offset

Offsetting

Net amounts of items

carried on the balance sheet

Financial instruments

Amounts of cash collateral

received/provided

Net amount of financial instruments

not offset

€ mn30 Jun

2014

31 Dec

2013

30 Jun

2014

31 Dec

2013

30 Jun

2014

31 Dec

2013

30 Jun

2014

31 Dec

2013

30 Jun

2014

31 Dec

2013

30 Jun

2014

31 Dec

2013

Positive fair values

of derivative financial

instruments 1,024.2 935.0 – – 1,024.2 935.0 –9.1 –373.9 –694.0 –459.9 321.1 101.2

Negative fair values

of derivative financial

instruments 342.7 393.8 – – 342.7 393.8 –9.1 –373.9 –86.8 – 246.8 19.9

28 Unrecognised differences upon initial recognition

Unrecognised gains upon initial recognition in 2011 resulted from the purchase of financial assets. The related amortisation amounts were €0.6 million (31 Dec 2013: €1.2 million) in the first half of 2014. Taking currency translation effects of €–0.1 million (31 Dec 2013: €–0.3 million) into account, the closing balance was €6.4 million (31 Dec 2013: €6.9 million).


Notes 28


Responsibility statement

To the best of our knowledge, and in accordance with the appli-cable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the DVB Group, and the management report of the DVB Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the DVB Group for the remaining months of the financial year.

Frankfurt/Main, 8 August 2014 DVB Bank SE

The Board of Managing Directors

Wolfgang F. Driese CEO and Chairman of the Board of Managing Directors

Ralf Bedranowsky Member of the Board of Managing Directors

Bertrand Grabowski Member of the Board of Managing Directors

Other disclosures

29 Financial guarantee contracts, contingent liabilities and other commitments

€ mn 30 Jun 2014 31 Dec 2013 %

Financial guarantee contracts

from guarantees 246.6 225.5 9.4

Contingent liabilities from

irrevocable loan commitments 1,204.8 1,213.2 –0.7

Other commitments 26.1 16.2 61.1

thereof: within one year 5.4 5.0 8.0

thereof: within one to

five years 14.0 9.5 47.4

thereof: five years or more 6.7 1.7 –

Total 1,477.5 1,454.9 1.6


29

Based on our review, nothing has come to our attention that causes us to believe that the interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IFRSs on interim financial reporting as adopted by the EU or that the interim group management report is not prepared, in all material respects, in accordance with the provi-sions of the WpHG applicable to interim group management reports.

Eschborn, Frankfurt/Main, 8 August 2014Ernst & Young GmbHWirtschaftsprüfungsgesellschaft

LöskenWirtschaftsprüfer(German Public Auditor)

StapelWirtschaftsprüfer(German Public Auditor)

To DVB Bank SE, Frankfurt/Main

We have reviewed the interim condensed consolidated financial statements, comprising the condensed income statement, the condensed statement of comprehensive income, the statement of financial position, the condensed statement of changes in equity, the condensed cash flow statement and selected explanatory notes, and the interim group management report of DVB Bank SE, Frankfurt/Main, for the period from 1 January 2014 to 30 June 2014, which are part of the six-monthly financial report pursuant to section 37w of the German Securities Trading Act (WpHG). The preparation of the interim condensed consolidated financial statements in accordance with IFRSs on interim financial reporting as adopted by the EU and of the group management report in accordance with the requirements of the WpHG appli-cable to interim group management reports is the responsibility of the Company’s management. Our responsibility is to issue a report on the interim condensed consolidated financial statements and the interim group management report based on our review.

We conducted our review of the interim condensed consolidated financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany). Those standards require that we plan and perform the review to obtain a certain level of assurance in our critical appraisal to preclude that the interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IFRSs on interim financial reporting as adopted by the EU and that the interim group management report is not prepared, in all material respects, in accordance with the provisions of the WpHG applicable to interim group management reports. A review is limited primarily to making inquiries of company personnel and applying analytical procedures and thus does not provide the assurance that we would obtain from an audit of financial statements. In accordance with our engagement, we have not performed an audit and, accordingly, we do not express an audit opinion.

