Relocation costs combined with trading losses reduced profits at Depfa Bank, the German financial institution which has its headquarters in Dublin.

According to figures issued yesterday, its pre-tax profits fell by 11.4 per cent to €203 million in the nine months to the end of September. After tax, its profits show a 17 per cent increase to €166 million with the bank signalling this will increase to €200 million by year end.

Depfa Bank is Germany's largest public sector bank providing financial services for public authorities in more than 30 countries. The move to Dublin followed a split in its operations with its property bank remaining in Germany.

Depfa is one of the highest rated banks in the German economy with international rating agencies assigning it one of the highest credit ratings. Its services include financing infrastructural projects, credit analysis and placing public debt in the capital markets.

Given the mix of its business the bank does not have the same exposure to the weak world equity markets as other financial services companies or to sectors such as technology and telecommunications which are financially strained. It did incur losses on derivatives trading during the period though.

Net interest income was unchanged at €281 million but declined to €203 million due to losses incurred on interest rate components of derivatives traded in the international markets. Overall, the group lost €112 million due to the impact of interest rate movements on its derivative positions.

Total revenues rose by 6.4 per cent to €266 million compared with €250 million in the first nine months of 2001. This year's revenues were boosted by €96 million raised from the sale of assets.

Operating profits were down 14.7 per cent at €203 million due to the increased cost of personnel and administration. Much of the cost increase was due to splitting of the bank into two divisions during the year.

Depfa operates subsidiaries in other European states as well as in the US and Japan.