KAS BANK ended 2004 with a net profit of EUR16.6 million (2003: EUR13.2 million), an increase of 26%. The operating result before taxation rose by 52% to EUR24.8 million (2003: EUR16.3 million). Interest income fell by 7%.
The strong improvement compared to 2003 can particularly be attributed to the acquisition of new clients, sale of an increasing number of commission-generating products to existing clients, growth in the number of securities lending activities and a decrease in expenses. The increase in commission income was the result of fierce competition and pressure on the fees, the bank said in a news release.
Commission income over 2004 totalled EUR67.3 million (2003: EUR59.6 million); an increase of 13%. The growth in commission income was realised at both the institutional clients in custody and investment management products and at the intermediaries in clearing and settlement products. Fee competition at the latter client group had an oppressive effect on commission income. Other services, including asset management and funds transfer, also realised a growth in commission income. Assets under custody rose to EUR260 billion (2003: EUR245 billion). Income from securities lending increased proportionally as a result of a sharp increase in volume. This growth was partly attributable to the increase in the so-called agency lending, whereby KAS BANK acts as intermediary instead of counterparty. The growth in commission income is largely attributable to the acquisition of new clients.
Across specific business lines, commission income fro securities borrowing and lending was up 54%, custody up 10%, and clearing and settlement up 3%.