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SNS Reaal posts first-quarter net loss of €1.6bn

The beleaguered bank improves pro forma core Tier 1 ratio banking activities.

The Dutch bank SNS Reaal has posted a net loss of €1.6bn for the first-quarter of 2013 as against a net loss of €972m in 2012.

During this quarter, loan impairments of Property Finance increased to €941m due to decline in real estate markets, while total commitments reduced by 18 per cent to €7.9bn.

One-off items at core activities, which comprise  SNS Retail Bank and Insurance,  were €602m negative, consisting mainly of impairments of goodwill and VOBA at the insurance activities.

The company said that its core activities posted a net profit, excluding one-off items, of €443m in 2012.

The company, which was nationalized in February 2013 to reinforce its capital base, reported lower net profit of €124m, excluding one-off items at SNS Retail Bank, mainly due to higher loan impairments.

Net loss in core activities were €159m, mainly due to one-off impairments of intangible assets.

Gerard van Olphen, CEO of SNS REAAL said: “The nationalisation of SNS REAAL on 1 February 2013 marked the end of a turbulent period. By taking a number of measures, the Dutch State has reinforced the capital base of SNS REAAL. Moreover, the real estate finance portfolio of Property Finance will be transferred to a separate asset management organisation.”

“The European Commission has temporarily approved the State aid (with the exception of the Property Finance measures) and will take a final decision on the basis of a restructuring plan, to be presented before 22 August 2013. Looking ahead, we can again focus on our core activities,” Olphen added.

The company, however, improved pro forma core Tier 1 ratio banking activities by 14.9 per cent during the quarter.