Annual Report 1999

Transcription

Annual Report 1999

LB Kiel
Landesbank
Schleswig-Holstein
Girozentrale
LB Kiel Annua l Re por t
1999
LB Kiel
Landesbank
Schleswig-Holstein
Girozentrale
Annual Repor t 1999
Helsinki
Oslo
Stockholm
Copenhagen
Kiel
Lübeck
Rostock
Hamburg Schwerin
London
Berlin
Dresden
Luxembourg
Tallinn
Content s
2
LB Kiel at a Glance
5
Preface of the Managing Board
8
Repor t of the Supervisor y Board
Repor t of the Guarantors’ Meeting
9
10
Statement of Condition
and Group Statement of Condition 1999
36
Our Staff
40
Activities Beyond the Banking Sphere
43
Annual Accounts for 1999
Balance Sheet
Statement of Income
Group Balance Sheet
Group Statement of Income
44
48
50
54
79
Notes to the Annual Accounts and
Group Annual Accounts
Notes to the Annual Accounts and
Group Annual Accounts
Executive Bodies
Auditor’s Certificate
80
Organizational Structure
84
Addresses
56
56
75
The photographs in this Annual Report show
staff members from different LB Kiel departments
and teams.
1
In halt
LB Kiel at a Glance
Foundation
1917 established as the state bank of the province of
Schleswig-Holstein
1940 merger with Girozentrale Schleswig-Holstein
Tasks
Commercial Bank: LB Kiel is a universal bank offering a
full range of traditional and innovative products
Central Clearing Bank: LB Kiel is the central clearing in-
Legal Form
Institution under public law
stitution for the savings banks of Schleswig-Holstein, providing them with supplementary group services. LandesBausparkasse (LBS) is an important member of the Group,
Owners and Guarantors
- the State of Schleswig-Holstein 25.05 %
- the Savings Banks and Giro Association
of Schleswig-Holstein 25.05 %
- Westdeutsche Landesbank Girozentrale (WestLB) 39.9 %
- Landesbank Baden-Württemberg 10.0 %
which complements the product range together with its
field staff and its subsidiary, LBS Immobilien GmbH.
State Bank: LB Kiel grants loans to public bodies and is
involved in issuing and placing state bonds and Schuldscheindarlehen; it supports the State of Schleswig-Holstein
in performing economic and structural tasks through
Governmental Control
Ministry of Economic Affairs, Technology and Transport
of the State of Schleswig-Holstein
Executive Bodies
- Guarantors’ Meeting
- Supervisory Board
- Managing Board
Investitionsbank Schleswig-Holstein (a legally dependent
division of LB Kiel).
Headquarters
Kiel
Branches
Domestic: Lübeck, Rostock, Schwerin
Foreign: Copenhagen, Luxembourg
Representative Offices
Domestic: Berlin, Hamburg
Foreign: Helsinki, London, Oslo, Stockholm, Tallinn
Real Estate Finance Office
Dresden
Member of
- German Savings Banks and Giro Association, Bonn
- Federal Association of German Public Banks, Bonn
Major Equity Holdings
- Landesbank Schleswig-Holstein International S.A.,
Luxembourg (100 %)
- Gudme Raaschou Bankaktieselskab, Copenhagen (100 %)
- Hamburgische Landesbank (49.5 %)
Ratings
Moody’s: short-term P-1, long-term Aa1
Standard & Poor’s: short-term A-1+
Fitch IBCA: short-term F1+, long-term AAA
2
LB Kiel at a Glance
Balance Sheet (Group)
in € billion
120
100
Financial Highlights of the LB Kiel Group
1)
80
128.0 € billion
115.1 € billion
125.9 € billion
Business volume
Total assets
Credit volume
60
40
Claims on
banks
customers
28.9 € billion
52.7 € billion
20
Securities
30.1 € billion
0
1995
Liabilities to
banks
customers
48.8 € billion
22.6 € billion
Certificated liabilities
34.0 € billion
1996
1997
1998
1999
Operating profit
before risk provisions (Group)
in € million
500
5.2 € billion
Liable capital funds
400
Principle 1 ratio (German Banking Law)
Total capital
Core capital
300
10.2 %
5.6 %
200
Net interest income
Net commission income
Trading operations
Personnel expenses
Operating expenses
Operating profit before risk provisions
Operating profit
704.1
100.3
24.3
203.8
175.2
429.6
251.4
€ million
€ million
€ million
€ million
€ million
€ million
€ million
100
0
1995
1996
1997
1998
1999
Liable capital funds (Group)
in € billion
Employees 1)
1)
excluding Hamburgische Landesbank (HLB)
2,264
6
5
4
3
2
1
0
1995
1996
1997
1998
1999
since 1997 including HLB
3
LB Kiel at a Glance
4
Preface
Preface of the Managing Board
Dear Business Partners,
1999 was yet another successful fiscal year for LB Kiel, which is not least shown
by the new record results reported for 1999. We are particularly pleased about
the fact that earnings increased more strongly than volumes.
In FY 1999, we consolidated and expanded our market position in nearly all
core business segments through – in some cases strong – portfolio gains while
at the same time remaining true to our conservative risk policy. No extraordinary loan losses occurred. The conservative approach to risk provisioning
remained unchanged. The good earnings for the year mean we will again be able
to pay out a net dividend of 7 % to our shareholders while increasing reserves
significantly at the same time.
Structural change in the European banking sector continued against the background of noticeably improved economic prospects. Two external developments
took on more concrete forms in 1999 and exposed us to additional challenges:
the EU Commission’s decision regarding WestLB as well as the discussion about
a review of the capital adequacy requirements.
With regard to the calculation of the remuneration for the liable capital of the
Wfa assets integrated into WestLB, the EU Commission decided on July 8, 1999
that the remuneration paid in the past was not in line with the market. WestLB,
the federal government and the North Rhine-Westphalian government have
lodged a complaint against this decision; the proceedings are ongoing. LB Kiel,
too, considers the decision to be inappropriate in legal and economic terms.
Nevertheless, we have to prepare for the EU Commission taking a similar
decision regarding the liable capital remuneration to be paid by Landesbank
Schleswig-Holstein.
In June 1999, the Basle Committee on Banking Supervision presented proposals
for a “new capital adequacy framework”. While these proposals are still being
discussed, we expect tougher capital adequacy requirements to be imposed.
Both developments discussed above will force us to use our capital even more
efficiently and manage our risks even more effectively. Also, it will be ever more
important to further strengthen our Bank’s profitability and, hence, profit retention ability in order to expand our capital base through increased reserves.
In order to fulfil the regulatory requirements and use the capital market as an
additional source of capital, we will further refine the management of all risks
related to our business activities and make the risk management system more
transparent. For this purpose, we have initiated a project on “Overall Bank Controlling” and “Risk Management”.
5
Preface
With regard to its business policy, LB Kiel has responded by focusing on its
core competencies and imposing strict return criteria for its strategic business
segments. Our objective is to achieve qualitative growth in these segments and
hence to further strengthen the Bank’s profitability.
In the context of setting the strategic course for the future, we have also started to redesign our operational processes with a strict view to service orientation and cost containment, to spin them off where necessary and to merge
them with our partners’ processes in order to achieve economies of scale.
The measures initiated mean we have created the basis for a continued successful operation in an increasingly competitive environment. The ongoing review of
our strategic orientation and the controlling concepts will remain a task to
which we will devote our full attention in the interests of our business partners,
our employees and our shareholders.
LB Kiel
The Managing Board
Dr. Dietrich Rümker
6
Preface
Hans Berger
Peter Pahlke
Dieter Pfisterer
Ernst Schröder
The Managing Board
( f r o m the l e f t ) :
Dieter Pfisterer
Hans Berger
D r. D i e t r i c h R ü m k e r
Pe t e r P a h l ke
Ernst Schröder
7
Preface
Report of t he Supervisory Board
The Supervisory Board and its committees were regularly informed about the
business development and the situation of the Bank and the Group during the
report year. They supervised the Managing Board’s conduct of business in
accordance with the legal and statutory regulations and decided on matters
requiring their approval which were submitted to them.
Wollert-Elmendorff Deutsche Industrie Treuhand GmbH (WEDIT) Wirtschaftsprüfungsgesellschaft audited the annual accounts of the Bank and of the Group,
as well as the statement of financial condition for the 1999 business year.
The annual accounts comply with the legal requirements. The statement of
financial condition is consistent with the annual accounts. The certificate of
audit was given without qualifications.
The Supervisory Board and the Audit Committee composed of its members
have comprehensively reviewed the official auditor’s report and conclusions and
have no objections.
The Supervisory Board and the Audit Committee have also reviewed the annual
accounts and statement of financial condition drawn up by the Managing Board.
No objections have been raised. The Guarantors’ Meeting was recommended to
approve the annual accounts and statement of financial condition drawn up by
the Managing Board.
The Supervisory Board approved the proposal of the Managing Board on the
distribution of profit to the shareholders.
The Supervisory Board has taken cognizance of the Group annual accounts.
The Supervisory Board herewith expresses its thanks to the Managing Board
and the employees of the Bank for their efforts in the 1999 business year.
Kiel, June 14, 2000
The Supervisory Board of Landesbank Schleswig-Holstein Girozentrale
Heide Simonis
Chairwoman
8
Report of the Supervisory Board
Report of t he Guarantors’ Meeting
The Board of Guarantors convened four times in the year
under review.
On June 14, 2000 it approved the 1999 annual accounts and
statement of financial condition drawn up by the Managing
Board, which are herewith adopted. During the same
meeting the Guarantors’ Meeting approved of the acts of
the Managing Board of the Bank for the 1999 business year
and decided on the appropriation of the profit as proposed
by the Managing Board and the Supervisory Board.
Kiel, June 14, 2000
The Guarantors’ Meeting
of Landesbank Schleswig-Holstein Girozentrale
Heide Simonis
Chairwoman
9
Repor t of the Guarantors’ Meeting
Statement of Condition and Group Statement of Condition 1999
The Economic Environment in 1999:
Upward Trend Continues
1999 was characterized by a noticeable change in economic
sentiment. In spring, the upward forces gained the upper
hand again in Germany, largely due to the positive turnaround in the export markets. As a result of the weak start
of the year, however, real growth reached only 1.5 %, although
the economic recovery accelerated in the course of the
year. Within EMU, the Italian economy also expanded at a
relatively low rate. Characterized by more robust domestic
demand, the two other major EMU economies, France and
Spain, hardly lost momentum. Overall, eurozone GDP increased by 2.2 % in real terms. Against this background, the
ECB, which had clearly lowered its key rates in spring 1999,
reversed this move again already in November. At approx.
4 %, US economic growth remained at a high level also in
the ninth year of the upswing. In view of the brightening
economic environment and continued tension in the US
labour market, the US central bank began to tighten its
monetary reins already in mid-1999. By changing their
monetary course, EMU and the USA have responded to
growing inflationary risks. Especially the strong surge in oil
prices that started in autumn meant that it was impossible
to maintain the very low rates of inflation prevailing in the
first half of the year.
EU Decision on WestLB
In the past fiscal year, decisions were taken at EU level which
may also have an impact on the development of Landesbank
Schleswig-Holstein Girozentrale. On July 8, 1999, the European Commission determined the size of the remuneration
to be paid for the integration of Wohnungsbauförderungsanstalt (Wfa), previously owned by the state of North RhineWestphalia, into WestLB. The Commission found the remuneration until then paid by WestLB to the state to be
inconsistent with general market practice and concluded
that this represented an infringement of the EU state subsidy regulations and that WestLB was obliged to pay the
balance. WestLB, the federal government and the government of North Rhine-Westphalia have challenged the decision in the European Court of Justice.
To determine whether other Landesbanks benefit from
similar cases of illegal state aid, the EU Commission has
launched an investigation, which also covers the state of
Schleswig-Holstein. In 1991, Investitionsbank Schleswig-
In 1999, yields in the financial markets, which had previously
Holstein (IB) was established as the central development
felt the effect of the financial market turmoil and the resul-
agency of the state of Schleswig-Holstein and integrated
ting “flight into quality”, turned around sharply. While yields
into LB Kiel. The purpose of the integration was to pool
in the eurozone and the USA increased noticeably from
the different development institutes and agencies in a single
their historic lows, the yield premiums in the emerging
unit. At the same time, the contribution of the appropriated
markets started to shrink. Buoyed by the “new economy”,
housing development assets, which may not be used as liquid
the European and US equity markets reached new historic
capital, was meant to help the Bank use its assets as effi-
highs. Recently, however, only the telecommunications and
ciently as possible. The IB capital not used by IB for backing
technology shares benefited from the bull market.
its own transactions may be used as liable capital by LB Kiel.
Should the EU Commission instigate official proceedings
against LB Kiel, we are confident that the charges resulting
from the EU decision will be manageable for our Bank.
Incidentally, by selling part of LB Kiel to WestLB and SüdwestLB with effect from January 1, 1994, the state of
Schleswig-Holstein has already realized certain economic
benefits which would have to be taken into account in determining the scope of a retroactive re-transfer of assets.
10
Sta tement of Condi tion
Business and Credit Volumes Continue to Grow
The Bank’s annual accounts include Investitionsbank Schleswig-Holstein (IB) and Landes-Bausparkasse (LBS) as legally
dependent central divisions, which each compile annual
accounts of their own. The Group annual accounts include
Landesbank Schleswig-Holstein International S. A., Luxembourg (LI), LB Finance BV, Amsterdam, Gudme Raaschou
Bankaktieselskab, Copenhagen, and the 49.5 % investment in
Hamburgische Landesbank.
In addition to its headquarters in Kiel, the Bank also maintains branches in Lübeck, Rostock, Schwerin, Copenhagen
and Luxembourg, representative offices in Berlin, Hamburg,
London, Oslo, Stockholm, Tallinn (Estonia) and Helsinki as
well as a real estate finance office in Dresden.
In 1999, LB Kiel continued the good performance of the pre-
Claims on customers rose by 12 % or € 5.8 billion to €
vious years. The Group’s total assets were up 15 % on the
52.7 (46.9) billion, with the bulk (52 %) accounted for by
previous year, reaching € 115.1 (1998: 100.3) billion.
long-term claims (in terms of residual maturities). The
The Bank’s total assets rose by 20 % to € 71.6 (59.6) billion,
share of medium-term claims remained unchanged at 27 %,
of which € 5.3 (5.0) billion were accounted for by IB and
while the share of short-term claims (residual maturity of
€␣ 1.4 (1.2) billion by LBS. The business and credit volumes
less than one year) climbed 6 % to 21 %. Claims on banks
again increased significantly. The Group’s business volume
were up 4 % to € 28.9 (27.8) billion. The portfolio of bonds
rose by 14 % to € 128.0 (111.9) billion, while the credit volume and other fixed-interest bearing securities increased by
climbed 15 % to € 125.9 (109.4) billion. The Bank’s business
33 % or € 7.2 billion to € 28.7 (21.5) billion.
volume increased by 20 % to € 79.9 (66.4) billion, while the
credit volume was up 22 % to € 78.7 (64.7) billion.
On the liabilities side, bank deposits accounted for the bulk
of refinancing, reaching € 48.8 (43.5) billion, an increase by
12 %. The share of long-term deposits was 14 %. At the same
time, the share of certificated liabilities rose by 24 % to
€␣ 34.0 (27.5) billion. Liabilities to customers amounted to
€␣ 22.6 (21.3) billion.
Total Assets in ¤ billion
G ROU P
1999
1998
115.1
100.3
8.2
8.2
Hamburgische Landesbank (49.5 %)
38.8
35.4
BAN K *
LI Luxembourg
71.6
59.6
IB
5.3
5.0
LBS
1.4
1.2
* including IB und LBS
11
Sta tement of Condi t ion
Ship financing experts in front of the latest addition to ”their“ fleet. The high- quality double-hull chemicals tanker
was built at the Lindenau shipyards in Kiel. The photo shows Steinar Pettersen and Manfred Ernst (from the left), heads
of internal operations at International Ship Finance.
12
POSITION AS THE REGION’S LEADING BANK EXPANDED
Our position as the region’s leading bank covers our three functions as central clearing bank, state
and municipal bank and commercial bank. Holding 30 % of the building society market, LandesBausparkasse (LBS) is the leader in this segment and cooperates closely with the savings banks to sell
its products. Impor tant state bank functions are handled by Investitionsbank Schleswig-Holstein (IB).
Our corporate banking activities focus on corporate clients in Schleswig-Holstein.
Market Leader in the Regional Corporate Clients
Business
Despite moderate projections, the corporate lending business developed favourably in the course of the year, benefiting from both continued favourable interest rates and
improved economic conditions. Moreover, syndicated savings banks loans as well as our close cooperation with
Hamburgische Landesbank helped us consolidate our leading market position in corporate loans in our core region,
Schleswig-Holstein. At € 0.9 (0.8) billion, the new business
volume in the Corporate Clients Division was up 13 % on
the previous year. Total claims increased by 9 % to € 3.8
(3.5) billion, of which roughly two thirds were accounted
for by companies in Schleswig-Holstein.
We intend to further consolidate our strong position in
our core region in the year 2000. Other objectives include
the gradual, risk-conscious expansion of our expertise in
providing finance to customers operating on a nationwide
scale, in particular in the changing healthcare, utilities and
waste management markets. In view of the improved overall economic outlook, we expect continued growth of our
corporate clients activities.
Cooperation with the Schleswig-Holstein
Savings Banks Intensified
Cooperation between LB Kiel and the Schleswig-Holstein
savings banks continued to intensify at all levels in 1999.
The savings banks made extensive use of our lending,
deposit-taking and service products. They primarily used
refinancing loans to fund their own customer business,
which increased by 5 % to € 24.6 billion. At € 1.7 billion,
the new business concluded with savings banks clearly
exceeded the previous year’s level of € 1.4 billion.
