Sparkasse KölnBonn Sparkasse KölnBonn Financial Group

Transcription

Sparkasse
KölnBonn
Sparkasse KölnBonn Financial Group
Consolidated Financial Statements
for Fiscal Year 2010 pursuant to
International Financial Reporting Standards (IFRS)
State of North Rhine-Westphalia District of Cologne
Founded 1826
Financial institution incorporated under public law
The responsible body for Sparkasse KölnBonn is the
special purpose savings banks association “Zweckverband Sparkasse KölnBonn”
Sparkasse KölnBonn
Financial Group
for Fiscal Year 2010 pursuant to
International Financial Reporting Standards (IFRS)
Founded 1826
Financial institution incorporated under public law
The responsible body for Sparkasse KölnBonn is the
special purpose savings banks association
“Zweckverband Sparkasse KölnBonn”
Although the greatest care has been taken to ensure that the
English translation conveys the true meaning of the original
text throughout, only the German text can be considered as legally binding.
Contents
Consolidated Financial Statements 2010
Contents
Group Management Report
A. Presentation and Analysis of Business Development, Business Results and
Financial Position
1. Business Development and Economic Environment
3 - 34
3
3
2. Results of Operations
12
3. Financial Position
16
4. Net Assets
16
B. Subsequent Events
18
C. Internal Control and Risk Management System for Accounting Purposes
18
D. Risk Report
20
E. Outlook
31
35 - 184
Consolidated Income Statement for the Period from
1 January 2010 to 31 December 2010
36
Statement of Comprehensive Income for the Period from
37
Appropriation of Profits / Reconciliation as at 31 December 2010
38
Consolidated Statement of Financial Position as at 31 December 2010
39
Statement of Changes in Equity
40
Consolidated Cash Flow Statement
41
Notes to the Consolidated Financial Statements 2010
43
Responsibility Statement
183
Auditors’ Report
184
Report of the Supervisory Board
185
2
A.
Presentation and Analysis of Business Development,
Business Results and Position of the Company
1. Business Development and Economic Environment
Business Environment in 2010
After passing through the heaviest recession since World War II in 2009, the economy bounced back
surprisingly strongly in 2010. After adjusting for inflation, GDP growth in Germany came to 3.6%.
Although the start of winter at the beginning of the year initially dampened economic growth, the
spring of 2010 saw a huge release of pent-up demand. Growth of 2.2% in the first three months
represented the strongest growth yet seen in Germany since reunification. In the summer, quarterly
growth came to 0.7% and slid to 0.4% in the fourth quarter of 2010.
The global economy recovered rapidly from the global recession and led to a rapid rise in German
exports. In expectation of rising sales volumes, capital expenditure displayed robust growth with gross
investments largely accounting for the economic upswing. Private consumption profited from the
rapidly brightening economic climate and favourable development in employment levels.
In comparison to the prior year, the number of unemployed dropped by 0.2 million to 3.2 million. The
number of employed people contributing to statutory social security rose strongly. The annual average
unemployment rate, measured on the basis of the total population of employable people fell by 0.5
percentage points to 7.7%. Due to the favourable development of the labour market, the number of
employed rose 0.5% to a new record of 40.5 million. The sectors which were primarily responsible for
this development were the construction industry and the service industry and, in the fourth quarter, the
manufacturing sector.
In spite of the general economic recovery, there were no noticeable signs of inflation in 2010. Given
that capacity was not fully utilised, companies only had little latitude to pass on price increases. Over
the full year, the inflation rate remained relatively low at 1.1% compared to 0.4% in the prior year. The
main drivers of inflation were the prices for fuels, heating oil and food. Inflation within the euro zone
was higher than the global rate as a result of higher energy prices. The average inflation rate reached
1.6% compared to 0.3% in the prior year. In December 2010, the inflation rate hit 2.2%, exceeding the
inflation goal of the European Central Bank (ECB) for the first time in a long period.
In 2010 the ECB continued the expansive monetary policy it had begun in the prior year. The key
lending rate of 1.0% remained unchanged at its historic low. The debt crisis in some member states of
the monetary union necessitated additional support measures. In the course of the year, the fiscal
measures were scaled back and some of the cash already provided paid back.
Trends in the Construction Industry
Investment in new construction was on the increase in Germany in 2010, rising slightly by 2.8%,
however the actual revenues recorded by the construction sector fell slightly by 0.3%. Construction of
public buildings recorded a rise in revenue of almost 10%, which unfortunately was almost completely
consumed by the downturn in public earthworks and foundations. By contrast, the downwards trend in
residential apartment construction has come to an end, with the sector recording a rise in revenues of
5.8%. Building approvals rose by 5.5%. Commercial construction remained depressed, with a fall in
revenues of 4.5%. Utilisation of capacity in the processing industry in 2010 was below the long-term
average. The strongest stimulus in the construction sector was recorded for finishing and fitting trades
which recorded a rise in revenue of 1.0%. This sector especially profited from the economic stimulus
packages in the field of energy and building technology and renovations to improve energy efficiency.
3
Trends in the Property Market
The residential property market in the Cologne/Bonn region developed positively. The cities of Cologne
and Bonn are regarded as attractive locations for working and living. In the City of Cologne, total
numbers of residential property rose by 10.2% compared to 1.6% within the City of Bonn. The mean
purchase price as determined in a professional report by the City of Cologne was up by 8% on the prior
year. In the City of Bonn, prices rose, depending on the age category of the property, by up to 7%. In
line with the revival of the labour market and the drop in business insolvencies, the amount of space
trading hands on the Cologne office property market in 2010 rose by approximately 3% on the prior
year. The ratio of vacant space to total space fell by 6%.
In recent years, Bonn has also evolved into a significant location of office property and is considered
one of the most important B-grade locations in Germany. Overall, there was a rise in peak rents in all
locations in 2010. The significant rise in vacant space in 2010 can be attributed to the reclassification
of a space of 20,000 m² as office space after the reporting date.
Economic Development of the Cologne/Bonn Region in 2010
The economic upswing was also noticeable in the Cologne/Bonn economic region. In 2010 the number
of business insolvencies filed in Bonn decreased from 194 to 168. In Cologne, the decrease was weaker,
dropping just 0.3% to 717 petitions filed by companies for insolvency protection. Overall, economic
development in the Cologne/Bonn region was stronger than in North-Rhine Westphalia. Across the
state, there was an increase of 5.7% in the number of business insolvencies.
Industrial companies in the region recorded strongly growing export sales. The construction industry
profited from the pent-up demand resulting from the long winter. The stabilisation of private
consumption was manifested in a significant rise in business activity among retailers. Wholesalers
profited particularly from the global economic recovery. The services sector caught up with this
development over the course of the year and reported a more favourable business climate.
This also improved the prospects on the labour market in the Cologne/Bonn region. The number of
companies providing for an expansion of their workforce in their business development plans
increased in all sectors of the economy. In Cologne, the average annual unemployment rate fell by 0.5
percentage points to 10.1%. In the City of Bonn, the annual average unemployment rate fell by 0.6
points to 7.0%.
Trends in the Lending Business in 2010
Now, over three years after the outbreak of the crisis on the financial markets, the situation on the
German lending market has improved considerably. Nevertheless, the impact of the crisis had still not
been fully overcome in 2010. The German financial system is strongly influenced by the risks in the
international environment. In addition to the risks arising from a long period of low-interest rates, the
sovereign debt crisis in the peripheral countries of the euro zone posed potential challenges for the
financial markets. In spite of the risks, the German lending sector developed better than initially
expected on account of the pleasing development of the real economy.
The results returned by most lending institutes improved. Healthy commission income and an
improvement in measurement gains from a lower level of risk provisioning in the lending business for
2010 than originally expected were the main factors here. The utilisation of the steep interest curves
and the related potential for transforming maturities improved net interest income at a number of
banks and savings banks, not least among numerous small and medium-sized institutes. Stable
earnings and improvements in the capital base generally led to an improvement in the ability of most
institutes to bear risks.
The German lending sector is still dominated by intense competition. Demand for credit in the
corporate lending business developed pleasingly in light of the growing economy. This has put margins
under pressure. There were no signs of a credit squeeze in 2010, particularly with regard to mediumsized enterprises, the traditional customers of the savings banks and credit cooperatives.
The keen competition seen in the deposit business continued, which led to cross-sanctioned
conditions in some cases. In this regard, new regulatory requirements from Basel III have already
resulted in many lending institutes making moves to anchor their funding more strongly in the private
customer market.
4
Future Capital Adequacy and Liquidity Requirements (Basel III)
On 16 December 2010 the Basel Committee on Banking Supervision pronounced the final framework
for future capital adequacy and liquidity requirements (Basel III). The new regulations in response to
the crisis of the financial markets are intended to strengthen the banking sector and make it less
exposed to crises. The planned application of the new requirements to all lending institutes from 2013
is conditional upon the accord being transported into European law. The new accord sets tighter
minimum capital requirements and quality standards concerning equity components, binding liquidity
standards and successive accretion of capital buffers. A new, non-risk-based leverage ratio is intended
to counteract excessive leverage and over-stretching the resources of the Bank due to an expansion of
business activity.
The new capital requirement will come into force successively from 1 January 2013 to 1 January 2019.
At the end of the transitional phase, lending institutes must display a core capital ratio of at least 8.5%
and a total capital ratio of at least 10.5%. The new liquidity standards should be applied from
1 January 2015 or 1 January 2018 in some cases. The leverage ratio will become binding from
1 January 2018.
Sparkasse KölnBonn simulated its capital position on the basis of its mid-term planning and taking
account of the new Basel III requirements. Moreover, it participated in the quantitative impact study of
the Basel Committee (QIS 6) in 2010.
The Sparkasse KölnBonn Financial Group believes that the measures already initiated to reduce risks,
reinforce the capital of the Bank and improve the quality of the capital will ensure that the coming
capital adequacy requirements will be met in future.
General Business Development of the Group
Sparkasse KölnBonn is a capital market-oriented company as defined by § 327a HGB and is therefore
exempted from the requirement to submit a responsibility statement (Bilanzeid) as well as from the
duty to publish its consolidated accounts within the shorter period of four months after the end of the
fiscal year. The Board of Management has made this declaration voluntarily. Due to the fact that §37z
WpHG (Wertpapierhandelsgesetz: Securities Trading Act) frees the company from the obligations under
§37v through to §37y, the provisions on annual and interim financial reporting do not apply.
The following comments relate to the development of Sparkasse KölnBonn in fiscal year 2010. The
transition of Group accounting to IFRS was conducted in the period beginning 1 January 2006. The
indicators given are based on the figures in the consolidated statement of financial position and the
consolidated income statement for the fiscal year:
Business
development
31.12.2006
31.12.2007
31.12.2008
31.12.2009
31.12.2010
EUR million
EUR million
EUR million
EUR million
EUR million
EUR
million
in percent
Consolidated total
assets
30,029
31,600
30,877
30,632
29,805
-827
-2.7
Lending volume less
risk provisioning
19,371
20,288
21,311
20,831
20,319
-512
-2.5
Customer deposits
19,970
20,823
21,376
21,011
20,749
-262
-1.2
8,410
8,822
7,817
8,819
8,960
141
1.6
Safe Custody Accounts
Change
Corresponding with the restructuring plan submitted to the EU Commission (see “Significant Events in
the Fiscal Year”), the business strategy of Sparkasse KölnBonn, which is the major entity within the
Sparkasse KölnBonn Financial Group, was characterized by a reduction in large lending exposures and
scaling back the investment book, thereby reducing the need for funding in 2010. As a result, the
consolidated total assets dropped by 2.7% to EUR 29,805 million.
5
Details of Individual Business Developments in 2010
Lending Business
Lending volume less risk
provisioning
Claims on customers
less risk provisions
Total
31.12.2006
EUR million
31.12.2007
EUR million
31.12.2008
EUR million
31.12.2009
EUR million
31.12.2010
EUR million
19,966
20,672
21,650
21,213
20,695
-595
-384
-339
-382
-376
19,371
20,288
21,311
20,831
20,319
Lending volume after deducting risk provisions (Statement of Financial Position item 3 less Statement
of Financial Position item 4) fell by 2.5% to EUR 20,319 million (see the table on business
development). The volume of public sector loans and larger corporate customer exposures fell
significantly, although development loans rose in comparison to the prior year. Risk provisioning,
which consists primarily of specific and portfolio-based valuation allowances, remained slightly below
the level of the prior year at EUR 376.0 million.
Lending volumes less risk
provisioning broken down by
customer segment
31.12.2006
EUR million
31.12.2007
EUR million
31.12.2008
EUR million
31.12.2009
EUR million
31.12.2010
EUR million
11,502
12,484
12,952
13,142
12,861
Private customers
6,580
6,537
6,495
6,406
6,394
Other
1,289
1,267
1,864
1,283
1,064
Total
19,371
20,288
21,311
20,831
20,319
Companies and the selfemployed
In total, EUR 12,861 million in loans and advances has been extended to corporate customers and the
self-employed. Lending to private customers comes to EUR 6,394 million and loans to other customers
(e.g. insurers, churches, associations) to EUR 1,064 million. Sparkasse KölnBonn approved new loans of
EUR 3,462 million, compared to EUR 3,015 million in the prior year.
Assets Held for Trading
Assets held for trading (Statement of Financial Position item 6) fell by 38.0% to EUR 1,320 million. This
reduction is attributable to the strategic realignment of Sparkasse KölnBonn. The Bank changed its
trading strategy in 2010 and limited its own-trading activities to the sales-oriented business on behalf
of its customers.
Investment Book
The investment book of Sparkasse KölnBonn Financial Group was scaled back further over the fiscal
year. Measures included liquidating the entire strategic assets allocation (SAA, diversified portfolio
structured as investment funds) by selling off the related securities. This move was part of the strategic
alignment of Sparkasse KölnBonn to distance itself in the short to mid-term from business that does
not fit the risk profile of a marketing-oriented savings bank. The strategic alignment of the Bank is also
a subject of the restructuring plan of Sparkasse KölnBonn submitted to the European Union. The total
balance of the investment book of Sparkasse KölnBonn Financial Group of EUR 3,418.2 million, carrying
amount including accrued interest, breaks down into other securities (generally government bonds,
bank bonds and corporate bonds of EUR 2,891.0 million) and asset-backed securities (ABS, EUR 527.2
million). The balance of the trading book of Sparkasse KölnBonn Financial Group comes to EUR 11.0
million. Other securities, which constitute by far the largest sub-portfolio, constitute the foundation on
which Sparkasse KölnBonn Financial Group secures its refinancing.
6
ABS are structured investments in international counterparties. When purchased, the portfolio served
to diversify the regional lending business. The portfolio is internationally diversified with 73% of the
volume based in Germany and the rest of Europe. The share of receivables originating from the USA
comes to 15%. The market for structured securities has shown very little trading in the past years,
making it difficult to assess market prices owing to the lack of active trading. Sparkasse KölnBonn
already recorded substantial fair value adjustments on the current portfolio as well as losses upon
disposal. The Sparkasse KölnBonn Financial Group received normal collections for a large majority of
the ABS portfolio. Overall, repayments of EUR 101.2 million were received in the year 2010.
In addition, the Sparkasse KölnBonn Financial Group was able to sell a portion of the portfolio, the
majority of which comprised collateralized debt obligations (CDOs), with a total volume of
approximately EUR 127.2 million. Due to the slight improvement in the market environment, the sale
could be realized at higher average prices than the values carried on 31 December 2009. As of closing
date 31 December 2010, the ABS portfolio of Sparkasse KölnBonn was scaled back to a sum of 111
individual securities with an aggregate nominal value of EUR 667.5 million.
Outside of its ABS portfolio, Sparkasse KölnBonn Financial Group carries investments of a total of
EUR 346.1 million (carrying amount including interest accrued) in the euro zone countries of Portugal,
Italy, Ireland, Greece and Spain. This carrying amount includes government bonds issued by these
countries of EUR 124.7 million. Of this amount, EUR 196.4 million relate to the financial sector and
EUR 25.0 million relate to the corporate sector. Bonds issued by Eurozone governments are recognised
at fair value under Financial assets, sub-item Bonds and other interest-bearing securities (AFV
designated) in the consolidated financial statements.
In spite of the recovery on the capital markets, trade in hybrid financial investments only picked up
moderately. To a large extent, prices on the market were merely indicative. Valuation techniques
therefore still have to be used in measuring items in the annual financial statements. More information
on this can be found in Note [11].
As at the reporting date, 31 December 2010, the investment book and the trading book break down as
follows:
Breakdown of the investment book
and the trading book
Bonds and other interest-bearing
securities
Shares and variable-yield securities
Total
31.12.2006
EUR million
31.12.2007
EUR million
31.12.2008
EUR million
31.12.2009
EUR million
31.12.2010
EUR million
5,618
5,381
4,231
4,073
3,378
393
367
47
45
51
6,011
5,748
4,278
4,118
3,429
“Bonds and other interest-bearing securities” (components of Statement of Financial Position item 6,
“Assets held for trading”, and Statement of Financial Position item 8, “Financial assets”) fell by 17.1%
to EUR 3,378 million and shares and other variable-yield securities (components of Statement of
Financial Position item 6, “Assets held for trading”, and Statement of Financial Position item 8,
“Financial assets”) increased by 13.3% to EUR 51.0 million. In total, the investment book fell by 16.7%
to EUR 3,429 million.
Shareholdings
Shareholdings
Non-current assets held for sale
Financial assets, of which investments
and shares in affiliated companies
classified as available for sale
Investments in associates
Total
31.12.2006
EUR million
31.12.2007
EUR million
31.12.2008
EUR millio
n
31.12.2009
EUR million
31.12.2010
EUR million
-
1
-
-
245
598
732
704
647
401
62
64
33
25
26
660
797
737
672
672
7
The Group’s shareholdings of EUR 672 million, which are presented under “Non-current assets
available for sale” (Statement of Financial Position item 7), “Financial assets" (Statement of Financial
Position item 8) under the category “Assets available for sale” (AFS) and “Investments in associates”
(Statement of Financial Position item 9), remained unchanged in comparison to the prior year. In
connection with the audit by the EU Commission (see "Significant Events in the Fiscal Year“), there is an
intent to dispose of the subsidiaries which do not form part of the Sparkasse KölnBonn’s core business.
Pursuant to IFRS 5, these shareholdings as well as shares in affiliated companies available for sale (AFS)
were reclassified from Financial assets (Statement of Financial Position item 8) into Non-current assets
available for sale (Statement of Financial Position item 7).
Property Holdings
Property holdings
31.12.2006
EUR million
31.12.2007
EUR million
31.12.2008
EUR million
31.12.2009
EUR million
31.12.2010
EUR million
Property, plant and equipment (2009:
Property, plant and equipment / Noncurrent assets held for sale)
218
219
97
131
84
Investment property / Non-current
assets held for sale
275
252
250
515
484
Total
493
471
347
646
568
The property holdings of the Group presented under “Non-current assets held for sale” (Statement of
Financial Position item 7), “Property, plant and equipment” (Statement of Financial Position item 10)
and “Investment property” (Statement of Financial Position item 11) fell by 12.1% to EUR 568 million.
This includes properties held for own use and commercial properties that are rented out.
The reduction in property, plant and equipment is primarily due to a significant reduction in rents that
became fully effective on 1 January 2010 for the studio buildings in Hürth and Ossendorf to which
MAGIC MEDIA COMPANY TV-Produktionsgesellschaft mbH (MMC) has economic title under a finance
lease.
Due to the fact that the revaluation of the leases required in this regard did not lead to any other
assessment, the fall in the liability was posted directly against the carrying amount of property, plant
and equipment without affecting profit and loss.
The fall in investment properties on the prior year results primarily from impairment losses recorded at
two subsidiaries and at Sparkasse KölnBonn.
Deposit Business
Customer deposits
31.12.2006
EUR million
31.12.2007
EUR million
31.12.2008
EUR million
31.12.2009
EUR million
31.12.2010
EUR million
15,920
15,746
16,702
17,614
17,954
Securitised liabilities
3,258
4,139
3,525
2,243
1,684
Subordinated capital
792
938
1,149
1,154
1,111
19,970
20,823
21,376
21,011
20,749
Liabilities to customers
Total
The portfolio of customer deposits (Statement of Financial Position item 2 as well as items 4 and 9)
decreased by 1.2% to EUR 20,749 million as a result of the strategic decision to scale back assets with
an associated fall in refinancing requirements (see the table on business development).
There was a rise of 1.9% in liabilities to customers to EUR 17,954 million. As in the prior year, many
customers put greater trust over the course of the year in Sparkasse KölnBonn to hold their deposits
safe.
Securitised liabilities were scaled back by 24.9% to EUR 1,684 million as they matured. This includes
the refinancing of Sparkasse KölnBonn by issuing Pfandbriefs (German covered bonds) and bearer
bonds.
Subordinated capital fell by 3.7% to EUR 1,111 million.
8
Safe Custody Accounts
Business with securities and asset management products off the face of the statement of financial
position developed pleasingly in 2010. The portfolio volume rose by 1.6% on the prior year to
EUR 8,960 million.
The portfolio of shares rose in the past year by 11.4% to EUR 1,702 million with the rise reflecting the
favourable development of share prices on the stock exchanges. By contrast, the portfolio of
certificates decreased by 8.0% to EUR 253 million. Fixed-interest securities and investment funds were
in less demand than in the prior year and decreased by 0.4% to EUR 4,514 million and 4.7% to
EUR 1,328 million respectively. Asset management products grew 6.5% in the past fiscal year to
EUR 1,163 million.
Development of off-statement-of
financial-position securities and
asset management products
31.12.2007
EUR million
31.12.2008
EUR million
2,036
1,986
1,258
1,528
1,702
336
444
314
275
253
Fixed-interest securities
3,230
3,608
3,904
4,530
4,514
Investment funds
1,559
1,475
1,313
1,394
1,328
Shares
Certificates
31.12.2006
EUR million
31.12.2009
EUR million
31.12.2010
EUR million
Asset management products
1,249
1,309
1,028
1,092
1,163
Total
8,410
8,822
7,817
8,819
8,960
31.12.2006
31.12.2007
31.12.2008
31.12.2009
31.12.2010
Full-time employees
3,565
3,655
3,559
3,257
3,117
Part-time employees and casual
workers
1,532
1,536
1,560
1,462
1,447
Human Capital
Average number of employees
Trainees
Total
Annual average share of part-time
workers in percent
325
303
259
229
217
5,422
5,494
5,378
4,948
4,781
30.1
29.6
30.5
31.0
31.7
As an annual average, the Sparkasse KölnBonn Financial Group employed a total of 4,781 employees
(see Note [93]), of which 3,117 were full-time employees, 1,447 part-time workers and 217 trainees. A
number of phased retirement schemes were entered into in the fiscal years 2006 to 2009 at the desire
of the employees of Sparkasse KölnBonn and these will take effect successively over the coming years.
