Discontinued operations

Revenue and earnings performance

Changed reporting structure

On 12 September 2008, Deutsche Post agreed to sell a minority shareholding in Deutsche Postbank AG to Deutsche Bank AG in the first quarter of 2009. We have adapted our reporting structure accordingly. The Pension Service was transferred from the FINANCIAL SERVICES Division to the mail business. The remaining segment consists only of Postbank and has therefore been reported under “discontinued operations” since the third quarter of 2008.

Financial crisis hampers Postbank earnings

The Deutsche Postbank Group was impacted by one-time charges as a result of the global financial market crisis, especially in the second half of 2008. In addition to other factors, Postbank’s earnings situation was noticeably impacted by the write-downs on Postbank’s exposure to investment bank Lehman Brothers and Icelandic banks as well as the decrease in equity holdings to be recognised in profit or loss – announced as an effort to reduce capital market-related risks and portfolios.

With respect to net interest income and net fee and commission income – Postbank’s customer business-related core income figures – the bank either reached or exceeded the previous year’s figure. By contrast, net trading income and net income from investment securities declined significantly as a consequence of the financial crisis.

In spite of a clear rise in the rate of inflation and several special factors, administrative expenses were only slightly higher than the prior year level. The allowance for losses on loans and advances rose, however, due to the effects of the financial market crisis.

Thus, profit or loss from operating activities (EBIT) from discontinued operations fell by €1,931 million from €1,060 million in 2007 to € –871 million in the year under review.

In line with this, the profit or loss after tax from discontinued operations in 2008 was € –713 million, well below the prior-year figure of €858 million.

Postbank’s operating business performed well in all major product segments despite a continued difficult climate in the German retail banking business.

Deutsche Postbank AG provides details of its business performance in 2008 in its own annual report, to be published on 9 March 2009.