Everyone knows that BayernLB is a disaster and has lost tons of money last year.
But how has the bank been doing in the longer run?
I took a look at their historical financial statements, as published on the bank's Investor Relations webpage all the way back to 2001.
BayernLB's RoE was as follows (in brackets: including changes to IFRS "Neubewertungsrücklage", which are not booked through p+l, but directly affect equity):
2008: -58.5 % (-76.8 %)
2007: 0.8 % ( -8.4 %)
2006: 8.3 % ( 8.2 %)
2005: 8.6 %
2004: 3.8 %
2003: 3.5 %
2002: 2.9 %
2001: 3.1 %
2000: 7.2 %
In other words: BayernLB never earned very much. In good years, it managed around 8 % RoE, but 2000-06 average was only 5 %, and cumulative profits over those 7 years were barely 3 bn €.
Then, it all evaporated: In 2007-08, 7.6 bn € of equity was lost.
(Note on methodology: IFRS from 2006 onwards, HGB up to 2005; RoE defined as "net profit / year-end equity". "Stille Einlagen" included in equity, and the "Vorabgewinnabführung auf stille Einlagen" is included in the net profit. Minorities are excluded.)
(Previous post on same subject)
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Shaun Rein on the TSM
vor 1 Jahr
You will find a similar picture for all the landesbanks. It is a pretty good example to show that return from credit risk are skewed. It's easy to earn some money in good times but you will loose a hell of a money in bad times. That's why politicians are especially bad in running banks: They don't care that the bank might loose money in the long run, they like to focus on the profits before the elections.
AntwortenLöschenEven if there is a disaster as right now, they still don't care. They will call it an "exception" and proof it by the 5% RoE that they will see in coming years again.