Moreover, Sparkasse KölnBonn made use of normal employee fluctuation to reduce its workforce.
Positions becoming free were generally filled with existing staff.
Considering the constant development of the financial business and technical innovations, a focus of
HR work was placed on the development and constant training of the Group’s workforce. To ensure that
working hours became more flexible and therefore more economic the staff were given the opportunity
to use flexitime and a range of part-time models. The ratio of part-time workers in the overall
headcount came to 31.7 % as of 31 December 2010, compared to 31.0% in the prior year.
9
Significant Events in the Fiscal Year
Audit by the EU Commission
On 4 November 2009 the EU Commission opened audit proceedings against Sparkasse KölnBonn. The
main issue at stake was a silent participation of EUR 350 million by the public body responsible for the
Sparkasse, Zweckverband Sparkasse KölnBonn, as well as the subscription of profit participation
certificates of EUR 300 million by Rheinische Sparkassen Förderungsgesellschaft mbH in favour of
Sparkasse KölnBonn. In the case of Sparkasse KölnBonn, the work of the Commission concentrated on
whether the market for such instruments had dried up at the end of 2008 and the beginning of 2009
and that no private investor was available to provide the capital despite the market interest rates and
conditions attached to the equity instruments. In the opinion of the Sparkasse, the capital
contributions were registered as non-state aid.
In the course of the audit, Sparkasse KölnBonn provided a comprehensive restructuring plan to the
Commission. The plan includes an alignment of the Sparkasse to the statutory business model of a
marketing-oriented savings bank (Vertriebssparkasse) with a regional focus. Sparkasse KölnBonn will
concentrate on the typical services for its traditional customer segment, i.e. private customers and
small and medium-sized enterprises, withdraw from business activities such as own-account trading
and investments in hybrid products and divest those subsidiaries that do not serve its core business. In
addition, Sparkasse KölnBonn plans to continue cutting its workforce by not recruiting any new staff. It
will reduce its administrative expenses significantly.
The EU Commission concluded its audit with a decision issued on 29 September 2010. In this decision,
the Commission stated that the recapitalization measures in favour of Sparkasse KölnBonn constituted
state aid as defined by Article 107 (1) of the Treaty on the Functioning of the European Union. However,
the Commission came to the conclusion that the restructuring plan submitted by Sparkasse KölnBonn
meets the criteria of the restructuring notice, i.e. the notice of the Commission dated 23 July 2009 on
restoring long-term profitability and the evaluation of restructuring measures in the financial sector. It
is in agreement with Article 107 (3) b of the Treaty on the Functioning of the European Union and
revokes the reservations of the Commission concerning the distortion of competition expressed in the
notice opening the audit proceedings. Taking account of other treaties, in particular those taken to
avoid competitive distortions of the internal market, the Commission comes to the final assessment
that the aid received is compatible with the internal market. It finds that the capital injections could be
approved on condition that the restructuring plan is implemented and the agreements made are kept
to.
EU Investigation into Trade Fair Building Transactions
By letter dated 15 May 2007, the European Commission opened an investigation into the sale of the
Rheinhallen trade fair buildings held by KölnMesse GmbH and the construction of the new Cologne
trade fair buildings (northern halls), demanding information from the Federal Republic of Germany.
This request was passed on to the City of Cologne. On 23 July 2007 the German government forwarded
a notice to the Commission in response to their questionnaire.
In correspondence dated 1 September 2010 the Commission addressed further questions to the
German government. In this regard Sparkasse KölnBonn was requested by the City of Cologne, which
was duty-bound to provide the information, to respond to the individually listed questions concerning
the Sparkasse. The draft of a response with associated attachments was communicated by the City of
Cologne on 29 November 2010 to the Federal Ministry of Economics and Technology for forwarding to
the Commission.
Sparkasse KölnBonn has examined the possible relevant state aid-related risks with regard to the trade
fair building transactions (Rheinhallen / Rheinpark / Nordhallen) in detail. This examination came to the
conclusion that even in the event that the Commission or the European Court of Justice or a national
court ruled there has been an infringement of the European law governing state aid, the risk of
negative consequences for Sparkasse KölnBonn is low.
10
Westdeutsche Landesbank AG (WestLB AG)
In a binding record dated 24 November 2009, the shareholders of Westdeutsche Landesbank AG
(WestLB AG), including the Rhineland Savings Banks Association RSGV (Rheinischer Sparkassen- und
Giroverband), Düsseldorf, which holds a stake of 25%, agreed with the Federal Agency for the
Stabilisation of the Financial Markets FMSA (Bundesanstalt für Finanzmarktstabilisierung) to conduct
further measures to stabilise WestLB AG. On this basis the contracts to set up a liquidation company
(EAA, Erste Abwicklungsanstalt) were concluded on 11 December 2009 in accordance with § 8a of the
Act on the Special Fund to Stabilise the Financial Markets (Finanzmarktstabilisierungsfondsgesetz).
RSGV is obliged, up to a limit of EUR 2.25 billion and in proportion to its share in ownership, to absorb
any actual cash losses of EAA that cannot be settled by the capital of the liquidation company of
EUR 3 billion provided at the time of incorporation and potential liquidation income. As a member of
RSGV, Sparkasse KölnBonn is indirectly obliged to absorb its share of this obligation (19.9%). On the
basis of the latest findings, no provision needs to be recognised for this obligation in the annual
financial statements for 2010 (see the annual financial statements of Sparkasse KölnBonn, the notes to
the Bank’s balance sheet, the disclosures there under “Other financial commitments”).
However, there is a risk that Sparkasse KölnBonn could be called on to meet its share of an indirect
obligation via RSGV over the duration of the EAA’s liquidation. To cover this risk, Sparkasse KölnBonn
intends to establish a provision for a period of 25 years from the profits of the respective fiscal year on
a percentage basis (“accumulation of savings”). After ten years, the EAA’s past and current economic
development will be assessed followed by a review of the required accumulated savings. Sparkasse
KölnBonn did not make any provision in fiscal year 2010 due to the prior duty of replenishing profit
participation capital. The failure to make any provision in 2009 and 2010 will be remedied in future by
making a higher provision at the next possible date.
In a letter dated 24 November 2010, the EU Commission found that the transfer of assets from WestLB
AG to EAA in 2009 qualified as state-aid. For this reason, the Commission demanded that the Federal
Republic of Germany submit an “extended restructuring plan” for WestLB AG by 15 February 2011 at
the latest. This restructuring plan, which was prepared by the Board of Directors of WestLB AG and
ratified by the Supervisory Board of WestLB was submitted to the EU Commission on 15 February 2011
within the deadline. At the same time, the Commission received a status report from the receiver on the
sales process of WestLB AG and initial ideas on a concept for a two-tier core bank (“Verbundbank”)
concept. The latter concept should then be pursued if the restructuring plan of the management board
of WestLB AG is rejected by the EU Commission and the sales process does not come to a positive
conclusion. After reviewing the documents submitted on 15 February 2011 the EU Commission
signalled that it considered the “Verbundbank” concept to be sustainable. The Federal Republic of
Germany was given a deadline until 30 June 2011, to submit a detailed version of the concept.
As of 30 June 2011, a complete restructuring plan for WestLB was submitted to the EU Commission
that had been prepared jointly by the Federal Republic of Germany, the State of North Rhine
Westphalia, FMSA, the Westphalian-Lippe Savings Banks Association (Sparkassenverband WestfalenLippe), RSGV, the Westphalian-Lippe Regional Association (Landschaftsverband Westfalen-Lippe) and
the Rhineland Regional Association (Landschaftsverband Rheinland). This comprehensive solution,
which is fixed in a letter of intent by all parties concerned and supported by the German Savings Banks
Association (Deutscher Sparkassen- und Giroverband), provides for the foundation of the core bank
(“Verbundbank”), as presented to the EU Commission on 15 February 2011, with the remaining parts of
WestLB AG rendering services to the core bank and EAA in the form of a service and portfolio
management bank (WestLB AG / SPM-Bank). The North Rhine Westphalian savings banks and the
members of the Sparkasse Financial Group will be responsible for the core bank. The core bank will
commence with capital of EUR 1 billion, which will be contributed by the savings banks associations of
North Rhine Westphalia and the Sparkasse Financial Group. It will service the business of the savings
banks associations, including corporate banking for medium-sized business, employing total assets of
between EUR 40 and 45 billion (assets-at-risk of approximately EUR 8.3 billion) and roughly 400
employees.
The sole owner of WestLB AG / SPM-Bank will be the State of North Rhine Westphalia, which will exempt
the savings banks associations from their liability for later losses under the UmwG
(Umwandlungsgesetz – Law of Reorganizations) and their liability as guarantor of the pension
obligations of WestLB / SPM-Bank. The remaining operations of SPM-Bank / WestLB AG will be sold or
transferred to EAA by no later than 30 June 2012 (“later contribution”).
11
With regard to their liability for the assets of WestLB AG / SPM-Bank, which were transferred to EAA, the
existing obligations of the savings banks associations remain unaffected by a later contribution to EAA.
In order to reinforce the liable capital of EAA, the special fund to stabilise the financial markets will
meet an obligation of EUR 1 billion to compensate losses by transferring the fair value of the silent
participation in WestLB AG / SPM-Bank to EAA. The EU Commission has signalled its approval of the
proposed solution. The core bank concept that was brought into consideration is currently being
reviewed.
On the basis of the arrangements described above, no further financial burdens are currently expected
to be placed on Sparkasse KölnBonn from obligations associated with the restructuring of WestLB AG.
Consulting Agreements
The results of the investigations conducted in 2008 and 2009 show that Sparkasse KölnBonn entered
into consulting agreements in isolated cases and made payments that, on the basis of the current
examination, were not fully documented in terms of their business purpose or services rendered. This
examination is still continuing. In those cases where Sparkasse KölnBonn is of the opinion that it did
not receive any corresponding services, it will claim back the payments made. In December 2009,
Sparkasse KölnBonn filed a suit against one party with the Cologne Regional Court. This case was
settled out-of-court in the middle of July 2010 on the basis of a proposal made by the court. In
November 2010, Sparkasse KölnBonn filed a suit with the Cologne Regional Court against another
party. In these proceedings, the court of the first instance dismissed the suit in July 2011. Sparkasse
KölnBonn then filed an appeal against this decision on time in September 2011. In a number of other
cases the Cologne State Prosecutor is investigating.
2. Results of Operations
The results of Sparkasse KölnBonn Financial Group improved in 2010. The Group’s business developed
pleasingly over the course of the year. 2010 was characterised by stable consumer business. Personnel
and non-personnel expenses were reduced once again. Risk provisioning for the lending business was
significantly below the level of the prior year. Thanks to the recovery of the capital markets in 2010,
Sparkasse KölnBonn Financial Group profited from the positive results of measuring derivatives and
securities at fair value.
In contrast to the prior year, the consolidated income statement of the Sparkasse KölnBonn Financial
Group for the year 2010 reports a significantly improved consolidated net profit before tax (see the
summarised version below) of EUR 57.7 million (prior year: EUR 21.7 million). The consolidated net
profit amounts to EUR 76.0 million (prior year: EUR 43.0 million). The consolidated profit carried
forward amounts to EUR 28.8 million compared to a profit of EUR 79.3 million in the prior year. This
result was negatively influenced by partly replenishing the hybrid financial instruments of Sparkasse
KölnBonn (EUR 47.2 million, partly replenishing the equity component of hybrid capital, disclosed
under Statement of Financial Position item 12.e).
12
Earnings development
31.12.2008
31.12.2009
31.12.2010
Change
Change
EUR million
EUR million
EUR million
EUR million
in percent
425.6
384.9
370.9
- 14.0
- 3.6
70.3
123.9
90.7
- 33.2
- 26.8
Net interest income after risk
provisions
355.3
261.0
280.2
19.2
7.4
+ Net commission income
149.6
149.4
162.5
13.1
8.8
- 528.8
71.5
72.6
1.1
1.5
+ Investment income
- 64.5
- 0.5
2.5
3.0
> 100.0
+ Result from associates recognised at
equity
- 23.6
- 5.0
1.5
6.5
> 100.0
./. Personnel expenses
279.7
264.8
259.3
- 5.5
- 2.1
./. Non-personnel expenses
333.3
222.3
214.5
- 7.8
- 3.5
+ / ./. Net other operating
income (+) / expenses (-)
- 47.5
32.4
12.2
- 20.2
- 62.3
- 772.5
21.7
57.7
36.0
> 100.0
Net interest income prior to risk
provisions
./. - Risk provisions for lending business
+ Financial instruments measured at fair
value through profit or loss
= Net profit / loss for the year prior to tax
./. Income taxes
74.4
21.3
18.3
- 3.0
- 14.1
./. Share of profit or loss attributable to
minority interests
0.1
0.0
0.0
0.0
---
= Net profit / loss for the year after tax
- 698.2
43.0
76.0
33.0
76.7
+ Withdrawals from hybrid financial
instruments (equity components)
+ 40.6
+ 16.8
0.0
- 16.8
- 100.0
./. Replenishment of hybrid financial
instruments (equity components)
---
---
- 47.2
- 47.2
---
+ Withdrawals from silent participations
0.0
+ 19.5
0.0
- 19.5
- 100.0
+ Withdrawals from the fund for general
banking risks
+ 30.0
0.0
0.0
0.0
---
- 627.6
79.3
28.8
- 50.5
- 63.7
Consolidated profit or loss carried
forward
Development of Earnings in 2010 in Detail
The presentation of the consolidated net profit before income taxes broken down into the segments of
Individual customers, Private customers, Corporate customers, Location development/restructuring,
Equity investments and Corporate Center, can be found under Notes [45] to [47].
Net interest income prior to risk provisions (Income Statement item 1 less Income Statement item 2)
dropped by 3.6% to EUR 370.9 million. Unwinding of the debt capital components of the hybrid
financial instruments led to interest expenses of EUR 10.2 million. As in the prior year, net interest
income includes expenses of EUR 13.9 million for the interest payable to the holders of profit
participation certificates issued by Sparkasse KölnBonn (see Note [70]) that must be recognised as
liabilities under IFRS.
Customer business of Sparkasse KölnBonn, deposit business in particular, was affected by the low
interest rates in 2010. In the lending business, the fierce competition continued to put margins under
pressure. Sparkasse KölnBonn remained very cautious in transforming maturities to exploit interest
rate differentials between short-term floating rate deposits and long-term fixed-interest deposits in
view of the regulatory requirements and the increasing uncertainty regarding the future development
of interest rates. Sparkasse KölnBonn continued to scale back its high-risk investments in the
securities business in 2010. This reduced potential interest income.
13
On the basis of the average risk positions subject to mandatory cover by own funds under financial
supervisory regulations, the interest margin comes to 1.9% (as in the prior year). Net interest income
accounted for 46.2% of total revenues of EUR 803.4 million (see Income Statement items 1, 2, 4, 5, 6
and 10) compared to 42.4% in the prior year. The fall of 3.8 percentage points in the relative share of
net interest income can be attributed to the fall in total revenue. Interest-bearing business remains the
most important source of revenue for Sparkasse KölnBonn.
The risk provisions required under IFRS to cover claims in the lending business fell significantly by
26.8% in comparison to the prior year to EUR 90.7 million. The fears that the strongest recession in the
history of the Federal Republic of Germany would lead to a credit squeeze in 2010 proved to be
unfounded, with the risk provisioning for the lending business falling slightly as a result. This is first
and foremost due to the slight rise of EUR 87.3 million (prior year: EUR 107.6 million) in net additions
to specific valuation allowances (impairment losses) in the lending business, both on and off the face of
the statement of financial position. In addition, net additions to portfolio-based allowances (PBA) of
Sparkasse KölnBonn for lending exposures for which no impairment was identified on the reporting
date were reduced by EUR 4.3 million (see Note [35]). Direct write-downs decreased year-on-year by
EUR 0.3 million to EUR 16.8 million in real terms. Collections of debts previously written off as bad fell
short of the prior-year level by EUR 4.5 million in real terms. A provision for country risks was only
recognised to a small extent (see Note [35]). Adequate provision was made for the credit risks which
are spread over various customer segments and industries.
In spite of the fall in net interest income, net interest income after risk provisions (Income Statement
item 1 less Income Statement 2 plus Income Statement item 3) rose by 7.4% to EUR 280.2 million due
to the significantly lower risk provisions for the lending business as at the reporting date as required
under IFRS. Net interest income after risk provisions accounted for 34.9% of total revenues of
EUR 803.4 million (see Income Statement items 1, 2, 4, 5, 6 and 10) compared to 28.8% in the prior
year.
The contribution of commission business to earnings (Income Statement item 4 less Income Statement
item 5) rose significantly by 8.8% to EUR 162.5 million. There was once again a substantial increase in
the number of current accounts in 2010 with an associated rise in commission on monetary
transactions, which contributed to the rise in commission income at Sparkasse KölnBonn. Commission
income for insurance services and commission paid on off-statement-of-financial-position securities
also rose. In total, the ratio of total commission income to total assets on reporting date comes to
0.5%. The share of commission income in total revenues of EUR 803.4 million (see Income Statement
items 1, 2, 4, 5, 6 and 10) came to 20.2% compared to 16.5% in the prior year (see Income Statement
items 1, 2, 4, 5, 6 and 10).
The “Gain or loss on financial instruments measured at fair value through profit or loss” (Income
Statement item 6), which is reflected in the sub-items “Result of transactions designated as at fair
value” and the “Trading result” (see Note [37]), comes to EUR 72.6 million, which is a slight
improvement by 1.5%.
The “Result of transactions designated as at fair value” comes to a profit of EUR 21.5 million, compared
to EUR 117.4 million in the prior year. The result in the prior year was dominated by effects associated
with the recovery of the financial markets from the crisis. Consequently, it was not possible to repeat
the jump in earnings in 2010. However, the situation on the capital markets has led to the market
values of the own investments of Sparkasse KölnBonn stabilising at positive values.
The trading result, which primarily reflects the result from trading in securities, derivatives, and foreign
currencies amounted to a gain of EUR 51.1 million compared to a loss of EUR 45.9 million in the prior
year. The significant improvement in the measurement of trading items is primarily due to the gain on
derivatives on account of their great influence on the trading result. This item consists mostly of the
changes in the fair value of hedging derivatives (EUR 10.1 million). The result reports the value of
transactions designated as at fair value less the change in the fair value of the designated financial
instruments due to changes in interest rates. Net interest arising from designated financial
instruments and derivatives used as hedging instruments is reported under interest income or interest
expenses respectively.
14
Investment income (Income Statement item 7), which includes the gain or loss from disposal of
financial assets plus the effects of measuring financial assets available for sale (AFS) at fair value
through profit or loss, comes to a profit of EUR 2.5 million compared to a loss of EUR 0.5 million in the
prior year. Income of EUR 3.7 million was realised upon the disposal of equity investments in SKB
Kapitalbeteiligungsgesellschaft KölnBonn mbH.
The “Result of associates recognised at equity” (Income Statement item 8) improved EUR 6.5 million in
real terms to a profit of EUR 1.5 million (prior year: loss of EUR 5.0 million) due to the positive share in
the net result of an associate attributable to the Group. More specifically, this resulted from the
measurement of the associate, CORPUS SIREO Holding GmbH & Co. KG (Corpus), using the equity
method.
General administrative expenses (Income Statement item 9) decreased by 2.7% (EUR 13.3 million in
real terms) to a total of EUR 473.8 million. The ratio of general administrative expenses to total assets
of 1.6% remained unchanged at the same level as that of the prior year.
The personnel expenses included in this item, including social security, pensions and other benefit
costs, fell by 2.1% to EUR 259.3 million. The fall in personnel expenses is mainly due to the result of
employee churn in fiscal year 2010 (see the section on Human Capital under 1., Business Development
and Economic Environment).
Moreover, general administrative expenses (Income Statement item 9) include non-personnel
expenses. They consist of rental expenses, rent incidentals, IT expenses, other non-personnel expenses
as well as depreciation of property, plant and equipment and amortisation of intangible assets. In total,
these items fell by 3.5% to EUR 214.5 million in the reporting year. Among other factors, savings were
made on rent, IT and the costs of settling technical bank services.
The net balance of other operating income and other operating expenses (Income Statement item 10
less Income Statement item 11) amounted to net income of EUR 12.2 million in the fiscal year (prior
year: EUR 32.4 million).
In sum, income (see Income Statement items 1, 2, 4, 5, 6 and 10) dropped by 11.5% to
EUR 803.4 million compared to EUR 907.3 million in the prior year. Total expenses (see Income
Statement items 9, 11 and 13) fell by 12.8% to EUR 640.8 million (prior year: EUR 735.0 million). Within
the Sparkasse KölnBonn Financial Group, income and expenses are significantly influenced by activities
that are not typical of banking business (Income Statement items 10 and 11) which are pursued by the
consolidated subsidiaries involved in commercial real estate operations. In spite of the negative
income trend and owing to the reduction of total expenses, the cost-income ratio could be improved to
75.2 compared to 76.9 in the prior year. Increasing income and simultaneously pursuing strict cost
management are primary goals of the corporate policy of the Sparkasse KölnBonn Financial Group.
Overall, the consolidated net profit before tax for the year 2010 comes to EUR 57.7 million (prior year:
EUR 21.7 million). The net tax position of the Group comes to EUR 18.3 million (prior year:
EUR 21.3 million).
In sum, the net profit for the Group amounts to EUR 76.0 million compared to EUR 43.0 million in the
prior year. Due to the fact that the equity components of hybrid financial instruments at Sparkasse
KölnBonn were replenished by an amount of EUR 47.2 million on the equity component pursuant to
IFRS, the Group recorded an appropriation of income of an equal amount. As a result the consolidated
profit carried forward amounts to EUR 28.8 million compared to EUR 79.3 million in the prior year. After
the consolidated financial statements are ratified, the profit carried forward of the Group will be added
to the revenue reserves.
At the time this Group Management Report was prepared, the financial position, net assets and results
of operations correspond to the forecast Sparkasse KölnBonn has made.
