Helaba with stable business and earnings development in first half- year

Frankfurt am Main (ots) -

- Net interest income rises by 10 per cent
- Substantial fall in provisions for loans and advances
- CET-1 ratio reaches 12.9 per cent
- Annual earnings projected to be in line with targets
- Joint venture in foreign trade finance

In the first half of 2014, Helaba achieved earnings before tax of
EUR 322 million, a result that was only slightly below the
exceptionally high level of the previous year (EUR 336 million).
After allowing for income taxes, the Group result amounted to EUR 216
million.

Hans-Dieter Brenner, Helaba's CEO, is extremely satisfied with
this result: "The welcome growth in net interest income is worth
highlighting because it demonstrates, as does the rise in net
commission income, that our strength lies in our customer-related
activities. In the wholesale business as well as the S-Group, private
customer and SME segments, we were able to achieve good margins on
new business, despite historically low interest rates. The
substantial fall in provisions for loans and advances is a reflection
of how well the German economy is performing. Beyond that, it is
testimony to the solid nature of our lending portfolio and the good
creditworthiness of our customers. Net trading income was noticeably
lower than in the previous year, in which the result was influenced
by a considerable tightening in spreads, but nevertheless remains in
line with our forecast."

Over the further course of the year, Helaba's CEO sees an imminent
economic slowdown in Germany, weak growth in parts of Europe as well
as the unstable geopolitical situation in Eastern Europe and the
Middle East as particular risks to the bank's earnings position.
Brenner: "As long as there are no extreme market distortions, I
anticipate that Group earnings for the year will be somewhat lower
than the very high level achieved in 2013 but that we will not have
any trouble in achieving our planned targets."

Currently, Helaba is in the midst of a strategic realignment with
respect to its foreign trade finance operations. The aim is to
considerably increase the efficacy of Helaba's services for the
savings banks and its key accounts and to be in a position to provide
all the relevant foreign trade finance products. In the course of
this strategy, Helaba will concentrate on the focus regions of German
companies' international business. In order to support these
activities, the bank is opening a further representative office in
Singapore this year. Region that Helaba does not fully cover will be
served by co-operations. In accordance with this strategy, the bank
is entering into a joint venture with the group of the 25 largest
savings banks in Germany (G25) and BNY Mellon.

Significant growth in net interest and commission income

The bank succeeded in boosting net interest income to EUR 657
million, representing a rise of 10 per cent or EUR 59 million. In
spite of an environment characterised by historically low interest
rates, good margins were achieved on a volume of new business that
remained practically constant.

Provisions for loans and advances, at EUR -45 million, were EUR 78
million lower than the year before. It should be noted in this case
that, pursuant to IFRS 10, instead of creating a loss provision
Helaba showed corresponding value adjustments for individual
borrowers in the other operating result. After deducting provisions
for loans and advances, the net interest income of EUR 475 million in
the first half of the previous year had risen to EUR 612 million in
the current reporting period.

Net commission income rose by EUR 13 million to EUR 154 million.
In this case, commission from transaction services, securities
trading and custodial business, as well as from asset management, saw
particularly strong growth.

As expected, net trading income of EUR 94 million returned to a
normal level. This result was generated to a large extent by
customer-driven capital market activities. Net trading income was EUR
154 million below the same period last year, which was characterised
by a significant tightening in credit spreads.

The result from hedges and derivatives, too, is strongly
characterised by the market value of securities, rising by EUR 29
million to EUR 49 million. There was an improvement in the result
from financial investments, including the result from companies using
the equity accounting method, which rose to EUR 12 million.

The other operating result fell by EUR 37 million to EUR 36
million, also owing to consolidation. This was primarily driven by
the result from property held as a financial investment (EUR 66
million). Among other things, the increase in reserves set aside for
restructuring activities in the scope of the Helaba PRO cost and
process optimisation project, as well as depreciations on financed
assets, had a negative impact on the result.

General administration expenses rose by EUR 17 million to EUR 635
million. The rise in personnel costs was mainly a result of salary
adjustments. The increase in other administrative expenses was
related, among other things, to IT projects in connection with
regulatory requirements and the migration of IT systems.

Earnings before tax amounted to EUR 322 million, having reached
EUR 336 million in the same period of the year before.

After making allowance for income tax of EUR 106 million, Group
earnings came to EUR 216 million (first half of 2013: EUR 231
million).