The portfolio of claims grew by 18 % to € 8.7 (7.4) billion.
Strong New Business Growth at LBS
Landes-Bausparkasse (LBS), an economically independent
but legally dependent central division of LB Kiel, continued
the positive performance of the previous years in 1999.
At € 0.86 (0.80) billion, the new business volume was up
7.5% on last year’s record. Lendings were at a high level.
LBS’ total loan portfolio rose by 10.6 % to € 1.04 (0.94)
billion. Total assets increased by 17 % to € 1.4 (1.2) billion.
Given the structure of the building loan business, default
risks are low. Moreover, LBS has appropriate risk measurement, analysis, monitoring and controlling instruments in
place.
Market Position in Private Banking Clearly Expanded
The Private Banking unit clearly expanded its market position in the business with wealthy private customers in
1999. This business unit again achieved double-digit growth
rates in the fiercely contested market segments. A major
contribution was made by the asset management segment.
Two new services, asset planning and foundation consulting,
were added to the range of services. Overall, we expect
the positive development in the Private Banking unit to
continue.
13
Alternative Finance for Infrastructure Projects
In our capacity as state and municipal bank, we extend loans
to federal, state and local governments and advise the state
and the municipalities in Schleswig-Holstein on financing
matters. At year-end 1999, the portfolio of state and municipal loans stood at € 10.2 (9.4) billion.
In addition, we provide the public sector with support and
advice on alternative financing of transport routes, local
public transport and water and waste management projects;
in the latter segment, alternative finance increasingly takes
the form of public-private partnerships. Current mandates
include that as lead manager in the financing of one of
Germany’s first two toll roads, the bridge over the River
Trave in Lübeck.
Investitionsbank Schleswig-Holstein Implements
Comprehensive Consulting Concept
As a member of the LB Kiel Group, Investitionsbank Schleswig-Holstein (IB) is the key administrator of the state’s funding and promotion programmes for the private sector,
residential construction, the environment and energy, municipal promotion as well as urban and agricultural development. In 1999, IB completed the implementation of a comprehensive consulting concept comprising 13 consulting
centres and offices in Schleswig-Holstein. This concept
made a major contribution to the increased promotion
volume, which was up 14 % to € 584 (513) million. With the
business volume growing moderately to € 5.8 (5.6) billion,
IB’s total assets increased by 6 % to € 5.3 (5.0) billion.
IB’s risk position is largely determined by counterparty
risks. Risk mitigants, especially in the residential construction sector, include the high diversification, the low average
credit amount and the mostly good credit standing of the
residential construction companies. Reasonable evaluations
were taken and provisions formed for all discernible counterparty risks in the area of private sector promotion.
Interest rate risks are negligible. Trading risks do not exist.
14
New Liaison Office Opened in Brussels
As a modern service provider offering solutions to publicsector tasks, IB also operates outside Germany. These operations include important cross-border funding and promotion activities in the Baltic region on behalf of 4 Baltic
states and 5 German federal states in the context of the
EU’s INTERREG II C programme.
In response to the growing importance of the EU’s regional
promotion activities, IB also stepped up the services provided by its Euro Info Centre and established a Liaison Office
in Brussels. The task and objective of the Brussels Office is
to devise new financing instruments which create added
value for the customer by pooling state, federal and EU development funds. A first project of this kind, an IT investment fund for municipalities, was launched in summer 1999.
RO L E A S B A N K F O R T H E N O RT H C O N S O L I DAT E D
Network in the Nordic Markets Has Been Expanded
LB Kiel continued to build its image as the leading German
wholesale bank in the Baltic region. The Copenhagen Branch
(LBC), which controls our activities in the Nordic region, is
today one of the 6 largest banks in Denmark (in terms of
business volume). The gradual and targeted expansion of
our network in Northern Europe continued in the past fiscal
year. In Finland, we strengthened our presence through a
35 % investment in PCA Corporate Finance Oy, a financial
service provider based in Helsinki. We have an option to
increase this share after the year 2000. The strategic focus
of PCA’s operations is on corporate finance in the Nordic
markets, the arranging of loans and securities issues as well
as M & A consulting for Finnish and Baltic customers, also in
close cooperation with our representative office in Tallinn.
In 1999, we also acquired LB Kiel Nordic Finance AG, a leasing company based in Stockholm, Sweden. Through this
company, we primarily intend to arrange structured leasing
and other project finance for the Nordic real estate sector.
Strong Business Growth of 40 %
LBC was characterized by a clear upward trend in 1999,
boosting its business volume from € 4.9 billion to € 6.9
billion. Loans to major Nordic corporations were the key
growth driver, but the continued growth of structured
finance, bank refinancing and, above all, syndications was
also very positive. The results benefited from the fact that
the previous years’ decline in margins did not continue.
In some cases, much higher margins than in the previous
years were achieved.
Gudme Raaschou Bankaktieselskab ...
The business activities of our Danish investment banking
subsidiary, Gudme Raaschou Bankaktieselskab, Copenhagen
(GR), focus on investment banking, securities trading and
portfolio management. This complementary positioning in
commission-earning business segments means GR perfectly
rounds off LB Kiel’s product range in the Nordic markets.
... manages second largest IPO in Copenhagen
In mid-1999, GR managed the IPO of pharmaceutical company H. Lundbeck A /S, which was the second largest IPO in
the history of the Copenhagen Stock Exchange. GR entered
an alliance with WestLB Panmure, London, a renowned international investment bank, in 1999. This enables the bank
to provide investors with equity and research advice on a
pan-European scale. GR has a representative office in
Stockholm and is a member of the Stockholm Securities
Exchange.
Due to the satisfactory economic situation currently prevailing in our Scandinavian core markets and the well diversified structure of our industrial accounts, no particular
risks are discernible.
In the current fiscal year, we want to intensify our existing
customer relations through cross-selling activities and expand our commission-related operations. In addition, we will
make further acquisitions – especially in Sweden – and step
up our real estate finance activities in the Nordic region.
15
S T RU C T U R E D F I N A N C E AC T I V I T I T I E S S T E P P E D U P
We stepped up our structured finance activities in fiscal
1999. This strategic business unit comprises the structured finance and ship financing activities. Total claims
were boosted by an impressive 20 % to € 6.7 (5.6) billion.
Growth Driven by Transpor t Financing
The structured finance activities continued to develop
dynamically in 1999. Above-average growth was reported in
the transport financing segment, which focuses on aircraft,
railway, logistics and infrastructure investments. Our good
positions in the refinancing of special banks and leasing
companies were consolidated at a high level. At € 1.9 billion,
new business again reached the high level of the previous
year (€ 1.9 billion), with margins at a higher level. Claims in
the Structured Finance unit rose by 8 % to € 4.0 (3.7) billion.
Risks remained well-balanced in all business segments, as
regards both new business and existing claims.
Thanks to the strong volume growth in recent years, the
ship financing operations have reached a size which makes
LB Kiel one of the world’s top 20 to 25 banks holding substantial ship financing portfolios. We expect the favourable
development of our ship financing activities to continue in
the current fiscal year.
In the current fiscal year, the business unit will concentrate
on the further expansion of its strategic focus on transport,
logistics and infrastructure finance. Moreover, the growing
asset-backed securities (ABS) segment will be expanded in
cooperation with the investment banking unit.
Structured and Special Finance 1)
LB Kiel: A Major Ship Financing Provider
The Ship Financing segment continued the previous years’
positive trend in 1999. New customers were attracted and
volumes increased considerably despite the difficult market
situation. The business activities focus on providing finance
for building new ships and the purchase of used ships as
well as corporate finance for renowned international shipping companies. Apart from Europe, the regional focus is on
North America and the Far East. The Ship Financing segment
also arranges or co-arranges large international syndicated
lendings. Commitments accepted by customers amounted
to € 0.8 (1.3) billion in 1999. Claims rose by a good 40 % to
€ 2.7 (1.9) billion. Since the loan portfolio focuses on counterparties with good credit standings and ship owners with
long-term charter agreements, the risk position is secure.
in € billion
New business
Total claims
1)
7
the Statement
6
of Condition.
5
4
3
2
1
0
1996
16
This diagram
is not par t of
1997
1998
1999
S T R E N G T H E N E D P O S I T I O N I N R E A L E S TAT E F I N A N C I N G
Despite the Difficult Markets ...
In 1999, we had to cope with the difficult situation in the
real estate market. In the new federal states, project sponsors focused less on the realization of projects but rather
on letting the large number of vacancies. In western and
southern Germany, however, the oversupply, especially of
commercial properties, was largely eliminated.
1)
Proper ties 1)
in € billion
This diagram
is not par t of
the Statement
New business
Existing portfolio
of Condition.
7
6
In the western German office market, a large number of
new building projects are being prepared. The market for
5
retail properties has shown the first signs of a recovery.
Demand for the construction of individualized, yet afforda-
4
ble owner-occupied homes will stabilize. The outlook for
multi-storey construction is less positive. Tax-induced resi-
3
dential and commercial construction has resulted in oversupply, part of which will be reduced only in the long term.
... Opportunities Were Identified and Used
In this continued difficult market environment, the Real
Estate Financing segment generated new business of € 1.3
(1.2) billion, which means we continued the successful performance of the previous years.
2
1
0
1996
1997
1998
1999
The main reason for this performance was that we anticipated the development in the German real estate market
at an early stage and adapted our policy accordingly. The
More than half of the properties financed abroad are com-
result is all the more gratifying as we retained our very
mercial properties, whose location is of major importance.
conservative risk policy. Overall, new business remained at
Financing commitments are made only for properties in
a relatively constant level, with over 50 % accounted for by
proven prime locations.
Schleswig-Holstein and Mecklenburg -Western Pomerania.
As in the previous years, the share of wealthy private cus-
Thanks to the solid new business, the real estate finance
tomers in the domestic business increased. Apart from the
portfolio grew by 10 % to € 6.6 (6.0) billion.
residential construction companies, this target group is of
particular importance for us.
Due to the improving outlook for the domestic real estate
markets, we will step up our new business activities in
International Activities Stepped up
Whereas in 1998 our international real estate activities
were only moderate, we signed up considerable high-profit,
low-risk business abroad in 1999. This helped us offset the
decline in domestic business. New business signed up both
on a stand-alone basis and in syndicates with renowned
domestic and international banks was at a gratifying level.
western and southern German conurbations. Moreover,
we intend to intensify our presence abroad with a view to
signing up one third of our new business abroad. Syndicated business, primarily with Westdeutsche Immobilienbank
and Hamburgische Landesbank but also with other partner
banks, will be of major importance in this context.
17
Growing international property finance activities.
International property finance team at Hamburg Airport shortly before a trip to the USA:
(from the left) Stefan Kolle (account manager), Uwe Wirries (head of new business and account management),
Lisa-Michelle Eugene (account manager).
18
INVESTMENT BANKING DIVISION INCREASES INTERNATIONAL FOCUS
The Investment Banking Division comprises LB Kiel’s issuing operations, its entire trading activities, its financial
institutions and part of the international finance business. Our Luxembourg subsidiary, Landesbank Schleswig-Holstein
International S. A., also operates successfully in this business segments.
In the first year of EMU, the market situation in Europe was characterized by the new currency. In response to the
heightened demands made by the global financial market, the division adjusted its strategic orientation. We now focus
more strongly on the customer business and sell the entire range of capital market products including derivatives in
the extended eurozone. Business with institutional customers in equity and forward market products has been pooled
and combined with equity research in organizational terms.
Successful Issuing Business
In 1999, LB Kiel strengthened its position as an issuer in
the national and international capital markets. In the context of the EMTN (Euro Medium-Term Note) and ECP
(Euro Commercial Paper) programmes, the international
investor base was expanded considerably. Five syndicated
and 48 non-syndicated issues were placed under the EMTN
programme. The Bank is an active issuer in the Japanese
retail market. Total sales including international issues surged by approx. 125 % to € 11.9 (5.3) billion in 1999.
In the equity markets, we fully achieved our short-term
trading targets. Results increased significantly over the
previous year. The Bank’s strategic equity positions include
substantial hidden reserves. Net commission income
continues to gain in importance. The previous year’s result
was boosted by approx. 23 % to a new record level of
€ 10 million.
In the current fiscal year, we will add credit trading to our
portfolio of trading products and step up our bond and
equity sales activities. We will also intensify our savings
Trading and Sales Segments Mostly Successful
As a result of the unexpectedly strong increase in longterm interest rates, price gains declined by approx. 30 %.
The Bank’s net trading income dropped from € 23.6 million
in 1998 to € 16.6 million in 1999. Those market segments
focusing on short-term investments took advantage of the
steep interest rate curve, which led to a gratifying result
that is reflected in net interest income.
As in the previous years, the surrogate loan business (securities purchased and refinanced for fixed assets) made a
bank support, e.g. in the area of balance sheet structure
management.
Continued Strong Growth of Financial Institutions/International Finance Operations
The Financial Institutions/International Finance unit offers
international customers suitable financing solutions on a
stand-alone or syndicate basis. The focus of these activities
is on international trade and export financing and increasingly also on companies in the utility and telecommunications industries.
major contribution to earnings. The excellent result of the
previous year was repeated almost 100 %. The cash value
New business grew by a gratifying 21 % to € 1.7 (1.4) billion
result was € 26.4 (27.3) million.
(excl. refinancing for the LB Kiel Group), with margins also
up considerably. Some 50 % of this are accounted for by
refinancing loans to banks, governments and government
institutions, the remaining 50 % by syndicated loans for the
corporate sector as well as export and trade finance.
In the past fiscal year, total foreign commitments of the LB
Kiel Group (excl. HLB) rose by 22 % to € 28.6 (23.4) billion,
representing 36 % of LB Kiel’s credit volume of € 78.7 billion
(excl. HLB).
19
Share of Regions in Country Exposure 1999 1)
Scandinavia 29 %
EU (excluding DK, S, FIN) 39 %
Asia 3 %
Central and Eastern
European countries 3%
Internationale Institutionen 1 %
Africa 2 %
Latin-America 1 %
Offshore financial centres 4 %
other industrialized countries 18 %
In our international core market – the Baltic rim – commitments increased to € 8.5 (6.8) billion, which is equivalent
1)
This diagram is not par t of the Statement of Condition.
to 30 % of our total foreign commitments. At € 3.8 billion,
the strongest increase was reported for loans to Western
European countries, which now total € 19.8 (16.0) billion.
The bank closed fiscal year 1999 with total assets of € 8.2
We continued to reduce our commitments in Central and
(8.2) billion. As in the previous year, growth was achieved
Southern America, which now amount to € 363 (390) million.
not only in the volume of credits to banks and customers
but also in the bank’s securities portfolio. At the same
Landesbank Schleswig-Holstein International S.A. (LI)
Pursues Successful Niche Strategy
A wholly-owned subsidiary of LB Kiel, LI focuses on Euroloans as well as money, foreign exchange and securities trading and also serves private clients.
time, the money dealing portfolio was reduced. Lending
was primarily refinanced in the interbank market. LI’s
earnings position improved on the high level of the previous year. The lending and securities results increased
once again, while expenses rose at a disproportionately
low rate. Net profit after taxes increased by a good 50 %
to € 20 (12.8) million.
Reasonable evaluations were taken and provisions formed
for all discernible counterparty risks of LI, especially in
problem countries. In addition, the good result will be used
for further allocations to provisions and open reserves.
The entire securities portfolio was valued according to the
principle of the lower of cost or market.
20
O P E R AT I N G P RO F I T A N D E Q U I T Y C A P I TA L
Group Operating Profit before Risk Provisions and
Evaluation up 17 % to € 429.6 million
At € 429.6 (368.3) million, LB Kiel’s Group operating profit
before risk provisions and evaluation reached a new record
level for the fifth consecutive time and was up € 61.3 million
or 17 % on the 1998 record result.
At Bank level, the operating profit before risk provisions
rose by 21 % to € 225.9 (187.6) million as a result of the
positive business development.
All operating units contributed to this excellent performance. As in the previous years, net interest income made
the largest contribution, rising by 16 % to € 704.1 (608.3)
million at Group level and to € 364.5 (302.7) million at
Bank level. As in 1998, the increase in net commission in-
Continued High Investments in Staff and
Technical Infrastructure
At € 203.8 (183.1) million, Group personnel expenses were
up 11 % on the previous year. The increase is attributable
to the expansion of the workforce as well as to higher pension provisions. At Bank level, personnel expenses amounted to € 124.6 (110.4) million.
come was primarily attributable to lively securities sales.
At Group level, net commission income rose to € 100.3
As at December 31, 1999, LB Kiel employed 2,264 (2,146)
(90.8) million, of which € 45.7 (38.1) million were accoun-
people, while HLB employed 2,240 (2,168).
ted for by the Bank. At € 24.3 (40.7) million, net trading
income remained below the planned target.
Group operating expenses were up 7 % or € 12.0 million
to € 175.2 (163.2) million. It is to be noted that the increase
was much lower than in the previous year (22 %). The Bank
accounted for € 110.6 (103.8) million. The increase was
primarily attributable to continued investments in the IT
infrastructure as well as to expenses related to the Year
2000 date change.
Good Risk Positions Remains Unchanged
Neither the Group nor the Bank recorded any notable
defaults on loans in FY 1999. The conservative approach
to risk evaluation was maintained. Reasonable evaluations
were taken and provisions formed for all risks. The securities portfolios continued to be valued according to the
strict principle of the lower of cost or market. The risk
provisions item includes the balance from the income from
the sale of investments on the one hand, and expenses for
risk provisions in the credit and securities business as well
as for the formation of taxed reserves on the other hand.
Overall, risk provisions amounted to € 178.2 (153.8) million
at Group level and to € 81.8 (52.5) million at Bank level.