15
3. Financial Position
The solvency of Sparkasse KölnBonn and the Sparkasse KölnBonn Financial Group was ensured at all
times in the fiscal year on the basis of planned and balanced cash management. The cash position of
the subsidiaries is managed and secured by Sparkasse KölnBonn.
The credit lines granted by WestLB were drawn on as needed. The offer from the ECB to enter into
refinancing transactions in the form of open market transactions was availed of to differing extents (see
the section on Liquidity Risks in the Risk Report). The required deposits were maintained at Deutsche
Bundesbank, Cologne branch, in order to meet the minimum reserve requirements.
4. Net Assets
The Sparkasse KölnBonn Financial Group reports a consolidated profit carried forward of
EUR 28.8 million in fiscal year 2010. Once the consolidated financial statements have been ratified, this
profit will be added to the revenue reserves.
The silent participations (Statement of Financial Position item 12.a), the revenue reserves (Statement
of Financial Position item 12.b) and hybrid financial instruments (Statement of Financial Position item
12.e) amount to a combined total of EUR 881.4 million (prior year: EUR 751.0 million). Zweckverband
Sparkasse KölnBonn provided a silent participation of EUR 350.0 million in the first six months of 2009
to reinforce the capital base of the Bank. This amount was reduced to a repayment of EUR 330.5 million
on account of the silent participation’s share in the loss made in fiscal year 2009. The revaluation
reserve (Statement of Financial Position 12.d) rose by a total of EUR 14.1 million. The increase is chiefly
due to the positive effect of revaluing investments and securities at fair value and the increase in
deferred tax assets (posted directly to equity) as of the reporting date. Total group equity (Statement of
Financial Position item 12) comes to EUR 990.6 million, compared to EUR 896.8 million in the prior
year.
Development of Group Equity under IFRS
EUR
600
million
500
1000
1,064.6
…
400
330.5
330.5
…
300
881.4
751.0
200
100
100
50
53.5
420.5
0.1
66.3
0.1
550.9
80.4
79.4
0.0
28.8
00
-100
-627.6
-600
-200
-300
490.6
31.12.2008
1 Profit/loss
2 carried
3 forward
4
Rücklage für
allgemeine Bankrisiken
Fig:
990.6
896.8
-400
31.12.2010
31.12.2009
5
6 Minority
7 interests
8
9
10
Revenue reserves and hybrid
financial instruments
11
12
13reserve
14
Revaluation
Silent participations
Development of equity of the Sparkasse KölnBonn Financial Group under IFRS.
16
The Sparkasse KölnBonn group of institutions has sufficient liable capital pursuant to the regulatory
requirements defined in the German Banking Act of a total of EUR 2,097.5 million (prior
year: EUR 2,274.6 million), which provides the foundation for developing its risk-bearing business in
future. In addition to the revenue reserves, which are a portion of the core capital, this includes
supplementary capital in the form of profit participation capital and subordinated capital. More
information can be found in Note [88].
Composition of the Statement of Financial Position
There were significant changes to the composition of the Statement of Financial Position in the
reporting year. On the assets side, “Claims on customers” (Statement of Financial Position item 3, see
also “Lending Business”) rose by 0.1 percentage points to 69.4% and Interbank claims (“Claims on
banks”, Statement of Financial Position item 2) rose by 3.5 percentage points to 8.9%. ”Financial
assets” (Statement of Financial Position item 8, bonds, shares, equity investments and shares in
affiliated companies) dropped by 0.6 percentage points to 12.9%. ”Assets held for trading” were scaled
back by Sparkasse KölnBonn by 2.6 percentage points to 4.4%.
On the liabilities side, “Liabilities to customers” (Statement of Financial Position item 2) rose by 2.7 %
to 60.2%. Interbank liabilities (”Liabilities to banks”, Statement of Financial Position item 1) were
reduced by 1.2 percentage points to 19.3%, “Assets held for trading” (Statement of Financial Position
item 3) by 0.4 percentage points to 5.8% and the “Securitised liabilities” carried by Sparkasse
KölnBonn (Statement of Financial Position item 4) by 1.6 percentage points to 5.7%.
The risk provisions under IFRS, which were slightly reduced in comparison to the prior year, totalling
EUR 375.8 million (prior year: EUR 382.0 million) have been recognised to adequately cover the lending
risks currently discerned by the Sparkasse KölnBonn Financial Group which are spread over all
customer segments and industries. Investment risks and other obligations are likewise included in the
consolidated financial statements.
Equity Ratios
The Sparkasse KölnBonn group of institutions applies the standard credit risk approach in accordance
with the German Solvency Regulation (SolvV). To differentiate its capital base and therefore its risk
sensitivity, the Bank relies on assessments made by recognised external rating agencies and their
allocation to the risk weightings prescribed by banking law (see Notes [88] and [89]).
Solvency coefficient *
(Sparkasse KölnBonn Financial Group)
31.12.2009
31.03.2010
30.06.2010
30.09.2010
31.12.2010
11.5
11.4
11.6
11.6
12.0
Total ratio
* Solvency Regulation / credit risk standard approach
The ratio of eligible own funds to the weighted risk items, consisting of default risks, operational risks
and the market risk, comfortably exceeded the minimum ratio of 8.0% set by the Federal Financial
Supervisory Authority on 31 December 2010, with the overall ratio lying at 12.0% at the level of the
Sparkasse KölnBonn group of institutions. The core capital ratio of Sparkasse KölnBonn, defined as the
ratio of its core capital to its risk positions (default risks, operational risks and market risks) comes to
6.3%. The minimum core capital ratio required by law is 4.0%. Thus the foundation for future
development in business is in place.
The positive development of the solvability ratio in 2010 is a result of the reduction in risk-weighted
assets.
On 31 March 2011 the solvency coefficient for the Sparkasse KölnBonn group of institutions stood at
12.8%. As a separate institution, the solvency coefficient of Sparkasse KölnBonn stood at 13.2% on
31 March 2011 and 13.0% on 31 December 2010.
Sparkasse KölnBonn manages its risks in a way that is commensurate with the scope and complexity of
its business (see Part D., Risk Report).
17
B. Subsequent Events
Subsequent Events
Indirect Acquisition via RSGV of DekaBank
The RSGV savings banks association, in which Sparkasse KölnBonn holds a 19.9% stake, decided in its
meeting on 14 March 2011 to participate in the German savings banks’ acquisition of the shares in
DekaBank held by the state banks (Landesbanken). The indirect shareholding held by RSGV in
DekaBank will rise from a current level of 6.56% to 13.90% in future.
There is potential for the distributions from DekaBank to offset the expenses incurred by RSGV to
finance the transaction. According to DekaBank, the required distribution potential is secured for the
long-term.
There were no other material events subsequent to the reporting date.
C. Internal Control and Risk Management System for Corporate
Accounting Purposes
As the Group’s parent company, Sparkasse KölnBonn is oriented towards the capital markets as it uses
an organised market in the sense of § 2 Sec. 5 WpHG to place the securities it issues in the sense of § 2
Sec. 1 Clause 1 WpHG. In accordance with the legal requirements of § 289 Sec. 5 HGB in connection with
§ 264d HGB (new version) the key characteristics of the internal control and risk management system
for corporate accounting purposes are described below.
The legislators have not defined any special requirements for the content or structure of an internal
control and risk management system for corporate accounting purposes. The Board of Management of
Sparkasse KölnBonn is responsible for setting up appropriate systems in the Sparkasse KölnBonn
Financial Group. Responsibility for the corporate accounting and the preparation of the consolidated
financial statements rests with the Accounting and Reporting department located within the corporate
Finance function. This structure means that corporate accounting is independent of the front office and
segregated from operations right up to the level of the Board of Management.
The corporate Accounting function of the Sparkasse KölnBonn Financial Group uses the WinKONS
corporate accounting and reporting application from IDL GmbH for technical support. Sparkasse
KölnBonn uses the One System Plus (OSP) accounting system from Finanz Informatik GmbH & Co. KG
(FI), an IT service provider integrated in the organisation of Sparkasse KölnBonn. In addition, the
SimCorp Dimension system (for financial information technology) is carried as a subsidiary ledger for
securities and issues and an in-house application of Sparkasse KölnBonn is used as a subsidiary ledger
for derivatives. The services performed under contract by FI are monitored within the framework of the
controlling of the service providers of Sparkasse KölnBonn. The subsidiaries use applications from
other firms for accounting purposes, including KHK Classic Line issued by Sage Software GmbH & Co.
KG and SAP from SAP AG is used at one associate. For a number of other subsidiaries, the accounting is
outsourced to Sparkasse KölnBonn.
As part of the corporate accounting-related risk management system, the corporate Finance function is
involved in significant decision-making processes such as uniform measurement within the Group, new
product releases and product variations. To ensure compliance with corporate accounting guidelines,
the corporate accounting of Sparkasse KölnBonn has issued a set of Group accounting guidelines
pursuant to International Financial Reporting Standards (IFRS) for all entities consolidated in the
consolidated financial statements. Separate explanations, for example on hedge transactions, can be
found in Part D. (Risk Report) of this Management Report. Please see Note [11] g) for information on
the use of the fair value option.
18
The Board of Management of Sparkasse KölnBonn approved the implementation of reporting and
escalation management to ensure that the time schedule for preparing the consolidated financial
statements is kept to. The corporate accounting process is supported technically by the dataprocessing tool, SmartCloseManager (SCM). In detail, SCM contains all the tasks and control functions
to be performed by all departments involved in the preparation of the IFRS consolidated financial
statements. Moreover, the higher level processes and other sub-processes needed to prepare the
consolidated financial statements of Sparkasse KölnBonn are filed in its process portal.
The corporate accounting function of the Sparkasse KölnBonn Financial Group is based on the
following four principles:
- defining the processes subject to mandatory controls
- ensuring transparency, clarity and completeness of source vouchers
- segregating functions between authors and controllers (principle of dual control)
- minimum information requirements (e.g. disclosure of estimated parameters when
recognising provisions)
The focus of the corporate accounting-related internal controls of the Sparkasse KölnBonn Financial
Group is on the segregation of functions and the principle of dual control. The goal is to avoid conflicts
and manipulations of financial data and financial transactions. There is a clear hierarchy of authorities
in the Accounting and Reporting department as well as in all decentralised departments that perform a
corporate accounting function. The internal control system covers all relevant fields and hierarchical
structures in the corporate accounting function. All corporate accounting processes are analysed
taking a front-to-end approach. The individual detailed tasks are a component of the SCM and serve to
validate the overall process.
The necessary controlling and auditing processes are defined on the basis of the line items and their
respective materiality. The audit processes include the reconciliation of intercompany balances
between Group entities, reconciliation of the amounts listed on source vouchers with the amounts on
the accounts, plausibility checks as needed, and spot-tests of completeness. The required controls
must be documented on the vouchers. The audits are performed by the corporate Accounting
department depending on the human resources available and the required tasks on the basis of the
line items and their materiality. The reconciliation of intercompany balances is vital for the accuracy of
the financial statements of the separate entities and is a critical factor in the consolidation process as
the result of the reconciliation of intercompany debts leads to the consolidation of income and
expenses and also the elimination of intercompany debts. The accuracy of the respective reporting
packages is attested by the auditors of the respective Group entity.
The Internal Audit reviews and assesses the appropriateness of the risk management in general and
the internal control system in particular, on the basis of the risk exposures and independent of the
processes concerned. Moreover, it reviews and assesses the compliance of all activities and processes
with requirements, regardless of whether these have been outsourced or not. For some outsourced
processes the Internal Audit of Sparkasse KölnBonn relies on the internal audits of the service
providers performing the outsourced tasks and regularly checks their functionality to its satisfaction.
The Internal Audit carries out comprehensive function and systems tests of all processes relevant to
the accounting on the basis of an audit plan that is rolled forward from year to year. Both the audit plan
and the execution of the audit are conducted on the basis of a risk-oriented audit approach.
19
D.
Risk Report
As the parent company of the Group, Sparkasse KölnBonn manages the risks of the Sparkasse
KölnBonn Financial Group arising from its banking activities. For this reason the risk report correlates
closely to that in the annual financial statements of Sparkasse KölnBonn.
Bank-Wide Risk-Based Management
Risk Strategy / Risk Management
As the parent company of the Group and with its bank-wide risk-based management, Sparkasse
KölnBonn systematically controls the risks associated with banking activities and keeps appropriate
risk coverage to ensure it maintains the ability to bear any risks that eventuate.
The full Board of Management of Sparkasse KölnBonn is responsible for a functioning and orderly risk
management system. In addition to the strategic goals of the Bank, the Board has approved a risk
strategy that is consistent with these goals. This defines two key strategic elements, the risk propensity
of the Bank and its ideal risk profile, which are strictly aligned to the needs of the business strategy and
the requirements of the mid-term planning. The risk propensity defines how much of the available
capital can be used to cover existing business and new business. The desired risk profile defines the
relative shares of default risks, market risks, investment risks and operational risks in the total risk
budget of the Sparkasse which the Bank should strive for in the future. The full Board of Management
also decides on the risk and loss limits, both for the individual risk categories and for individual
elements of the controlling, in accordance with the risk strategy.
Sparkasse KölnBonn applies a system of limits for all significant quantifiable risk categories which,
among other factors, is based on measuring the risks using comparable Value at Risk (VaR) indicators.
Sparkasse KölnBonn controls compliance with the risk limits, both at the level of the Bank as a whole
(macro level) and also at the level of individual portfolios. Derivative financial instruments are used in
the process, in particular for market risk exposures. These derivatives are combined with the
underlying in the financial statements pursuant to the German Commercial Code wherever the main
risk factor is identical, e.g. interest rates in one currency, share prices or individual currencies. In
addition, interest risks are limited at group level within the framework of the Bank’s interest rate risk
management.
In addition to the full Board of Management, the Finance and Cash Management Committee (FDA) also
takes responsibility for the functions of risk management. The risks attached to lending exposures and
equity investments are managed by the full Board of Management and the Finance and Cash
Management Committee is responsible for strategic market risk exposures. The entire Board of
Management members are members of the FDA. Operational risks are managed by a committee
specially set up for this purpose.
In line with the requirements of the Federal Financial Supervisory Authority, risk controlling at
Sparkasse KölnBonn is performed by a department that is independent of the front office. Apart from
assessing the potential risks, the assets available to cover potential losses are identified.
Classification of risks is based firstly on the business focus of Sparkasse KölnBonn – to generate
income by consciously accepting risk exposures on condition the Bank receives an appropriate risk
premium – and secondly on the requirements imposed by the financial supervisory authorities for the
management of risk. The risk management process is regularly subject to both internal and external
audits.
20
Risk Categories
At Sparkasse KölnBonn, a risk is identified as the danger of potential loss or lost profit that is caused by
internal or external factors. The risks originating from the banking business of Sparkasse KölnBonn
that are classified as relevant and significant are managed using the following general risk
management concepts:
Risikokategorien
Risk categories
Adressenausfall
Default risks risiken
Market
risks
Marktpreis
risiken
Equity
Beteiligungsinvestment
risiken risks
Main risks:
Wesentlich:
Main risks:
Wesentlich:
Wesentlich:
Main
risks:
Interest
Borrower
Immobilienrisiko
Zinsrisiko
Kreditnehmerrisiko
risk
rate risk
Property risk
Exchange
Issuer
Währungsrisiko
risk
Emittentenrisiko
rate risk
risk
Aktienkursrisiko
Insolvency
Bonitätsrisiko
Share price risk
Fondrisiko
Settlement
risk
Settlementrisiko
Investment fund risk
Vega-Risiko
Counterparty
risk
Kontrahentenrisiko
Volatility risk
Securities
Sicherheitenrisiko
risk
Country
Länderrisiko
risk
Conscious
by
riskRisikomessung
assessment
Bewusste
Risikonahme
durch
Bewussterisk-taking
Risikonahme
durch
Risikomessung
--limitierung
and riskund
management/limitation
Risikosteuerung/
und
Risikosteuerung/
limitierung
Fig:
Operationelle
Operational
risks
Risiken
Main risks:
Wesentlich:
Compliance
- risk
Legal
Rechtsrisiko
risk
Disaster
Katastrophenrisiko
risk
Liquidity
Liquiditärisks
tsrisiken
Other
Sonstige
risks
Risiken
Main risks:
Wesentlich:
Main risks:
Wesentlich:
Concentration
Refinancing
risk
Konzentrationsrisi
Refinanzierungsris
risk
Market
risk
liquidity
ätsrisiko
risk Association
Verbundrisiko
Marktliquidit
Reputation
Withdrawal
Reputationsrisiko
risk
Abrufrisiko risk
Business
Scheduling
Geschäftsrisiko
risk
Terminrisikorisk
Model
Modellrisiko
risk
Placing
risk
Platzierungsrisiko
äätzung
Minimisation/evaluation
Minimierung
Minimierung // Absch
Absch
tzung
-Risk
Risikover
Risikover
avoidance
meidung/
meidung/
/hedging
--versicherung
versicherung
Overview of the main risk types with regard to risk tolerance and risk management strategies at Sparkasse KölnBonn
Risk Tolerance
The business activity of Sparkasse KölnBonn is exposed to the risk that the projected earnings for a
one-year planning period can no longer be achieved due to unexpected risks that suddenly materialize.
When analysing the Bank’s risk tolerance (i.e. its ability to bear risks), which was revised at the end of
2009/beginning of 2010, Sparkasse KölnBonn pursues the objective of identifying the Value at Risk for
which the probability of a higher loss is less than 0.1% (i.e. there is a 99.9% probability in this period
that losses will lie within the Value at Risk). It must be possible to cover this Value-at-Risk at all times
from the available risk coverage. Under the revised concept, own funds as defined by banking law have
been included in the potential risk coverage, with any losses occurring during the year or forecast for
the coming year being suitably considered. The risk tolerance is subject to a stress test in order to
make a statement on the capital adequacy of the Bank in a crisis situation. This involves considering
factors that increase the risk and factors that reduce capital. Moreover, an analysis of the Bank’s ability
to bear risk is used to analyse the Bank’s risk propensity and define the desired risk profile in
accordance with the risk strategy and identify any discrepancies using gap analysis.
In addition to analysing risks at a 99.9% confidence level, risks are also calculated at a 99% and a 95%
confidence level. In essence, the 99% confidence level corresponds to the risk analysis applied until
the end of 2009. Sparkasse KölnBonn uses this confidence level to set its effective limits and to
manage its risk in operating business. The underlying assets are determined on the basis of the
Group’s equity measured under IFRS. This is calculated from the equity carried in the statement of
financial position on the reporting date plus the liabilities towards holders of profit participation rights
less deferred tax assets and a security buffer set as a percentage of equity. Target values are then set
for the strategic limits at a 99% confidence level on the basis of the risk propensity and the desired risk
profile. These are used as guidelines for setting the actual limits. This mechanism ensures that the
findings of the risk strategy are integrated in the risk management used for day-to-day operations. In
addition to risk limits, loss limits are also defined for net present values. The degree to which these loss
limits are drawn on is measured using Value-at-Risk methods, depending on the risk category. The
utilisation of the loss limits for net present values is calculated by assessing the changes in discounted
cash flows.
21
Over the course of 2010, the measures taken to reduce the risks in the money market and capital
market as well as in equity investments, have led to a slight reduction in the Bank's aggregate risk
exposure in comparison with the beginning of 2010. Temporary breaches of the sub-limits in some
areas of risk management were remedied by reallocating the relative shares of permitted limits. No
limits were breached at the end of 2010.
An analysis of the aggregate risk profile, based on the defined risk limits but ignoring diversification
between the various risk categories, reveals that 54% of the risk coverage was tied up in risk capital by
the end of the year. Using an adjusted retrospective analysis, this risk propensity came to 58% in the
prior year. Over the full course of 2010 it lay significantly below the maximum risk propensity of 75%
defined in the risk strategy. The quotient from dividing the Bank’s aggregate risk exposure under
stress by the adjusted risk coverage potential also declines over the year from 74% to 69%. The slight
downwards trend in these indicators over the course of the year is due to the fall in the Bank’s
aggregate risk exposure with the potential risk coverage remaining virtually constant. Further
measures to reduce risks and thus improve the ability of the Bank to bear risk are planned for the year
2011.
In addition to an economic analysis of the aggregate risk profile, the regulatory requirements must also
be observed in terms of both solvency (see Part A., 4. Net Assets, section on Equity Ratios) and liquidity
(see Part D., Liquidity Risks).
An analysis of the aggregate risk profile of Sparkasse KölnBonn reveals that available assets cover the
risk exposures entered into from both an economic perspective and in terms of the regulatory
requirements.
Risk Controlling Process
Default Risks
Sparkasse KölnBonn defines its default risk as the risk that the contractual partners of Sparkasse
KölnBonn fail to meet their payment obligations towards the Bank in part or at some delay.
Consequently, a distinction is made between the borrower’s risk, the issuer risk, the country risk, the
settlement risk (advance payment or settlement risk) and the replacement risk.
The Board of Management of Sparkasse KölnBonn has issued principles governing the key aspects of
assuming risks. The structure of the lending processes of Sparkasse KölnBonn is heavily affected by the
clear segregation of front office and back office functions within the organisation. At Board of
Management level the functional segregation between the front office and back office is ensured by a
formal allocation of management functions.
Special financing issues have been placed in separate units so as to bundle expertise and ensure
efficient processing. The tasks of loan analysis, loan processing, loan controlling, risk controlling,
special loan management and loan audits have all been allocated independently of the front office.
Some loan processing duties are performed by the front office.
The controlling instruments of Sparkasse KölnBonn include an early warning system for the recognition
and consistent processing of potentially delinquent loans, a system of limits to avoid concentrations of
risk and a rating and scoring system for a comprehensive appraisal of the lending portfolio. In addition
to the controlling instruments already mentioned, the risk controlling of the lending business bankwide includes loss and risk limits on the lending portfolio that are set by the full Board of Management.
By applying all these controlling instruments Sparkasse KölnBonn expresses its risk awareness when
extending loans and credit.
22
The rating models used are consistent methods that are calibrated to the risk of default within a period
of one year, by which the following master scale issued by the German Savings Bank and Giro
Association (DSGV) serves as a reference. The DGSV master scale is divided into 18 rating classes, 15
for borrowers who have not defaulted and 3 for borrowers who have defaulted. In the process the mean
risk of default is allocated to each class.
