(New: Statements by the Board of Management on the acquisition of Simcorp added.)

FRANKFURT (dpa-AFX) - A favorable market environment kept profits bubbling at Deutsche Borse in the second quarter. Interest income from the banking business in particular played into the borse operator's cards, prompting it to raise its targets for the second time this year. However, it also did better than analysts expected in other segments. The news was well received on the stock market on Wednesday.

In the weakening Dax, Deutsche Borse shares were trading around 0.4 percent higher at 168.50 euros in the afternoon, while Germany's leading Dax index was down more than one percent. After reaching a record high of just over 186 euros at the end of April, the share price had fallen sharply until mid-July, partly due to the controversial plans to take over software provider Simcorp, before recovering to some extent.

As Group CEO Theodor Weimer told analysts on Wednesday, Deutsche Borse expects the takeover to be completed in September. The EU's approval is still pending from the competition authorities. Shortly thereafter, the offer for the Simcorp shares will also end. The Danish company is to be incorporated in the fourth quarter. "Simcorp will contribute substantially to our organic growth," Weimer said.

In addition, he said, the acquisition fits Deutsche Borse's strategy of positioning itself more broadly and thus more independently of market fluctuations. At the end of the third quarter, Deutsche Borse will present an updated forecast because of the acquisition, said CFO Gregor Pottmeyer.

In the current fiscal year, Deutsche Borse aims to collect more than 4.7 billion euros in net proceeds, as it announced after the close of trading on Tuesday. In terms of earnings before interest, taxes, depreciation and amortization, the DAX-listed group aims to break the 2.8 billion euro mark. The new targets do not yet take into account the planned Simcorp acquisition.

When presenting the figures for the first quarter, management had already indicated that it was aiming for the upper end of the target ranges or - if the tailwind continued - would exceed them. Net revenues were originally set at 4.5 to 4.7 billion euros, and operating profit at 2.6 to 2.8 billion euros.

Compared with the prior-year period, net proceeds in the second quarter climbed by a fifth to EUR 1.22 billion. As in the first quarter, a favorable market environment - above all rising interest rates - played into the operator's hands. Growth in the most important segment, Trading and Clearing, was rather meager at two percent, partly because there was less turbulence on the markets.

In the second-largest segment, Securities Services, on the other hand, revenues were buoyant. The division's net proceeds climbed 73 percent to 399 million euros in the second quarter. One reason for this was higher proceeds from the settlement of securities transactions. In addition, there was a multiplication of net interest income from the banking business. The Group subsidiary Clearstream, for example, has a banking license and invests customer funds deposited as collateral itself - benefiting from the favorable interest rate environment.

Overall, cyclical effects such as the higher net interest income from banking business were responsible for 14 percentage points of Group sales growth. Deutsche Borse achieved six percent through its own efforts, for example by acquiring new customers and expanding existing customer relationships.

Not only the bubbling revenues, but also good cost control contributed to the good quarterly result, wrote JPMorgan analyst Enrico Bolzoni. It is true that net interest income was primarily responsible for the upturn. However, the other segments also performed somewhat better than generally expected.

Net income rose even more strongly than net income. Earnings before interest, taxes, depreciation and amortization (Ebitda) rose by a quarter to 733 million euros. Both earnings and operating profit exceeded analysts' expectations. Deutsche Borse shareholders received a bottom-line profit of 443 million euros, compared with 341 million euros a year earlier./jcf/mis/jha/