21
The operating profit after risk provisions and evaluations
reached € 251.4 (214.5) million and € 144.1 (135.1) million
at Group and Bank level, respectively. After deduction of
Group taxes on income and earnings of € 119.0 (90.9)
million and a dividend of € 36.6 (29.2) million on dormant
equity holdings, the Group’s net profit amounted to € 95.8
(94.4) million. The Bank’s net profit stood at € 63.7 (71.1)
million.
A special dividend paid out by IB to the state had a positive impact on the previous year’s operating result and net
profit. Adjusted for this special dividend payment of € 22
million, the Bank’s net profit increased by an impressive
€␣ 14.6 million.
Increased Allocations to Reserves
Of the Bank’s net profit, a dividend of 7 % (7 %) will be paid
out to the shareholders. A remuneration of € 4.2 million
will be paid to the state in return for the liable capital of IB
used by the Bank. € 35.0 (15.3) million will be allocated to
profit reserves.
Group Liable Capital Increased to € 5.2 Billion
At year-end 1999, the Group’s liable capital, excluding allocations to reserves, amounted to € 5.2 (3.9 incl. allocations
to reserves) billion. The increase is primarily attributable to
the acceptance of dormant equity contributions qualifying
as core capital as well as of subordinated liabilities and profit participation capital. In September 1999, the shareholders authorized us to raise dormant equity contributions
worth € 1.5 billion. Of this, € 44 million were raised in
1999 and € 250 million in the first few months of 2000.
This increase in our liable capital means the Bank will be
able to fund its future growth. The equity basis for the
three-year planning period (i.e. up to 2002) is good.
On the balance sheet date, the ratio between own funds
qualifying as core capital and risk-weighted assets as well as
market price risk positions (solvency ratio) was 10.2 % for
the Group (8.6 %).
Solvency ratio
22
31.12.1999
31.12.1998
Principle I - Bank
10.1 %
9.0 %
Principle I - Group
10.2 %
8.6 %
Copenhagen: the hub of LB Kiel’s Baltic operations.
Experts of the Copenhagen Branch in front of the old Copenhagen Stock Exchange: (from the left) Pia Karvonen (project
finance specialist), Peter Hamann (chief trader, money / FX ) and Paul Therkelsen (head of syndications).
23
R I S K R E P O RT O F T H E B A N K
Management Concept
Risks are an inevitable part of the banking business.
The management of counterparty, market and operational
risks in a constantly changing market entails increasingly
complex challenges for banks. To master these challenges,
they need to adapt their risk management systems accordingly. LB Kiel has adopted a pro-active approach to this
task.
LB Kiel has established a comprehensive set of planning
and controlling tools, most of which are managed by the
We have traditionally pursued a conservative risk strategy,
Controlling/Finance Division. The set comprises, in parti-
attaching particular importance to a well-balanced port-
cular:
folio structure. Large-scale counterparty risks as well as
- rolling three-year planning and quarterly target / actual
counterparty risk clusters are generally avoided. Due to LB
Kiel’s deliberately moderate trading activities, market price
risks are negligible. Major liquidity risks do not exist.
comparisons
- business management of all organizational units based on
profit centre accounts
No particular legal or operational risks are discernible.
- monthly operating income statements
This strategy will be continued in future. To support this
- equity capital management
strategy, we launched a project on ”Overall Bank Control-
- ongoing counterparty risk and large-scale risk manage-
ling“ and ”Risk Management“ in 1999.
ment on an individual risk and portfolio basis
- assets / liabilities management, regular preparation of
maturity balance sheets to identify interest rate risks and
opportunities
- rolling 12- month liquidity forecast
- daily cash planning
- ongoing market price risk management
- limitation and monitoring of all relevant risks
- additional tools of the internal controlling system for the
management of operational and strategic risks.
The risk controlling and management systems are refined
on an ongoing basis. Decision-making lines, information
lines and functional responsibilities have been clearly
defined. The Managing Board decides on all relevant risk
measurement methods. The risk monitoring activities of
the Managing Board are supported by the management
team, which is primarily responsible for its own areas, as
well as by the Controlling and Risk Controlling units and,
as far as country risks are concerned, by the Banks/International Finance unit. The Managing Board is additionally
supported by Accounting, Auditing, Organization and IT,
Processing, Legal and Compliance. Management of the
Bank’s major risks is additionally in the hands of expert
committees (Disposition Committee, Country Rating
Committee, Risk Committee).
24
I N D I V I D UA L R I S K M A N AG E M E N T
I. Counterparty Risks
The term counterparty risk refers to the risk of a business
partner failing to meet their contractual obligations.
The Managing Board defines the methods and processes
for measuring, limiting and managing counterparty and
country risks.
Central Risk Controlling is in charge of developing and
implementing methods and processes for measuring, limiting and managing counterparty and country risks. Central
Risk Controlling monitors the Bank’s risks independently
of the market departments based on a bank-wide approach.
Limits for counterparty risks have been fixed in line with
the Bank’s risk cover potential and future profitability.
The results of the risk controlling analyses are reported to
The credit risk, portfolio and overall bank management
the decision-making committees in charge (to the Mana-
models are being further developed in the context of the
ging Board on a monthly basis, to the Risk Committee on a
”Overall Bank Controlling / Risk Management“ project
quarterly basis); if required, the committees immediately
initiated in 1999. These models form part of an integrated
initiate appropriate controlling measures. This has not been
risk management system, which is also being implemented
necessary so far.
under the above project.
LB Kiel uses a uniform rating-based process to measure
Individual counterparty risks are analyzed in detail in the
and manage counterparty default risks. This process was
lending departments. In addition, the lending desk performs
put on a broader basis in 1999 and adapted to new findings.
an independent evaluation of important individual cases
Major elements of this process include the internal rating
before a decision on the loan application is taken.
procedure (corporates, banks, properties and privates) and
market-related historic default probabilities. These factors
In 1999, new limit systems were created for monitoring the
are linked with accounting data (contract value, loan /tran-
counterparty risks of the trading sectors as well as the
saction amount or market value, recovery rates divided
large-scale risks. Controlling /Finance has central responsi-
into different collateral types) in order to enable segment
bility for these systems.
analyses according to different criteria such as sector,
country of incorporation, credit rating category or organi-
An additional country limit system controls the country
zational units to be performed.
risk, which also needs to be taken into account in conjunction with the counterparty risk. Based on an upper limit
The risk measurement process is reviewed constantly both
for all Group-wide country risks, upper limits for individual
in the market departments and on the basis of the Bank’s
countries and country groups are determined on the basis
own default history; according to these reviews, the under-
of a country rating. Compliance with these limits is moni-
lying model has been working well.
tored on an ongoing basis by Banks / International Finance.
25
Foreign commitments primarily focus on Europe and
North America. As at December 31, 1999, the country
portfolio had the following structure:
Foreign commitments
in € million
HLB
pro-rata
Commitments of
the LB Kiel Group
Percentage
share in Group
commitments
19,773.10
774.90
9,960.00
296.80
29,733.10
1,071.70
64
2
5,106.80
363.40
756.30
457.60
1,329.10
3,743.00
213.80
590.40
624.20
2,557.70
8,849.80
577.20
1,346.70
1,081.80
3,886.80
19
1
3
2
9
28,561.20
17,985.90
46,547.10
100
LB Kiel Group
excl. HLB
Europe (excl. Central
and Eastern Europe)
Central and Eastern Europe
Other industrialized
countries
Latin America
Asia
Africa
Other
Total
The cautious risk policy is reflected in the Bank’s (excl.
IB and LBS) total volume of specific bad debt charges of
€␣ 220 million as at December 31, 1999. The share of specific bad debt charges in the credit volume was 0.30 %
(1998: 0.34 %).
2. Liquidity Risks
The term liquidity risk describes the risk of the Bank becoming unable to meet its payment obligations, to provide
sufficient liquidity or, because of insufficient market depth
or market disruptions, to liquidate /close transactions at all
or without making a loss (market liquidity risk).
The calculation of the general bad debt charges is based on
the administrative regulations outlined in the letter of the
The Bank’s Disposition Committee is responsible for
Federal Finance Ministry dated January 10, 1994. As per
defining the conditions and strategies for planning and
December 31, 1999, general bad debt charges amounted to
controlling liquidity and taking the fundamental decisions
€ 32 million. All securities are valued to the strict principle
on the maturity transformation contribution from new
of the lower of cost or market.
business. Central Disposition takes the measures required
for implementation, especially the covering of financing
gaps. Day-to-day cash management and compliance with
minimum reserve requirements are the responsibility of
Money/ FX Trading. The monthly maturity balance sheets,
which are prepared by Risk Controlling and take account
of all cash flows of the Bank, are an important cash
management tool.
26
At present, Principles II and III are calculated by LB Kiel
(Bank) according to the Liquidity Rules for Banks on the
basis of agreed terms and maturities. As per December 31,
1999, Principle II and Principle III stood at 97.5 % and
59.3 %, respectively.
A project is underway to ensure that the first notification
to the new Principle II will be made on time by July 1, 2000.
Hamburgische Landesbank, a member of the LB Kiel
Group, has reported the solvency ratio according to the
new Principle II since the end of 1999. As at December 31,
1999, the ratio was 1.6, i.e. clearly above the standard
value.
3. Market Price Risks
Market price risks include interest rate risks, share price
risks, currency risks as well as commodity and other price
risks.
Measurement of Market Price Risks
LB Kiel has adopted the Value-at-Risk (VaR) approach to
measure and control market price risks. This approach
determines possible losses from trading positions arising
from one day to the next on account of market fluctuations in a worst-case scenario. The potential losses (risks)
are determined with 95 % confidence. Historical interest
rates, exchange rates and equity prices over the past 201
days are used for these projections. The risks are measured
against predefined loss limits and reported to the Managing
Board and the responsible trading units on a daily basis.
New products are regularly included in risk measurement.
Measurement of Interest Rate Risks
LB Kiel uses a cash value oriented procedure to record
and control interest rate risks. An important element of
this procedure is the determination of an accumulated
cash value, which is calculated on the basis of the net cash
flows generated by the interest-bearing assets and liabilities
including derivatives for transactions subject to interest
risks. The cash value of the calculated net cash flows is
calculated on the basis of maturity-oriented market rates
derived from the yield curve.
There is no major interest rate risk.
27
Global Market Price Risk Position
In addition to the interest rate risk for the main and second-line currencies, price risks for equities and investment
certificates of the liquidity reserve are also included in
global risk management on a VaR basis. To limit the resulting global risk, the Managing Board has defined a risk limit
for the Bank. The risk limit was used only moderately and
observed at all times. All interest-bearing non-trading positions (e.g. loan portfolios and own issues) are also valued
using the VaR approach on the basis of the balance sheet,
which is updated each day.
As per December 31, 1999, the value at risk was € 3.386
million (trading in the narrow sense). Based on a limit of
€␣ 15 million, the average VaR limit utilization was 23 % for
trading risks, with the minimum at 9 % and the maximum at
40 %.
Back-Testing, Stress Testing, Worst-Case Scenarios
Back-testing comprises a comparison between the projected maximum loss that may be incurred within one trading
day, the VaR and the actual change in the result for the
individual trading portfolios. Each test is based on a period
of 100 trading days. According to statistical laws, the number of outliers (actual decline in the result exceeds the
projections) must not exceed an upper limit. Based on the
results obtained, there was no need to change the measurement model in 1999.
Daily utilization of the VaR limit
for trading operations in 1999
45%
40%
35%
30%
25%
Ø 22,75
The stress tests performed are based on a shift in the
confidence level from 95 % to 99 %. Simulations have shown
20%
15%
that even with a confidence level of 99 %, the risk cover
potential was not exceeded.
10%
5%
In the context of statistical approaches, the ”worst case“
0%
is the most unfavourable case that would have occurred
for a given portfolio in the past. The calculation of the
worst-case scenario is based on the risk parameters that
would have meant the greatest loss in value for the portfolio over the past ten years.
The average daily value at risk for the three risk categories
is shown below:
Average daily VaR 1)
in € ’000
Interest-rate risks
Currency risks
Equity and other risks
1)
28
Average calculation based on 254 trading days
1.1. up to 31.12.1999
3,179
210
419
On the basis of 254 trading days, the average daily per-
The Bank has drawn up contingency plans for all areas,
formance (operating profit contribution of the trading
which were updated and optimized in conjunction with
operations) in 1999 was € 125,000.
the Y2K issue. LB Kiel is confident that these plans take
account of all contingencies so that potential disruptions
Breakdown of the daily performance of the trading operations in 1999
in ¤ ’000
will not result in major risks.
To counteract legal risks, LB Kiel uses internationally
80 (Frequency)
acknowledged standard framework agreements (ISMA,
70
ISDA), scrutinizes individual agreements and regularly
60
adapts contractual documentation to current legislation;
50
in addition, the Bank’s own legal department provides local
40
and centralized support to the market departments.
30
No extraordinary legal disputes which might have a negative effect on the financial position exist at present.
20
10
0
-∞ up to
- 4000
up to
- 2000
up to
-1000
up to
- 500
up to
- 0,1
up to
500
up to
1000
up to
2000
up to
4000
from
4000
4. Operational Risks
Operational risks are risks due to human or technical failure and/or external factors as well as legal risks resulting
from contractual agreements or statutory requirements.
Conclusion
In 1999, LB Kiel made considerable advances in all areas
of risk controlling. Among other things, the Bank recorded
all potential risks as well as the procedures and measures
which are in place to manage these risks. The ”Overall
Bank Controlling / Risk Management“ project focusing on
”Value -oriented Controlling“ and ”Expansion of a Comprehensive Risk Management System“ means LB Kiel will
consistently and systematically continue on this course.
In 1999, LB Kiel initiated a large number of measures
reaching well into the future to counteract risks inherent
in technical/organizational systems or processes. The most
important measures were the adoption of a new IS /Org
strategy based largely on the use of standard IT systems
and the related reorganization of the IT Systems /Organization units.
The Year 2000 date change was a major operational
challenge in technical /organizational terms. In the context
of the Group-wide Year 2000 project, which was launched
in 1998, the complete IT infrastructure, data networks,
central and decentralized applications as well as all other
building and operating facilities were recorded and tested
systematically and replaced if necessary. The smooth transition to the new year showed that this challenge was
mastered successfully.
29
Special Finance:
the project team for the new, privately financed crossing over the River Trave in front of the Herrenbrücke bridge in Lübeck :
(from the left) Dr. Elisabeth Keßeböhmer (lawyer), Jörg Böttcher (project analyst), Hella Prien (head of project team).
30
S U C C E S S F U L F I S C A L Y E A R F O R H A M BU R G I S C H E L A N D E S B A N K ( H L B )
Fiscal 1999 was another successful year for Hamburgische
Landesbank, in which LB Kiel holds 49.5 %. HLB aggressively
seized the opportunities resulting from the overall economic development and the structural changes in the competitive environment for corporate finance and exploited
them giving due consideration to potential risks.
HLB’s group accounts include Hamburgische LB Finance
(Guernsey) Ltd., Hamburgische Landesbank (Guernsey) Ltd.
Hamburgische Wohnungsbaukreditanstalt, Hamburg (WK),
as well as Kommanditgesellschaft Altstadt Verwaltungsgesellschaft & Co. Grundstücksgesellschaft, Hamburg.
risk provisions and evaluation climbed 22 % to € 336.6
(276.2) million, primarily as a result of the increased net
Total Assets Rise 10 % ...
The balance sheet reflects the gratifying business growth.
Total assets of the HLB group rose by 10 % to € 78.4 (71.4)
billion. The business volume increased by 7 % to € 88.7
(82.6) billion, while the lending volume was up 7 % to €
85.2 (79.6) billion.
interest income (+12 %) and the decline in other operating
expenses. The group’s net risk provisions were somewhat
lower than in the previous year, resulting from income
from the sale of investments and expenses on risk provisions, which increased by 25%, and the formation of noncore capital. HLB’s improved profitability was also used for
allocations to the fund for general bank risks (€ 27 million)
... against the Background of Increased Profitability
HLB’s profitability developed satisfactorily and in line with
the overall business expansion. The operating profit before
and, hence, an increase in core capital. The result from ordinary activities improved by a good one third to € 186.9
(139.1) million. The 50 % increase in taxes on income to
€␣ 74.2 million also reflects HLB’s increased profitability.
Transparent Risk Management
Retaining its strict evaluation principles, HLB again established sufficient provisions for all discernible and future
risks; the focus was on domestic credit risks, which primarily referred to real estate loans. Thanks to HLB’s comprehensive risk monitoring and management system, the size
of the risks incurred and the risk controlling process are
highly transparent.
31
Increase in Core Capital
The HLB group’s equity capital amounted to € 3.6 (2.6)
billion, of which DM € 0.29 (0.29) billion were accounted
for by outside shareholders. The group’s liable equity capital according to KWG increased by € 1.4 billion to €␣ 5.1
(3.7) billion, of which € 3.4 (2.3) is core capital.
New Strategic and Organizational Orientation
In early 1999, HLB launched a project entitled ”Strategic
and Organizational Orientation of Hamburgische Landesbank“, which will be of fundamental importance for the
bank’s future success in the marketplace. The project activities, which benefit from external support, produced
important results already in the past fiscal year. Going
forward, HLB will differentiate between three different
business segments. First, there are the core businesses in
which the bank has a core competency over its competitors, e.g. domestic corporate client business, leasing
finance and ship financing. These are supported by basic
business segments which are an integral part of the banking business. The so-called ”build-up segments“ are promising activities which will be developed in an agreed investment phase based on specific allocation of resources. The
results of this prioritization are now being implemented
in the organizational structures and processes. In this context, the Private Clients „build-up segment“ was transformed into an independent unit and a new Ship Finance
Department was established in the past fiscal year.