Review report

INTERIM MANAGEMENT REPORT INTERIM F INANCIAL STATEMENTS RE VIE W REPOR T FURTHER INFORMATION

INTERIM MANAGEMENT REPORT INTERIM F INANCIAL STATEMENTS RE VIE W REPORT FUR THER INFORMATION

DVB worldwide

Further information

30 DVB worldwide

32 Financial calendar

32 Imprint

Piräus

Curaçao

New York

London

BergenOslo

Singapore

Tokyo

EUROPEAMERICA ASIA/PACIFIC

Frankfurt/Main

Zurich

Hamburg

Athens

Shipping Finance

Aviation Finance

Offshore Finance

Land Transport Finance

Amsterdam


31


DVB worldwide

Head office Frankfurt/MainDVB Bank SEPlatz der Republik 660325 Frankfurt/Main, GermanyPhone +49 69 9750 40, Fax +49 69 9750 4444 Europe AmsterdamDVB Bank SEAmsterdam Branch, WTC Schihol, Tower F, 6th FloorSchiphol Boulevard 255, 1118 BH Schiphol, The NetherlandsPhone +31 88 3997 900, Fax +31 88 3998 301

AthensDVB Bank SERepresentative Office Greece3, Moraitini Street & 1, Palea Leof. Posidonos, Bldg. K4Delta Paleo Faliro, 175 61 Athens, GreecePhone +30 210 4557 400, Fax +30 210 4557 420

BergenDVB Bank SENordic Branch, Strandgaten 18, 5013 Bergen, NorwayPhone +47 5 5309 400, Fax +47 5 5309 450

HamburgDVB Bank SEHamburg Office, Ballindamm 6, 20095 Hamburg, GermanyPhone +49 40 3080 040, Fax +49 40 3080 0412

LondonDVB Bank SE London Branch, Park House, 6th Floor16–18 Finsbury Circus, London, EC2M 7EB, United KingdomPhone +44 20 7256 4300, Fax +44 20 7256 4450

OsloDVB Bank SENordic Branch, Haakon VII’s gate 1, 0161 Oslo, NorwayPhone +47 2 3012 200, Fax +47 2 3012 250

ZurichITF International Transport Finance Suisse AGWasserwerkstrasse 12, 8006 Zurich, SwitzerlandPhone +41 44 3656 100, Fax +41 44 3656 200

The Americas CuraçaoDVB Bank America N.V.Zeelandia Office Park, Kaya W.F.G. Mensing 14Willemstad, CuraçaoPhone +599 9 4318 700, Fax +599 9 4652 366

New YorkDVB Transport (US) LLC Representative Office of DVB Bank SE609 Fifth Avenue, New York, NY 10017-1021, USAPhone +1 212 588 8864, Fax +1 212 588 8936

DVB Capital Markets LLC 609 Fifth Avenue, New York, NY 10017-1021, USAPhone +1 212 858 2624, Fax +1 212 588 0424 Asia SingaporeDVB Group Merchant Bank (Asia) Ltd77 Robinson Road # 30-02, Singapore 068896Phone +65 6511 3433, Fax +65 6511 0700

TokyoDVB Transport Finance LtdTokyo Branch, The Imperial Hotel Tower, 14th Floor (A-2)1-1, Uchisaiwaicho 1-chome, Chiyoda-kuTokyo 100-0011, JapanPhone +81 3 3593 7700, Fax +81 3 3593 7860 www.dvbbank.com e-mail: [email protected]


32


Financial calendar

Imprint

Design concept and realisationGolinHarris B&L GmbH, Frankfurt/Main, Germany

DVB Group’s Half-Yearly Financial Report 2014 is published as a PDF file on our webpage www.dvbbank.com.It is available in German and English.

After scanning this QR code with your smartphone, you will have direct access to our website.

DVB Bank SEPlatz der Republik 660325 Frankfurt/Main, Germany

Elisabeth WinterHead of Group Corporate CommunicationsPhone +49 69 9750 4329

Sabine SchliebenManager Investor RelationsPhone +49 69 9750 4449

By 14 November 2014 Publication of the Interim Management Statement

during the second half of 2014 (for the first nine months ending 30 September 2014)

5 December 2014 Publication of the

Declaration of Compliance for 2014/2015

19 March 2015

Annual Accounts Press and Analyst Conference Frankfurt/Main

25 June 2015

Annual General Meeting Frankfurt/Main