Balance sheet total and customer receivables stable

The balance sheet total of the Helaba Group declined slightly from
EUR 178.3 billion to EUR 176.5 billion. Loans and advances to
customers, at EUR 91 billion, remained at a similar level to 2013. On
top of that, there were EUR 9 billion in loans and advances to
savings banks. The amount of customer-related business as a
proportion of the Group balance sheet, reflecting the fact that
Helaba's business model is entrenched in the real economy, thus
increased in the first half of 2014 to 57 per cent.

The principal changes on the asset side resulted from the decline
in loans and advances to banks, including cash reserve, by EUR 2.2
billion to EUR 20.9 billion. There was a targeted reduction of 5 per
cent in assets held for trading, accounted for at market value, to
EUR 30.8 billion.

On the liabilities side, liabilities due to banks fell by EUR 2.2
billion to EUR 32.0 billion. Securitised liabilities were increased
by EUR 0.7 billion to EUR 49.1 billion. This particularly included an
expansion in the volume of public Pfandbriefe of EUR 1.6 billion.
Subordinated capital rose from EUR 5.1 billion at the end of 2013 to
EUR 5.3 billion.

Positive development in new business with good margins CET-1
capital ratio at 12.9 per cent

The volume of medium and long-term new business in the Helaba
Group reached EUR 7.9 billion (2013: 7.8 billion). EUR 4.4 billion of
this was attributed to real estate finance and EUR 1.5 billion to
activities with corporate customers and project finance transactions
within the Corporate Finance business segment. The S-Group business
with the savings banks, the private customer and SME business and the
home loan and savings business together contributed EUR 1.5 billion.
In the capital market business, Helaba arranged 30 Schuldschein
issues for companies with a total volume of EUR 3.5 billion.
Furthermore, it supported 7 Schuldschein issues for local authorities
with a total volume of EUR 320 million.

The market environment for refinancing activities in the first
half of 2014 was positive. Around EUR 6.0 billion (same period in
2013: EUR 3.5 billion) in medium and long-term funding had been
raised by the middle of the year. The volume of unsecured funding was
around EUR 3.0 billion (same period in 2013: EUR 2.2 billion).
Revenues from retail issues for private customers of the savings
banks amounted to approximately EUR 2.1 billion (same period in 2013:
1.5 billion). There was an overall volume of Pfandbrief issues of
about EUR 3.0 billion (same period in 2013: 1.3 billion), of which
EUR 2.6 billion were public Pfandbriefe. For the first time,
Pfandbrief issues in the first half of the year included a
dual-tranche benchmark with a total volume of EUR 1 billion and
maturities of three and seven years. In order to strengthen the
regulatory supplementary capital, subordinated issues with a volume
of around EUR 200 million were placed with institutional customers.
Customer deposits in the retail segment, principally at Frankfurter
Sparkasse, contribute to a further diversification of the bank's
funding sources.

Since the beginning of the years, the determination of regulatory
capital requirements as well as the calculation of capital ratios has
been conducted in accordance with provisions laid out in the CRD
IV/CRR. In the first six months of the year, the core capital ratio
rose from 12.8 per cent to 13.7 per cent. With a tier 1 (CET-1)
capital ratio of 12.9 per cent as of 30 June 2014 and a total capital
ratio of 17.8 per cent, Helaba's capital ratios are significantly
higher than the regulatory capital requirements laid out in the CRR,
which have been tightened considerably, both in a quantitative and
qualitative way. Helaba's leverage ratio of 3.9 per cent as of 30
June 2014 is also considerably above the future regulatory minimum
requirement of 3 per cent. Thus, Helaba is well prepared for the
ECB/EBA stress test.

Segment Report

Real Estate segment

The Real Estate segment comprises the business divisions of real
estate lending and management. Subsidiaries in the real estate
business are also part of this segment.

Helaba is among the leading German banks active in this business
field. Within the Real Estate segment, real estate lending makes the
largest contribution to earnings. The latter achieved a 12 per cent
increase in the volume of medium and long-term new business compared
to the same period last year, reaching EUR 4.4 billion. The margin on
the existing portfolio saw a slight improvement while margins on new
business were satisfactory, which led to a rise in the net interest
income in this segment. The amount of provisions for loans and
advances was significantly lower than last year's level. The result
of real estate subsidiaries, especially GWH, showed a positive
development compared to the same period in 2013.

Earnings before tax in this segment were EUR 167 million,
representing an almost 40 per cent increase.

Corporate Finance segment

The Corporate Finance segment consists primarily of earnings from
corporate customer activities and tailored financial solutions.