25 % Investment in WPS
With a view to leveraging synergies in securities transactions, HLB acquired a 25 % equity interest in WPS WertpapierService-Bank AG with effect from December 31, 1999.
SWS Systemhaus für Wertpapiersoftware GmbH & Co. KG
and SWS Systemhaus für Wertpapiersoftware GmbH were
transferred to WPS Bank with effect from the same date.
HLB Expects No Negative Effects from EU Decision
With regard to the EU Commission’s state aid decision,
the situation at HLB is the following: In 1986 and 1993,
the Free and Hanseatic City of Hamburg (FHH) transferred
some 82 % of the shares in WK to Hamburgische Landesbank as a contribution in kind. Since the form of the transfer of the fund assets and its remuneration differ substantially from the Wfa case, HLB does not expect any negative
effects at the bottom line.
32
OUTLOOK
Growing Competitive Pressure
Competitive pressure in the banking sector will continue to
grow. The mergers in Germany have shown that new structures are being created. Moreover, it is only a question of
time before more foreign competitors and suppliers from
other sectors will enter the market. Cross-border mergers
are now also on the cards, since the national consolidation
of the banking sector in Europe has advanced considerably.
In the payments sector, we want to leverage cost synergies
by pooling available regional strengths in a joint service
and competence centre in cooperation with the savings
banks in Schleswig-Holstein as well as with Hamburgische
The economic situation is currently having a positive effect.
Landesbank (HLB) and Hamburger Sparkasse (Haspa).
The upswing in the eurozone will result in real growth of
Apart from domestic and foreign payment transactions
a good 3 %. Given that the capital markets anticipated the
and documentary foreign payments, the concept will cover
economic recovery last year and sent yields rising strongly,
the entire value chain from market analysis to processing.
there is now only limited scope for a further increase in
The securities operations are currently being pooled in
yields. By long-term comparison, financing conditions are
Wertpapier-Service-Bank (WPS), in which LB Kiel, as a
thus still relatively favourable. The new Basle capital ade-
founding member, holds 6 %. In coordination with its
quacy regulations may have a negative effect on the finan-
cooperation partners, LB Kiel is preparing for the transfer
cing conditions for small and medium-sized enterprises,
of the eligible securities transactions segments to WPS.
though.
The respective project started last year, and LB Kiel is
confident that the transition will be completed in 2001.
Strategic Measures at LB Kiel
We will face the challenges in the banking sector by expanding our business activities in a selective and riskconscious manner and continuing our qualitative growth.
We will continue to strengthen the Bank’s profitability and
make efficient use of our equity capital by focusing on our
core competencies and complying with strict return criteria
for the individual business segments. Increased asset securitization in the form of asset-backed securities and synthetic
transactions will help us optimize the use of our equity
capital. In the context of strict service and cost orientation,
business processes are being redesigned, outsourced or
pooled with those of our partners.
In the fast-growing electronic banking and e-commerce
markets, we have joined forces with the savings banks in
Schleswig-Holstein and HLB: For this purpose, two companies have been established: SNetLine GmbH, which sets
up and supports virtual marketplaces, and eBanking Services Nord GmbH (eBS), a provider of IT and electronic
services.
LB Kiel’s cooperation with HLB has developed favourably
for the mutual benefit of both partners and is to be expanded in 2000. Cooperation extends from organization and
shared IT solutions to back-office securities transactions
and syndicated loans in various market segments.
We expect the results in FY 2000 to be on a par with the
previous year.
33
Group Balance Sheet 1995 – 1999
€␣ million
1995
1996
1997
1998
1999
Assets
Cash, debt instruments issued by public institutions,
bills of exchange eligible for refinancing
Claims on banks
Claims on customers
Bonds and other interest-bearing securities
Equity investments in affiliated and non-affiliated companies
Trust assets
Other assets
150
13,043
21,416
11,090
55
1,693
220
73
15,846
24,110
11,997
64
1,603
239
165
25,357
40,888
20,813
96
1,453
566
117
27,758
46,936
22,732
154
1,459
1,139
287
28,869
52,692
30,083
186
1,322
1,709
Total assets
47,667
53,932
89,338
100,295
115,148
Liabilities
Liabilities to banks
Liabilities to customers
Certificated liabilities
Trust liabilities
Subordinated liabilities
Profit participation capital
Fund for general bank risks
Equity capital
Other liabilities
16,606
7,236
18,858
1,693
455
51
–
1,339
1,429
19,076
9,294
20,276
1,603
651
66
–
1,418
1,548
35,971
18,781
27,272
1,453
1,113
446
–
2,126
2,176
43,519
21,267
27,480
1,459
1,127
499
19
2,200
2,725
48,833
22,634
34,027
1,322
1,464
987
72
2,849
2,960
Total liabilities
47,667
53,932
89,338
100,295
115,148
Business volume
48,636
58,838
100,330
111,926
127,981
since 1997 including HLB
34
The Funds Statement shows inflowing
and outflowing funds during the fiscal
year and their effects on the cash reserve,
divided into sources of funds (inflows)
and uses of funds (outflows) .
It is the result of the 1999 Income
Statement and the presentation of the
differences between the balance sheet
items as per December 31, 1998 and as
per December 31, 1999.
Statement of Financial Resources
in € million
Cash reserve on Dec. 31, 1998
+ Sources of funds
- Uses of funds
= Cash reser ve on Dec . 31, 1999
1999 Funds Statement of the LB Kiel Group
in € million
Sources of funds
Increase in deposits*
- by banks
- by customers
Increase in certificated
liabilities
Interest income
Commission income
Net trading income
Increase in subordinated liabilities/profit participation capital
Increase in own funds
114
22,296
22,125
Other sources of funds
1999
5,314
1,367
6,547
6,888
148
24
Uses of funds
Increase in claims
- on customers
- on banks
Increase in the
securities portfolio
Interest expenses
Commission expenses
Personnel expenses
1999
5,757
1,111
7,351
6,256
48
204
826
Other administrative expenses
145
704
Depreciation. value adjustments
and other valuations
Taxes
Net profit
Other uses of funds
163
117
96
877
478
Sources of funds
22,296
Uses of funds
Change in cash reserve
22,125
171
total
22,296
total
22,296
285
* incl. registered notes and to-the-order instruments issued
35
Our Staff
Fiscal year 1999 saw our staff numbers rise once again. As a result of LB Kiel’s
business expansion, 77 new, mostly highly qualified, jobs were created.
Business Expansion Creates 77 New Jobs
In line with our clearly defined strategy of growth in selected core business segments, we once again expanded our
workforce against the general industry trend. Overall, the
number of permanently employed people of the LB Kiel
Group (excl. HLB) rose to 2,097 (2,020). Most of the 77
new jobs were created in Investment Banking, Corporate
Finance, Controlling and IT. As a result, personnel expenses
increased by 10 % to € 203.1 (183.1) million, also due to
higher pension provisions. The growing internationalization
of our business and our position as the Bank of the North,
in particular, are also reflected in our staff structure; more
than 200 foreign employees, most of them Danes, work in
the LB Kiel Group. We intend to expand our headcount by
another 80 people in the year 2000.
Projects and Virtual Units
Offer Attractive Working Conditions
The banking business is becoming increasingly complex,
putting a premium on expert know-how and swift, flexible
response to changes in the banking environment. This
requires the organization to adapt accordingly. We have
therefore established flatter hierarchies, developed a dedicated project culture and created ”virtual“ organizational
units.
People working in project teams and virtual units must be
especially communicative and willing to adopt a pro-active
approach to change. At the same time, these organizational
forms offer great scope for own initiative and independence, making them particularly attractive.
Objective Achievement System
for Performance-oriented Remuneration
In response to the increased demands on flexibility and
initiative, we have adopted a modern remuneration system
based on the achievement of objectives. This system also
forms the basis for the calculation of bonus payments, optimizes the control of the Bank’s overall targets thanks to
greater transparency and encourages functional and executive staff to assume greater responsibility. We continued
to refine this tool in 1999. Coaching sessions held at all
management levels of our Bank also focused on management by objectives. We intend to adopt an objective
achievement system for all employees covered by collective agreements in the current fiscal year.
Individualized Development Opens up
Job Oppor tunities for University Graduates
Apart from the qualified, experienced functional and executive staff, university graduates are the second largest
group of new employees at LB Kiel. They are offered two
different career paths to embark on; a direct appointment
based on coaching and partnerships will enable them to
assume responsibility within a short space of time and is
complemented by dedicated seminars to expand their
competence and develop their personalities. The second
option is a trainee programme, which is designed for
graduates with no prior bank experience. The programme
usually lasts 12 months, during which the trainees will
work in four to six business and/or staff units, including
our foreign locations, especially in Copenhagen and Luxembourg.
New Approach to Training / Number of
Traineeships Increased Again
In 1999, LB Kiel for the first time joined the ”Triales Modell“
of the Westküste college. The model combines the usual
professional training in a bank with subsequent business
management studies at a technical college. Participants in
the model may graduate as a bank clerk or do their
master’s degree in business administration after only five
years.
36
Our Staff
In addition to the classical training as a bank clerk (with
the additional possibility of studying business management),
we also offer traineeships for computer science, office
duties, real estate and housing business. In 1999, we
increased the number of trainees to 94 (88) in order to
train qualified junior staff for the Bank and improve the
vocational training situation for young people. We have
increasingly been testing capacity limits, though, both as
Key Staff Figures (Group)
As at December 31
regards our training resources and the choice of qualified
1999
1998
1997
Total staff employed
of whom female
2,264
1,097
2,146
989
2,026
967
Regular staff
Bank
Landes-Bausparkasse
Investitionsbank
LB Schl.-Holst. Int. Luxembourg
Gudme Raaschou
2,097
1,447
189
322
68
71
2,020
1,384
189
310
64
73
1,940
1,361
186
329
65
–
94
73
83
88
38
105
61
25
91
Apprentices
Temporary staff / trainees
Staff on maternity
and parent leave
Ratio of part-time staff
Average age
Retired staff and surviving
dependents /
Employees in early retirement
New appointments
13.8 % 13.4 %
12.8 %
41 years 40 years 40 years
940
898
852
190
154
167
applicants meeting our requirements.
Graduate Recruitment Days Show Qualified Young
Talent the Way to LB Kiel
To satisfy our demand for qualified junior staff, we establish
contacts with high potentials at a very early stage. For over
ten years, we have been organizing Graduate Recruitment
Days during which we assess participants’ potential and
personalities. These assessments provide the participants
with valuable feedback and form the basis for potential
recruitments.
Also with a view to establishing early contacts, LB Kiel
offers interested students support for their graduation
theses on banking-related topics.
Qualified Functional and Executive Staff Recruited
via the Internet
The Internet has also become an important medium for
establishing contacts with potential employees. We have
noticed that applicants contacting us via the Internet are
frequently better qualified for the tasks at hand than conventional applicants. At www.lb-kiel.de, we provide constantly updated job offers and offer applicants a possibility
for online applications.
37
Our Staff
Divisional Development Plans for More Transparent
Career Paths
In response to the growing demands made on our employees in terms of qualification, we have designed a wide
range of personnel development measures, which also
open up career paths within our Group.
Our personnel development concept enables us to systematically develop and train our employees. An important
element of this concept are the Personnel Development
Days during which an individualized development plan is
drawn up for each individual employee. On the basis of
these plans, we design tailor-made development initiatives
in line with individual requirements. Additionally, we draw
up divisional development plans which provide a systematic
overview of each organizational unit’s tasks and requirements, thus making possible career paths in the Bank more
transparent. In 1999, we organized some 9 00 development
and further training events, which were attended by 3,500
Flexible Working Hours
Instead of rigid core working hours, the new working hour
agreement provides for so-called functional hours which
can be arranged individually by the employees. They must
work the contractually agreed hours within a period of six
months. During this time, the working hours account is
kept like a current account including a pre-defined ”overdraft facility“.
The ”mobileTime“ scheme pays particular attention to the
possibility of splitting functional and management duties
and refers to any form of working hour arrangement
below the collectively agreed hours. This gives especially
our female employees new opportunities to assume greater responsibility and still have time for their families.
Under the pre-retirement part-time employment scheme,
employees aged 55+ have the chance to reduce their working hours. This scheme enables a smooth transition to
retirement for older employees while at the same time
creating new jobs.
participants.
Career Development Seminar (KESS) Reveals
Internal Potential
KESS is a new tool developed by LB Kiel for identifying
internal functional and management potential. It has been
used successfully since 1998 and replaces the traditional
Assessment Centers. During the two-day seminar, the
participants are given the chance to present themselves in
group discussions, interviews and lectures. After each individual exercise, the participants get feedback both from
the moderators and from their fellow participants, so that
they can start adjusting their behaviour during the seminar.
Following in-depth feedback interviews, individual development initiatives are defined which facilitate the best possible development for each participant’s future tasks.
38
Our Staff
IT Support for All Personnel Management Processes
We introduced IT support for our personnel management
tools at an early stage. These modern IT systems make for
fast access to information, better planning data and increased efficiency. We will step up our activities in this
respect in the year 2000, so that all personnel management
processes will benefit from IT support by the end of 2001.
The Managing Board Thanks All Employees
We would like to thank our employees, whose motivation
and performance all throughout the LB Kiel Group made
a major contribution to our success in FY 1999. We also
extend our thanks to the staff councils for the past year’s
constructive cooperation in an atmosphere of mutual
trust.
A competent financial partner to SMEs in Northern Germany. Corporate clients managers in front of a shopping
centre in Flensburg: (from the left) Klaus-Dieter Dahnke (manager of internal operations, central Schleswig-Holstein),
Werner Schwolow (head of operations, central Schleswig-Holstein).
39
Our Staff
The promotion of the Schleswig-Holstein Music Festival, our own Art Foundation as well as comprehensive environmental and climate protection initiatives – these are the key aspects of our cultural
and ecological activities, which testify to our strong regional roots in Schleswig-Holstein, where we
have operated for over 80 years. Moreover, we regularly make large donations for charitable, scientific
and sporting purposes.
Main Sponsor of the
Schleswig-Holstein Music Festival Since 1994
The biggest and most renowned classical music festival of
its kind in Europe, the Schleswig-Holstein Music Festival
(SHMF) is a significant asset to the image and the economy
of Schleswig-Holstein. LB Kiel and its partners in the
S-Finance Group, who have been the main sponsors of the
SHMF since 1994, for the first time committed themselves
to a long-term sponsorship of the festival and agreed to
pay an annual amount of DM 1.6 million in 1999, 2000 and
2001. This way, they help put the event on a longer-term
financial basis and help ensure its continuance.
In 1999, LB Kiel and its partners in the S-Finance Group
also included up-and-coming musicians in their sponsoring
activities. They invited over 100 music students from
Schleswig-Holstein to attend the rehearsals of the Salzau
Orchestra Academy under Christoph Eschenbach and to
speak with the musicians. This year, the number of music
students benefiting from this opportunity is to be expanded to 200.
The Art Foundation of Landesbank Schleswig-Holstein:
Year 2000 Arts Programme to Promote Literature for the
First Time
In 1998 / 99, the arts programme of the “Ar t Foundation of
Landesbank Schleswig-Holstein”, which promotes contemporary fine arts and culture in Schleswig-Holstein, was in
the hands of Dr. Heinz Spielmann, who has for many years
been Director of the Land Museum of Schleswig-Holstein.
His programme was based on the idea of implementing
self-contained artistic projects which establish a link with
existing art. In 1999, these included three workshops organized at the Salzau Cultural Centre: Under the motto
“Silver – Implements and Receptacles for a Meal”, young
smiths had the chance to refine their skills under the
direction of renowned gold and silversmiths Gerda and
Wilfried Moll. At two printing workshops (lithography and
etching), young artists were given an opportunity to work
with Klaus Fußmann and Max Neumann, two renowned
painters.
Other projects included a literary discussion between
Günter Kunert and Reiner Kunze on “Intellectuals – a Threat
to Mankind”, which was moderated by Doris Runge.
The Foundation’s new art expert for the year 2000 is
Dr.␣ Hans Wißkirchen, director of the “Heinrich-undThomas-Mann Centre” in Lübeck. His arts programme is
the first to focus exclusively on literature. The planned
events will present the literary achievements of SchleswigHolstein to a greater audience. The programme will build
on the great literary traditions of Schleswig-Holstein, especially of Heinrich and Thomas Mann. Events will be organized on the occasion of the 50th anniversary of the death
of Heinrich Mann and the 125th birthday of Thomas Mann
as well as in the context of the Schleswig-Holstein Music
Festival and EXPO 2000.
The art experts of the previous years included Dr. HansWerner Schmidt (“Painting the Palm Leaves”, 1994),
Professor Peter Nagel (“Salute - Art Expedition to Italy”,
1995) and Dr. Marina von Assel (“LAND:ART”, 1996).
40
Climate Protection Measures to Compensate for
CO 2 Emissions / LB Kiel Voted “Environmentally Friendly
Operation”
LB Kiel has adopted two complementary approaches to
environmental protection, which are supported by the
“Prima Klima – weltweit – e.V.” association and Investitionsbank Schleswig-Holstein. First, we implement numerous in-house environmental protection measures such as
the use of recycled products and materials, the sorting of
waste and, in particular, the reduction of our energy consumption, which we want to lower by 20 % over the coming years. For this purpose, we are currently installing a
waste management system. Second, LB Kiel supports climate protection projects in order to compensate for the CO2
emissions resulting from the residual energy consumption
in the long term. DM 1.1 million have been earmarked for
these projects for the period from 1996 to 2000.
In the context of the climate protection projects, we
primarily promote the planting of new woodland in Schleswig-Holstein without assuming ownership of the sites.