DSGV master
scale
Default probability
(%)
1 (AAA)
0.01
6
0.60
1 (AA+)
0.02
7
0.90
1 (AA)
0.03
8
1.30
1 (AA-)
0.04
9
2.00
1 (A+)
0.05
10
3.00
1 (A)
0.07
11
4.40
1 (A-)
0.09
12
6.70
2
0.12
13
10.00
3
0.17
14
15.00
4
0.30
15
20.00
5
0.40
16-18
Default
Speculative Grade
Default probability
(%)
Investment Grade
DSGV master
scale
Default
The coverage of the rating and scoring methods is 93.5% (FY 2009: 93.3%). Of this amount 57.6% (FY
2009: 59.8%) of the rated volume qualifies as Investment Grade customers (better than 6) and 42.4%
(FY 2009: 40.2%) as Speculative Grade customers (6 and below).
23
The following summary shows an analysis of the lending business and a breakdown of money market
and capital market business into the various rating classes as at 31 December 2010:
Gross volume: EUR 25,346 million
41.2%
23.8%
14.6%
11.0%
6.3%
3.1%
AAA to A
Customer lending
Change on prior year
Money & capital market
Change on prior year
1 (A-) to 5
0
6 to 9
10 to 15
16 to 18 *
without rating
9.135
5.869
3.604
794
1,246
- 74
±0
- 631
- 55
+ 286
- 41
2,792
1,306
157
93
0
350
- 1,034
+ 820
+ 63
- 21
0
- 11
* 16 = 90-day delay,
17 = valuation adjustment, 18 = insolvency application, depreciation, termination
When measuring and analysing risks, a basic distinction is made between customer business segments
and the Treasury. Lending portfolio models are used to quantify the credit risks and potential
concentrations of risk in controlling default risks. In the process, different confidence levels and a
holding period of one year are taken to analyse the Credit Value at Risk. The following description of
the risk assessment is based on a confidence level of 99%.
At the end of the fiscal year 2010, the lending risks in the customer business of Sparkasse KölnBonn
(Credit Value at Risk) amounted to EUR 188 million (prior year: without expected losses:
EUR 181 million). The moderate rise in the credit risk in customer business is partly due to some
customers being downgraded. In the money market and capital market business, the own investments
of the Bank were measured in an integrated manner on account of the reclassification of a part of the
trading book to the investment book according to regulatory requirements in fiscal year 2010. Credit
risks totalled EUR 71.2 million (comparative figures of the prior year: trading book: EUR 21.3 million,
investment book: EUR 87.7 million). The reduction in risk is primarily due to the reduction in the size of
the ABS portfolio.
In the money and capital market business the default risk is measured weekly using the Credit Metrics
model. In the customer business the default risk is measured monthly using the Credit Portfolio View
Direct model. The quarterly risk reports contain comprehensive structural analyses of the lending
portfolio.
The primary lending business in customer business lines is dominated by the economic environment
within the respective field. Particularly in the field of corporate customers, a moderate concentration on
certain industries is evident due to the regional concept of Sparkasse KölnBonn. 12% of the gross
volume is attributable to just five industries of a total of 88 and a quarter of the aggregate risk
exposure (FY 2009: 10% of gross volume to five of 88 industries, accounting for a third of the
aggregate risk exposure). The greatest risk concentrations are in the sector of “residential building
developers” which accounts for 5.0% (FY 2009: 14.0%) and the sector of “Retail textiles, leather,
shoes", which accounts for 4.6% (FY 2009: “Persons of independent means” with a share of 9.3%).
24
The breakdown of commercial lending, money market and capital market business for each industry is
as follows:
Industry
Volume
Change on the prior year
Banking and Insurance
4,618
-343
Real estate and housing
4,122
+88
Consultancy, planning, security
1,837
-14
Wholesale and retail
1,021
-68
Business services
919
-85
Construction
777
-4
Public and private services
704
-61
Health, social services
605
-21
Traffic, communications
601
-90
Manufacturing
582
-56
Residential building developers
579
-112
Energy, water and mining
459
+35
Non-commercial organisations
391
-13
Hotel and catering
326
-1
Persons of independent means
258
+12
Automobile trading
142
-2
29
+1
Agriculture, forestry, fishing
Other
Volume (in EUR million)
216
+37
18,186
-697
84% (FY 2009: 85%) of the individual items in the portfolio of loans and advances to customers carried
by Sparkasse KölnBonn are smaller than EUR 100 thousand. Mortgages are the most significant form of
collateral, accounting for a share of 93% (FY 2009: 93%). The most important customer segments in
the portfolio of loans and advances to customers at Sparkasse KölnBonn are self-employed and
corporate customers which account for roughly 64% of total lending volume (FY 2009: 65%) and
private customers which account for approximately 31% (FY 2009: 31%):
The following table shows the items which account for the largest share of risks in the customer lending
business:
1
Exposure1
EUR million
Marginal risk2
in EUR million
Private borrowers
309.0
65.4
9
169.1
4.4
3
9
300.7
3.2
4
15
38.7
3.2
5
14
40.5
0.9
6
15
12.3
0.9
7
8
Traffic, communications
84.1
0.7
8
8
Real estate and housing
49.7
0.4
9
11
31.8
0.3
10
14
11.8
0.2
Position
Rating
1
15
2
Industry
Book values plus open lines of credit.
Share of credit Value at Risk 99% less the share of the expected loss (expected value for losses in the portfolio on the risk
horizon).
2
25
The structure of the Treasury lending portfolio is dominated by Investment Grade investments which
account for 87% (FY 2009: 88%) of the lending volume, with the financial sector playing a leading role.
The largest items in the money and capital market business are as follows:3
Position
Rating
Industry
EUR million
Securities4
OTC
derivatives
Deposits
Total
5
1
A3
Banking and
2
Aa2
Banking and
172.1
28.8
574.4
775.3
210.1
0.0
250.0
460.1
66.8
0.0
150.1
216.9
195.3
0.6
0.0
195.9
151.7
0.0
0.0
151.7
136.8
1.0
3.1
140.9
131.2
2.2
0.0
133.4
0.0
0.0
130.1
130.1
84.5
0.0
0.0
84.5
55.5
0.0
0.0
55.5
Insurance
Insurance
3
A3
Banking and
Insurance
4
Aa2
Banking and
5
A1
Banking and
Insurance
Insurance
6
Aa2
Banking and
Insurance
7
Aa2
Banking and
8
A1
Banking and
Insurance
Insurance
9
Aaa
Banking and
Insurance
10
3
Aaa
Land
Excluding funds, as the transparency principle does not apply
Contains covered and uncovered securities and subordinated securities.
5
Calculated on the basis of current market values plus add-ons.
4
26
The trends in risk provisioning, which effectively reflects the impact on the income statement of
measuring the customer lending exposures of Sparkasse KölnBonn, comprise direct write-downs,
additions to and releases of valuation allowances and collections of claims already written off as bad.
They have fallen in comparison to the prior year.
140 %
120 %
100 %
80 %
60 %
40 %
20 %
0%
2006
Fig:
2007
2008
2009
2010
Development of risk provisioning in lending business (base year 2006 = 100 percent)
The methods used to measure the risk provisions for the customer lending business are governed by
standard operating procedures and processes. Early warning of non-performing engagements is
provided by clearly defined indicators of any borrowers displaying unusual behaviour. This process is
supported by an automatic early-warning system. Non-performing engagements are processed with
the necessary care (intensive monitoring, work-out).
A notable lending exposure of Sparkasse KölnBonn with an aggregate sum of EUR 113.0 million at
present, that has already been terminated, is fully secured by a mortgage and declarations of a nature
similar to a guarantee. The validity of personal guarantees has been called into doubt by the guarantor.
Sparkasse KölnBonn assumes, on the basis of legal appraisals and a market valuation, that its claims
are fully collateralised in the event that the security needs to be liquidated. Moreover, the independent
legal appraisals indicate that there are enforceable claims for damages of an amount equal to the
lending exposure.
Sparkasse KölnBonn has provided loans totalling EUR 962 million to 113 individual borrowers to
refinance their investments in 11 mutual property funds. Some of these funds have deteriorated in
value on account of their poor commercial performance. Although Sparkasse KölnBonn now has a
better picture of the financial circumstances of the subscribers to the funds, the Bank still does not
have an adequate picture of the financial circumstances of a number of subscribers. Apart from a small
residual amount, it was possible to avoid recognising risk provisions on these exposures due to the
available credit ratings and/or the security provided. Legal risks (claims for damages and rights of
revocation) were deemed to be immaterial in a statement issued by a law firm.
Equity Investment Risks
Equity investment risk is defined as the risk of an impairment of any equity investments entered into,
shareholder loans extended or any reliance on the joint liability of Sparkasse KölnBonn and the
respective equity investment company. A methodical approach is applied, based on a system of
representative alternative investments with the exception of the risks from equity investments within
the Sparkasse Financial Group network. As such the Sparkasse allocates the risks of its equity
investments to the category of market risks. The risk model is based on the historical data of the
alternative investment over the last 250 days of trading.
27
Property risks constitute their own sub-category of equity investment risks. The equity investment
risks represent the primary entrepreneurial risks of Sparkasse KölnBonn and amounted to EUR 153
million at a confidence level of 99% and a holding period of one year (FY 2009: EUR 171 million). The
reduction in the reported risk is chiefly due to the sale of individual investments and a reduction in the
volatility of individual variables of the risk model.
The risks in the portfolio of equity investments are controlled within the framework of the equity
investment strategy installed by the Board of Management of Sparkasse KölnBonn and by observing
the loss limits and risk limits for the portfolio. Risk controlling is performed by the full Board of
Management and the front office for equity investments. The front office department for equity
investments conducts its activities within the framework of a loan approval and monitoring process at
the level of each individual equity investment. The department prepares the relevant controlling
activities of the subsidiaries responsible on which the decision-makers can make their decision.
Decisions on equity investments are made by the Board of Management using a two-vote process,
similar to that used in the lending business.
The risk controlling of equity investments is performed by a back office department. This department
quantifies the risks of equity investments at portfolio level and provides the management with a
separate detailed summary of risk positions within the framework of the quarterly integrated risk
report. The plausibility of the valuations of equity investments was checked by a back-office
department and ratified. Equity investment risks represent a significant risk category at Sparkasse
KölnBonn. In addition to other financial investments, further significant risk drivers are the risks
associated with the network investments in Rheinischer Sparkassen- und Giroverband (RSGV), the
purchases association, Deutscher Sparkassen- und Giroverband öK, (an indirect equity investment in
Landesbank Berlin Holding AG) and RSL Rheinische Sparkassen Leasing Beteiligungsgesellschaft mbH
& Co. KG. Accounting for a 47% share in investment risks, this remains the most significant risk
category (FY 2009: 40%).
The quantification of property risk takes due account of the exposures of the property sector that are
generally dependent on the development of the commercial property market in the Cologne/Bonn
region. These exposures involve holding property in their own name, in project development, in equity
investments in real estate companies as well as in the form of property letting and rental. The
respective subsidiaries are responsible for controlling the business activities, project and portfolio
controlling in particular. The business activities mentioned are incorporated in the quantification of
property risk. With a share of 40% (2009: 33%) in the equity investment risk, the risk of investments in
the property sector represents a significant sub-category in addition to network investments in
affiliated companies.
We have made appropriate provisions and/or valuation allowances in the Annual Financial Statements
for 2010 above and beyond the provisions already recognised in prior periods, for all discerned risks,
particularly those associated with project developments and the development of individual equity
investments. In addition, any latent risks are monitored intensively. We have explained the risks arising
from the indirect obligations of Sparkasse KölnBonn associated with the stabilisation of WestLB AG in
the section on “Significant Events in the Fiscal Year” found in Part A, “1. Business Development and
Economic Environment”.
Market Risks
Market risks refer to the potential danger that changes in market parameters such as interest rates,
market volatility, foreign exchange rates and share prices could lead to losses or falls in value.
The Board of Management sets market risk and loss limits for the trading book and the investment
book on the basis of the latest respective system of limits. In association with the reclassification of
parts of the trading activities of Sparkasse KölnBonn from the trading book to the investment book
according to regulatory requirements6 at the beginning of October 2010, the limits for market risks and
default risks were adjusted in the trading book and investment book to match the change in the risk
exposure. At the end of the fiscal year 2010 the market risks of Sparkasse KölnBonn amounted to
EUR 75.1 million at a confidence level of 99%. The comparative figure at the end of fiscal year 2009
came to EUR 123.2 million. The change in the reported risk is largely attributable to the complete
reduction in the Strategic Asset Allocation (SAA), the sale of ABS’s and the reclassification of portions of
the securities portfolio to fixed assets at the end of 2010.
6
First measures to discontinue the Bank’s trading book institute status were taken effective 1 January 2011
28
Market risk limits are defined as mutually restrictive, with the exception of the limits for non-current
assets. This means that any losses in net present value automatically reduce the market limit by the
respective loss in net present value. This ensures that if any losses are incurred in net present value
then the risk positions are automatically limited or reduced.
The Finance and Cash Management Committee of Sparkasse KölnBonn is responsible for any measures
to control the risk of changes in interest rates within the investment book. In addition, the committee
sets the structural targets for the Treasury department, particularly with regard to the management of
assets and liabilities/equity. Operational management of market risk exposures in the investment book
is part of the management of assets and liabilities and equity within the framework of the decisions
made by the Finance and Cash Management Committee.
Significant open forex positions are not maintained due to the business model of Sparkasse KölnBonn.
Foreign exchange exposures therefore do not represent any significant risk for Sparkasse KölnBonn.
The same conditions apply to the risks of fluctuations in share prices. Consequently, there is no
significant risk in this regard either.
The Treasury (Trading), Settlement/Controlling, Accounting and Risk Controlling are organisationally
and functionally segregated.
Risk Controlling monitors the defined limits by the full Board of Management or the member of the
Board of Management responsible for supervisory matters on a daily basis. The basis for determining
the risk positions are the respective portfolios which are marked to market daily. Since February 2011,
the reporting cycle for risk positions and the result of operations has been changed from a daily basis
to a monthly basis. This change is related to the change in the status of the Bank to that of a trading
book institution under German banking law effective 1 January 2011. Furthermore, the Bank issues ad
hoc reports in the event of any significant influences on market risks or the results of operations.
Market risks are identified and measured daily using an internal model. Market risks are measured
methodically at the Value at Risk using a variance/covariance approach. Interest risks represent a
significant subcategory of market risks. Risks associated with market volatility are of lesser importance.
The risks of loss are examined daily from the perspective of assumed extreme market developments
(scenario analyses). The scenarios are specific for each instrument, i.e. there are different scenarios for
shares, currencies and interest. With regard to interest, the scenarios include parallel shifting of the
interest curves as well as twisting and changes in the credit spread.
An appropriate assessment of market risks requires continuous fine-tuning and development of the
systems and methods involved with regard to the scope, the complexity, and the content of the risk.
These represent a core element of risk controlling at Sparkasse KölnBonn.
Modelling the interest risk is based on a variance/covariance approach using delta gamma
approximations. Input data include the volatilities and correlations of a recognised external data
provider and sensitivity data from Sparkasse KölnBonn. The most important premise is a finite number
of risk factors that follow a Markov process. Options are incorporated in the estimate of Value at Risk
via the gamma variables. The general market risk is aggregated with the credit spread risk. In this
regard, it is assumed there is no correlation between the two risk categories.
The change in the net present value of the interest book due to the interest shock scenario defined in
§ 24 Sec. 1 KWG (Kreditwesengesetz: German Banking Act) developed as follows:
Change in net present value
in percent
31.12.2008
31.12.2009
31.12.2010
0.5
2.4
3.1
At all times in the year 2010 the change in the net present value in relation to own funds lay
significantly below the threshold of 20% set by the Federal Financial Supervisory Authority, as in prior
years.
Operational Risks
Operational risk is the risk of loss resulting from the inadequacy or failure of internal processes,
employees, internal infrastructure or from external events. This definition also includes legal risks.
Operational risks (OR) are an unavoidable element of bank business.
29
The identification of operational risks is based on the reactive analysis of any losses that have occurred
by storing them in a loss event database after the event, the proactive analysis which involves
assessing possible loss scenarios, and participating in the data pooling of the German Savings Bank
and Giro Association (Deutscher Sparkassen- und Giroverband).
Instruments used within the framework of the strategy to avoid or transfer operational risks include an
IT contingency concept, the optimisation of business processes, the discontinuation or outsourcing of
certain business processes and insurance. The Board of Management is informed of operational risks in
the integrated risk report that is prepared quarterly. The Board of Management sets the basic rules for
handling operational risks. It decides on the measures proposed to it to reduce risk exposures. The
Operational Risks Committee advises the Board of Management of Sparkasse KölnBonn on managing
operational risks and prepares the managerial decisions.
Liquidity Risks
With regard to liquidity risk Sparkasse KölnBonn makes a distinction between the liquidity risk per se
(the risk of insolvency) and other (strategic) liquidity risks (the risk of a run on deposits, the refinancing
risk, the market liquidity risk and the maturity risk).
In addition to analysing appropriate ratios (the liquidity ratio as defined by the Liquidity Regulation
and the other indicators) Sparkasse KölnBonn regularly conducts scenario analyses. The measurement
and limitation of liquidity risk relies on cash flow projections over the course of time. Liquidity risk
management is supplemented by a number of stress scenarios. Together with estimates of the money
market and capital markets, the analyses of ratios, cash flows and the result of stress tests, which are
reported on a monthly basis to the full Board of Management and the decision-makers concerned in the
second management level, can be used to derive controlling measures, right up to triggering a
contingency plan.
The liquidity risks are generally managed by holding liquid assets and structuring the Bank’s liabilities
and equity. The planning of refinancing is based on the cash flow projections, the given refinancing
potential and the activities planned in the various fields of business. Controlling is monitored
continuously and the planning assumptions are adjusted if needed.
Liquidity ratio according
to Liquidity Regulation
Liquidity ratio
Observed ratios according to
residual maturities as at
31.12.2010
Observed ratio
31.12.2009
31.03.2010
30.06.2010
30.09.2010
31.12.2010
1.6
1.5
1.4
1.8
1.5
Sight and up to 1 month
Over 1 month and up to 3 months
Maturity band 1
Maturity band 2
1.5
1.6
At year-end the liquidity ratio as defined by the Liquidity Regulation stood at 1.5, comfortably above
the minimum requirement of 1.0. The risk assessment of possible insolvency in future periods does not
indicate that any liquidity bottlenecks are expected. Sparkasse KölnBonn is noted for the adequacy of
its long-term funding on account of its prudent, forward-looking refinancing strategy. In addition to the
refinancing possibilities in customer business, at the end of the year it had a freely available pledged
securities account at the ECB of EUR 1.8 billion and freely available cover funds of EUR 2.2 billion. Both
these sources of refinancing could be increased if needed. As a consequence, Sparkasse KölnBonn is
able to compensate any unexpected large cash outflow, as needs to be simulated in the scenarios
required by the minimum requirements on risk management. The solvency of Sparkasse KölnBonn was
adequately secured during the entire fiscal year 2010.
30
Hedging
Sparkasse KölnBonn also uses derivative financial instruments to manage its compliance with the risk
limits, in particular for market risks. In the Bank’s annual financial statements pursuant to the German
Commercial Code these are combined into a valuation unit with the underlying. However, in the IFRS
consolidated financial statements Sparkasse KölnBonn does not apply hedge accounting. An
accounting mismatch arises due to the fact that all derivatives are measured at fair value as required by
IAS 39 because the hedged transactions are generally measured at amortised cost. To reduce this
accounting mismatch, Sparkasse KölnBonn avails of the fair value option for some of its hedged
transactions. Please see Note [11] g) for more details on the use of the fair value option.
E. Outlook
The following comments are by nature forward-looking statements. For this reason, the expectations of
future development that were made at the time this Group Management Report was prepared could
diverge significantly from actual events.
Sparkasse KölnBonn ratified its mid-term planning for fiscal years 2011 to 2015 in December 2010. The
Bank’s planning for Sparkasse KölnBonn Financial Group is based on the following economic
environment:
The economic developments on which the mid-term planning is based are founded on the forecasts of
leading economic research institutes. For 2011 these institutes forecast real GDP growth in a range of
between 1.7% and 2.5%. Whereas some institutes believe the economy will return to the level of
activity seen prior to the crisis by the end of 2011 already, other research institutes do not expect this
to happen until 2012. In the mid-term, the German economy is likely to profit from the continuing low
market interest rates that will stimulate investment activity. This assessment is confirmed by the
International Monetary Fund, which expects Germany to occupy a leading position among the industrial
countries in the mid-term on account of its exports and growing domestic economy.
Sparkasse KölnBonn is forecasting a similar development in its economic region. Examinations have
shown that economic growth in the region has run almost parallel to the wider German economy in the
past. The strong regional focus on exports suggests that the recovery in the region might even be
stronger than expected. Consequently, the economy might return to the level prior to the crisis in 2011
already.
The reports of the respective chambers of commerce and industry of Cologne and Bonn also expect
economic output to develop positively. The brighter prospects for business development have put the
chambers in an optimistic mood for the coming months. Such faith in the future is reflected in the
investment planning and human resources planning of local companies, with roughly a third of all
respondents expecting to expand their capital expenditure, of which 30% will be due to business
expansion. Sparkasse KölnBonn has relied on this information for its own planning in which it expects
real GDP growth of 2.1% for 2011 and 1.8% for 2012.
A boom year is expected for the German construction industry in 2011. Leading economic institutes
assume that investments in construction will rise by 2%. Investments in residential construction
should continue to profit from the favourable interest rates for mortgages, the stable situation on the
labour market and the rise in private incomes. The trend towards to modernisations and renovations
should continue to support the segment of fittings and finishing. With rising utilisation of capacity in
the processing trades, the economic research institutes expect investments in commercial real estate
to pick up by 3% in real terms. On account of the expiry of the economic stimulus programs and the
tight situation for state budgets, public investment in construction is expected to fall below the level of
2010. In light of the expected growth in the overall economy and the continuing slide in
unemployment, prices for residential property should continue to rise in the Cologne/Bonn region in
2011. The long-term perspective is also for stability on the residential property markets in Cologne and
Bonn.
31
With regard to the development of interest rates, Sparkasse KölnBonn assumes that there will be a
moderate rise in rates with the interest curve flattening out in the coming years after a sharper rise in
the short term. The rise is expected to occur in the coming two years, providing the Bank with enough
headroom to increase its spreads, particularly in the deposit business. From 2013, the rise in interest
rates will slow down to a moderate level. The rise in the key lending rate of the ECB to 1.5% constitutes
the second tightening of monetary policy since the global financial crisis started. This measure is
within the range expected by Sparkasse KölnBonn.
