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26 münchener Hypothekenbank eg | annual report 2014management report into € 64.8 million of paid-up capital. The increase in paid-up capital allowed us to terminate silent participations worth € 128.7 million effective December 31, 2014 due to altered over- all regulatory conditions. Total regulatory equity capital rose to € 1,377.5 million (previ- ous year € 1,250.6 million). The common equity Tier 1 capital amounts to € 942.1 million. As a result, the common equity Tier 1 capital ratio noted on De- cember 31, 2014 was 12.5 percent (previous year 6.9 percent), the core capital ratio stood at 14.2 percent (previous year 11.7 percent) and the total capital ratio was 18.3 percent (previous year 16.7 percent). These figures exceed the minimum ratios de- fined by the ECB for Pillars I and II (individual risk assessment), which are 9.8 percent for common equity Tier 1 capital, and 13.4 percent for the total capital ratio. Development of earnings As anticipated, we were able to improve our net interest income1 , which rose by 18.8 percent to € 170.6 million. The gain of € 27.0 million was driven by the successful new business in the previ- ous years. This figure contains income derived from the early ter- mination of interest rate swaps at the level recorded last year. Commissions paid amounted to € 71.3 million and were almost 17 percent more than in the previous year as the volume of dis- bursements in the residential property financing business grew again. Due to a slight decrease in commission income to € 11.2 million, the net commission balance2 totalled minus € 60.1 mil- lion following minus € 49.3 million in the previous year. This resulted in net interest income and net commission income3 of € 110.5 million, an increase of € 16.2 million, or 17 percent. Total administrative expenses increased by € 7.6 million to € 74.6 million, including personnel expenses, which rose by € 3.5 million or 9.7 percent. The higher new business results noted in the past two years, as well as various projects – and, not leastly, the more extensive supervisory requirements – required the Bank to hire new employees to a greater extent than in the past. In particular, the extraordinary burdens we incurred due to the ECB assuming direct supervision of MünchenerHyp, and the associated future requirements, made it necessary for us to hire additional employ- ees with the special qualifications needed for these tasks. The other administrative expenses increased by € 4.1 million due to costs incurred for audit activities that took place within the frame- work of the Comprehensive Assessment conducted prior to the assumption of direct supervision by the ECB. Just the costs of the external audits mandated by the Federal Financial Supervisory Authority (BaFin) amounted to € 4.0 million. In addition to the auditor’s fees, we also incurred expenses of about € 0.5 million for external support. Depreciations and adjustments to value of intangible and tan- gible assets amounted to € 6.8 million and were € 0.4 million higher than the same year-ago figure. “As predicted, we were able to increase our net income. We are satisfied with the way our business has been generally developing.” Total administrative expenses4 amounted to € 81.5 million, com- pared to € 73.5 million recorded in the previous year. The cost- income ratio excluding interest expenses from silent participa- tions was 61 percent (previous year 61 percent). The net sum of other operating expenses and income amounted to minus € 2.0 million, while results from operations before de- ducting provisions for risk5 amounted to € 27.0 million, 21 per- cent more than in the previous year. 1) Net sum of interest expenses, interest income, current income, and income from profit pooling agreements, profit transfer, or partial profit transfer agreements 2) Net sum of commission costs and commission income 3) Net sum of net commission income and net commission balance 4) General administrative expenses and depreciation and adjustments to intangible and tangible assets 5) Net sum of Income statement expense items 1. 2. 3. 4. 5. and income items 1. 2. 3. 4. 6.