This approach takes account of the fact that growing trees
In recognition of LB Kiel’s environmental commitment, the
withdraw carbon dioxide from the atmosphere and release
Bank – and two other Schleswig-Holstein companies – will
oxygen for many decades to come. Up to now, LB Kiel has
be presented with the “Environmentally Friendly Operati-
promoted the planting of new woodland at more than 60
on” award by “Studien- und Fördergesellschaft der Schles-
locations on a total area of 530 hectares.
wig-Holsteinischen Wirtschaft”.
In cooperation with the Schleswig-Holstein Environmental
Protection Foundation, we also sponsored the rehabilitation of marshland in the Dithmarschen district; a total of
320 hectares of marshland have been restored so far.
This form of rehabilitation also contributes to climate
protection, given that it stops the carbon dioxide emissions of the marshland and bonds small quantities of CO2.
By the end of the year, LB Kiel’s climate protection initiatives will have compensated for the Bank’s CO 2 emissions.
41
Luxembourg, an attractive financial centre and the home of Landesbank Schleswig-Holstien S.A..
In front of the Grand Ducal Palace: (from the left) Hanns Grad (manager /chief trader, securities),
Ralf Ackermann (securities trader), Anke Jodes (assistant to the top management).
42
44
Balance Sheet
48
Statement of Income
50
Group Balance Sheet
54
Group Statement of Income
43
BALANCE SH E ET AS AT DECE M BE R 31, 19 99
ASSETS
€ thousands
1. Cash
a) cash on hand
b) balances with central banks
including:
with Deutsche Bundesbank
prev. year
4,337
87,615
91,952
86,397
2. Debt instruments issued by public institutions and bills
of exchange eligible for refinancing with central banks
a) treasury bills and discounted treasury notes as well as
similar debt instruments issued by public institutions
including:
–
eligible for refinancing with Deutsche Bundesbank
b) bills of exchange
including:
eligible for refinancing with Deutsche Bundesbank 2,129
3. Claims on banks
a) payable on demand
b) other
including:
loans of Landes-Bausparkasse
4. Claims on customers
including:
secured by mortgages
loans to public authorities
and entities under public law
secured by ship mortgages
from allocation (LBS loans)
pre and interim financing
other
including:
5. Bonds and other interest-bearing securities
a) money market instruments
aa) of public issuers
including:
eligible as collateral
for Deutsche Bundesbank advances
ab) of other issuers
including:
eligible as collateral for
Deutsche Bundesbank advances
b) bonds and notes
ba) of public issuers
including:
bb) of other issuers
including:
c) bonds issued by the Bank
principal amount
To be carried forward:
44
prev. year
(67,238)
–
48
(48)
2,129
2,129
2,521
2,569
19,239,145
327,749
16,350,241
16,677,990
32,987,862
29,637,534
(2,521)
884,129
18,355,016
165
(411)
5,923,531
(5,624,743)
11,501,284
2,307,268
(11,388,416)
(1,754,809)
421,780
582,695
34,341
(438,269)
(466,121)
(34,250)
939,160
(873,284)
100,099
50,010
3,698
72,830
76,528
76,916
(76,916 )
75,552
100,636
175,651
55,615
(–)
4,515,490
3,838,115
1,950,725
(1,175,840)
9,836,291
7,067,373
14,351,781
2,516,023
(1,607,613)
1,162,951
(864,118)
1,174,786
15,702,218
890,868
10,086,518
68,023,306
56,481,139
BALANCE S H E ET AS AT DECE M BE R 31, 19 99
LIABILITIES
€ thousands
prev. year
prev. year
1. Liabilities to banks
b) with agreed maturity or period of notice
c) deposits of Landes-Bausparkasse
2,045,307
25,889,332
11,120
27,945,759
2. Liabilities to customers
a) saving deposits
aa) with agreed period of notice of three months
ab) with agreed period of notice of more than three months
ac) deposits at Landes-Bausparkasse
including:
for terminated contracts
6,165
for allocated contracts
17,953
1,577,330
22,283,436
5,960
23,866,726
42,156
3,648
752,922
46,473
4,024
776,343
(6,989)
(18,048)
826,840
b) other liabilities
ba) payable on demand
bb) with agreed maturity or period of notice
858,551
8,365,506
1,277,244
9,249,915
10,527,159
11,353,999
10,022,783
527,734
539,655
25,727,030
18,090,671
1,628,280
19,718,951
1,225,205
1,373,029
6. Other liabilities
105,849
133,735
7. Deferred items
242,801
238,176
271,932
148,042
54,794
60,697
263,533
947,202
956,001
14,993
–
11. Subordinated liabilities
889,990
697,060
12. Profit participation capital
564,788
153,388
69, 817,282
57,963,037
3. Liabilities of Investitionsbank relating to federal promotion
programmes with agreed maturity or period of notice
of four years or more
4. Certificated liabilities
a) bonds issued by the Bank
b) other
including:
money market instruments
own acceptances and
promissory notes outstanding
5. Trust liabilities
including:
trust loans
8. Provisions
a) for pensions and similar obligations
b) tax reserve
c) other
9. Interest equalization fund
10. Special item with partial reserve character
22,608,469
3,118,561
3,118,561
(1,596,579)
–
(49,271)
1,214,752
(1,364,074)
159,032
50,092
62,808
45
BALANCE SHEET AS AT DECEMBER 31, 1999
ASSETS
€ thousands
prev. year
prev. year
Carried forward:
68,023,306
56,481,139
6. Shares and other non-interest-bearing securities
517,920
427,924
7. Equity investments in non-affiliated companies
including:
banks
777,912
781,429
163,648
139,152
1,225,205
1,373,029
18,943
22,495
11. Fixed assets
135,289
109,966
12. Other assets
603,599
133,622
13. Deferred items
118,109
107,320
71,583,931
59,576,076
8. Equity investments in affiliated companies
including:
banks
9. Trust assets
including:
trust loans
10. Intangible assets
Total assets
46
759,300
112,940
1,214,752
(766,227)
(99,576)
(1,364,074)
BALANCE SH EET AS AT DECEMBER 31, 1999
€ thousands
LIABILITIES
prev. year
prev. year
Carried forward:
13. Fund for general bank risks
14. Equity capital
a) subscribed capital
b) capital reserves
appropriated reserves of Investitionsbank
69,817,282
57,963,037
40,000
–
340,492
296,549
967,630
918,597
1,308,122
c) reserves from retained earnings
ca) statutory reserves
cb) reserves of Landes-Bausparkasse
cc) appropriated reserves of Investitionsbank
d) profit
294,225
71,070
27,835
259,225
68,002
27,603
393,130
25,397
1,726,649
43,063
1,613,039
71,583,931
59,576,076
1. Contingent liabilities
a) liabilities on rediscounted bills of exchange
b) liabilities from guarantees and indemnity agreements
–
2,306,393
34,704
2,457,157
2. Other commitments
a) placing and underwriting commitments
b) irrevocable credit commitments
–
4,954,279
6,890
3,372,109
Total liabilities
47
January 1 – December 31, 1999
STATEMENT OF INCOME
€ thousands
1. Interest from
a) lending and money market transactions
including:
interest of Landes-Bausparkasse
from LBS loans
from pre and interim financing
from other building loans
3,272,631
3,724,053
20,276
32,811
2,403
(20,748)
(28,229)
(2,558)
b) interest-bearing securities and Government-inscribed debt
2. Interest paid
including:
for deposits of Landes-Bausparkasse
prev. year
prev. year
587,613
669,756
4,393,809
4,076,462
21,905
3,596,803
263,441
45,431
19,083
14,255
4,018
37,356
1,760
1,791
(21,332)
3. Current income from
a) shares and other non-interest-bearing securities
b) equity investments in non-affiliated companies
c) equity investments in affiliated companies
21,991
17,337
6,103
4. Income from profit pooling, profit transfer and
partial profit transfer agreements
5. Commission income
including:
commission income of Landes-Bausparkasse
from contracts signed and arranged
from loan arrangements after allocation
from provision and handling of
317,347
67,596
82,643
7,859
2,394
(7,400)
(2,342)
8
(6)
45,703
29,653
37,943
7. Net result from trading activities
16,550
23,561
8. Other operating income
38,365
43,039
–
1,351
6. Commission paid
including:
for signed and arranged contracts
of Landes-Bausparkasse
36,940
9,337
(9,403)
9. Income from the liquidation of
the special item with partial reserve character
10. General administrative expenses
a) personnel expenses
aa) wages and salaries
ab) compulsory social security contributions and
expenses for pensions and
other employee benefits
including:
for pensions
b) other
11. Depreciation and value adjustments on intangible
and tangible fixed assets
48
83,248
88,101
27,221
36,524
124,625
22,688
(14,409)
216,413
86,683
197,152
18,845
17,228
229,898
194,102
91,788
STATEMENT OF INCOME
€ thousands
prev. year
prev. year
Carried forward:
229,898
194,102
6,984
4,843
53,893
27,998
14. Write-downs and value adjustments on equity investments
in non-affiliated companies, equity investments
in affiliated companies and securities treated as fixed assets
–
25,762
15. Income from allocations to equity investments
in non-affiliated companies, equity investments
in affiliated companies and securities treated as fixed assets
27,157
–
16. Allocations to the fund for general bank risks
40,000
–
57
71
14,993
–
141,128
135,428
12. Other operating expenses
13. Write-downs and value adjustments
on loans and certain securities
as well as allocations to loan loss provisions
17. Expenses from the assumption of losses
18. Allocations to special item with partial reserve character
19. Profit or loss on ordinary activities
20. Taxes on income and revenues
74,829
21. Other taxes not shown under item 12
-2,951
58,536
71,878
343
58,879
5,553
5,441
63,697
71,108
24. Allocation of net income to reserves from retained earnings
a) statutory reserves of Landesbank
b) statutory reserves of Landes-Bausparkasse
c) appropriated reserves of Investitionsbank
35,000
3,068
232
15,339
3,068
9,638
25. Profit
25,397
43,063
22. Profits transferred under a partial profit transfer agreement
23.Net income for the year
including:
Landes-Bausparkasse
3,068
(3,068)
49
GROUP BALANCE SHEET AS AT DECEMBER 31, 1999
€ thousands
1. Cash
a) cash on hand
b) balances with central banks
including:
with Deutsche Bundesbank
AS S ETS
prev. year
prev. year
8,482
276,736
274,719
7,297
107,186
(99,792)
285,218
2. Debt instruments issued by public institutions and bills
of exchange eligible for refinancing with central banks
a) treasury bills and discounted treasury notes
as well as similar debt instruments
issued by public institutions
including:
–
eligible for refinancing with Deutsche Bundesbank
b) bills of exchange
including:
eligible for refinancing with Deutsche Bundesbank 2,129
3. Claims on banks
b) other
including:
4. Claims on customers
including:
loans to public authorities and entities
under public law
secured by ship mortgages
from allocation (LBS loans)
other
including:
5. Bonds and other interest-bearing securities
a) money market instruments
aa) of public issuers
including:
ab) of other issuers
including:
b) bonds and notes
ba) of public issuers
including:
bb) of other issuers
including:
c) bonds issued by the Bank
principal amount
50
48
(48)
2,129
2,129
2,521
2,569
28,869,200
1,120,113
26,637,606
27, 757,719
52,691,543
46,935,334
(2,521)
1,397,209
27,471,991
165
(411)
11, 557,386
(10,628,794)
15,177,236
5,241,834
(14,866,178)
(3,971,553)
421,780
582,695
34,341
(438,269)
(466,121)
(34,250)
939,160
(873,284)
88,578
100,099
50,010
(76,916)
75,652
110,685
175,751
55,615
(–)
4,711,630
7,658,377
4,837,886
(1,539,852)
19,356,108
15,264,601
27,014,485
5,475,754
(4,219,144)
1,533,092
1,514,072
–
114,483
28,723,328
1,297,970
21,473,464
110, 571,418
96,283,569
(1,249,878)
€ thousands
LIAB I LITI E S
prev. year
prev. year
1. Liabilities to banks
b) with agreed maturity or period of notice
c) deposits of Landes-Bausparkasse
3,039,403
45,782,574
11,120
48,833,097
2. Liabilities to customers
a) saving deposits
aa) with agreed period of notice of three months
ab) with agreed period of notice of more than three months
ac) deposits of Landes-Bausparkasse
including:
for terminated contracts
6,165
for allocated contracts
17,953
2,372,577
41,140,460
5,959
43,518,996
84,494
5,531
752,922
88,642
5,900
776,343
(6,989)
(18,048)
870,885
b) other liabilities
ba) payable on demand
bb) with agreed maturity or period of notice
2,539,264
17,345,073
2,799,541
18,435,694
21,235,235
22,106,120
20,727,284
527,734
539,655
34,026,708
24,977,117
2,503,179
27,480,296
1,321,961
1,459,418
6. Other liabilities
1,036,134
887,602
7. Deferred items
394,397
393,662
462,536
212,874
105,631
103,070
421,575
947,201
956,001
61,866
–
1,464,163
1,126,923
111,181,917
97, 511,412
3. Liabilities of Investitionsbank relating to federal
promotion programmes with agreed maturity
or period of notice of four years or more
4. Certificated liabilities
a) bonds issued by the Bank
b) other
including:
money market instruments
own acceptances and promissory
notes outstanding
5. Trust liabilities
including:
trust loans
8. Provisions
a) for pensions and similar obligations
b) tax reserve
c) other
9. Interest equalization fund
10. Special item with partial reserve character
11. Subordinated liabilities
29,854,167
4,172,541
4,172,541
(2,373,272)
–
(91,816)
1,237,209
(1,386,702)
229,592
110,395
122,549
51
GROUP BALANCE SHEET AS AT DECEM BER 31, 1999
€ thousands
AS S ETS
Carried forward:
6. Shares and other non-interest-bearing securities
7. Equity investments in non-affiliated companies
including:
banks
8. Equity investments in affiliated companies
including:
banks
9. Trust assets
including:
trust loans
10. Equalization claims against public authorities
including bonds and notes issued in substitution thereof
11. Intangible assets
12. Fixed assets
13. Other assets
14. Deferred items
Total assets
52
prev. year
prev. year
76,032
5,599
1,237,209
110, 571,418
96,283,569
1,360,045
1,258,743
110,655
113,634
75,756
40,648
1,321,961
1,459,418
7,596
3,886
19,083
23,061
204,392
172,606
1,213,714
690,272
263,201
248,785
115,147,821
100,294,622
(74,069)
(–)
(1,386,702)
€ thousands
LIAB I LITI E S
prev. year
prev. year
Carried forward:
12. Profit participation capital
including:
due in less than two years
25,309
97,511,412
986,793
498,349
72,175
18,982
(30,371)
13. Fund for general bank risks
14. Equity capital
a) subscribed capital
b) capital reserves
appropriated reserves of Investitionsbank
111,181,917
296,549
340,492
918,597
967,631
1,308,123
c) reserves from retained earnings
ca) statutory reserves
cb) reserves of Landes-Bausparkasse
cc) appropriated reserves of Investitionsbank
d) Group reserves
e) equalizing items for shares of other shareholders
f) Group profit
259,225
68,002
27,603
294,225
71,070
27,835
393,130
1,002,257
145,098
58,328
2,906,936
Total liabilities
484,176
145,030
66,697
2,265,879
115,147,821 100,294,622
1. Contingent liabilities
a) liabilities on rediscounted bills of exchange
b) liabilities from guarantees and indemnity agreements
–
3,950,666
44,818
3,852,735
2. Other commitments
a) placing and underwriting commitments
b) irrevocable credit commitments
–
6,859,987
6,890
5,379,243
53
GROUP STATEMENT OF INCOME
€ thousands
1. Interest from
a) lending and money market transactions
including:
interest of Landes-Bausparkasse
from LBS loans
from pre and interim financing
from other building loans
5,272,027
5,627,953
20,276
32,811
2,403
(20,748)
(28,229)
(2,558)
b) interest-bearing securities and Government-inscribed debt
2. Interest paid
including:
for deposits at Landes-Bausparkasse
prev. year
prev. year
1,259,550
1,151,602
6,887,503
6,255,568
21,905
7,859
2,394
(7,400)
(2,342)
8
(6)
9,337
54
130,498
100,311
39,832
90,666
24,268
40,674
102,967
104,194
–
1,351
(9,403)
9. Income from the liquidation of the special item
with partial reserve character
11. Depreciation and value adjustments on intangible
and tangible fixed assets
1,791
47,717
8. Other operating income
b) other
1,760
148,028
7. Net result from trading activities
10. General administrative expenses
a) personnel expenses
aa) wages and salaries
ab) compulsory social security contributions
and expenses for pensions
and other employee benefits
including:
for pensions
70,409
60,919
5,332
1,576
67,827
60,740
5,053
4,616
4. Income from profit pooling, profit transfer and
partial profit transfer agreements
6. Commission paid
including:
for signed and arranged contracts
of Landes-Bausparkasse
5,885,103
538,526
(21,332)
3. Current income from
a) shares and other non-interest-bearing securities
b) equity investments in non-affiliated companies
c) equity investments in affiliated companies
5. Commission income
including:
commission income of Landes-Bausparkasse
from contracts signed and arranged
from loan arrangements after allocation
from provision and handling of
631,935
146,753
136,320
57,060
46,779
203,813
33,145
(24,852)
144,808
348,621
135,937
319,036
30,331
27,357
552,698
498,636
GROUP STATEMENT OF INCOME
€ thousands
prev. year
prev. year
Carried forward:
552,698
498,636
12. Other operating expenses
125,032
130,861
13. Write-downs and value adjustments on loans
and certain securities as well as allocations
to loan loss provisions
132,955
104,243
–
31,902
15. Income from allocations to equity investments in non-affiliated
companies, equity investments in affiliated companies
and securities treated as fixed assets
69,679
–
16. Allocations to the fund for general bank risks
53,061
18,918
57
71
61,866
–
249,406
212,641
117,046
90,989
–
-1,910
89,079
36,542
29,193
95,818
94,369
810
373
25. Allocation of net income to reserves from retained earnings
a) statutory reserves of Landesbank
b) statutory reserves of Landes-Bausparkasse
c) appropriated reserves of Investitionsbank
35,000
3,068
232
15,339
3,068
9,638
26. Group profit
58,328
66,697
14. Write-downs and value adjustments on equity
investments in non-affiliated companies, equity investments in
affiliated companies and securities treated as fixed assets
17. Expenses from the assumption of losses
18. Allocations to special item with partial reserve character
19. Profit or loss on ordinary activities
119,001
20. Taxes on income and revenues
21. Other taxes not shown under item 12
-1,955
22. Profits transferred under a partial
profit transfer agreement
23. Net income for the year
including:
Landes-Bausparkasse
3,068
24. Profit carried forward from the previous year
(3,068)
55
Notes to the Annual Accounts and Group Annual Accounts
Landesbank Schleswig-Holstein Girozentrale (LB Kiel) is an institution
incorporated under public law.