At EUR 1.5 billion, the level of medium and long-term new business
in the Corporate Finance business field was slightly lower than the
year before. Due to weak demand, especially for corporate loans, this
new business was not able to compensate for maturities in the
existing portfolio. Project-based financing activities, especially
the financing of infrastructure projects, showed further welcome
growth. The result before tax in this segment, at EUR 91 million, was
marginally higher than last year.

Financial Markets segment

The business segment of Financial Markets includes the results of
the Global Markets, Asset and Liability Management, Public Sector
Sales as well as Financial Institutions and Public Finance divisions.

Net interest income in this segment mainly results from lending to
domestic and foreign public sector municipalities as well as from
earnings generated by capital market transactions for retail
customers. Medium and long-term new business with domestic and
foreign municipalities amounted to EUR 0.8 billion. The bank was
successful in maintaining its position as market leader in the
Schuldschein market for corporates and the public sector. In capital
market activities, improved earnings from primary market transactions
and from business in foreign notes and coins and precious metals led
to a rise in the net commission income. The result before tax of this
segment was EUR 79 million. The higher result in the same period last
year was characterised by a very positive market environment and a
significant tightening in credit spreads.

Asset Management segment

The Asset Management segment represents earnings from Helaba
Invest Kapitalanlagegesellschaft mbH as well as the Frankfurter
Bankgesellschaft Group. Helaba Invest was able to expand its volume
of assets under management by around 6 per cent, which contributed to
higher net commission income. This segment's earnings before tax
amounted to EUR 3 million and thus approached the level seen last
year.

S-Group Business segment

The S-Group Business segment comprises the activities of the
S-Group Bank and the Landesbausparkasse Hessen-Thüringen. Two years
after Helaba assumed the role as central clearing bank for all
savings banks in the states of North Rhine-Westphalia and
Brandenburg, the migration of all existing portfolios to Helaba's
systems was completed as planned on 30 June 2014. The bank is to open
a further sales office in Münster.

As the leading German S-Group Bank, Helaba maintains business
relationships to almost all savings banks in Germany.

Having overhauled its range of joint lending services in the
corporate loan business last year, Helaba is currently in the process
of improving its position as a competent partner for foreign trade
finance. Now, Helaba is ready to support the savings banks and their
customers with all relevant foreign trade finance products. An
agreement has been signed with the G25 group of the largest savings
banks and BNY Mellon to form a joint venture in foreign trade finance
for the region of Southeast Asia, India and China (APAC).

As expected, the gross volume of new business of LBS Hessen-
Thüringen showed a somewhat more subdued development in light of the
introduction of a new tariff generation. As a result of historically
low investment returns, the net interest income continued to decline.

The result before tax in the S-Group Business segment was
marginally lower than the equivalent period in 2013.

Public Development and Infrastructure Business segment

This segment mainly includes the activities of Wirtschafts- und
Infrastrukturbank Hessen (WIBank), which operates for the State of
Hesse in managing and supporting public development business.

The first half of the year was characterised by the continued
growth in subsidised programmes for infrastructure, small businesses
and housing development. In order to refinance the municipal
protection shield, which was established to achieve permanently
balanced fiscal budgets for local authorities in Hesse, WIBank placed
another bond on the capital markets. By expanding its development
activities, it was able to increase the net interest income.

The result before tax in this segment was EUR 9 million, which was
slightly lower than last year.

Frankfurter Sparkasse

This segment consists of the result of Frankfurter Sparkasse
including its consolidated subsidiaries. As a consequence of low
interest rates, the net interest income saw a slight fall. Net
commission income was somewhat higher than the same period in 2013.
Earnings before tax in this segment, at EUR 68 million, were a little
above those achieved in the previous year.

Outlook for the year

Helaba has a stable and balanced business model with sustained
growth in earnings. That is why its customers value it as a reliable
partner. External conditions, however, can have negative consequences
for business development. Risks to Helaba's earnings in the second
half of the year include a more pronounced economic slowdown in
Germany and continued weak growth in certain eurozone countries. This
could bring about a further decline in demand for credit. Political
instability in Eastern Europe, too, and the crises in the Middle East
pose risks for the financial markets.

In the first half of 2014, Helaba managed to sustain a positive
business and earnings development. Provided the existing risks do not
lead to any upheavals in the real economy and on the financial
markets, the bank feels that, in view of the stable nature of its
operating activities, it is still on course for a successful year.