The business policy of Sparkasse KölnBonn will follow the path already taken to focus on the core
businesses of the Bank.
Against this economic backdrop, Sparkasse KölnBonn Financial Group is entering the new fiscal year
with the following expectations for its business development and earnings:
In the private customer business, the Bank has based its sales planning on assumed growth in claims
on customers and customer deposits in 2011, roughly in line with the growth in nominal GDP (and
assuming an inflation rate of 1%), with slight market growth from 2012. In its plans for the deposit
business, the Bank assumes that the issue of security will still dominate the investment decisions of its
customers.
The sales planning for corporate business has been differentiated in accordance with the strategic
realignment of the Bank: a reduction in the portfolio of key corporate customers as a result of the plan
to scale back the large customer business and win market share in corporate customer business with a
wider and flatter base.
In light of the continuing low level of interest rates, the net interest income of Sparkasse KölnBonn in
2011 should remain at approximately the same level as 2010, particularly that Sparkasse KölnBonn will
continue to act cautiously with regard to the long-term investment of floating rate customer deposits.
In the following year, it can be assumed that the interest margin on deposits will rise once interest
rates in the wider economy have stabilised. This is particularly the case for deposits in variable
products. If the interest level returns to normal at a slower rate than expected in our planning, this will
burden the expected net interest income in the coming year.
Our risk provisioning for the lending business is based on an expert appraisal for 2011. Overall, we
expect risk provisions to rise slightly in comparison to the actual value for 2010. However, the rise
should be very slight. The planning for the following years is based on the expected loss on our lending
portfolio determined using our credit risk model. We assume that risk provisioning will rise slightly in
parallel to the growth in the lending business. Sparkasse KölnBonn counters the uncertainties in some
portfolios, also in terms of potential concentration risks, by putting special emphasis on monitoring its
exposures. This is particularly true for those cases where the defaults could be significant if the
economic environment developed unfavourably. Monitoring is related to exposures for which no risk
provisions have been recognised on account of the collateral provided.
The net commission income is developing positively. Our planning for the coming two years forecasts
this positive trend to continue. In our view, the most significant growth drivers will be building society
contracts, life insurance policies, property and casualty insurance as well as commission on securities
trading. Proceeds from monetary transactions will stabilise in the coming years and trend slowly
upwards thereafter.
The measures decided on in the prior year to cut back administrative expenses have already borne the
first fruit. In the coming two years the Sparkasse expects to consolidate its costs more or less at the
current level.
With regard to its investment book, Sparkasse KölnBonn will continue to exploit any possibilities
afforded by the market to scale back the volume invested. Due to the increase in the credit spread in
some segments of the structured portfolio, Sparkasse KölnBonn is expecting a moderate expense from
fair value adjustments to its ABS portfolio. In some respects, substantial write-ups were recorded in the
first six months of 2011. With regard to its other portfolios of securities, Sparkasse KölnBonn expects
the capital markets to continue to stabilise. Consequently, the result from its financial investments in
securities should develop at a similar level to 2010 in the coming two years.
32
On 21 July 2011 the heads of the member states of the European Union accepted the proposals made
by the Institute of International Finance (IIF) regarding the involvement of the private sector in the
second package of support measures for the Greek economy. These provide for a programme to swap
the government bonds of Greece with terms expiring in or before 2020, which allows four different
possibilities for the private sector to participate in the restructure of Greek public debt, provided that
the debt swap meets the approval of 90% of the private sector.
The Sparkasse KölnBonn Financial Group informed the German Central Bank that it intends to
participate in the swap program. The terms and conditions of the swap provide for a present value of
79% for the bonds to be swapped. As the Sparkasse KölnBonn Financial Group recognises all
government bonds in the consolidated financial statements (AFV designated), the losses in their
carrying amounts due to changes in market value were already recognised in the consolidated financial
statements for 2010. If the debt swap program is carried out as described, the Sparkasse KölnBonn
Financial Group could generate income in the consolidated financial statements for 2011 from writing
up the Greek government bonds which qualify for the swap program. The other portfolios of Greek
government bonds with longer terms continue to be recognised at fair value. The swap program should
generally have a stabilising influence on the market prices of all Greek bonds and help to calm the
market.
Sparkasse KölnBonn Financial Group has developed an exit strategy for a significant portion of its
equity investments. Whereas some smaller exits were already realised in 2010, most of the planned
exits will occur in 2011. In light of this and with regard to the valuations performed to prepare the
consolidated financial statements for 2010, Sparkasse KölnBonn assumes that there will not be any
extraordinary burdens on the income statement in 2011 arising from its equity investments and that
the revaluation loss will not exceed that of 2010. We assume that revaluation losses will decline over
the coming years as a result of the reduction in the Bank’s risk exposure.
In past years Sparkasse KölnBonn already recognised significant provisions for the Rheinparkmetropole project, which was handed over to the tenants in 2009. The advanced stage of the audit
procedures has resulted in a very reliable estimate of the costs of the overall project as of 31 December
2010. This was used as the foundation by the Bank to assess the risks and make adequate provision in
the consolidated financial statements for fiscal year 2010 where required. At the same time, we are fully
aware that there are still latent risks associated with the Rheinparkmetropole project due to the
uncertainties that remain.
In 2010, the consolidated net profit before taxes of EUR 57.7 million developed much more positively
than the forecast made in the prior year. The reason for this development was the positive result from
financial instruments measured at fair value through profit or loss due to the continued recovery of the
capital markets and the significant drop in interest rates on the market. This development is not
expected to continue into 2011 and the following years based on the environmental factors assumed in
our mid-term planning. The assumed cost-savings measures and further reduction of assets-at-risk
should result in the Group’s result developing positively at a moderate level.
The development of earnings at the Group’s various segments already show positive trends in 2010
which indicate that the Sparkasse KölnBonn Financial Group will continue to develop in accordance
with its business planning.
As one of the key segments in the strategy of the Sparkasse KölnBonn Financial Group, the Private
customers segment will profit from the revival in the securities business, particularly with regard to
commission income, and the measures initiated to improve sales. The Corporate customers segment
will endeavour to stabilise its results at the level it has attained in light of the rise in risk provisions
allowed in the planning and the planned reduction in large exposures. Similar parameters determine
the development of earnings in the Individual customers segment where a slight decline in the result is
forecast. The Location development / restructuring segment should continue to profit from the planned
sale of parts of the portfolio and the associated reduction in risk exposures. The Equity investments
segment will continue to concentrate on advising our small and medium-sized customers in meeting
their equity financing requirements and its contribution to revenue is expected to develop at the same
pace as in 2010. The measures taken in the Corporate Center segment to further reduce administrative
overheads and scale back the investment book will generally have a positive impact on profit.
33
Owing to the duty, explained in more detail in the Notes, to replenish any hybrid capital that was
consumed by losses accumulated in previous years, the Sparkasse KölnBonn Financial Group will only
be able to recognise a small volume of provisions in its statement of financial position in the coming
two years to cover its indirect obligations associated with the first liquidation company (Erste
Abwicklungsanstalt) of WestLB AG. The replenishments will tend to burden the consolidated profit
carried forward of the Sparkasse KölnBonn Financial Group and thus inhibit additions to the Group's
revenue reserves.
Cologne, 9 September 2011
Sparkasse KölnBonn
The Board of Management
Grzesiek
Dr. Schmalzl
Dr. Gröschel
Dr. Siemons
Voigt
34
35
IFRS Consolidated Financial Statements
as at 31 December 2010 of
Sparkasse KölnBonn Financial Group
Consolidated Income Statement for the Period from 1 January 2010 to 31 December 2010
Consolidated Income Statement for the Period from
01.01.-31.12.2010
01.01.-31.12.2009
Notes
EUR
EUR ’000
1.
Interest income
[34]
1,060,323,435.55
1,201,382
2.
Interest expenses
[34]
689,393,811.84
816,427
370,929,623.71
384,955
-90,736,120.12
-123,870
280,193,503.59
261,085
Net interest income prior to risk provisions
3.
Risk provisions
[11], [17], [35]
Net interest income after risk provisions
4.
Commission income
[36]
177,786,979.85
164,255
5.
Commission expenses
[36]
15,297,971.40
14,870
162,489,008.45
149,385
6.
Gain or loss on financial instruments measured
at fair value through profit or loss
[37]
72,589,724.56
71,495
7.
Investment income
[38]
2,545,175.30
-536
8.
Result of associates recognised at equity
[39]
1,469,364.75
-4,970
9.
General administrative expenses
[40]
473,751,438.05
487,090
10. Other operating income
[41]
197,400,331.53
301,478
11. Other operating expenses
[42]
185,259,759.90
269,170
-.--
-
[33], [43]
18,348,773.57
21,330
76,024,683.80
43,007
7,687.15
-7
76,016,996.65
43,014
Net commission income
12. Earnings from discontinued operations
13. Income taxes
Consolidated net profit or loss for the year
attributable to minority interests
attributable to the responsible body
36
Consolidated Statement of Comprehensive Income for the Period from 1 January 2010 to 31 December 2010 37
Consolidated Statement of Comprehensive Income for the Period
from 1 January 2010 to 31 December 2010
The following statement reconciles the consolidated profit or loss carried forward to the consolidated
comprehensive income for the period according to IAS 1.81 taking into account the related components
of comprehensive income not affecting profit and loss (other comprehensive income for the period):
01.01.-31.12.2010
01.01.-31.12.2009
EUR
EUR ’000
76,024,683.80
43,007
15,417,487.36
-1,846
16,364,741.20
-2,111
-947,253.84
265
75.47
29
Change in revaluation reserve through carrying amount of associates
recognised at equity
-859,750.00
-2,008
Change in revaluation reserve through deferred taxes not affecting
profit and loss
-445,076.02
16,672
Total other comprehensive income for the period
14,112,736.81
12,847
Comprehensive income for the period
90,137,420.61
55,854
attributable to minority interests
7,687.15
-7
attributable to the responsible body
90,129,733.46
55,861
Other comprehensive income for the period
Change in revaluation reserve through financial instruments classified
as Available for sale
thereof fair value of financial instruments classified
as Available for sale
thereof reclassification to investment income from financial
instruments classified as Available for sale
Change in revaluation reserve through currency translation of nonmonetary financial instruments
The tax effects for each component of other comprehensive income for the period are as follows:
Reporting period in EUR
Other comprehensive income for the
period
Available for sale financial instruments
Currency translation of non-monetary
Adjustments to the carrying amount of
associates recognised at equity not
affecting profit and loss
Total
Before taxes
Taxes
After taxes
15,417,487.36
-445,076.02
14,972,411.34
75.47
-.-
75.47
-859,750.00
-.-
-859,750.00
14,557,812.83
-445,076.02
14,112,736.81
Previous period in EUR’000
Other comprehensive income for the
period
Available for sale financial instruments
Before taxes
Taxes
After taxes
-1,846
16,672
14,826
29
-
29
Adjustments to the carrying amount of
associates recognised at equity not
affecting profit and loss
-2,008
-
-2,008
Total
-3,825
16,672
12,847
Currency translation of non-monetary
Appropriation of Profits / Reconciliation as at 31 December 2010
Appropriation of Profits / Reconciliation
Consolidated net profit or loss for the year attributable to the
responsible body
Contributions to the fund for general banking risks
76,016,996.65
43,014
-.--
-
47,236,367.03
-
-.--
-
47,236,367.03
-
Withdrawals from the funds for general banking risks
-.--
-
Withdrawals from hybrid financial instruments
-.--
16,843
Contributions to hybrid financial instruments
Contributions to silent participations
Total contributions
Withdrawals from silent participations
Total withdrawals
Consolidated profit carried forward
-.--
19,522
-.--
36,365
28,780,629.62
79,379
38
39
Assets
Notes
Reporting year EUR
Prior year EUR ’000
[48]
328,395,914.25
691,891
1.
Cash reserve
2.
Claims on banks
[16], [49]
2,652,344,753.64
1,650,606
3.
Claims on customers
[16], [50]
20,695,136,273.12
21,212,952
4.
Risk provisions
[11], [17], [52]
-375,774,131.29
-381,968
5.
Hedge derivatives
-.--
-
6.
Assets held for trading
[18], [53]
1,319,809,337.03
2,130,164
7.
[19], [54]
394,060,682.44
5,190
8.
Financial assets
[20], [55]
3,830,151,870.76
4,140,480
9.
Investments in associates recognised at equity
[21], [39], [56]
25,992,602.62
25,491
10. Property, plant and equipment
[22], [57]
138,472,367.52
195,114
11. Investment property
[23], [58]
380,301,644.52
510,240
12. Intangible assets
[24], [59]
6,093,547.05
6,458
13. Current tax assets
[33], [60]
28,795,875.72
48,126
14. Deferred tax assets
[33], [61]
225,368,075.72
204,067
[62]
156,096,985.53
193,512
29,805,245,798.63
30,632,323
15. Other assets
Total assets
Liabilities and equity
Notes
Reporting year EUR
Prior year EUR ’000
1.
Liabilities to banks
[27], [63]
5,744,795,567.75
6,272,133
2.
[27], [64]
17,954,472,762.22
17,613,744
3.
Liabilities held for trading
[28], [65]
1,716,135,066.92
1,893,047
4.
[27], [66]
1,684,226,121.58
2,242,665
5.
Hedge derivatives
-.--
-
6.
Provisions
[29], [30], [67]
328,215,235.90
323,690
7.
Current tax liabilities
[33], [68]
17,750,000.47
15,285
8.
Deferred tax liabilities
[33], [69]
-.--
-
9.
[32], [70]
1,110,516,017.53
1,154,214
10. Other liabilities
[72]
131,787,127.30
220,698
11. Liabilities held for sale
[73]
126,776,786.49
-
[74], [88]
990,571,112.47
896,847
a) Silent participations
330,477,960.74
330,479
b) Revenue reserves
501,480,120.64
418,396
-.--
-
12. Equity
c) Fund for general banking risks
d) Revaluation reserve
[11]
80,434,471.73
66,322
e) Hybrid financial instruments
[71]
49,377,056.91
2,141
[6]
20,872.83
130
28,780,629.62
79,379
29,805,245,798.63
30,632,323
f) Minority interests
g) Consolidated profit carried forward
Total liabilities and equity
Statement of Changes in Equity
Statement of Changes in Equity 2010
EUR million
Balance as at 01.01.2010
Revenue
reserves
Fund for
general
banking
risks
Revaluation
reserve
Hybrid
financial
instruments
Silent
participations
Equity
Minority
prior to interests
minority
interests
Total
equity
497.8
-.-
66.3
2.1
330.5
896.7
0.1
896.8
Dividends
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
Contributions to silent
participations
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
Withdrawals from silent
participations
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
Contributions to hybrid
-.-
-.-
-.-
47.3
-.-
47.3
-.-
47.3
Withdrawals from hybrid
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
Withdrawals from the fund
for general banking risks
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
28.8
-.-
-.-
-.-
-.-
28.8
-0.1
28.7
-.-
-.-
14.1
-.-
-.-
14.1
-.-
14.1
3.7
-.-
-.-
-.-
-.-
3.7
-.-
3.7
530.3
-.-
80.4
49.4
330.5
990.6
-.-
990.6
Equity
Minority
prior to interests
minority
interests
Total
equity
Consolidated profit
carried forward
Other comprehensive
income for the period
Changes to the
consolidated group and
consolidation-related
adjustments
Statement of Changes in Equity 2009
EUR million
Revenue
reserves
Fund for
general
banking
risks
Revaluation
reserve
Hybrid
financial
instruments
Silent
participations
418.2
-.-
53.5
18.8
-.-
490.5
0.1
490.6
Dividends
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
Contributions to silent
participations
-.-
-.-
-.-
-.-
350.0
350.0
-.-
350.0
Withdrawals from silent
participations
-.-
-.-
-.-
-.-
-19.5
-19.5
-.-
-19.5
Contributions to hybrid
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
Withdrawals from hybrid
-.-
-.-
-.-
-16.7
-.-
-16.7
-.-
-16.7
Withdrawals from the fund
for general banking risks
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-.-
79.4
-.-
-.-
-.-
-.-
79.4
-.-
79.4
-.-
-.-
12.8
-.-
-.-
12.8
-.-
12.8
0.2
-.-
-.-
-.-
-.-
0.2
-.-
0.2
497.8
-.-
66.3
2.1
330.5
896.7
0.1
896.8
Consolidated profit
carried forward
Other comprehensive
income for the period
Changes to the
consolidated group and
consolidation-related
adjustments
40
2010
2009
EUR ’000
EUR ’000
76,025
43,007
162,221
193,205
48,638
39,800
Adjustments to other non-cash items
Income from the disposal of non-current assets
-110,444
-9,430
-81,139
-16,791
Other adjustments (net)
-355,526
-424,167
-1,020,501
-135,605
419,325
832,961
361,506
296,276
-
13,404
Non-cash items included in consolidated net profit or loss for the year and
reconciliation of cash flows from operating activities
Depreciation, amortisation, impairments and additions to receivables,
property, plant and equipment, financial assets, intangible assets and
investment properties
Adjustments to provisions for pensions and other provisions and additions to
provisions for the off-statement of financial position lending business
Changes in assets and liabilities from operating activities after adjusting for
non-cash elements
Claims on banks
Claims on customers
Other assets from operating activities
12,136
23,111
-406,519
-809,701
449,830
573,266
-596,050
-1,301,049
-176,912
649,473
Liabilities held for sale
Other liabilities from operating activities
-128,681
-12,256
-84,819
1,026,422
1,237,452
-665,267
-845,583
Interest, dividends and tax payments
Interest received
Interest paid
Dividends received 1)
8,844
5,002
-932
-15,842
-433,860
-291,450
Cash inflows from the disposal of financial assets 2)
Cash inflows from the disposal of property, plant and equipment, investment
properties and intangible assets
Cash outflows for investments in financial assets
169,049
1,064
273,303
2,597
-5,003
-64,485
Cash outflows for investments in property, plant and equipment, investment
properties and intangible assets
Cash inflows from the disposal of consolidated entities less cash and cash
-18,417
-18,091
-
6,015
-
-
146,693
199,339
Cash inflows from additions to equity
-
350,000
Cash inflows from the issue of subordinated capital
-
6,594
-76,328
-53,590
-
-
-76,328
303,004
Income taxes
Cash flow from operating activities
equivalents disposed of 2)
Cash outflows for the acquisition of consolidated entities less cash and cash
equivalents acquired
Cash flow from investing activities
Cash outflows for the redemption of subordinated capital
Other cash outflows
Cash flow from financing activities
1) including dividends of associates recognised at equity
2) The effects of liquidating and deconsolidating special funds which were contained in the prior year under the item “Cash inflows
from the disposal of consolidated entities less cash and cash equivalents disposed of” are reported under the line item “Cash
inflows from the disposal of financial assets” in fiscal year 2010. The prior-year figures have been adjusted accordingly.
41
Cash and cash equivalents as at 1 January
2010
2009
EUR ’000
EUR ’000
691,891
480,998
Cash flow from operating activities
-433,860
-291,450
Cash flow from investing activities
Cash flow from financing activities
146,693
-76,328
199,339
303,004
Adjustments from changes in exchange rates and revaluations
Cash and cash equivalents as at 31 December
-
-
328,396
691,891
The Consolidated Cash Flow Statement reconciles the cash and cash equivalents of the Sparkasse
KölnBonn Financial Group at the beginning of the period with the cash and cash equivalents held at the
end of the period by presenting the cash flows from
•
operating activities,
•
investing activities and
•
financing activities
This corresponds to the statement of financial position item “Cash reserve“ (see Note [48]).
The cash flow from operating activities are determined according to the indirect method. According to
this the consolidated net profit or loss for the year is adjusted for the effects of non-cash income and
expenses. Cash interest, dividend and tax payments are reported separately in accordance with IAS 7.
Thereafter net profit/loss for the year is adjusted using the item “Other adjustments” to eliminate net
interest and taxes recognised through profit or loss.
The cash flow from investing activities shows cash inflows and outflows which generally relate to noncurrent investments or use thereof. For example, these include investments in securities which cannot
be allocated to the Sparkasse KölnBonn Financial Group's trading activities or investments in land and
buildings.
The cash flow from financing activities shows changes in equity as a result of the issue or redemption of
subordinated capital which, from a regulatory viewpoint, qualify as liable equity capital.
The cash flow statement is prepared in accordance with IAS 1.7 in conjunction with IAS 7.1. There are no
exemptions for banks pursuant to IAS 7.3.
A bank's cash flow statement has limited informative value since it does not provide any information
about the Bank's actual liquidity position. The cash flow statement does not replace the Sparkasse
KölnBonn Financial Group's liquidity plan or financial plan, nor is it used as a controlling instrument.
Please see Note [9] for more information on the disposal of assets and liabilities.