The Bank’s subscribed capital is held by Westdeutsche Landesbank Girozentrale, Düsseldorf / Münster (39.9 %), Landesbank Baden-Württemberg,
Stuttgart (10 %), the State of Schleswig-Holstein and the Savings Banks and
Giro Association of Schleswig-Holstein (25.05 % each).
The State of Schleswig-Holstein, the Savings Banks and Giro Association
of Schleswig-Holstein, Westdeutsche Landesbank as well as Landesbank
Baden-Württemberg are jointly and severally liable for other obligations
of the Landesbank that cannot be met from its assets.
The State of Schleswig-Holstein is liable for the obligations arising from the
business activities of the Investitionsbank.
Governmental control is exercised by the Minister for Economic Affairs,
Technology and Transport of the State of Schleswig-Holstein.
56
CONSOLIDATION PRINCIPLES AND COMPANIES
INCLUDED IN THE GROUP ACCOUNTS
The accounts of the individual Group companies are uni-
In addition to LB Kiel, the Group annual accounts include
formly prepared in accordance with the accounting and
Landesbank Schleswig-Holstein International S. A., Luxem-
valuation methods applicable to LB Kiel. Claims and
bourg, LB Finance B.V., Amsterdam, Gudme Raaschou Bank-
liabilities, expenses and income as well as interim results
aktieselskab, Copenhagen, as well as the 49.5 % investment
existing or arising between companies included in the
in the Hamburgische Landesbank Group, Hamburg.
Group accounts are eliminated.
Investitionsbank Schleswig-Holstein and Landes -Bausparkasse Schleswig-Holstein are organizationally independent
but legally dependent central departments of LB Kiel.
As the central funding and promotion institute, Investitionsbank supports the State of Schleswig-Holstein in
fulfilling economic and structural tasks, offering impartial
services in the fields of industry, residential construction,
the environment and energy, municipal promotion,
urban and agricultural development as well as project
management.
The branches in Luxembourg and Copenhagen are included as well.
57
ACCOUNTING AND VALUATION PRINCIPLES
The annual accounts of LB Kiel and the Group have been
compiled in accordance with the German Commercial
Code (HGB) and Ordinance Regarding Accounting for
Banks (RechKredV).
The annual accounts and the Group annual accounts are
drawn up in euros. For the sake of comparison, the previous year’s figures have also been converted to euros.
The Bank has entered into interest-rate and currency swap
The assets and liabilities as well as the expenditure and
agreements to hedge open positions, to control its overall
income of the Investitionsbank Schleswig-Holstein (IB) and
interest-rate position and for trading purposes.
the Landes-Bausparkasse (LBS), which both publish separate
annual accounts, are consolidated in the corresponding
Results from interest-rate swap agreements are carried
items of the balance sheet and profit and loss account of
gross under interest income and expenditure respectively.
LB Kiel unless otherwise stated.
Claims are shown with the principal amount outstanding,
liabilities with the amount repayable. Discounts and pre-
Assets, liabilities and pending transactions are valued in
miums are shown under deferred items as an asset or liabi-
accordance with §§ 252 et seq. and §§ 340 et seq. of the
lity accordingly and dissolved pro rata temporis.
German Commercial Code (HGB).
Value adjustments and specific provisions are made to
In accordance with § 9 of the Ordinance Regarding
cover discernible risks in the loan business. Adequate
Accounting for Banks (RechKredV) claims on banks and
account was taken of risks in respect of outstanding claims
customers and liabilities to banks and customers, savings
by way of general provisions on receivables.
deposits as well as certificated liabilities have been broken
down according to residual maturities. Pro-rata interest
The securities held in the Bank’s and the Group’s trading
not to be broken down according to residual maturities
portfolio, investment portfolio and in the liquidity reserve
pursuant to § 11 (3) of the Ordinance Regarding Accoun-
are valued strictly according to the lower of cost or mar-
ting for Banks (RechKredV) is shown in the first maturity
ket principle at market or lower book values.
band.
Equity investments in affiliated and non-affiliated companies
are shown at cost less depreciation, if any.
Assets and liabilities in foreign currencies are translated at
Original values are reinstated both in the commercial
the official mean rate of exchange prevailing on the balan-
balance sheet and the tax balance sheet as required under
ce-sheet date. Foreign currency assets treated as fixed
the 1999 / 2000 / 2002 Tax Relief Act.
assets were valued in the same way, as they are specifically
covered in the same currency.
In the past fiscal year, interest-earning securities held in the
The Copenhagen branch’s and the Copenhagen subsidiary’s
trading portfolio and denominated in EU currencies were
financial statements, which were compiled in a foreign
added to the interest-rate portfolio. All elements of the
currency, were also converted at the official mean rate of
interest-rate portfolio were then valued at the market
exchange.
value as at December 31, 1999. The resulting impending
losses and unrealized profits are balanced out; the balance
Forward transactions and hedging operations specifically
is treated according to the imparity principle.
related to them have been treated as an integrated whole.
Tangible assets whose use is limited by time are written off
in accordance with the relevant tax regulations. Low-value
assets are written off in full in their year of purchase.
58
A special item entitled ”fund for general bank risks“ of
€␣ 72.2 million was established for the first time in 1999
Option premiums paid are carried at their purchase costs.
to hedge against general bank risks. Allocations are shown
They are written down to their market price in accordan-
separately in the statement of income.
ce with the lower of cost or market principle. In the case
of options sold, provision has been made for potential
Dormant equity contributions accepted in the fiscal year in
losses. Valuation units are taken into account.
order to strengthen the Bank’s equity base comply with
Provisions for pension obligations have been established
the requirements contained in § 10 (4) of the German Ban-
on the basis of actuarial principles based on the new tables
king Law and are classed as subscribed capital.
of Dr. Klaus Heubeck and are shown at their commercial
Capital consolidation is effected on the basis of the values
values. Of the adjustment amount resulting from the adop-
applicable on the date of first-time consolidation of the
tion of the actuarial tables published in 1998, half is allo-
companies in question. The difference arising from capital
cated to provisions for commercial balance sheet purposes
consolidation pursuant to § 301 section 1 clause 2 No. 1 of
up to 1999 and one third for tax purposes starting 1999.
the German Commercial Code is included in the Group
In the next two years, another € 5.3 million will be allocated
reserves.
to provisions for commercial balance sheet purposes.
In 1999, reserves for contingencies resulting from the duty
The liabilities-side difference shown in the Group reserves
to grant benefits to pensioners and surviving dependants
from the capital consolidation of a total of € 392.0 million
were established for the first time. Adequate provision for
is the result of netting an assets-side difference of € 12.2
obligations relating to early retirement has been made. In
million against a liabilities-side difference of € 404.2 million.
addition, indirect pension-like obligations in accordance
with Art. 28 (2) EG HGB exist at Group level.
The item entitled “equalization items for shares of other
shareholders“ contains shares in a fully consolidated com-
In the past fiscal year, reserves for contingencies were
pany not belonging to a Group company.
established for the first time, and the risk provisions
The Bank’s liabilities capable of resulting in a credit risk are
formed for this purpose under general provisions on re-
shown as irrevocable credit commitments.
ceivables were written back in return.
In addition to Investitionsbank’s payment obligations resulThe Interest Equalization Fund represents a value adjust-
ting from the development activities for construction and
ment for all interest-free or low-interest claims arising
investment loans, Investitionsbank has a payment obligation
from the promotion programmes of the Investitionsbank
of € 57.9 million for the future acquisition of state proper-
which were disbursed by December 31, 1994. The claims
ties.
are carried as assets at their nominal value.
The fund thus functions as provisions. As regards the interest-free or low-interest claims disbursed between 1995
and 1998, the State of Schleswig-Holstein is obliged to take
over these claims at their nominal values upon request.
Due to the 1999 / 2000 / 2002 Tax Relief Act, write-ups of
balance sheet assets are effected pursuant to § 280 section
1 of the German Commercial Code. According to § 273 of
the German Commercial Code in conjunction with § 52
section 16 of the German Income Tax Law, part of these
write-ups are allocated to the special item with partial reserve character, which will be written back with an impact
on the result over the past four years.
59
Information on the Balance Sheet and Statement of Income as well as the
Group Balance Sheet and Statement of Income
INFORMATION ON ASSETS
as at December 31
Claims on Associated Savings Banks
Claims on banks include claims on
associated savings banks:
€ million
Affiliated Companies
The following items include claims
on affiliated companies in securitized
or non-securitized form:
Bank
Group
1999
Bank
Group
1998
6,535.3
7,552.6
6,159.9
7,143.3
€ million
Bank
Bank
Claims on banks
30.6
Group
1999
–
204.0
Group
1998
3.0
525.6
525.9
57.4
57.4
–
1.9
–
28.6
–
0.6
–
0.6
€ million
Bank
Bank
Claims on banks
85.5
Group
1999
160.5
78.6
Group
1998
67.3
271.4
273.5
324.3
326.7
Bonds and other interest-bearing
securities
Money market instruments
Bonds and notes
–
24.0
–
62.6
–
43.2
–
16.5
€ million
Bank
Bank
Other claims on banks
62.9
Group
1999
63.3
62.9
Group
1998
63.5
5.2
6.3
4.3
5.4
33.1
231.3
31.0
149.6
–
17.1
–
21.2
Claims on
associated savings banks
Claims on customers
securities
Money market instruments
Bonds and notes
Companies in Which Interests
Are Held
Claims on companies in which
interests are held are included in
the following items:
Subordinated Claims
The following items include subordinated claims:
Claims on customers
Claims on customers
securities
Shares and other interest-bearing
securities
60
Information on Securities Items
€ million
Bank
Group
1999
Bank
Group
1998
155.7
155.7
151.6
173.3
19.9
20.0
26.0
26.0
Bonds and debentures of public issuers
Marketable bonds and debentures
listed on a stock exchange
not listed on a stock exchange
4,468.7
7,012.2
1,898.3
4,105.5
46.8
646.2
52.4
606.1
of other issuers
8,603.0
16,387.0
1,233.3
2,969.2
645.9
2,113.7
Bonds issued by the Bank
1,146.9
1,454.1
867.3
1,254.0
27.9
79.0
23.6
44.0
12.3
70.8
12.1
84.8
23.3
30.2
23.8
29.5
Bonds and other interest-bearing securities
Money market instruments of public
and other issuers
Shares and other non-interest-bearing
securities
Marketable shares listed on a stock exchange
and other non-interest-bearing securities
Marketable shares not listed on a stock
exchange and other non-interest-bearing
securities
6,421.5 13,150.9
61
Equity Investments in Affiliated
and Non-Affiliated Companies
The item ”equity investments
in affiliated companies“ includes:
Trust Assets
Trust assets comprise the following:
€ million
Bank
Group
1999
Bank
Group
1998
19.4
19.4
5.6
5.6
37.3
37.3
23.9
24.1
Bank
Group
1999
Bank
Group
1998
3.4
12.5
1,209.3
3.4
12.9
1,305.6
4.1
15.9
1,353.0
4.1
16.4
1,438.9
Bank
Group
1999
Bank
Group
1998
275.3
335,7
–
–
0.1
4.1
23.6
15,8
445,3
32,5
0.2
6.4
17.0
3.2
486.1
25.9
23.6
11.1
31,4
20,2
21.5
12.0
26.9
21.1
€ million
Bank
Group
1999
Bank
Group
1998
Deferred items
Deferred discounts
Deferred premiums
84.6
33.2
120.8
46.2
69.2
37.3
115.1
53.0
Equity investments in affiliated companies
Marketable shares
Marketable shares
€ million
Trust assets
Claims on banks
payable on demand
other claims
Claims on customers
Other Assets:
The main components of this
item are:
Deferred Items
Deferred items include:
€ million
Other assets
Equalization item for foreign
currency conversion
Claims under options
and collateral
Swap deferrals
Claims under options
Collection documents, bonds and
debentures due as well as interest and
dividend coupons due
Land acquired for temporary use
62
Breakdown by Residual Maturities
Assets according to original
maturities:
€ million
Bank
Group
1999
Bank
Group
1998
4,683.8
1,833.2
6,110.2
5,727.8
7,878.8
2,865.8
8,805.8
7,921.6
3,958.2
2,574.6
5,323.2
4,494.3
6,439.9
6,092.5
7,883.4
6,221.9
Other claims on banks
up to
more
more
more
three months
than three months up to one year
than one year up to five years
than five years
Claims on customers
up to three months
more than three months up to one year
more than one year up to 5 years
more than five years
Claims with undetermined maturity
Bonds and debentures and other
interest-bearing securities
Bonds and debentures
maturing in the following year
1,580.1 4,960.1
2,112.5 3,887.3
9,435.2 14,310.7
19,151.6 28,255.7
708.5 1,277.7
4,005.5
4,854.7
1,835.0 4,464.9
1,796.1 3,043.5
7,226.5 12,487.0
18,427.2 25,905.4
352.8 1,034.7
2,110.9
3,142.7
63
Fixed Assets
Tangible Assets
€ million
Land and buildings
(excluding tangible assets
under construction)
Acquisition cost
Additions
Subtractions
Write-ups / transfers
Depreciation
in current business year
Cumulated depreciation
Book value
on December 31, 1999
Advance
payments and
tangible assets
under construction
Bank
Group
Group
Bank
Group
Bank
112.5
177.6
112.4
172.1
0.2
2.6
23.7
27.4
23.7
26.9
3.2
6.9
0.9
1.1
0.9
0.9
0.2
0.2
–
–
–
–
–
–
3.0
4.2
3.0
4.2
–
–
33.1
55.7
33.1
51.7
–
–
102.2
148.2
102.1
146.5
3.2
9.3
€ million
Office
equipment
Intangible
assets
Bank
Group
Bank
Group
Acquisition cost
87.7
143.4
29.8
31.0
Additions
15.0
26.2
–
–
6.1
12.7
0.7
0.7
–
–
–
-0.5
Depreciation in current business year
17.8
33.9
3.5
3.5
Cumulated depreciation
66.7
110.0
10.2
10.7
Book value on December 31, 1999
29.9
46.9
18.9
19.1
Subtractions
Write-ups / transfers
Financial Assets
including:
used for the
Bank business
€ million
Book value
Changes in 1999
Book value
64
Equity investments in
non-affiliated companies
Equity
investments in
affiliated companies
Bank
Group
Securities shown
as fixed assets
Bank
Group
Bank
Group
781.4
-3.5
113.6
-2.9
139.2
24.4
40.6
35.2
6,436.5 13,392.3
137.3
425.8
777.9
110.7
163.6
75.8
6,573.8 13,818.1
INFORMATION ON LIABILITIES
as at December 31
Liabilities to Associated
Savings Banks
The item ”liabilities to banks“ includes
liabilities to associated savings banks
in the amount of:
€ million
Affiliated Companies
Liabilities to affiliated companies are
included in the following items:
€ million
Liabilities to associated
savings banks
Cer tificated liabilities
bonds issued by the Bank
Other certificated liabilities
Bank
Group
1999
Bank
Group
1998
1,703,3
1,956.0
1,580.7
1,897.9
Bank
Bank
1,628.7
65.2
Group
1999
–
65.2
1,811.8
2.4
Group
1998
–
2.4
0.8
–
0.8
–
1.3
–
1.3
–
Bank
458.2
9.6
Group
1998
168.7
9.7
Companies in Which Interests
Are Held
Liabilities to companies in which
interests are held are included in the
following balance sheet items:
€ million
Bank
bonds issued by the Bank
Other certificated liabilities
184.7
3.3
Group
1999
267.6
21.5
484.3
–
484.3
–
70.4
–
70.4
–
Assets Pledged as Collateral
The assets pledged as collateral stem
from open-market transactions with
Deutsche Bundesbank and from claims
under loan agreements assigned
as part of the promotion activities.
€ million
Bank
Group
1999
4,582.0
Bank
Group
1998
1,338.5
Trust Liabilities
Trust liabilities comprise the following:
€ million
Bank
Group
1999
Bank
Group
1998
payable on demand
with agreed maturity or period of notice
2.1
110.2
2.1
120.0
2.4
119.8
2.4
132.0
payable on demand
with agreed maturity or period of notice
16.5
1,096.4
16.5
1,183.4
14.4
1,236.5
14.4
1,310.7
Assets pledged as collateral
1,577.8
987.9
65
Other Liabilities
This item mainly comprises:
Deferred Items
Deferred items include:
Subordinated Liabilities
Volume of subordinated liabilities:
€ million
Bank
Group
1999
Bank
Group
1998
Other liabilities
Interest rates on subordinated liabilities,
profit participation rights
Liabilities under options and collateral
Swap deferrals
Equalization item for foreign
currency conversion
56.0
22.7
–
112.2
43.3
408.7
32.2
16.8
–
69.6
232.8
409.3
–
–
60.1
28.0
€ million
Bank
Group
1999
Bank
Group
1998
Deferred items
Deferred discounts
Deferred premiums
215.4
7.0
272.4
14.5
203.7
4.7
264.1
12.9
€ million
Bank
Bank
Subordinated Liabilities
890.0
Group
1999
1,464.2
Group
1998
1,126.9
697.0
Expenditure of € 50.7 (1998: 45.4)
million was incurred in connection
with subordinated liabilities.
