April 3 (Bloomberg) -- Landesbank Hessen-Thueringen Girozentrale, the government-controlled bank based in the German state of Hesse, said regulatory costs will hurt earnings this year after reporting an increase in profit for 2013.
The bank expects earnings to fall below last year’s level, partly due to the expense of implementing regulatory requirements, it said in a statement from Frankfurt today.
Landesbank Hessen-Thueringen is one of 128 banks being reviewed by the European Central Bank to determine the health of the continent’s financial system and to buttress it against future shocks. Other banks including German real estate financer Aareal Bank AG have reported rising costs associated with the ECB’s assessment and increasing regulation.
“These are long-term costs and will remain with us for the next few years,” Chief Executive Officer Hans-Dieter Brenner said.
Net income rose 11 percent to 354 million euros ($487 million) last year, helped by an acquisition made in the German state of North Rhine-Westphalia, the lender said.
Helaba said it feels “sufficiently prepared and well positioned” for the ECB review and stress test, after increasing its capital base by 2 billion euros since 2007.
To contact the reporter on this story: Shane Strowmatt in Frankfurt at email@example.com
To contact the editors responsible for this story: Frank Connelly at firstname.lastname@example.org Mark Bentley, Jon Menon