42
43
General ...............................................................................................................................................................47
[1]
General Information about the Sparkasse KölnBonn Financial Group .......................................................47
[2]
Accounting Policies ............................................................................................................................................47
[3]
Declaration of Compliance with International Financial Reporting Standards .........................................48
[4]
Applied International Financial Reporting Standards...................................................................................50
[5]
Disclosures Relating to the Nature and Extent of Risks Arising from Financial Instruments .................51
[6]
Consolidation Principles....................................................................................................................................51
[7]
Consolidated Group ...........................................................................................................................................52
a)
Subsidiaries ........................................................................................................................................................52
b) Associates recognised at equity......................................................................................................................54
[8]
First-time Consolidation (Business Combinations).......................................................................................55
[9]
Disposal of Consolidated Entities ....................................................................................................................55
[10] Significant Accounting Judgements and Estimates......................................................................................56
[11] Disclosures on the Accounting and Measurement of Financial Instruments ............................................57
a)
Categories of financial instruments................................................................................................................57
b) Explanations of other measurement criteria .................................................................................................60
c)
Risk provisioning for financial assets in the LAR category..........................................................................62
d) Embedded derivates .........................................................................................................................................64
e)
Initial recognition and disposal of financial instruments ............................................................................64
f)
Hedge accounting..............................................................................................................................................64
g) Disclosures on the use of the fair value option .............................................................................................65
[12] Revenue Recognition.........................................................................................................................................65
[13] Currency Translation ..........................................................................................................................................66
[14] Netting .................................................................................................................................................................66
[15] Government Grants ............................................................................................................................................67
[16] Claims on Banks and Customers ......................................................................................................................67
[17] Risk Provisions....................................................................................................................................................67
[18] Assets Held for Trading .....................................................................................................................................68
[19] Non-current Assets Held for Sale .....................................................................................................................68
[20] Financial Assets ..................................................................................................................................................68
[21] Investments in Associates Recognised at Equity ..........................................................................................69
[22] Property, Plant and Equipment ........................................................................................................................69
[23] Investment Property ..........................................................................................................................................70
[24] Intangible Assets ................................................................................................................................................70
44
[25] Leases...................................................................................................................................................................71
[26] Borrowing Costs..................................................................................................................................................72
[27] Liabilities to Banks and Customers and Securitised Liabilities ...................................................................72
[28] Liabilities Held for Trading................................................................................................................................72
[29] Provisions for Pensions and Similar Obligations...........................................................................................73
a)
Direct Pension Obligations ..............................................................................................................................73
b) Indirect Pension Obligations ...........................................................................................................................74
[30] Other Provisions .................................................................................................................................................75
[31] Financial Guarantee Contracts..........................................................................................................................76
[32] Subordinated capital..........................................................................................................................................76
[33] Deferred and Current Taxes ..............................................................................................................................76
Notes to the Consolidated Income Statement .................................................................................................77
[34] Net Interest Income Prior to Risk Provisions..................................................................................................77
[35] Risk Provisions....................................................................................................................................................78
[36] Net Commission Income....................................................................................................................................80
[37] Gain or Loss on Financial Instruments Measured at Fair Value through Profit or Loss ...........................80
[38] Investment Income.............................................................................................................................................82
[39] Result of Associates Recognised at Equity.....................................................................................................83
[40] General Administrative Expenses ....................................................................................................................84
[41] Other Operating Income....................................................................................................................................86
[42] Other Operating Expenses ................................................................................................................................87
[43] Income Taxes.......................................................................................................................................................88
Segment Reporting ...........................................................................................................................................90
[44] Notes on Segment Reporting ...........................................................................................................................90
[45] Calculation of Segment Results........................................................................................................................92
[46] Segment Reporting ............................................................................................................................................93
[47] Reconciliation and Consolidation ....................................................................................................................94
Notes to the Consolidated Statement of Financial Position – Assets.............................................................98
[48] Cash Reserve .......................................................................................................................................................98
[49] Claims on Banks..................................................................................................................................................98
[50] Claims on Customers..........................................................................................................................................99
[51] Lending Volume............................................................................................................................................... 100
[52] Risk Provisions................................................................................................................................................. 101
45
[53] Assets Held for Trading .................................................................................................................................. 104
[54] Non-current Assets Held for Sale .................................................................................................................. 104
[55] Financial Assets ............................................................................................................................................... 107
[56] Investments in Associates Recognised at Equity ....................................................................................... 108
[57] Property, Plant and Equipment ..................................................................................................................... 109
[58] Investment Property ....................................................................................................................................... 111
[59] Intangible Assets ............................................................................................................................................. 113
[60] Current Tax Assets........................................................................................................................................... 115
[61] Deferred Tax Assets......................................................................................................................................... 115
[62] Other Assets ..................................................................................................................................................... 116
Notes to the Consolidated Statement of Financial Position – Equity and Liabilities ..................................117
[63] Liabilities to Banks .......................................................................................................................................... 117
[64] Liabilities to Customers.................................................................................................................................. 118
[65] Liabilities Held for Trading............................................................................................................................. 119
[66] Securitised Liabilities...................................................................................................................................... 119
[67] Provisions ......................................................................................................................................................... 120
a)
Provisions for pensions and similar obligations........................................................................................ 120
b) Provisions for off-statement of financial position lending business ...................................................... 124
c)
Other provisions ............................................................................................................................................. 125
[68] Current Tax Liabilities ..................................................................................................................................... 127
[69] Deferred Tax Liabilities ................................................................................................................................... 127
[70] Subordinated Capital ...................................................................................................................................... 128
[71] Hybrid Financial Instruments......................................................................................................................... 130
[72] Other Liabilities ............................................................................................................................................... 132
[73] Liabilities Held for Sale ................................................................................................................................... 132
[74] Equity ................................................................................................................................................................ 133
Other Disclosures ............................................................................................................................................134
[75] Quantitative Disclosures on Risk Management .......................................................................................... 134
[76] Net Result of Measurement Categories under IAS 39 ................................................................................ 138
[77] Fair Value of Financial Instruments............................................................................................................... 139
[78] Disclosures on the Fair Value Hierarchy pursuant to IFRS 7 ..................................................................... 140
[79] Reconciliation Pursuant to IFRS 7.28 ........................................................................................................... 147
[80] Maturity Analysis ............................................................................................................................................. 147
[81] Disclosures on the Use of the Fair Value Option for Financial Assets and Financial Liabilities ........... 150
[82] Contingent Liabilities and Other Commitments ......................................................................................... 151
46
[83] Notes to Leases................................................................................................................................................ 152
a)
The Group as Lessee - Finance Leases ........................................................................................................ 152
b) The Group as Lessee - Operating Leases .................................................................................................... 153
c)
The Group as Lessor - Operating Leases..................................................................................................... 154
[84] Securities Sale and Repurchase Transactions............................................................................................. 155
[85] Securities Lending Transactions ................................................................................................................... 156
[86] Assets Pledged as Security ............................................................................................................................ 156
[87] Assets Pledged as Collateral .......................................................................................................................... 157
[88] Capital Management ....................................................................................................................................... 158
[89] Risk Positions and Solvency Indicators........................................................................................................ 160
[90] Related Entities................................................................................................................................................ 161
[91] Related Persons............................................................................................................................................... 164
[92] Details on German Covered Bonds (Pfandbriefe)........................................................................................ 166
a)
Mortgage Bonds (Hypothekenpfandbriefe)................................................................................................. 166
b) Public Sector Bonds (Öffentliche Pfandbriefe)............................................................................................ 168
[93] Average Number of Employees ..................................................................................................................... 170
[94] Auditors’ Fees .................................................................................................................................................. 170
[95] Shareholdings .................................................................................................................................................. 171
[96] Letters of Comfort............................................................................................................................................ 175
[97] Board Members................................................................................................................................................ 176
Auditors’ Report ..............................................................................................................................................184
Report of the Supervisory Board ....................................................................................................................185
General
[1] General Information about the Sparkasse KölnBonn Financial Group
Sparkasse KölnBonn, the parent company of the Sparkasse KölnBonn Financial Group, is a financial
institution incorporated under public law with its headquarters at Hahnenstrasse 57, 50667 Cologne,
Federal Republic of Germany. It has branches and various competence centres for asset management
(VermögensCenter), real estate (ImmobilienCenter) and business clients (FirmenCenter) in the cities of
Cologne and Bonn. Sparkasse KölnBonn's responsible body (Träger) is the special-purpose
organisation, “Zweckverband Sparkasse KölnBonn”, whose members are the City of Cologne and the
Federal City of Bonn. Sparkasse KölnBonn is entered in the commercial register of the District Court of
Cologne under HRA 7961. Its fiscal year is the calendar year.
Sparkasse KölnBonn is a universal financial institution with banking operations pursuant to § 1 KWG. In
this connection, it provides financial services which, for the most part, comprise loans and deposits
affecting the statement of financial position, though it also provides other services. As part of the SFinanzgruppe (Savings Banks Financial Group), it provides a range of building loan and investment
products such as lease financing.
The parent company Sparkasse KölnBonn has its main business operations in the banking business
pursuant to § 1 Sec. 1 Clause 2 KWG. Its business partners are mainly customers in the Cologne/Bonn
business region. Certain consolidated entities also operate in the equity investment and property
business. The consolidated group is presented in Note [7]. The parent company, Sparkasse KölnBonn,
issues listed bonds on the capital market and handles their market management. It is a long-term
issuer of Pfandbriefs (a traditional kind of German covered bond). The required notification in
accordance with the German Pfandbrief Act (Pfandbriefgesetz) was submitted to the Federal Financial
Supervisory Authorities (Finanzdienstleistungsaufsicht) on 12 October 2005. Moreover, it trades in
financial instruments with the main objective of hedging customer transactions and achieving a
positive short-term proprietary trading result.
[2] Accounting Policies
In addition to the income statement, statement of comprehensive income, the statement of financial
position, the cash flow statement, the consolidated financial statements of the Sparkasse KölnBonn
Financial Group comprise the statement of changes in equity and the notes. As a capital marketoriented company, it also implements segment reporting pursuant to IFRS 8. The segment reporting is
provided in Notes [44] to [47]. Pursuant to § 315a HGB the consolidated financial statements are
supplemented by the Group management report as specified in § 315 HGB. Since August 2008, the
Sparkasse KölnBonn Financial Group has qualified as a capital market-oriented company as defined by
§ 327a HGB and is therefore exempted from the requirement to submit a responsibility statement
(Bilanzeid) as well as from the duty to publish its consolidated accounts within the shorter period of
four months after the end of the fiscal year. The Board of Management has made this declaration
voluntarily. Due to the fact that § 37z Sec. 1Wp HG frees the Group from the obligations under § 37v
through to § 37y WpHG, the provisions on the annual and six-monthly financial report do not apply.
Accounting and valuation are based on the assumption that the company is a going concern. Income
and expenses are recognised and reported on a pro rata basis in the period in which they are incurred.
Pro rata interest for financial instruments resulting from this matching principle is reported in
conjunction with the underlying receivable or liability. Assets and liabilities are not offset against each
other unless stated explicitly otherwise. Recognition and measurement methods are applied
consistently.
47
References to HGB (Handelsgesetzbuch: German Commercial Code) relate to the HGB as amended by
the introduction of BilMoG (Bilanzrechtsmodernisierungsgesetz: Accounting Law Modernization Act)
which came into force on 29 May 2009.
Pursuant to § 325 HGB in conjunction with § 328 HGB, the consolidated financial statements are
submitted to the electronic Bundesanzeiger (Federal Gazette) (www.ebundesanzeiger.de).
The consolidated financial statements were prepared by the Board of Management on 9 September
2011.
The reporting currency is euro. Unless otherwise specified, all amounts are stated in thousands of euro
(EUR ’000) and the figures have been rounded off as necessary using the business method. In isolated
cases, this method has not been applied in order to ensure the arithmetical accuracy within the
individual tables.
[3] Declaration of Compliance with International Financial Reporting
Standards
The consolidated financial statements of the Sparkasse KölnBonn Financial Group for the 2010 fiscal
year were prepared in accordance with § 315a HGB and International Financial Reporting Standards
(IFRSs) and International Accounting Standards (IASs) published by the International Accounting
Standards Board (IASB) as adopted by the European Union (EU).
The interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the
Standing Interpretations Committee (SIC) which are mandatory in the EU have also been observed.
Moreover, the requirements of § 315a Sec. 1 HGB were complied with.
Moreover, the following standards and interpretations were mandatory in fiscal year 2010:
Improvements to IFRSs (May 2008) - Amendments to IFRS 5
Improvements to IFRSs (April 2009)
Amendments to IAS 39: Eligible Hedged Items
Amendments to IAS 27 - Consolidated and Separate Financial Statements
IFRS 1 - First-time Adoption of International Financial Reporting Standards (revised in 2008)
Amendments to IFRS 1: Additional Exemptions for First-time Adopters
Amendments to IFRS 2: Group Cash-Settled Share-based Payment Transactions
IFRS 3 – Business Combinations (revised 2008)
IFRIC 12 – Service Concession Arrangements
IFRIC 15 – Agreements for the Construction of Real Estate
IFRIC 16 – Hedges of a Net Investment in a Foreign Operation
IFRIC 17 – Distributions of Non-Cash Assets to Owners
IFRIC 18 – Transfers of Assets from Customers
The above standards and interpretations which had to be adopted in fiscal year 2010 did not have any
significant impact on the consolidated financial statements. The amendments to IAS 24 – Related Party
Disclosures issued by the IASB in 2009 were early adopted by the Sparkasse KölnBonn Financial Group
in 2010. The standard setters have made application of these amendments mandatory for fiscal years
beginning on or after 1 January 2011. The early adoption of these amendments did not have any
significant impact on the consolidated financial statements.
48
In fiscal year 2010, the following standards and interpretations were not yet mandatory:
Improvements to IFRSs (May 2010)
Amendments to IAS 12: Recovery of Underlying Assets
IAS 27 – Separate Financial Statements (amended 2011)
IAS 28 – Investments in Associates and Joint Ventures (amended 2011)
Amendments to IAS 32: Classification of Rights Issues
Amendments to IFRS 1: Limited Exemption from Comparative IFRS Disclosures, Severe Hyperinflation and
Revocation of Fixed Dates for First-time Adopters
Amendments to IFRS 7 – Disclosures: Transfers of Financial Assets
IFRS 9 – Financial Instruments
IFRS 10 - Consolidated Financial Statements
IFRS 11 – Joint Arrangements
IFRS 12 – Disclosures of Interests in Other Entities
IFRS 13 – Fair Value Measurement
Amendments to IFRIC 14: Prepayments of a Minimum Funding Requirement
IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments
The Group did not early-adopt the above amendments and new standards and interpretations. IFRS 9
could result in significant changes to the accounting and measurement policies of the Group. Other
changes in measurement policies could arise from the adoption of IFRS 13. IFRS 12 will result in
extended disclosures. No significant impact on the consolidated financial statements is expected from
the other standards and interpretations. An overview of the IFRS which have been applied (as at
31 December 2010) is provided in Note [4].
49
[4] Applied International Financial Reporting Standards
The consolidated financial statements of the Sparkasse KölnBonn Financial Group are based on the
IFRS framework and the following IASs/IFRSs:
Standard
Title
IAS 1
Presentation of Financial Statements
IAS 2
Inventories
IAS 7
Statements of Cash Flows
IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
IAS 10
Events After the Reporting Period
IAS 12
Income Taxes
IAS 16
Property, Plant and Equipment
IAS 17
Leases
IAS 18
Revenue
IAS 19
Employee Benefits
IAS 20
Accounting for Government Grants and Disclosure of Government Assistance
IAS 21
The Effects of Changes in Foreign Exchange Rates
IAS 23
Borrowing Costs
IAS 24
Related Party Disclosures
IAS 27
Consolidated and Separate Financial Statements
IAS 28
Investments in Associates
IAS 31
Interests in Joint Ventures
IAS 32
Financial Instruments: Presentation
IAS 36
Impairment of Assets
IAS 37
Provisions, Contingent Liabilities and Contingent Assets
IAS 38
Intangible Assets
IAS 39
Financial Instruments: Recognition and Measurement
IAS 40
Investment Property
IFRS 3
Business Combinations
IFRS 5
Non-Current Assets Held for Sale and Discontinued Operations
IFRS 7
Financial Instruments: Disclosures
IFRS 8
Operating Segments
IAS 11, 26, 29, 33, 34, 41, IFRS 1, 2, 4 and IFRS 6 have not been applied because they are of no
relevance for the current consolidated financial statements of Sparkasse KölnBonn Financial Group.
50
[5] Disclosures Relating to the Nature and Extent of Risks Arising from
Financial Instruments
IFRS 7 requires the Sparkasse KölnBonn Financial Group to provide detailed information on the nature
and extent of risks to which it is exposed as a result of financial instruments and on the necessary risk
management procedures. (Please refer to the disclosures required by IFRS 7.31 to IFRS 7.42).
It is also mandatory for group management reports which are prepared in accordance with § 315a HGB
to include a risk report and an explanation of risk management processes. The Sparkasse KölnBonn
Financial Group therefore decided to make the disclosures required under IFRS 7 – in addition to
further quantitative disclosures in the notes – mainly in the framework of the group management
report. This risk report is therefore an integral component of the consolidated financial statements
pursuant to IFRS.
Where IFRS 7 allows any further disclosures on financial instruments to be made either in the
statement of financial position or the income statement or, alternatively, in the notes, the parent
company, Sparkasse KölnBonn, has opted to make such disclosures in the notes.
[6] Consolidation Principles
The consolidated financial statements were prepared in accordance with IAS 27.24 using uniform
accounting and valuation methods throughout the Group.
Subsidiaries and special funds (Spezialfonds) which are subject to mandatory consolidation are
consolidated using the purchase method. Under the purchase method of accounting, all of the
subsidiaries’ assets and liabilities on the acquisition date or on the date when control of the entity is
obtained are recognised at fair value and taking account of deferred taxes. Any hidden assets and
liabilities which are uncovered are measured in accordance with the applicable standards in the
subsequent period. The difference resulting from setting off the purchase price against the fair value of
assets and liabilities is reported as goodwill under intangible assets. The carrying amount of goodwill is
subjected to an impairment test at least once a year and if there are indications that impairment exists.
If impairment is ascertained, an impairment loss is recognised. Pursuant to IFRS 3.53 acquisitionrelated costs are accounted for as expenses.
Intercompany receivables and liabilities and all expenses, income and intercompany profits and losses
originating from intercompany financial transactions and services are eliminated in the process of
consolidating intercompany debts and profits and losses. Minority interests in the equity of
subsidiaries not attributable to the parent company are reported as minority interests under equity
unless they qualify as a liability under IAS 32.
Associates and joint ventures are consolidated using the equity method pursuant to IAS 28.13 and
IAS 31.38, unless they are immaterial for the presentation of the Group's net assets, financial position
and results of operations. The same recognition and measurement methods applied by the Sparkasse
KölnBonn Financial Group are applied at these entities. Such equity investments are reported under
“Investments in associates recognised at equity”. The carrying amount of these equity investments is
carried forward and recognised through profit or loss or directly in equity depending on the change in
equity in the entity's financial statements due to the associate’s net profit/loss for the year or the
changes in its revaluation reserve. Losses that exceed the share held by the Group in the entity
recognised at equity are not recorded unless the Group has entered a legal or constructive obligation
to make payments in place of the entity recognised at equity.
51
Shares in subsidiaries, associates and joint ventures which are not consolidated due to their
immateriality are reported under financial assets at fair value, if this can be reliably ascertained, or at
cost.
[7] Consolidated Group
a)
Subsidiaries
The subsidiaries, i.e. entities in which the parent company, Sparkasse KölnBonn, holds either directly or
indirectly a majority of the voting rights or can otherwise control its financial or operating policy, are
included in the consolidated group. When assessing whether Sparkasse KölnBonn controls an entity in
this sense, the existence and effect of potential voting rights that are currently exercisable or
convertible on the closing date are also considered.
In addition, companies in which most of the risks and rewards of ownership accrue to Sparkasse
KölnBonn are also included in the consolidated group.
Initial recognition in the group of consolidated companies occurs on the date on which control is
transferred to Sparkasse KölnBonn. Entities are deconsolidated or held as discontinued operations as
soon as Sparkasse KölnBonn loses its controlling interest over them.
Subsidiaries without any active operations or a low volume of activity are not consolidated on grounds
of their immateriality for the presentation of the net assets, financial position and results of operations
of the Group. Overall 18 affiliated domestic companies were not consolidated (prior year: 19). Together,
these companies account for less than 0.1% of the total assets of the Group (prior year: 0.2%). Also in
terms of their results of operations and net assets, these companies are immaterial, even taken
together as a group.
52
In addition to the parent company, Sparkasse KölnBonn, the consolidated financial statements as at
31 December 2010 include 22 subsidiaries (prior year: 21). Seven entities which were included in
consolidation as special purpose entities pursuant to IAS 27 and SIC-12 to date were liquidated and
deconsolidated in fiscal year 2010: the security-based funds INKA–SK 1 to 5 and the security-based
funds INKA-SK 66 and 67.
Entities included in the consolidated financial statements of Sparkasse KölnBonn:
BioCampus Cologne Grundbesitz GmbH & Co. KG, Cologne*)
Campus Grundstücksentwicklungsgesellschaft mbH i. L., ´Cologne
EUROFORUM Grundstücksentwicklungsgesellschaft mbH & Co. KG, Cologne*)
GKS – Gesellschaft für KontoService mbH, Cologne
GSE Grundstücksentwicklungsgesellschaft mbH & Co. KG, Cologne
HC Bauprojektentwicklung GmbH & Co. KG, Cologne*)
MMC Independent GmbH, Cologne
Magic Media Company TV-Produktionsgesellschaft mbH, Cologne
Paglos Grundstücksverwaltungsgesellschaft mbH & Co. Objekt Friedensplatz KG, Pöcking
S MittelstandsKapital KölnBonn GmbH, Cologne
S RheinEstate Grundbesitz GmbH & Co. KG, Cologne*)
SAVOR Verwaltung GmbH & Co. Objekt Kalk KG, Cologne*)
SK Equity Investment GmbH & Co. KG, Cologne*)
SKB Invest GmbH & Co. KG, Cologne*)
SKB Kapitalbeteiligungsgesellschaft KölnBonn mbH, Cologne
SKBI Beteiligungsgesellschaft mbH & Co. KG, Cologne *)
SKI Standort Köln-Immobilien GmbH & Co. KG, Cologne*)
SKI Standort Köln-Immobilien GmbH & Co. Objekt Gottfried-Hagen-Strasse KG, Cologne*)
SKI Standort Köln-Immobilien GmbH & Co. Objekt Im MediaPark KG, Cologne*)
SKI Standort Köln-Immobilien GmbH & Co. Projekt Butzweilerhof KG, Cologne*)
SRE GmbH & Co. Immobilien Bonn KG, Bonn*)
S-ProFinanz KölnBonn GmbH, Cologne
*) Pursuant to §264 b HGB use is made of the exemption from the duty to prepare and disclose audited annual financial
statements and a management report in keeping with the provisions applying to stock corporations.
In fiscal year 2010 S MittelstandsKapital KölnBonn GmbH was added to the consolidated group.
53
b)
Associates recognised at equity
In the reporting year, one material associate (prior year: 1) is accounted for using the equity method.
There is an intention to dispose of one company in terms of IFRS 5 (prior year: 1) which was classified
as a joint venture to date based on its articles of incorporation and recognised using the equity method
in accordance with IAS 31.38. Consequently, it is now measured in accordance with IFRS 5.15 in
conjunction with IAS 31.42. It is no longer presented as an entity measured using the equity method
but under Non-current assets held for sale.
Associates and Joint Ventures
Percentage share
CORPUS SIREO Holding GmbH & Co. KG (associate)
25,0
27 associates (prior year: 29) with a total carrying amount of approx. EUR 11.4 million (prior year:
EUR 14.9 million) were not accounted for at equity as they are immaterial for a true and fair view of the
net assets, financial position and results of operations of the Group. These were therefore accounted
for in accordance with IAS 39. Please see Note [54] for two other associates (prior year: 0) which were
accounted for in accordance with IFRS 5.