At Group level, it amounted to
€ 73.9 (1998: 64.7) million.
Each of the following subordinated
liabilities exceeded 10 % of the total
subordinated debt:
Amount
in € million
161.2
161.2
Currency
Interest rate in %
Maturity
GBP
GBP
6.5
var.
2004
2006
The remaining funds were raised in CAD, Yen, NLG, PTE, LUF, DEM and EUR
in an equivalent amount of € 1,141.6 million.
Carrying interest between 2.4 % and 16.0 %, these liabilities mature between
2001 and 2039.
The subordination cannot be limited and the maturity and period of notice
cannot be shortened; otherwise the terms of subordinations are in accordance
with the relevant provisions of the German Banking Law.
66
Profit Participation Capital
The profit participation capital raised in DM and € stands at € 564.8 million
(1998: € 153.4 million). Group profit participation capital stands at
€ 986.8 million (1998: € 498.4 million).
Of the profit participation capital shown, € 518.8 million were raised in the
year under review.
Contingent Liabilities
The majority of contingent liabilities
are loan guarantees.
€ million
Breakdown According to
Original Maturities
Liabilities according to original
maturities:
€ million
Bank
Contingent liabilities
2,306.4
Bank
with agreed maturity
or period of notice
up to three months
more than one year up to five years
Group
1999
4,209.8
Group
1999
13,422.7 24,446.9
6,447.0
2,047.4
8,476.0
4,851.7
6,412.7
5,567.5
Bank
2,491.9
Bank
Group
1998
3,897.6
Group
1998
9,800.2 20,459.3
2,418.1 5,701.6
5,299.1 9,252.5
4,766.0 5,727.0
Savings deposits
up to three months
46.5
0.6
3.4
–
88.6
1.1
4.7
0.1
42.2
0.1
3.5
–
84.5
0.5
4.9
0.1
Other liabilities
to customers with agreed maturity
or period of notice
up to three months
1,180.0
232.5
1,812.7
6,024.8
5,546.3
791.1
3,201.4
8,896.9
1,160.6
309.7
1,478.8
5,416.5
5,604.5
1,016.1
2,586.1
8,138.3
Bonds issued by the Bank
Bonds issued maturing
in the following year
7,718.5
9,582.9
4,560.8
5,836.2
Other cer tificated liabilities
up to three months
2,704.1
414.5
–
–
3,570.3
602.3
–
–
938.4
689.8
–
–
1,692.8
810.3
–
–
67
Information on the
Statement of Income:
Geographic Breakdown
of Profit Components:
€ million
1999
5,019.1
1,713.8
154.6
70.2
0.3
Commission income
115.9
Other operating income
Net result
from trading activities
€ million
Bank
Group
1999
Bank
Group
1998
32.8
37.3
30.4
33.5
–
–
11.1
20.6
–
42.9
–
38.0
Interest
Current income from
shares and other non-interestbearing securities, equity
investments in non-affiliated
and affiliated companies
Other operating income
Asia
Europe
excl.
Germany
Asia
Europe
excl.
Germany
1998
4,781.6
1,499.5
142.5
–
67.8
–
–
30.1
2.1
104.5
23.8
2.2
101.5
1.5
–
102.5
3.1
–
23.8
1.2
-0.7
37.5
3.4
- 0.2
Germany
Germany
This item
mainly comprises
Refund of expenses
by third parties
Liquidation
of investments
Income from
promotion activities
Other operating expenses
€ million
This item
mainly comprises
Special building
depreciation
Expenses related
to promotion activities
Deferred/Accrued Taxes
Bank
Group
1999
Bank
Group
1998
–
–
–
15.1
–
110.5
–
104.4
Provisions for deferred / accrued taxes amount to € 3.7 (3.5) million. Accrued
taxes are not netted with deferred taxes.
68
OTHER INFORMATION
Capital and Reserves
Including allocations to reserves and
other changes resulting from the 1999
annual accounts, the Bank’s liable
equity capital amounts to € 3,103.2
(1998: 2,454.4) million. Group liable
equity capital stands at € 5,282.3
(1998: 3,922.1) million.
The capital resources of € 57.9 million
with which Investitionsbank was
provided in conjunction with the
€ million
1999
1998
Liable capital of the Bank acc . to § 10
of the German Banking Law (KWG)
Subscribed capital
Capital reserves
Reserves from retained earnings
Fund for general bank risks
Intangible fixed assets
340.5
909.7
393.1
40.0
-18.9
296.5
918.6
354.8
–
-22.5
Core capital
Supplementary capital
Equity investments acc. to § 10 section 6 a
clause 1 No. 4 a of the German Banking Law
Tier 3 capital
1,664.4
1,433.6
1,547.4
908.9
-2.0
7.2
-1.9
–
Total liable capital - Bank
3,103.2
2,454.4
Liable capital of the Group companies acc . to
§␣ 10a of the German Banking Law (KWG)
Core capital
Supplementary capital
Deduction from equity
1,273.1
928.9
-15.7
749.6
733.8
-15.7
2,186.3
-7.2
1,467.7
–
5,282.3
3,922.1
formation of the ”state properties“
special-purpose fund are not used to
back risk-weighted assets.
Total liable capital - Group companies
Tier 3 capital
not counting towards the capital base
Total liable capital - Group
Banking Law Ratios
Having consistently complied with the capital adequacy and
liquidity stipulations under German Banking Law during the
year under review, the Bank has fulfilled the requirements
for recognition as a suitable bank as defined by § 54a
section 2 No. 9c of the German Insurance Supervision Act
(VAG).
Liability not Shown in the Balance Sheet
As a result of being a shareholder in a number of smaller
companies, the Bank may be obliged to pay up certain
fractions of share capital not yet fully subscribed and paid.
There is a commitment to put up further capital when
called, resulting from the Bank’s participation in the Liquiditäts-Konsortialbank GmbH as well as a limited contingent
Deposit Security Fund
The Bank is a member of the Landesbanken /Girozentralen
deposit security fund, which falls under the security system
of the German Savings Bank Organization. This ensures full
satisfaction of all maturing customer deposits and certificated liabilities as well as all other claims.
Regardless of this, LB Kiel’s liabilities are fully backed by its
guarantors.
liability for the payment obligations of other shareholders.
Landesbank Schleswig-Holstein holds a 49.5 % stake in
Hamburgische Landesbank.
Letter of Comfor t
Landesbank Schleswig-Holstein will, except in the case of
political risk, ensure that the following Group companies
will be in a position to meet their obligations:
Landesbank Schleswig-Holstein International S.A., Luxembourg, and LB Schleswig-Holstein Finance B.V., Amsterdam.
69
Forward Transactions
The Bank’s and the Group’s unsettled foreign currency, interest-related and
other forward transactions outstanding at year-end were primarily entered
into to cover fluctuations in interest rates and market prices. The proportion
of transactions entered into for trading purposes is not significant.
The following types of transactions are involved:
Currency-Related
- Forward exchange transactions
- Forex swap deals
- Interest-rate/currency swaps
- Written currency options
- Purchased currency options
Interest-Related
- Forward securities transactions
- Stock futures transactions
- Forward rate agreements
- Written interest-rate options
- Interest-rate swaps
- Interest-rate forward transactions
- Purchased interest-rate options
- Interest-rate futures
Other Forward Transactions
- Sold share options
- Index forward transactions
- Sold index options
- Purchased share options
- Purchased index options
- Gold futures
70
Credit derivatives
- Credit default swaps
(guarantee/guarantor)
- Total return swaps (guarantor)
- Credit spread options (guarantor)
Foreign Currency Assets,
Foreign Currency Liabilities
€ million
Foreign currency assets
Foreign currency liabilities
Cover
€ million
Mor tgage-backed bonds
Bearer bonds
Registered bonds
Registered bonds used
as collateral
Redeemed and terminated bonds
Assets used for covering purposes
Claims on customers
Claims on banks
Excess cover
Municipal bonds used as cover
Municipal bearer bonds
Municipal registered bonds
Registered bonds used
as collateral
Redeemed and terminated bonds
Assets used for covering purposes
Claims on customers
Claims on banks
Securities and bonds
of public issuers
Replacement cover
Excess cover
Bank
Group
1999
Bank
Group
1998
15,382.4
18,067.9
30,485.1
27,228.9
14,806.6
16,605.8
32,376.8
28,094.9
Bank
Group
1999
Bank
Group
1998
-2,174.1
-1,972.2
-3,090.1
-2,531.4
-1,701.1
-1,449.9
-2,864.7
-1,892.9
-553.6
-86.3
-4,786.2
-581.8
-86.3
-6,289.6
-496.0
-25.6
-3,672.6
-531.9
-25.6
-5,315.1
5,269.6
–
7,557.7
–
4,895.3
–
6,845.6
1.0
483.4
1,268.1
1,222.7
1,531.5
-11,679.6 -14,152.6
-7,049.0 -9,025.1
-10,271.9 -13,169.0
-5,243.2 -6,482.7
-1,020.0 -1,080.0
-69.7
-69.7
-19,818.3 -24,327.4
-999.3 -1,055.5
–
–
16,514.4 -20,707.2
10,947.3
7,141.4
13,065.9
10,449.1
10,246.2
7,057.1
12,317.0
10,019.8
1,750.1
800.2
20,639.0
1,750.1
800.2
26,065.3
–
76.7
17,380.0
–
76.7
22,413.5
820.7
1,737.9
865.6
1,706.3
71
Average Number of Employees
in 1999
Landesbank
Landes-Bausparkasse
Investitionsbank
Sub total
LB Schl.-Holst. International S.A.
Hamburgische Landesbank *
Gudme Raaschou
Total
including: part-time employees
plus: apprentices
female
male
total
1998
656
118
186
960
35
1,065
18
2,078
493
107
738
89
129
956
30
1,044
51
2,081
47
75
1,394
207
315
1,916
65
2,109
69
4,159
540
182
1,381
188
315
1,884
64
2,044
72
4,064
513
163
* Total headcount of Hamburgische Landesbank
Remuneration Paid to the Members
of the Managing Board and the Supervisory Board
The total remuneration paid to the Managing Board in the business year was € 2.0 (1998: 1.9) million,
including € 0.1 (1998: 0.1) million for the subsidiaries. Remuneration paid to the Supervisory Board
amounted to € 0.3 (1998: 0.3) million. Total remuneration paid to former members of the Managing
Board or their survivors was € 1.0 (1998: 1.1) million. Pension provisions in an amount of € 8.4
(1998: 8.2) million have been made for members or former members of the Managing Board or their
survivors.
Loans to Members
of the Executive Bodies
€ million
Managing Board
Supervisory Board
72
Bank
1.2
2.6
Konzern
1999
1.2
2.6
Bank
1.2
3.0
Konzern
1998
1.2
3.0
Seats on other supervisory boards
of the Members of the Managing Board
DGZ Deka Bank Deutsche Kommunalbank, Frankfurt/Main
Hamburgische Landesbank – Girozentrale –, Hamburg
Landesbank Schleswig-Holstein International S.A., Luxemburg
Minimax GmbH, Bad Oldesloe
Hans Berger
dvg Hannover Datenverarbeitungsgesellschaft mbH, Hannover
Flender Werft AG, Lübeck
Hamburgische Landesbank – Girozentrale –, Hamburg
SIZ Informatik – Zentrum der Sparkassenorganisation GmbH, Bonn
Deka Deutsche Kapitalanlagegesellschaft mbH, Frankfurt/Main
eBanking Services Nord GmbH (eBS), Kiel
SNetLine GmbH, Kiel
Peter Pahlke
A/O WestLB Vostok, Moskau
BIG Bau-Investitions-Gesellschaft mbH, Kronshagen
Gudme Raaschou Bankaktieselskab, Kopenhagen
W. Jacobsen AG, Kiel
LBS Immobilien GmbH, Kiel
WestInvest Westdeutsche Grundstücks-Investment GmbH, Düsseldorf
WestLB Polska S.A., Warschau
BIG Heimbau AG, Kiel
SVEDEG-Schwedisch-Deutsche Portfolio Management GmbH, Düsseldorf
Despa Deutsche Sparkassen-Immobilien-Anlage-Gesellschaft mbH,
Frankfurt
Dieter Pfisterer
Deutsche Factoring Bank – Deutsche Factoring GmbH & Co., Bremen
Gesellschaft für Wagniskapital Mittelständische Beteiligungsgesellschaft
Schleswig-Holstein GmbH – MBG –, Kiel
IKB – Leasing GmbH, Hamburg
Wankendorfer Baugenossenschaft eG, Wankendorf
Stadtwerke Kiel AG, Kiel
eBanking Services Nord GmbH (eBS), Kiel
ORGA Kartensysteme GmbH, Flintbek
Ernst Schröder
S-direkt Schleswig-Holstein Dienstleistungsgesellschaft für die
Sparkassenfinanzgruppe GbR, Kiel
73
Shareholdings Pursuant to § 285 No. 11 of the German
Commercial Code (HGB)
The Group financial statements include Companies 1) to
4). The other companies were not consolidated as they are
of minor importance for meeting the obligation to provide
a true and fair view of the net assets, financial condition
and earnings of the group. All computations reflect the
companies’ most recent financial statements.
