Deutsche Post - Postbank returns to profit in 2009

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German lender Deutsche Postbank AG said Thursday it returned to a profit in 2009 as it trimmed losses in capital markets amid improvements in the global economy.

Postbank, based in Bonn, said it earned euro76 million ($103 million) in 2009 compared with a loss of euro886 million a year ago. Fourth quarter figures were not immediately available.

Postbank, which was once majority held by mail and logistics company Deutsche Post AG, said 2009 interest income, a measure of revenue, fell 20 percent to nearly euro8 billion from euro10 billion in 2008.

However, Postbank reduced its negative capital market position with net losses from investment securities narrowing to a euro148 million loss last year compared with a euro1.3 billion loss in 2008.

Allowances for losses on loans and advances increased 36 percent to euro678 million in 2009 from euro498 million in 2008, but were within Postbank's target.

The company said the allowances would probably remain at a moderate level, as the effects of the downturn linger.

The bank said it would continue its efficiency measures and streamline its offering, which could see the dismissal of around 2,000 employees between now and 2012. It said the moves would lower administration costs by 5 percent.

Germany's biggest bank, Deutsche Bank AG, is Postbank's second-largest single stockholder with just over 25 percent of the shares. Deutsche Post still holds nearly 40 percent.

Deutsche Bank also has an option to buy more Postbank shares from Deutsche Post in future, which could give Deutsche Bank a majority stake.

Postbank said it expects the global economy to recover slightly in 2010 but business conditions on capital markets to remain fragile. Real estate markets are also expected to remain challenging.

The company said its own allowances for losses on loans should remain at a moderate level in future quarters compared with other banks.

"In summary, we expect that extraordinary burdens in 2010 may decline gradually from the levels experienced in the two previous years," Postbank said in its report.

"On the basis of solid revenue streams from customer business and systematic cost management, we should be able to generate positive results once again."

Shares of Postbank were down about three quarters of a percent at euro22.47 in Frankfurt afternoon trading.