The banking arm of German postal group Deutsche Post has reported record earnings for 2005, backed by above expected customer recruitment and a significant rise in contributions to its pensions offering.

Postbank delivered pre-tax earnings of E719 million in 2005, an 11% increase on 2004. Meanwhile, thanks to an expanded customer base and steady costs, net income improved 13% to E492 million.

The financial performance was in line with industry expectations. However, the company exceeded its own customer acquisition target for the year by 100,000. Additionally, the retail banking outfit experienced a dramatic increase in the take-up of its Riester pension scheme, as new business soared by 270% in 2005.

The German government-backed Riester pension plan had struggled to find support among the public, however following major reforms last year Postbank increased its customer contribution to its scheme to E235 million. The bank’s overall savings division improved its market share by 0.2 percentage points to 5.3% and a total volume of E42 billion.

Reflecting on the strong figures, Postbank’s chairman Wulf von Schimmelmann said he wanted to grow after-tax return on equity to 20% by 2008.