Number, Name, Headquarters
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
25)
26)
27)
28)
29)
30)
31)
32)
33)
34)
35)
36)
37)
38)
39)
40)
41)
42)
43)
44)
45)
LB Schleswig-Holstein Finance B.V., Amsterdam
Hamburgische Landesbank – Konzern, Hamburg
Gudme Raaschou Bankaktieselskab, Kopenhagen
LiLux Management S.A., Luxemburg
Verwaltungs- und Treuhandgesellschaft von 1963 mbH, Kiel
Wirtschafts- und Aufbaugesellschaft Stormarn mbH, Bad Oldesloe
Kieler Grunderwerbsgesellschaft mbH, Kiel
Schleswig-Holsteinische Kapital-Beteiligungsgesellschaft mbH, Kiel
Anker Schiffsbetreuungsgesellschaft mbH, Kiel
W. Jacobsen AG, Kiel
Schleswig-Holsteinische Immobilienfonds KG, Kiel
BIG Bau-Investitions-Gesellschaft mbH, Kiel
Gesellschaft für Wagniskapital Mittelständische Beteiligungsgesellschaft
Schleswig-Holstein GmbH, Kiel
Grundstücksverwaltungsgesellschaft
der schleswig-holsteinischen Sparkassenorganisation mbH, Kiel
Cape May Shipping Company Ltd., Monrovia
LBSH Leasing Verwaltungs GmbH, Lockstedt
LBSH Leasing Geschäftsführungs GmbH, Lockstedt
LBSH Leasing Objekt GmbH, Lockstedt
LBSH Leasing GmbH & Co. KG, Lockstedt
LBSH Leasing Objekt GmbH & Co. KG Immobilienprojekt Heide, Lockstedt
LBSH Fondsmanagement GmbH, Lockstedt
LBSH Fonds Verwaltung GmbH, Lockstedt
LBSH Fonds Verwaltung GmbH & Co. Objekt Mobilien LISTAR KG, Lockstedt
LBSH Fonds Verwaltung GmbH & Co. Objekt Mobilien MERKUR KG, Lockstedt
LBSH Fonds Verwaltung GmbH & Co. Objekt Mobilien SAMUS KG, Lockstedt
LBSH Fonds Verwaltung GmbH & Co. Objekt Mobilien SATURN KG, Lockstedt
Bausteine für Kinder, Kindertagesstätten Bau- und Entwicklungs GmbH, Lockstedt
Spielbank SH GmbH, Kiel
Spielbank SH GmbH & Co. Casino Stadtzentrum Schenefeld KG, Schenefeld
Immobilienverwaltungsgesellschaft Schleswig-Holstein mbH, Kiel
Grundstücksverwaltung O.Z.W. GmbH, Lockstedt
Spielbank SH GmbH & Co. Casino Kiel KG, Kiel
Spielbank SH GmbH & Co. Casino Lübeck-Travemünde KG, Lübeck-Travemünde
Spielbank SH GmbH & Co. Casino Westerland auf Sylt KG, Westerland
Kieler Förde-Verwaltungsgesellschaft mbH, Kiel
Baltic Sea-Verwaltungsgesellschaft mbH, Kiel
Nord-Ostsee Verwaltungsgesellschaft mbH, Kiel
Kiel-Hörn Vermarktungsgesellschaft mbH, Kiel
MDK Holdings Limited, London
Gudme Raaschou AB, Stockholm
eBanking Services Nord GmbH, Kiel
LB Kiel Nordic Finance AB, Stockholm
Gebäudemanagement Schleswig-Holstein, Kiel
Notes:
1) The term ”Capital“ corresponds to the definition in Articles 266 and
272 of the German Commercial Code (HGB)
2) There is a profit and loss transfer agreement with the company
74
Capital 1)
€ million
Capital
share in %
Result
€ million
135.09
0.71
3,385.6
11.12
0.77
0.03
26.93
0.03
0.51
0.03
7.98
0.21
13.12
0.26
100.00
100.00
49.50
100.00
100.00
100.00
24.00
100.00
100.00
100.00
92.51
100.00
24.00
100.00
12.78
13.02
56.10
0.03
0.001
0.04
0.02
0.03
13.33
0.42
0.02
0.03
0.02
0.02
0.02
0.02
0.02
0.03
4.89
5.01
0.03
2.83
2.32
1.02
0.03
0.03
0.02
0.32
0.03
0.01
0.03
5.49
10.23
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
40.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
24.50
33.33
100.00
33.33
100.00
24.9
3) Not published according to § 286 section 3 sentence 1 and § 313
section 2 No. 4 of the German Commercial Code (HGB)
4) Indirect shareholding
5) Direct and indirect shareholding
3)
50.34
0.02
4)
2)
3)
3)
2)
3)
2)
3)
2)
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Executive Bodies
GUARANTOR S ’ M E ETI NG
Chairwoman
Members Representing the State
Members Representing Westdeutsc he
of Sc hleswig-Holstein
Landesbank Girozentrale
acc . to § 8 sec . 2 of the Statutes
Horst Günter Bülck
Dr. Karlheinz Bentele
Minister of Economic Affairs,
President of the Rhineland Savings Banks
Technology and Transport of the
and Giro Association,
State of Schleswig-Holstein, Kiel
Düsseldorf
Chairman of the Managing Board
Claus Möller
Dr. Wolf-Albrecht Prautzsch
Westdeutsche Landesbank
Minister of Finance and Energy of
Deputy Chairman of the Managing Board
Girozentrale, Düsseldorf
the State of Schleswig-Holstein, Kiel
Heide Simonis
Minister President of
First Deputy Chairman
Dr. h.c. Friedel Neuber
Girozentrale, Münster
Second Deputy Chairman
Dr. Jürgen Miethke
Member s Representing the Savings
President of the Savings Banks
Banks and Giro Association
Member Representing
and Giro Association for
Landesbank Baden -Wür ttemberg
Schleswig-Holstein, Kiel
(up to September 30, 1999)
Geerd Bellmann
District Administrator of
Heinrich Haasis
Olaf Cord Dielewicz
the Rendsburg-Eckernförde district,
President of the Württemberg
Rendsburg
Savings Banks and Giro Association,
Stuttgart
Rudolf Konegen
(since October 1, 1999)
Sparkasse Elmshorn, Elmshorn
Third Deputy Chairman
Josef Schmidt
President of the Baden Savings Banks
and Giro Association, Mannheim
75
Executive bodies
S U P E RV I S O RY B OA R D
Chairwoman
Fir st Deputy Chairman
Third Deputy Chairman
Heide Simonis
Dr. h.c. Friedel Neuber
Josef Schmidt
Minister President of
President of the Baden Savings Banks
and Giro Association, Mannheim
Substitute acc . to § 11 sec . 3
of the Statutes
of the Statutes
of the Statutes
Heinrich Haasis
Klaus Gärtner
State Secretary
Dr. Adolf Franke
President of the Württemberg
Head of the State Chancellery of
Member of the Managing Board
Savings Banks and Giro Association,
Stuttgart
Second Deputy Chairman
Dr. Jürgen Miethke
and Giro Association
for Schleswig-Holstein, Kiel
Olaf Cord Dielewicz
of the Statutes
Wolfgang Stut
Association Director of the
Savings Banks and Giro Association
for Schleswig-Holstein, Kiel
76
Executive bodies
Members Representing the State
Member s Representing the
Members Representing
of Sc hleswig-Holstein
for Schleswig-Holstein
Girozentrale
Minister of Economic Affairs,
Günter Anders
Theo Dräger
Technology and Transport of the
Sparkasse Schleswig-Flensburg,
Drägerwerk AG, Lübeck
Horst Günter Bülck
Schleswig
Hans-Peter Krämer
of the Statutes
Geerd Bellmann
District Administrator of the
Kreissparkasse Köln, Cologne
Dr. Bernd Rohwer
Rendsburg-Eckernförde district,
State Secretary at the Ministry of
Rendsburg
Dr. Ingrid Nümann-Seidewinkel
Senatrice, Head of the Ministry of
Economic Affairs, Technology and
Transport of the State of Schleswig-
Olaf Cord Dielewicz
Finance of Free and Hanseatic City of
Holstein, Kiel
Lord Mayor of the City of Flensburg,
Hamburg, Hamburg
Flensburg
Peter Deutschland
Deputy Chairman of the Managing Board
Chairman of the DGB’s
Nordmark District, Hamburg
Norbert Gansel
Lord Mayor of the City of Kiel,
Girozentrale, Münster
Uwe Döring
Kiel
State Secretary at the Ministry
Dr. Fritz Süverkrüp
President of the Chamber of
of Finance and Energy of the State
of Schleswig-Holstein, Kiel
Dr. Wolf-Albrecht Prautzsch
Rudolf Konegen
Industry and Commerce of Kiel, Kiel
Claus Möller
Sparkasse Elmshorn, Elmshorn
Jorma Juhani Vaajoki
Minister of Finance and Energy of the
President and CEO of Metsä-Serla
Corporation, Espoo / Finland
Member s Representing both the
State of Sc hleswig-Holstein and the
for Schleswig-Holstein
Dr. Hans Lukas
Sparkasse Stormarn, Bad Oldesloe
Member Representing the
Landesbank Baden-Wür ttemberg
Werner Schmidt
Vorstandsvorsitzender der
Landesbank Baden-Württemberg,
Stuttgart
77
Executive bodies
MANAGING BOARD
Member s Elected by the Employees
Chairman
Astrid Balduin
Kiel
Hans Berger
Deputy Chairman
Katarina Blanking
Copenhagen
Peter Pahlke
Waltraut Fuhrmann
Dieter Pfisterer
Vice President, Kiel
Ernst Schröder
Helmut Gründel
Kiel
Ditmar Höret
Kiel
Knuth Lausen
Kiel
Karl-Heinz Ravn
Vice President, Kiel
Michael Schmalz
Kiel
Bettina Scholtys
Kiel
Gaby Woelk-Hens
Kiel
As at 31. 12.1999
78
Executive bodies
AUDITOR’S CE RTIFICATE
We have audited the Annual Accounts and accounting
records of Landesbank Schleswig-Holstein Girozentrale as
well as the Group Annual Accounts and the statement of
financial condition of Landesbank Schleswig-Holstein Girozentrale and the Group for the year ending December 31,
1999. The preparation of these documents according to
German accounting standards and the complementary provisions in the articles of partnership is the responsibility of
the legal representatives of Landesbank Schleswig-Holstein
Holstein Girozentrale and the Group are primarily exa-
Girozentrale. It is our task to assess the Annual Accounts
mined on a sample basis. The audit includes appraisal of
and accounting records as well as the Group Annual Ac-
the accounting and consolidation principles, the key
counts and the statement of financial condition of Landes-
assumptions of the legal representatives and the overall
bank Schleswig-Holstein Girozentrale and the Group on
presentation of the Annual Accounts and the Group Annual
the basis of our audit.
Accounts as well as the statement of financial condition of
Landesbank Schleswig-Holstein Girozentrale and the Group.
We carried out our audit of the Annual Accounts and the
We believe that our audit provides a sufficiently sound basis
Group Annual Accounts in accordance with the German
for our assessment.
audit regulations in sec. 317 of the German Commercial
Code (HGB) and the auditing principles of the Institut der
Our audit produced no negative findings.
Wirtschaftsprüfer (IDW - Institute of German Certified
Public Accountants). These stipulate that the audit must be
We are satisfied that the Annual Accounts and the Group
planned and carried out in such a way that it is possible
Annual Accounts provide a true and fair view of the asset,
to identify with reasonable certainty any errors or infringe-
finance and profit situation of Landesbank Schleswig-
ments with a material impact on the view of the asset,
Holstein Girozentrale and the Group in accordance with
finance and profit situation of the company which is provi-
generally accepted accounting principles. The statement
ded by the Annual Accounts and the Group Annual Ac-
of financial condition of Landesbank Schleswig-Holstein
counts in accordance with generally accepted accounting
Girozentrale and the Group as a whole gives a true and
principles and by the statement of financial condition of
fair view of the position of Landesbank Schleswig-Holstein
Landesbank Schleswig-Holstein Girozentrale and the
Girozentrale and the Group and of the risks in their future
Group. Specification of audit work is based on knowledge
development.
of the company’s business operations and its economic and
legal circumstances, as well as on expectations with regard
to possible errors. In the course of the audit, the effec-
Kiel, April 7, 2000
tiveness of the internal control system and documentation
of the information in the accounting system, the Annual
Wollert-Elmendorff
Accounts and the Group Annual Accounts as well as the
Deutsche Industrie-Treuhand GmbH
statement of financial condition of Landesbank Schleswig-
Wirtschaftsprüfungsgesellschaft
Dr. Göttgens
Bottermann
German Public Accountant
German Public Accountant
79
Notes to the Annual Accounts and Group
Auditor’s
AnnualCertificate
Accounts
Responsibilities of the Members
of the Managing Board
Chairman
Executive Services /Communications
Legal Affairs
Internal Auditing
Personnel
Controlling / Finances
Taxes
Investitionsbank Schleswig-Holstein
Hans Berger
Deputy Chairman
Information Systems / Organization
Administration
Ship Financing
Private Banking
Payment Systems
Peter Pahlke
Real Estate Financing
Financial Institutions / International Finance
Copenhagen Branch
Landes-Bausparkasse
Gudme Raaschou Bankaktieselskab
Dieter Pfisterer
Trading and Securities Settlement
Structured Finance / Transportation / Leasing
Corporate Clients
Credit Office
Ernst Schröder
Savings Banks / Public Clients
Capital Markets
Money Market / Foreign Exchange
Luxembourg Branch
Landesbank Schleswig-Holstein International S. A.
80
Investment Banking
Division
Corporate Banking
Division
Capital Markets
Corporate Clients
Wolfgang Delfs
Eckhardt Fischer
Senior Executive Vice President
Senior Vice President
Money Market / Foreign Exchange
Structured Finance /
Guenther Gerson
Transportation / Leasing
Executive Vice President
Klaus Bernhart
Financial Institutions /
Ship Financing
International Finance
Friedrich Bunzen
Dr. Rainer Lemor
Copenhagen Branch
Credit Office
Ulrich Ellerbeck
Holger Freytag
Flemming Jensen
Branch Manager
Division
Luxembourg Branch
Wolfgang Delfs
Benno Mokwinski
Dr. Hans-Albrecht Sasse
Branch Manager
81
Savings Banks / Public Clients /
Pr ivate Banking / Payment Systems
Division
Savings Banks / Public Clients
Internal Auditing
Heinrich Haverkampf
Hans-Joachim Gorsulowsky
Internal Auditing Director
Priva te Banking
Personnel
Ernst-Wilhelm Münster
Hans-Wilhelm Grabbe
Payment Systems
Trading and Securities Settlement
Werner Bak
Peter Krull
Administration
Rainer Krause
Staff and Services
Division
Executive Services / Communications
Controlling/Finances
Dr. Jörn W. Winterfeld
Anke Lilienthal
Legal Affairs
Taxes
Dr. Michael Berghaus
Hans-Peter Hoffmann
Informat ion Sys tems /Organization
Dr. Wolfgang Botschatzke
82
Central Divisions
Investitionsbank
Gudme Raaschou
Schleswig - Holstein
Bankaktieselskab
Lutz Koopmann
Kåre B. Dullum
Chairman of the Management
Dr. Heinz Engelhaupt
Per Skovsted
General Manager
Dr. Klaus Rave
Aage Jacobsen
General Manager
Landes - Bausparkasse
Schleswig - Holstein
Dieter Heymann
Sönke Koch
Landesbank Schleswig - Holstein
International S.A.
Dr. Hans-Albrecht Sasse
General Manager
Guenther Gerson
General Manager
Wolfgang Dürr
General Manager
83
Addresses
Landesbank Schleswig-Holstein
Girozentrale Kiel
Postfach 11 22, 24100 Kiel
Martensdamm 6, 24103 Kiel
Phone: + 49 4 31 900 - 01
Telefax: + 49 4 31 900 - 24 46
Telegramm: Landesbank Kiel
Telex: 292822 gzki d
T-Online: * 23230 #
Internet: http: //www.lb-kiel.de
E-mail: [email protected]
Lübeck Branch
Postfach 19 04, 23507 Lübeck
Breite Straße 36 – 40, 23552 Lübeck
Phone: +49 451 70 35 - 0
Telefax: + 49 451 70 35 - 51 19
Telegramm: Landesbank Lübeck
T-Online: * 23230 #
Rostock Branch
Grubenstr. 20, 18055 Rostock
Phone: +49 3 81 4 54 84 - 0
Telefax: + 49 381 4 54 84 - 52 53
T-Online: * 23230 #
Schwerin Branch
Spieltordamm 9, 19055 Schwerin
Phone: +49 385 5 58 20 - 0
Telefax: + 49 385 5 58 20 - 53 02
T-Online: * 23230 #
Representative Office Berlin
Kurfürstendamm 45,
10719 Berlin
Phone: + 49 30 88 57 36 - 0
Real Estate Financing/
Corporate Clients
Telefax: + 49 30 88 57 36 - 53 53
Private Banking
Telefax: + 49 30 88 57 36 - 53 54
Representative Office Hamburg
Lilienstraße 3, 20095 Hamburg
Phone: + 49 40 32 56 22 - 0
Telefax: + 49 40 32 56 22- 54 16
Corporate Clients/Asset Management
Telefax: + 49 40 32 56 22- 54 15
Real Estate Financing Office
Dresden
Königstraße 5a,
01097 Dresden
Phone: + 49 351 8 26 40 - 0
Telefax: + 49 351 8 26 40 - 54 52
Landes-Bausparkasse
Schleswig-Holstein
Wellseedamm 14, 24145 Kiel
Phone: + 49 431 900 - 0 4
Telefax: + 49 431 900 - 46 78
Telegramm: Landesbank Kiel
Internet: http://www. LBSSCHLESWIGHOLSTEIN .de
LBS Immobilien GmbH
Wellseedamm 14, 24145 Kiel
Phone: + 49 431 900 - 45 72 / 45 73
Telefax: + 49 431 900 - 45 89
E-mail: LBS-ImmoSchleswig
[email protected]
84
Addresses
Investitionsbank
Schleswig-Holstein
Zentralbereich der Landesbank
Schleswig-Holstein Girozentrale
Fleethörn 29 – 31, 24103 Kiel
Phone: + 49 431 900 - 03
Telefax: + 49 431 900 - 33 83
Internet: http://www.ibank-sh.de
Schleswig-Holsteinische
Kapital-Beteiligungsgesellschaft mbH
Martensdamm 6, 24103 Kiel
Phone: + 49 431 900 -10 37 /16 44
Telefax: + 49 431 900 -10 49
LBSH Leasing GmbH & Co. KG
Kellinghusener Weg 1
25551 Lockstedt
Phone: + 49 48 77 906 - 01
Telefax: + 49 48 77 906 -17
Copenhagen Branch
Kalvebod Brygge 39 - 41,
DK-1560 Copenhagen V
Phone: + 45 33 44 99 00
Telefax: + 45 33 44 99 99
Telex: 27228 kila dk
United Kingdom
Representative Office
50 Gresham Street,
GB-London EC2V 7AY
Phone: + 44 20 76 00 70 60
Telefax: + 44 20 76 00 70 20
Luxembourg Branch
2, rue Jean Monnet,
L-2180 Luxembourg
Phone: + 352 42 41 37
Telefax: + 352 42 41 41 -330
Telex: + 402 60779 lshbx lu
Tallinn Representat ive Off ice
2 Roosikrantsi Str.,
EE-10119 Tallinn
Phone: + 372 6 11 06 70
Telefax: + 372 6 11 06 71
International S.A.
2, rue Jean Monnet,
L-2180 Luxembourg
Phone: + 352 42 41 41-1
Telefax: + 352 42 41 96 /97
Telex: + 402 1806 Ishi lu
LB Schleswig-Holstein
Finance B.V.
Strawinskylaan 3111, 6th floor
NL-1077 ZX Amsterdam
Phone: + 31 2 04 42 -1118
Telefax: + 31 2 04 42 -1119
Telex: + 44 15614 altru nl
LB Kiel Nordic Finance AB
Norrmalmstorg 1, 3 rd floor
S-111 46 Stockholm
Phone: + 46 8 54 50 10 70
Telefax: + 46 8 11 94 20
Södergatan 16,
S-21134 Malmö
Phone: + 46 40 30 63 10
Telefax: + 46 40 30 63 12
PC A Corporate Finance OY
Eteläranta 12,
FIN - 00130 Helsinki
Phone: + 358 961 33 44 00
Telefax: + 358 961 33 44 55
Stockholm Representative Off ice
Norrmalmstorg 1, 3 rd floor
S-11146 Stockholm
Phone: + 46 8 54 50 10 70
Telefax: + 46 8 54 50 10 89
Oslo Representat i ve Off ice
Drammensveien 111 B,
N-0273 Oslo
Phone: + 47 22 12 82 -10
Telefax: + 47 22 12 82 -22
Helsinki Representat ive Of f ice
Fredrikinkatu 48 A,
FIN- 00100 Helsinki
Phone: + 35 8 9 694 -20 40
Telefax: + 358 9 694 -2810
Gudme Raaschou Bankaktieselskab
Kalvebod Brygge 39 - 41,
DK-1560 Copenhagen V
Phone: + 45 33 44 90 00
Telefax: + 45 33 44 90 01
Telex: 15071 GUDME DK
85
Addresses
Imprint
LB Kiel
Landesbank Schleswig-Holstein Girozentrale
Presse und Kommunikation/Volkswirtschaft
Martensdamm 6, D-24103 Kiel
Postfach 1122, D-24100 Kiel
Photographs
Fotostudio Jürgen Müller, Hamburg
Annual Repor t in the internet:
http://www.lb-kiel.de

Annual Report 1999

Transcription

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