Annual Report 2010 - Muenchener Hypothekenbank eG

our portfolio of long-term refinancing funds rose by € 0.7 bil- lion to € 31.2 billion. Total refinancing funds – including money market – declined from € 34.1 billion in the previous year to € 33.6 billion as of december 31, 2010. Paid up capital rose by € 4.6 million to € 151.5 million. Total liable equity increased by € 63.2 million over the same year-ago fig- ure to € 1,198.0 million. The major portion of this increase was due to the issuance of subordinated loans. Core capital amounts to € 762.8 million (previous year € 738.9 million). The solvency figure for core capital on december 31, 2010 was 6.4 percent (previous year 6.5 percent) and 10.0 percent for total capital (previous year 10.0 percent). Development of earninGs driven by our good new business results as well as by the favourable overall business conditions we were able to increase our net interest income2 by € 8.0 million to € 124.5 million. Earnings also include income from the early termination of interest rate swaps. furthermore, € 24.8 million in interest on silent participations was booked under interest expenses. in order to ensure comparability with the previous year‘s figures, € 16.2 million in interest for silent participations posted in 2009 were transferred to interest expenses. despite a higher volumes paid out the amount of commissions paid remained almost unchanged. Thanks to higher commission income, the net commission balance3 was minus € 27.6 million (previous year minus € 30.0 million). This resulted in a net interest less commission income figure of € 96.9 million, or an increase of € 10.3 million over the same year-ago figure. Net results for the trading portfolio amounted to a minus € 4.6 million. Total administrative expenses for the year under review were at the previous year‘s level. Personnel expenses fell from € 32.6 million to € 31.3 million. it should be noted in this context, that as of 2010 the german Accounting Law Modernisation Act (Bilanzrechtsmodernisierungsgesetz) requires that interest effects arising from provisions to be entered under “other operating expenses”. The remaining administrative expenses were € 23.0 million and were higher than the same year-ago figure of € 22.5 million. This change was mainly driven by a doubling of the Bank’s con- tribution to the protection scheme operated by the National Association of german Cooperative Banks (BvR) to € 4.8 mil- lion. Thanks to the successful execution of a comprehensive cost-cutting project and measures taken to increase efficiency we were able to keep remaining administrative expenses at almost the previous year‘s level despite this added burden. The item “depreciation and write-downs of intangible and tangible assets” rose by € 0.3 million over the same year-ago figure to € 4.6 million. Total administrative expenses4 therefore amounted to € 58.9 million compared to € 59.4 million recorded in the previous year. due to an increase in income the cost-income ratio5 fell from 59.3 percent to 50.3 percent. 34 | 35 münchener hypothekenbank eg | annUaL report 2010 management report “Driven by our good new business results and our expanded loan portfolio, we were able to increase our net interest income by 7 percent.” 2) Net sum of interest expenses, interest income and current income 3) Net sum of commission costs less commission income 4) general administrative expenses and depreciation, and adjustments to value of intangible and tangible assets 5) Ratio of the sum of „general administrative expenses”, and “depreciation and write-downs of intangible and tangible assets”, to net interest less commission income excluding interests paid to silent participations, as well as net results from the trading portfolio