OREANDA-NEWS. On August 03, 2007 HVB Group presented its half-yearly financial report at June 30, 2007, reported the press-centre of HVB Group.

The transfers decided by the Management Board and Supervisory Board, which were approved by the Extraordinary Shareholders' Meeting on October 25, 2006, represent "discontinued operations" in accordance with IFRS 5.

This is why the results of the discontinued operations are not shown in the income statement until after the net profit after tax and minorities of "HVB Group new" (continuing operations). The year-on-year figures have been adjusted accordingly.

In the first quarter of 2007 all the companies or respective sub-groups (BA-CA Group, IMB, AS UniCredit Bank, Riga, HVB Bank Ukraine) defined to date as discontinued operations were transferred and deconsolidated with effect from January 1, 2007, except for the HVB AG branches in Vilnius and Tallinn. Hence in 2007, the income statement for HVB Group now only reflects the operating profit generated from the ordinary business operations of the Vilnius and Tallinn branches until March 1, 2007 in addition to the gains on the deconsolidation of the transferred sub-groups or respective companies, including the respective taxes and minority interests, as separate income statement items "net profit after tax of discontinued operations and minority interest in the net profit of discontinued operations" only after the profit of the new HVB Group is reported. However, the year-on-year figures of the income statement items mentioned still include the results of the ordinary business activities of the transferred companies.

As per April 1, 2007, the investment banking activities of UniCredit Banca Mobiliare (UBM) were transferred to HVB AG. This, compared to the results of the first-half year of 2006 and of the first quarter of 2007, results in a first-time consolidation effect. The results shown below exclusively reflect the performance of the new HVB Group:

Overview
In the first six months of the 2007 financial year, HVB Group recorded a very pleasing financial trend. Total revenues rose substantially by 24,1% compared to last year. Net interest income including dividends increased by 25,9%. Net fees and commissions remained almost stable. Net trading, hedging and fair value income was boosted by 69,9%.

Operating costs increased only slightly by 1,5%. The target of a further significant improvement in the cost-income ratio, at 47,6%, in full-year 2007 was easily achieved in the first six months. Operating profit (? 2,089 million) rose by 55,5%. Profit before tax (? 2,054 million) doubled and the profit (? 1,394 million) more than doubled.

HVB Group succeeded in further improving the return on equity after taxes of 25,0% (17,5% adjusted for non-recurring items) compared to the good figures achieved last year.

Dr. Wolfgang Sprissler, Board Spokesman of HVB: "In the first six months of 2007 we continued the positive trend of last year and also of the successful first quarter. The pleasing operating performance fully met our high expectations, even if we do not expect to fully maintain the high level of earning's dynamic in the next quarters. We are on track towards realizing our annual targets. In our core operating businesses we are well-positioned. Overall I see good potential for further strengthening our earning power and for sustainable growth."