P&L Figures Helaba Group as of 30 June 2014 under IFRS

|01.01.- |01.01.- |Change
|30.06. |30.06. |
|2014 |2013 |
|EURm |EURm | EURm |in %

Net interest income |657 |598 |59 |9.9
Provisions for loans
and advances |-45 |-123 |78 |63.4
Net interest income after
provisions for loans and advances |612 |475 |137 |28.8
Net commission income |154 |141 |13 |9.2
Net trading income |94 |248 |-154 |-62.1
Result from hedges/derivatives |49 |20 |29 |>100
Result from financial investments | | | |
(incl. result from companies using | | | |
the equity accounting method) |12 |-3 |15 |>100
Other operating result |36 |73 |-37 |-50.7
General administrative expenses |-635 |-618 |-17 |-2.8
Group earnings before tax |322 |336 |-14 |-4.2
Income taxes |-106 |-105 |-1 |-1.0
Net group earnings |216 |231 |-15 |-6.5

In the 2014 fiscal year, Helaba's financial statements have been
prepared for the first time in accordance with the new consolidation
provisions of IFRS 10, 11 and 12 as well as the adjusted IAS 27 and
28. As a rule, changes resulting from this are applied retroactively
and thus also lead to an adjustment in the corresponding period of
2013.

Balance Sheet Development Helaba Group as of 30 June 2014 under IFRS

|30.06. |31.12. |Change
|2014 |2013 |
|In EURm|In EURm |In EURm |in %
| | | |
Loans and advances to banks incl. |20,876 |23,108 |-2,232 |-9.6
cash reserve | | | |
Loans and advances to customers |91,116 |91,032 |84 |0.1
Impairments on receivables |-1,046 |-1,119 |73 |6.5
Assets held for trading |30,771 |32,311 |-1,540 |-4.8
Positive market value of |5,407 |4,690 |717 |15.3
derivatives not held for trading | | | |
Financial investments (incl. result|25,388 |24,196 |1,192 |4.9
from companies using the equity | | | |
accounting method) | | | |
Property, equipment, intangible |2,481 |2,482 |-1 |-
assets | | | |
Deferred income taxes |330 |342 |-12 |-3.5
Other assets |1,185 |1,234 |-49 |-4.0

Total assets |176,508|178,276 |-1,768 |-1.0
| | | |
Liabilities due to customers |44,524 |43,916 |608 |1.4
Securitised liabilities |49,093 |48,371 |722 |1.5
Trading liabilities |31,419 |33,739 |-2,320 |-6.9
Negative market value of |4,155 |3,471 |684 |19.7
derivatives not held for trading | | | |
Provisions |1,817 |1,632 |185 |11.3
Income tax liabilities |98 |83 |15 |18.1
Other liabilities |851 |595 |256 |43.0
Subordinated capital |5,268 |5,073 |195 |3.8
Equity |7,306 |7,234 |72 |1.0
Total liabilities |176,508|178,276 |-1,768 |-1.0

Segment Development Helaba Group as of 30 June 2014 under IFRS
(earnings before tax)

|01.01.- |01.01.-
|30.06.2014 |30.06.2013
|EURm |EURm

Real Estate |167 |121
Corporate Finance |91 |90
Financial Markets |79 |189
Asset Management |3 |5
S-Group Business |1 |8
Public Development and |9 |11
Infrastructure Business | |
Frankfurter Sparkasse |68 |66
Other /Consolidation/ Transition |-96 |-154
Group |322 |336

Financial Ratios
in % |01.01.- |01.01.-
|30.6.2013 |30.0.06.2014
| |
Cost-income ratio |63.4 |57.4
Return on equity (before tax) |8.9 |9.5

|30.06.2014 |31.12.2013
| |
Total capital ratio |17.8% |17.4%
Core capital ratio |13.7% |12.8%
CET-1 capital ratio(1) |12.9% |12.5%

(1) The CET-1 ratio was reported for the first time on 31 March
2014 after the implementation of CRR/CRD IV.

Ratings
|Moody's |FitchRatings |Standard &
|Investors| |Poor's
|Service | |Corp.
Long-term liabilities |A2 |A+* |A*
Short-term liabilities |P-1 |F1+* |A-1*
Public Pfandbriefe |Aaa |AAA |_
Mortgage Pfandbriefe |- |AAA |-
Financial strength/ | | |
viability rating |D+ |a+* |-

(*) Joint S-Group rating for the Sparkassen-Finanzgruppe
|Hessen-Thüringen

Press Contact:
Press and Communication
MAIN TOWER · Neue Mainzer Strasse 52-58
60311 Frankfurt am Main · www.helaba.de
Tel.: +49 69 / 9132 ? 2192

Wolfgang Kuss
E-mail: wolfgang.kuss@helaba.de

Ursula-Brita Krück
E-mail: ursula-brita.krueck@helaba.de