The aggregated financial information of these companies in accordance with IAS 28.37(i) is shown in
the following table:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
Total assets
189,761
274,962
Total liabilities
167,904
215,477
Equity
21,857
59,485
Ordinary income
37,071
75,987
2,937
6,731
Net profit or loss for the period
For another eight (prior year: 7) entities, in which the Sparkasse KölnBonn Financial Group holds at
least 20.0% of the voting rights, there is no significant influence in terms of the criteria listed in
IAS 28.7.
Please see Note [95] for the complete list of the shareholdings of Sparkasse KölnBonn Financial Group.
54
[8] First-time Consolidation (Business Combinations)
One subsidiary was included in the consolidated financial statements of Sparkasse KölnBonn for the
first time in the fiscal year.
On account of the change of the significance of S MittelstandsKapital KölnBonn GmbH for the
Sparkasse KölnBonn Financial Group, it was first consolidated until after the date of acquisition.
Sparkasse KölnBonn as the sole founding shareholder of S MittelstandsKapital KölnBonn GmbH,
Cologne,
has
taken
over
100.0%
of
the
shares
upon
the
foundation
of
SK Unternehmensbeteiligungsgesellschaft Köln mbH, as it was named at that time, in February 2002
for historical costs of EUR 8.5 million. The historical cost amounted to the capital assumed in the entity.
There are no different voting rights. No debit differences arose from the acquisition. In the following
years, the shareholder contributed further capital of EUR 1.0 million to the company. SK
Unternehmensbeteiligungsgesellschaft Köln mbH has traded under the name of S MittelstandsKapital
KölnBonn GmbH since mid 2010. The purpose of the company is primarily to acquire, hold, manage and
sell venture capital investments as well as extend loans to entities in which it has invested venture
capital. The Company operates its business as an integrated investment holding company in the
definition
of
the
law
on
investment
holding
companies
(Gesetz
über
Unternehmensbeteiligungsgesellschaften - UBGG). Up until the date of first-time consolidation,
impairment losses of EUR 2.7 million and revaluations of EUR 4.3 million not affecting profit and loss
were posted directly against Group equity. In the course of the first-time consolidation, which took
effect at the beginning of fiscal year 2010 on the basis of the shareholdings held on the founding date,
the Company’s net results for the years of EUR 0.9 million that had accrued by 31 December 2009 were
offset directly against Group equity without affecting profit and loss. In the reporting period, the
Company reports revaluations of EUR 0.3 million not affecting profit and loss and a net result of
EUR 0.4 million under IFRS.
[9] Disposal of Consolidated Entities
No subsidiary was sold and thus removed from the scope of consolidation as at the closing date (prior
year: 2).
For details on the deconsolidation of the security-based funds INKA–SK 1 to 5 and the security-based
funds INKA-SK 66 and 67 see Note [55].
Information required under IAS 7.40 et seq. is shown in the following tables.
55
Consideration received
31.12.2010
31.12.2009
EUR ’000
EUR ’000
Consideration received by means of cash and cash equivalents
(IAS 7.40 (b))
-
7,548
Individual components of other non-cash items of the
consideration (IAS 7.43)
-
-
Consideration received
-
7,548
31.12.2010
31.12.2009
EUR ’000
EUR ’000
Cash and cash equivalents
-
1,533
Claims on customers
-
-
Property, plant and equipment
-
12,500
Intangible assets
-
4
Tax assets
-
11
Other assets
-
733
Total assets
-
14,781
-
6,856
Provisions
-
229
Tax liabilities
-
137
Other liabilities
-
6,428
-
13,650
Net assets disposed of
-
1,131
Assets and liabilities disposed of by sale
Assets
Liabilities
[10]
Significant Accounting Judgements and Estimates
In many cases, the adoption of IFRS requires management to make assumptions and estimates which
are based on a subjective assessment of future developments which inherently involve a degree of
estimation uncertainty. Even if Sparkasse KölnBonn as the parent of the Sparkasse KölnBonn Financial
Group has relied on the most likely estimates and forecasts of future events based on the information
available, its historical experience, and other factors, such as its business planning, the actual events
occurring in the future could deviate from these estimates. This could result in not insignificant risks to
the net assets, financial position and results of operations.
Estimation uncertainties primarily arise in the determination of fair values, particularly in the
measurement of ABS transactions in fiscal year 2010, the measurement of the risk provisions
(impairments), the determination of the expected useful life of certain bonus savings contracts, the
calculation of deferred taxes and the determination of pension provisions and other provisions. Similar
to the prior year, the fiscal year 2010 was affected by the crisis on the financial markets. Due to the fact
that markets were partly inactive, the fair value of certain securities was determined using valuation
models. The individual definition of significant measurement parameters is associated with
discretionary judgment, which despite the exercise of due prudence, entails far greater uncertainty
compared to the values that can be obtained on an active market (see Note [11] b)).
56
Where a large number of estimates were required, the assumptions on which they are made and the
carrying amounts of the contracts and liabilities concerned have been explained in depth in the
corresponding explanation of the items concerned.
The assumptions and estimates as well as the underlying parameters and methods used are reviewed
regularly and compared to the actual results.
Risk provisions were recognised at two affiliated companies for the “Rheinparkmetropole” project
(redevelopment of the old exhibition grounds in Cologne-Deutz to create an office and commercial
park). These entities are both the tenants towards the owners but also lessors of the property to the
actual users. Differences in the conditions between the primary leases and the sub-leases are very
much to the detriment of the Sparkasse KölnBonn Financial Group. Although a great deal of prudence
was exercised when measuring the risk provision for the “Rheinparkmetropole” project, there is still
great uncertainty and a number of risks associated with the current stage of the project.
[11]
a)
Disclosures on the Accounting and Measurement of Financial
Instruments
Categories of financial instruments
A financial instrument is defined as a contract which leads to a financial asset for the one entity and a
financial liability or equity instrument for the other entity.. Pursuant to IAS 39, all financial assets and
liabilities, including derivatives, are recorded and categorised in accordance with IAS 39.9 and
measured in line with the respective category. As the parent of the Group, Sparkasse KölnBonn
determines the allocation of an instrument to a particular category. For the Group companies, the rules
on this categorisation are laid out in the consolidation manual used to prepare the consolidated
financial statements in accordance with International Financial Reporting Standards (IFRSs). The
Sparkasse KölnBonn Financial Group allocates financial instruments on the basis of the characteristics
of the financial asset or liability and after considering its investment strategy.
According to IAS 39.9, financial assets should be classified as either
•
Financial Assets at Fair Value through Profit or Loss (AFV)
•
Held-to-Maturity Investments (HTM)
•
Loans and Receivables (LAR) and
•
Financial Assets Available for Sale (AFS).
Financial liabilities are sub-classified into the categories
•
Financial Liabilities at Fair Value through Profit or Loss (LFV)
•
Other Financial Liabilities (OFL).
According to internal guidelines, the category “Held to Maturity” (HTM) is not used in the Sparkasse
KölnBonn Financial Group.
57
AFV/LFV:
The category AFV/LFV comprises the two sub-categories
•
Financial Assets or Liabilities Held for Trading (AFV/LFV Trading), and
•
Financial Assets or Liabilities designated as at Fair Value through Profit or Loss
(AFV/LFV Designated).
The sub-category AFV trading is used for financial instruments which
•
meet the definition of a derivative financial instrument not used in a hedge relationship as defined
by IAS 39.72 et seq.,
•
are included in a trading portfolio, or
•
are generally held for sale in the near term.
Depending on their measurement, financial instruments included in the AFV trading category are
reported under assets or liabilities held for trading. The measurement and gains or losses on disposal
are reported in the income statement under the trading result, which is a component of the item “Gain
or loss on financial instruments measured at fair value through profit or loss”. With regard to interest
payments and other interest components, the Sparkasse KölnBonn Financial Group avails itself of the
option to report these under net interest income.
According to IAS 39, it is possible to reclassify financial instruments from at fair value - held for trading
(AFV) to loans and receivables (LAR). The Sparkasse KölnBonn Financial Group did not avail of this
reclassification option.
The fair value option also allows non-derivative financial instruments that are not held for trading to be
voluntarily measured at fair value through profit and loss. Financial instruments are designated upon
acquisition and this designation cannot be reversed at a later date unless
•
It involves a host contract with an embedded derivative that must be separated (IAS 39.11A) or
•
voluntary designation improves the informative value of the financial reporting. This is usually
only the case if:
a)
The voluntary measurement at fair value eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise from measuring
assets or liabilities or recognising the gains and losses on them on different bases
(avoiding an accounting mismatch – IAS 39.9(b)(i)).
b)
The financial instrument is part of a portfolio that is managed and reported at fair value for
internal purposes in accordance with a documented risk management strategy
(IAS 39.9(b)(ii)).
Please see Note [81] for more information on the use of the fair value option at the Sparkasse KölnBonn
Financial Group.
The Sparkasse KölnBonn Financial Group reports the gain or loss on measuring designated financial
instruments at fair value or on disposal under “Gain or loss on financial instruments measured at fair
value through profit or loss” whereas the instruments are allocated to the respective category in the
statement of financial position in accordance with their respective characteristics. Net interest income
from these financial instruments is reported under interest income or interest expenses respectively.
LAR category:
The “Loans and Receivables” category includes all non-derivative financial instruments with fixed or
determinable payments that are not quoted on an active market and there is no intent to sell them in
the near future. Claims on customers from the primary lending business of the Sparkasse KölnBonn
Financial Group are the main items allocated to this category.
58
Financial instruments in the category LAR are measured at amortised cost. When measuring amortised
cost, impairment losses, if applicable, are posted to profit or loss. Debt surpluses or debt discounts and
any capitalised transaction costs such as fees or commissions are spread over the term of the
instrument to ensure a constant effective rate of interest with the interest component being recorded
under net interest income.
AFS category:
The AFS category comprises all those non-derivative financial assets that are not classified as AFV or
LAR. The assets are measured at fair value without affecting profit or loss.
By contrast, surpluses or debt discounts and any capitalised transaction costs such as fees or
commissions are spread over the term of the instrument to ensure a constant effective rate of interest
with the interest component being recorded under net interest income.
The revaluations (revaluation reserve) recorded under equity without affecting profit and loss are
included in the income statement upon disposal or impairment of the financial instrument.
With regard to impairment losses, Sparkasse KölnBonn reviews financial instruments in the AFS
category for any indications of impairment at each closing date.
The specific criteria used by the Sparkasse KölnBonn Financial Group for ascertaining any impairment
of equity instruments in the AFS category are defined as follows:
•
A fall in fair value of 20% below their historical cost. It is not relevant here for what period this
lower fair value threshold is breached. Rather, a closing date perspective is applied.
•
A permanent fall in the fair value of the instrument below its historical cost over a period of 12
months. The actual amount by which fair value decreases compared to historical cost is of no
relevance here.
Debt instruments in the AFS category are always measured on an item-by-item basis using the
impairment criteria applied to receivables in the LAR category (see Note [11] c)).
If the reasons for impairment no longer apply, the impairment is reversed but such reinstatement may
not exceed the amortised cost of the instrument. For debt instruments the reversal is posted to profit
and loss and for equity instruments it does not affect profit and loss.
If the market value of an equity instrument in the AFS category cannot be reliably determined, it is
measured at historical cost. In such cases it is not permitted to reinstate the original value of the
instrument when the reasons for impairment no longer apply.
The Sparkasse KölnBonn Financial Group applies this category primarily for its equity investments.
OFL category:
All financial liabilities that are neither trading liabilities nor voluntarily measured at fair value through
profit or loss are allocated to this category.
These liabilities are measured at amortised cost. Any surplus or debt discount and transaction costs are
spread over the term of the instrument, or – if the counterparty has a right of termination – over the
expected term of the instrument, using the effective interest rate method with the interest component
being posted to net interest income.
59
b)
Explanations of other measurement criteria
Additions of financial assets and financial liabilities are measured at fair value, which, in most cases,
generally corresponds to historical cost. Subsequent measurement depends on the category to which
the instrument is allocated and is either at amortised cost or at fair value. Financial instruments which
are measured at fair value through profit or loss or financial assets which can be sold at any time are
always measured at fair value. As a result, financial instruments measured at fair value include
derivative financial instruments, instruments held for trading as well as instruments designated under
the fair value option.
Apart from financial instruments in the AFV and LFV categories, interest income and expenses are
recognised using the effective interest method. This involves calculating the interest component in
such a way that the net present value of future payments corresponds to the carrying amount of the
instrument upon acquisition. If it is not possible to reliably determine the timing of future payments,
due to rights of termination for instance, the effective interest rate is calculated using the expected
dates on which future payments will be made. The effective interest rate method considers standby
fees, surpluses and debt discounts as well as any directly attributable transaction costs.
Interest income from impaired financial assets in the LAR category is calculated by unwinding the
discount of the carrying amount after the impairment using the original effective interest rate.
Fair value is determined in accordance with the hierarchy laid out in IAS 39.48A. The fair value of an
instrument is the amount for which a financial instrument could be exchanged between knowledgeable,
willing parties in an arm's length transaction. The best reference for fair value is the quoted market
price of an identical instrument on an active market. If the financial asset or liability is traded on an
active market, the Sparkasse KölnBonn Financial Group applies the market price for measurement.
Pursuant to IAS 36.6, IAS 38.8 and IAS 41.8 a market is deemed to be active in the sense of the IFRS if all
the following conditions exist (IDW RS HFA 9 item 64):
•
the items traded within the market are homogeneous,
•
willing buyers and sellers can normally be found at any time, and
•
prices are available to the public.
In line with the aforementioned criteria, a financial instrument is regarded as quoted in an active
market under IAS 39.AG71 if
•
quoted prices are readily and regularly available from an exchange, broker, industry group, pricing
service (Bloomberg, for example) or regulatory agency, and
•
those prices represent actual and regulatory occurring market transactions on an arm's length
basis.
On an active market, fair value generally corresponds to the historical cost of the instrument upon
initial recognition. If there is no price currently quoted on an active market, the price of the latest
transaction is used to determine fair value, provided there have been no significant changes in
economic circumstances in the market since the time of the transaction.
If there is no active market or if there are other assets than the financial instrument involved in the
transaction, then fair value is calculated as
•
either the transaction price in other observable market transactions with similar instruments,
•
or using valuation techniques; input data should be based, where possible, on verifiable market
sources.
60
The valuation techniques used by the Sparkasse KölnBonn Financial Group are customary valuation
models used by the market (e.g. discounted cash flow, option price models). Valuation models are
reviewed periodically and adjusted as necessary. They comply with accepted economic methods to
measure financial instruments and take into account all factors market players would consider
adequate when pricing the instrument.
We have examined securities in the investment book to determine whether there was an active market
on closing date or whether the market qualified as inactive. The market conditions on days shortly
before or after closing date were also considered. An active market is assumed to exist if prices can be
obtained from an exchange, a dealer or a pricing agency on a regular basis and these are based on
current and regularly occurring transactions. Active markets were identified for publicly listed shares
and government bonds. Securities traded on an active market are measured at fair value on closing
date.
However, particularly in light of the crisis on the financial markets, there were no active markets for
large portions of the portfolio of interest-bearing securities. In these cases valuation models were
applied, provided that there was no information available on the latest transactions in these or similar
securities.
The discounted cash flow (DCF) method was used as the valuation model. This method is based on
discounting the cash flows expected from the respective security using an appropriate interest rate.
The estimated cash flows are based on the terms and conditions governing the interest and
repayments in the underlying contract. Cash flows from floating-rate instruments are estimated on the
basis of forward interest rates. The likelihood of future defaults is covered by factoring in a risk
premium in the discount rate. The discount rate comprises the risk-free rate and a risk markup
(“spread”). When setting the parameters the conditions observable on the market were used first and
foremost. The risk-free rate is therefore taken from the swap curve observable on the market for
interbank trade in interest swaps. The spread generally consists of a premium for the issuer’s credit risk
(credit spread) and a premium for the liquidity risk (liquidity spread). Credit spreads are determined on
the basis of the industry, the respective rating and the term of the instrument. These are derived from
the credit default swaps traded on the market or publicly traded bonds.
With regard to the liquidity spread, the main feature of an inactive market is that a liquidity spread
cannot be derived from actual market transactions. Sparkasse KölnBonn applies two different kinds of
liquidity spread. The basis liquidity spread is used to ensure that no illiquid bonds display a lower
liquidity spread than the average spread of liquid bonds of the same category now that the banking
crisis has broken. For this purpose, the mean spreads between the bid and the asking price are
analysed plus a simple standard deviation for the different categories of securities over the period
beginning with the insolvency of Lehman Brothers. The basis liquidity spreads are reviewed regularly
as part of the quality assurance for the measurement of securities. In addition, a liquidity spread that is
independent of the issue is also applied if there is a defined difference to a reference price on the
market. We have recognised shares in investment funds at fair value measured as the repurchase price
under investment law.
Portfolios of the Group’s own asset backed securities where there is no active market that can be used
as a reference to determine fair value are measured using the following measurement procedure: If
there are any market indications of the fair value of the securities from information providers or rating
agencies, such as Markit or Bloomberg, then these are referred to for an assessment of fair value. At the
same time, any valuations from the issuers of the instruments are drawn on to test the plausibility of
the valuations and, if justified, used to measure fair value.
61
Moreover, the following valuation technique was also used: The expected cash flows are determined in
each case by means of an individual review of the risk of counterparty default, any collateral given and
the contractually agreed hierarchy of creditors. These cash flows are discounted using the credit
spreads for the same or similar classes of assets offered by third parties (e.g. JPMorgan Chase & Co.).
This involves using the spreads corresponding to the latest (instrument) rating unless there is any
more recent information indicating otherwise. Changes in ratings are examined on a case-by-case basis
and are considered in the valuation if they lead to a higher value. Existing bank valuations were drawn
on to assess the plausibility of the measurements. In those cases where the bank valuation was lower
than the values returned by the valuation techniques, the bank valuation was recognised in the
consolidated financial statements as the bank prices already consider losses from repayments of
interest and principal that are no longer expected.
For OTC products, such as interest swaps, fair value is calculated as the net present value of future
interest cash flows based on market rates. This involved applying the swap interest curves as at closing
date which corresponds to the currency of the respective transaction. The fair value of options is
determined using the universally accepted Black Scholes model. For index options and European
interest options the Black Scholes formula is modified accordingly.
The weighted average method was applied for products traded on the Eurex futures exchange.
Financial instruments traded in an active market are always recognised at the price of the latest
transaction. For all other financial instruments any difference between fair value and the transaction
price (day one profit) on the date of acquisition is only posted to profit and loss to the extent that fair
value can be substantiated by reference to other observable market transactions in the same
instruments or is based on a valuation technique whose variables are all founded in observable market
data. An unrealisable day one profit is only recognised subsequently if the gain originates from the
change in another factor – primarily the residual term – which other market players would consider
when pricing the instrument. An explanation of these differences can be found in Note [79]. Due to this
ruling, no day one profit was recognised directly by Sparkasse KölnBonn.
c)
Risk provisioning for financial assets in the LAR category
The Sparkasse KölnBonn Financial Group recognises any discernible risks from its lending business by
creating specific risk provisions to cover the full risk of loss.
Credit risks within a portfolio of receivables are accounted for by means of impairment losses created
on the basis of uniform Group guidelines. Risk provisioning for a loan exposure is required when a loan
is or expected to become delinquent and the debtor cannot meet his debt servicing obligations or it is
likely that he will default on them.
62
Loan receivables are reviewed individually for impairment each closing date and also during the year by
the Sparkasse KölnBonn Financial Group. According to the Group's internal guidelines, possible
indications for an impairment test include:
•
Arrears or overdrawn accounts
•
Significant deterioration in the rating made by the internal credit rating system
•
Sudden drop in profits on the prior year
•
Falling sales revenues
•
Reduction in capital
•
Restructuring agreements
•
Application for insolvency protection
•
Profit warning
•
Any other indications from the early warning system that has been implemented to control the
risk of counterparty default
The risk provision corresponds to the difference between the carrying amount of the exposure and the
present value of the expected future cash flows. These include not only the expected loan repayments
but also any cash flows from drawing on collateral. No more interest is posted to profit and loss from
the date of impairment. Rather, the expected cash flows are discounted using the original effective
interest rate and the interest portion is spread over the expected term of the cash flows. The resulting
interest from this unwinding procedure is recorded in net interest income through profit or loss. From
an accounting perspective, unwinding is treated as a reduction of the risk provision.
Risk provisions are released on an item-by-item basis in keeping with the individual development of
the recoverability of the underlying receivable.
The Sparkasse KölnBonn Financial Group accounts for any impairments of receivables in the LAR
category that have occurred as at closing date but have not yet been individually identified by
recognising risk provisions on a portfolio basis. The entire portfolio of LAR has been split into
significant receivables and insignificant receivables. In terms of the line items in the statement of
financial position pursuant to IFRS, most of these items are claims on banks and customers. The
Sparkasse KölnBonn Financial Group distinguishes between significant and insignificant items on the
basis of the distinction of risk-relevant business required by MaRisk. For this purpose, all receivables
with a similar risk structure are combined into one portfolio in keeping with the internal risk controlling
guidelines by customer group. Impairment is calculated on the basis of the likelihood of default, the
carrying amount of the receivables based on a
12-month time horizon and the estimated loss. In
order to quantify the incurred losses in the sense of IAS 39 the amount of the impairment calculated
using the above method is adjusted by means of a correction factor. This correction factor reflects the
loss identification period which is the maximum period between closing date and the identification of
the loss in the course of the credit monitoring process (Loss Identification Period (LIP) factor). The
Group has not recognised any portfolio-based specific valuation allowances.
Where receivables of the LAR category are concerned, the total risk provisioning is reported as an
adjustment of the related asset item under the caption “Risk provisions”. By contrast the risk
provisioning for off-statement of financial position transactions (guarantees, loan approvals) is
disclosed under liabilities as a provision for lending risks. In the income statement the cost of risk
provisions is reported under “Risk provision”.
Uncollectible receivables for which there is no specific risk provision are written off immediately. Later
collections of debts previously written off as bad are credited to the “Risk provisions” account though
profit or loss in the income statement.
63
d)
Embedded derivates
An embedded derivative is a component of a hybrid financial instrument that also includes the nonderivative host contract, with the effect that some of the cash flows of the combined instrument vary in
a similar way to a standalone derivative. Provided the economic characteristics and risks of the
embedded derivative are not closely related to the economic characteristics and risks of the host
contract, and the instrument qualifies as an embedded derivative, it is recognised at fair value. In this
case, either the fair value option is availed of and the entire hybrid (combined) contract is recognised
as a financial asset or financial liability at fair value through profit or loss or the derivative is separated
from the host contract and recognised at fair value as an independent instrument.
