Helaba reports fall in first‑half earnings as real estate pressures intensify

Helaba has reported significantly lower earnings for the first half of 2026, with consolidated profit before tax dropping to €194 million, down from €458 million a year earlier.

Helaba Chief Executive Thomas Groß

The decline was driven primarily by burdens in the commercial real estate business and a markedly lower result from fair value measurement, reflecting the continued impact of higher interest rates, geopolitical tensions and subdued economic activity in Germany.

Chief Executive Thomas Groß said the half‑year performance fell short of expectations. He noted that the challenging macroeconomic and capital market environment had weighed heavily on Helaba’s commercial real estate activities, while rising interest rates contributed to a sharp fall in fair value measurement. “Despite this, the strong growth in new business and net fee and commission income confirms that our strategic direction is the right one,” Groß said, adding that targeted portfolio management had helped reduce the bank’s NPL ratio to 2.6 per cent, down from 3.1 per cent.

Operating income fell 8.9 per cent to €1,368 million. Net interest income declined moderately by 6.4 per cent to €770 million, while net fee and commission income rose 10 per cent to €319 million, supported by positive developments in lending and guarantee business. The result from fair value measurement dropped 67.1 per cent to €54 million. Income from investment property, primarily residential assets held by GWH, increased 22.2 per cent to €163 million.

General and administrative expenses rose 6.6 per cent to €975 million, reflecting inflation, collective bargaining agreements and investments in growth. Loan loss provisions increased substantially to €198 million, driven by higher burdens in the real estate business and geopolitical risks.

Helaba now expects full‑year pre‑tax profit of around €500 million, below previous expectations, but reaffirmed its medium‑term target of achieving €1 billion in pre‑tax profit within five years. Groß said the bank is sharpening its investment focus, accelerating growth initiatives and implementing cost‑saving measures to limit future cost increases to below inflation.

Across segments, the Real Estate division recorded a pre‑tax loss of €26 million, compared with a €106 million profit in the prior year, reflecting higher loan loss provisions and weaker net interest income. New medium and long‑term business rose to €3.9 billion. The Corporates & Markets segment posted a pre‑tax profit of €58 million, down from €84 million, despite growth in net interest and fee income. Retail & Asset Management delivered a stronger pre‑tax profit of €209 million, while the Development Business segment generated €21 million. The Other segment reported a pre‑tax loss of €69 million, affected by lower net interest income, weaker fair value measurement and burdens from OFB’s project business realignment.

Helaba’s CET1 ratio remained strong at 15.8 per cent, while total assets increased slightly to €205 billion. Return on equity fell to 3.5 per cent and the cost/income ratio rose to 70.8 per cent.