In the Sparkasse KölnBonn Financial Group, all embedded derivatives subject to mandatory separation
are covered by the fair value option. Due to the fact that the host contract and the derivative constitute
a single legal unit, the entire financial instrument is reported under the statement of financial position
item used for the host contract. Corresponding to IFRIC 9 a reassessment is only made of separating
embedded derivatives if significant changes are made to the terms of the contract since its initial
recognition.
e)
Initial recognition and disposal of financial instruments
Corresponding to IAS 39.14 financial assets and financial liabilities are recognised if the Sparkasse
KölnBonn Financial Group is a party to the contractual provisions of the instrument.
The initial recognition of regular way purchases of financial instruments allocated to the AFV (AFV
trading and AFV designated) or AFS category is on trade date (trade date accounting). Sparkasse
KölnBonn recognises financial assets in the LAR category upon the transaction being settled
(settlement date accounting).
Financial assets are derecognised if the rights to the asset are extinguished. Financial assets are
derecognised if the Sparkasse has assigned all the risks and rewards or the control over the financial
asset. Financial liabilities are derecognised when they are extinguished, i.e. if the contractual
obligations are settled, revoked or have expired. Comments on the issues of repurchase transactions
and securities lending can be found in Note [84] and Note [85].
f)
Hedge accounting
The Sparkasse KölnBonn Financial Group does not apply the requirements of IAS 39 with respect to
hedge accounting.
64
g)
Disclosures on the use of the fair value option
The Sparkasse KölnBonn Financial Group creates economic hedges by voluntarily designating the
underlying instruments at fair value through profit and loss, i.e. it applies the fair value option to avoid
an accounting mismatch pursuant to IAS 39.9(b)(i) in its IFRS financial statements.
Such voluntary and irrevocable measurement of financial instruments at fair value upon initial
recognition is permitted if this results in more relevant information (IAS 39.AG4B). The financial
instruments measured in this way are allocated to the categories, “Financial Assets at Fair Value
through Profit or Loss” or “Financial Liabilities at Fair Value through Profit or Loss” respectively.
The Sparkasse KölnBonn Financial Group only undertakes such classification when this eliminates or
significantly reduces an accounting mismatch in the measurement or recognition of profit and loss
which would otherwise arise from measuring the financial asset or financial liability or recognising any
related profit or loss using different measurement bases.
An accounting mismatch depends on two criteria which the Sparkasse KölnBonn Financial Group fulfils
and substantiates by corresponding documentation:
•
•
There are financial assets or financial liabilities that are measured on different bases or whose
profits and losses are recognised differently.
There is a perceivable economic relationship between these financial assets and financial
liabilities.
The Sparkasse KölnBonn Financial Group makes great use of financial derivatives to manage its interest
rate exposures. These financial derivatives are always measured at fair value through profit or loss
whereas the hedged item is either not measured or measured at fair value through profit or loss. This
results in an accounting mismatch. An economic relationship between the derivative and the
underlying is assumed if the interest items are objectively and personally managed and controlled.
Starting with the basis point value (BPV) of the derivative entered into to hedge the risk, spot positions
are entered into with the aim of reducing the BPV. A secondary requirement is that the Value at Risk
must also decrease after the fair value designation. The entire portfolio of interest-related financial
assets and structured instruments issued by the Group are designated in the process. Other spot
positions are designated on a case-by-case basis if the above criteria are met.
With regard to the institution’s specific management of its interest exposures, Sparkasse KölnBonn
does not always enter into financial assets and financial liabilities that would lead to an accounting
mismatch on exactly the same date. IAS 39.AG4F allows for a reasonable delay when entering into the
hedge. The maximum period for entering into a hedge within the context of managing interest rate
exposures is 30 days of the initial recognition of the underlying and corresponds to the period for the
regular adjustment of the interest exposure of the Sparkasse KölnBonn by the respective decisionmaking body.
[12]
Revenue Recognition
Revenue is recognised when it is realised or realisable and its amount can be reliably determined.
Interest from interest-bearing assets and liabilities is recognised proportionately over the term of the
assets or liabilities concerned using the effective interest method and taking into account any deferred
charges and fees as well as premiums or discounts.
65
[13]
Currency Translation
In accordance with IAS 21.23 all monetary assets and obligations denominated in foreign currency are
translated into euro at the EuroFX exchange rate issued by Reuters on closing date. Forward exchange
transactions are measured at net present value. The main inputs in this calculation involve the interest
curves and exchange rates. Any gains or losses from the translation of non-monetary financial
instruments of the AFS category are not posted to profit and loss. Income and expenses in foreign
currency are translated using the exchange rate prevailing on the date of recognition.
The most important exchange rates for the Group (for one euro) are as follows:
2010
2009
USD
1.3248
1.4326
GBP
0.8582
0.9040
CHF
1.2444
1.4880
JPY
108.1600
132.1600
The measurement gains or losses from currency translation are reported as a component of the item
“Gain or loss on financial instruments measured at fair value through profit or loss” in net trading
income.
[14]
Netting
The Sparkasse KölnBonn Financial Group offsets financial assets and financial liabilities if there is a
legally enforceable right to set off the recognised amount; and there is an agreement with the
counterparty to settle on a net basis.
66
[15]
Government Grants
A consolidated subsidiary receives government funds for the production of films in its capacity as coproducer. These funds take the form of repayable loans that are paid out in accordance with the stage
of completion of the project. The repayment of the loans depends on the success of the subsidised
projects measured in accordance with the share in the profit agreed on in the pledge for government
assistance. In order to monitor this share in the profit and to handle the cash flows, the company uses
the services of specialised collection and payment agencies, which are customary in the industry. These
companies distribute any income directly to the entitled parties, including government sponsors if
applicable, and issue regular statements and billings.
As in the prior year, no amounts were collected indirectly. However, cash and cash equivalents of
EUR 45.0 thousand received in the fiscal year were recognised under other liabilities. The loans granted
and the waiver of the need to repay them are attached to a number of conditions which can be fulfilled
on the basis of what is known today. The collection will be posted through profit or loss as soon as
these conditions are met.
[16]
Claims on Banks and Customers
Claims on banks and claims on customers primarily consist of loans and advances to customers and
banks that are not held for trading and also fixed-term and sight deposits and registered bonds. For a
portion of these receivables Sparkasse KölnBonn avails itself of the fair value option to voluntarily
measure them at fair value through profit or loss.
Depending on the category to which they have been allocated the items are measured either at
amortised cost (LAR) or at fair value (AFS and instruments designated as AFV).
Net interest and any premiums or discounts on receivables released in the period are reported under
net interest income. The other components of profit or loss from instruments voluntarily designated as
“at fair value through profit and loss” are reported under “Gain or loss on financial instruments
measured at fair value through profit or loss”.
In the event of an impairment caused by a fall in the credit-rating, a provision for impairment is
recognised on receivables in the LAR category by crediting the risk provision account. By contrast,
receivables in the AFS category reported under this item are written down directly.
[17]
Risk Provisions
Any impaired receivables in the LAR category are written down indirectly by creating a risk provision by
Sparkasse KölnBonn Financial Group. Reference is made to Note [11] c) for more information on risk
provisioning.
67
[18]
Financial instruments classified as AFV trading are reported under assets held for trading. These
instruments involve derivatives – regardless of the purposes for which they were entered into – and
other financial instruments that were acquired for trading purposes.
For some of its product groups, the Sparkasse KölnBonn Financial Group trades in derivatives, primarily
to hedge interest exposures, foreign exchange risks and market price fluctuations inherent in business
with customers. The counterparties of the derivative financial instruments of the Sparkasse KölnBonn
Financial Group are mainly German banks or financial institutes in OECD countries.
Financial instruments in the AFV trading category are measured at fair value in the statement of
financial position. Derivatives with a negative market value are disclosed as liabilities held for trading.
Derivatives with a positive market value are reported as assets held for trading. Changes in the fair
value of these financial instruments are posted to profit or loss. The gains or losses from fair value
measurement or upon disposal are reported as a component of the “Gain or loss on financial
instruments measured at fair value through profit or loss” in net trading income. Interest is reported in
net interest income.
[19]
Non-current Assets Held for Sale
In accordance with IFRS 5.38, non-current assets held for sale and disposal groups and their associated
liabilities are reported separately from other assets in the statement of financial position. Such assets
are only classified as “held for sale” if a decision has been made to sell the asset, an active programme
to locate a buyer and to complete the plan to sell has been initiated and its sale is highly probable
within 12 months of classification. The defining characteristic of these assets is that their carrying
amount will be recovered principally through a sale transaction and not through their value in use.
These assets are measured at the lower of carrying amount and fair value less costs to sell provided
they are not excluded from the measurement criteria of IFRS 5 in accordance with IFRS 5.5. The
reporting requirements of IFRS 5 apply to all assets. Entire operations have not been disposed of.
Please see Note [54] for more information.
[20]
Financial Assets
Financial assets include all securities and equity investments in the category “Available for Sale” (AFS)
and “Financial Assets Designated at Fair Value through Profit or Loss” (AFV Designated).
In addition to shares in non-consolidated subsidiaries and in associates not accounted for using the
equity method and in other equity investments, all shares held and other non-fixed-interest-bearing
securities are allocated to the AFS category.
These financial instruments are measured at fair value in the statement of financial position if this can
be reliably determined. Shares in non-consolidated subsidiaries and associates not measured using
the equity method and other equity investments for which there is no active market, or the parameters
for a valuation technique cannot be reliably determined, are measured at historical cost or the most
recent carrying amount.
68
The fair value option is availed of for registered bonds and other interest-bearing securities to
voluntarily measure them at fair value.
Depending on their category, the Sparkasse KölnBonn Financial Group reports the gain or loss from
such instruments under “Gain or loss on transactions designated as at fair value” as part of “Gain or
loss on financial instruments measured at fair value through profit or loss” or under investment
income. Current interest payments and dividend income is recognised under net interest income.
Whereas the gain on the disposal of financial instruments in the AFS category is reflected in investment
income, changes in the value of the instruments themselves are posted to the revaluation reserve
under equity. Only impairment losses are recognised in profit or loss. Once the reasons for impairment
no longer apply, equity instruments are not reversed through profit and loss in accordance with
IAS 39.69.
[21]
Investments in Associates Recognised at Equity
Investments in associates and joint ventures are recognised at historical cost and on the date when
significant influence is obtained over the entity. They are subsequently measured using the equity
method by which the carrying amount is rolled forward adjusted for any pro rata share in the equity
movements of the associate. The pro rata share in the profits of the associate is posted to a separate
item in the income statement. Where applicable, the carrying amounts of an associate are written down
by impairment losses.
[22]
Property, plant and equipment is recognised at historical cost. The carrying amount of property, plant
and equipment is reduced by scheduled depreciation calculated using the straight-line method. The
useful life of the assets takes into account physical wear and tear and technical obsolescence.
Property, plant and equipment are depreciated over the following useful lives:
Useful life
Land
Buildings
Banking halls
Furniture and fixtures
Indefinite
15 to 33 years
10 years
3 to 25 years
Leasehold improvements in rented buildings and leased assets to which Sparkasse KölnBonn has
economic title, are depreciated over their remaining term of the lease, where this is not indefinite and
of shorter duration than the useful life of the asset concerned. Depreciation is reported under general
administrative expenses (Note [40]).
An impairment loss is recorded if there is any impairment above and beyond systematic depreciation.
Once the reasons for the impairment no longer apply, the assets are written up to amortised cost.
Subsequent expenditure is capitalised under historical cost if it results in a future economic benefit for
the entity.
69
Any assets of EUR 150.00 or less are immediately recorded in non-personnel expenses under “General
administrative expenses”. Low-value assets with an acquisition cost of between EUR 150.00 and
EUR 1,000.00 are capitalised under a catch-all account and depreciated over a period of five years with
an effect on income under depreciation of operating equipment and furniture and fixtures. Gains from
the disposal of property, plant and equipment are disclosed in the income statement under “Other
operating income” and the corresponding losses under “Other operating expenses”.
[23]
Investment Property
Investment property is property held to earn rentals or for capital appreciation and is recognised at
historical cost less straight-line depreciation calculated over useful lives. Impairment losses are
recorded in the event of a permanent impairment. The useful life of investment property ranges
between 15 and 33 years.
Pursuant to IAS 40 investment properties are disclosed in a separate item in the statement of financial
position. Depreciation is reported under other operating expenses (Note [42]). Any rental income or
gain or loss on disposal is posted under other operating income (Note [41]) or other operating
expenses (Note [42]) respectively.
[24]
Intangible Assets
Intangible assets generally comprise acquired and internally-developed software and derivative
goodwill.
Intangible assets are measured at amortised cost. Provided they do not represent goodwill, intangible
assets are amortised on a systematic basis over their expected useful life. Development expenses
incurred for internally generated intangible assets are capitalised if they meet the general recognition
criteria of IAS 38.21 and all of the criteria stipulated in IAS 38.57. If the recognition criteria are not met,
development expenses are recorded directly under “General administrative expenses” for the period. If
the criteria are met, internally developed software is recognised at cost and amortised over its useful
life. The capitalised costs mainly include personnel expenses for the people involved in the
development.
Amortisation is measured on a straight-line basis over the prospective useful life of the assets as listed
in the following table:
Useful life
Purchased software
5 years
Internally developed software
5 years
Goodwill
Indefinite
Impairment losses are recorded on intangible assets if the future economic benefits expected to flow
from the asset no longer match its carrying amount. Intangible assets are derecognised when a future
economic benefit is no longer expected. A corresponding review is made each closing date.
Amortisation and impairment losses are reported under “General administrative expenses” in the
income statement. Any derivative goodwill is subjected to an impairment test at least once annually.
70
[25]
Leases
In IFRS accounting, a distinction is made between operating leases and finance leases. According to
IAS 17 and IFRIC 4 a lease is allocated to either the lessor or the lessee on the basis of the risks and
rewards incidental to ownership of the leased asset. A lease is classified as an operating lease if
substantially all the risks and rewards incidental to ownership remain with the lessor. By contrast, a
lease is classified as a finance lease when the risks and rewards incidental to ownership pass to the
lessee.
Sparkasse KölnBonn Financial Group as lessee
The Sparkasse KölnBonn Financial Group acts as a lessee in both operating and finance leases.
With regard to finance leases, the Sparkasse KölnBonn Financial Group recognises the leased asset
under property, plant and equipment or investment property at the inception of the lease and
simultaneously recognises a liability equal in amount to the present value of the future minimum lease
payments or fair value, whichever is lower. The present value of the minimum lease payments is
calculated on the basis of the interest rate implicit in the lease or the lessee’s incremental borrowing
rate. This involves separating the lease instalments into a finance charge and a repayment of the
borrowed capital. While the finance charge is charged against net interest income, the repayment
portion reduces the outstanding liability.
The lease instalments incurred for operating leases are posted to rental expenses under general
administrative expenses. Rental expenses for furniture and fixtures, such as IT equipment, vehicles,
and facilities are also posted to this item under general administrative expenses if they are related to
an asset that is expensed under non-personnel expenses.
Sparkasse KölnBonn Financial Group as lessor
The Sparkasse KölnBonn Financial Group acts solely as a lessor in operating leases.
In an operating lease the leased asset is recognised at amortised cost in the consolidated statement of
financial position less the depreciation recorded over its useful life and any scheduled depreciation or
impairments, provided the leased asset is not rented by the Financial Group itself within the framework
of an operating lease (sub-lease). The rental income recognised in the period is posted to other
operating income. Depreciation and impairment losses related to the assets are reported under
general administrative expenses, provided that the leased assets are recognised under property, plant
and equipment. If they concern investment properties, the charge is posted under other operating
expenses.
71
[26]
Borrowing Costs
Upon publication by the IASB of the revised IAS 23 on 29 March 2007, borrowing costs that can be
directly allocated to a qualifying asset must be recognised under the cost of the asset. The revised
standard applies to the borrowing costs of qualifying assets which were acquired on or after
1 January 2009 or, likewise, the construction of the asset started on or after this date. The European
Union endorsed the revised IAS 23 in December 2008. Any immediate recognition in profit or loss is
now only permitted if the borrowing costs do not meet the criteria of IAS 23.8. In the reporting year
there were no borrowing costs subject to mandatory capitalisation under IAS 23.
[27]
Liabilities to Banks and Customers and Securitized Liabilities
Sparkasse KölnBonn measures its financial liabilities depending on the category to which they have
been allocated at either amortised cost (other financial liabilities) or at fair value through profit or loss
(voluntarily designated as AFV).
Any premiums or debt discounts on instruments measured at amortised cost are released at a constant
effective interest rate and posted to net interest income. The gain or loss on a premature repayment of
securitised liabilities is posted to other operating income or other operating expenses accordingly.
The gain or loss on interest payments is reported under net interest income. The other components of
profit or loss from instruments voluntarily designated as “at fair value through profit and loss” are
reported under “Gain or loss on financial instruments measured at fair value through profit or loss”.
[28]
Liabilities Held for Trading
Financial instruments classified as LFV trading are reported under liabilities held for trading. These
instruments involve derivatives – regardless of the purpose for which they were entered into – and
other financial instruments that were acquired for trading purposes.
For some of its product groups, the Sparkasse KölnBonn Financial Group trades in derivatives, primarily
to hedge interest exposures, foreign exchange risks and market price fluctuations inherent in business
with customers. The counterparties of the derivative financial instruments of the Sparkasse KölnBonn
Financial Group are mainly German banks or financial institutes in OECD countries.
Financial instruments in the LFV trading sub-category are measured at fair value in the statement of
financial position. Derivatives with a negative market value are disclosed as liabilities held for trading.
Changes in the fair value of these financial instruments are posted to profit or loss. The gains or losses
from fair value measurement or upon disposal are reported as a component of the “Gain or loss on
financial instruments measured at fair value through profit or loss” in net trading income. Interest is
reported in net interest income.
72
[29]
a)
Provisions for Pensions and Similar Obligations
Direct pension obligations
Pension provisions have been created solely for defined benefit plans. These pension provisions were
calculated using the projected unit credit method defined in IAS 19. This method considers current and
future pension benefits known at the closing date as well as future anticipated salary and pension
increases.
Pension obligations for current and former members of the Board of Management, individual
employees in active service or retired, and former civil servants employed by Sparkasse KölnBonn and
their surviving dependents. The actuarial reports for direct pension obligations as at 31 December
2010 are based on assumed annual increases in salaries and pensions of 3.0% and 2.0% respectively
(prior year: 3.00% and 2.00% respectively). A discount rate of 4.97% was applied in the calculation
(prior year: 5.8%). As these obligations are not covered by plan assets, the obligation must be
disclosed in full as a liability.
In addition, Sparkasse KölnBonn has granted its employees the right to participate in a fund-based
pension scheme. The employees acquire their right by converting a portion of the regular
compensation into contributions to the scheme. When measuring this obligation a distinction is made
between the actuarial calculations of the guaranteed pension obligation and of the variable portion.
While the guaranteed portion is determined on the basis of the actuarial projected benefit obligation,
the variable portion of the benefit obligation corresponds to the fair value of the units in the
investment fund underlying the scheme and the risk reinsurance.
Any over-performance of these reference assets, which in accordance with the pension plan the
employees are entitled to, is recorded in the statement of financial position as an additional pension
obligation to the extent that it exceeds the guaranteed portion of the pension plan. The actuarial report
for the pension plan is based on an interest rate of 5.35% (prior year: 5.8%). The probability of
employee churn has not been considered due to the structure of the pension plan.
The assets set aside by Sparkasse KölnBonn to cover the pension obligations to employees and which
have been pledged by the institution do not qualify as plan assets in the sense of IAS 19.7.
Sparkasse KölnBonn applies the corridor method for any actuarial gains and losses arising from the
required adjustments to the parameters used in the actuarial calculation. This means that actuarial
gains and losses are only recorded as expense or income when the balance of the accumulated
unrecognised actuarial gains and losses at the end of the previous reporting period exceeds 10% of
the defined benefit obligation at this point in time. If this corridor is breached, the excess is spread
over the average remaining working lives of the employees in the plan beginning in the following year
with an effect on profit or loss.
Any expenses arising from additions to pension provisions are charged to personnel expenses. No
separate disclosure has been made for the interest expenses relating to vested pension obligations.
The calculations are based on the 2005 G mortality tables of Professor Dr. Klaus Heubeck.
73
b)
Indirect pension obligations
Sparkasse KölnBonn is a member of the Rheinische Zusatzversorgungskasse (RZVK) welfare fund and
the Zusatzversorgungskasse der Stadt Köln (ZVK) welfare fund and also belongs to the billing union I of
the supplementary welfare funds (“Abrechnungsverband I der Zusatzversorgungskassen”) which
allocates expenses among its members. The task of RZVK and ZVK is to provide the employees of its
members supplementary retirement benefits, disability and surviving dependents benefits in keeping
with its articles and the industrial agreement from 1 March 2002 (ATV-K). According to § 1 Sec. 1
Clause 3 BetrAVG, Sparkasse KölnBonn is indirectly liable to meet these additional benefit obligations
(secondary liability from an indirect pension obligation).
These pension obligations are multi-employer defined benefit plans as defined by IAS 19.7. There is an
inherent difficulty in such allocation procedures of making any sensible allocation of the scope of the
obligation, the plan assets and the costs attributable to the various members of the scheme, as
required by IAS 19.29 “Defined Benefit Multi-Employer Plan”. This difficulty arises from the fact that the
costs allocated to the various members or parties involved is based on their share in the vested
pension obligations to be paid out by the fund. The same applies to the allocation of restructuring
funds and supplementary contributions.
Given that the allocation is based on an actuarial calculation, both plans contain a certain degree of
risk-sharing as defined by IAS 19.32b. Common accounting practice in such cases is to apply IAS 19.30
which allows defined contribution accounting for defined benefit plans provided that additional
disclosures are made.
In fiscal year 2010 the allocation key for membership in the supplementary retirement benefit plan,
RZVK, was 4.25% (prior year: 4.25%) of the qualifying emoluments (measurement base). As at
31 December 2000 the former comprehensive welfare plan was closed and replaced with a pointsbased company pension plan. RZVK levies a “restructuring fee” of 3.5% (prior year: 2.5%) of the
measurement base under Art. 63 of its articles of association in addition to the cost allocations to
partially finance the benefits which vested prior to 1 January 2002. The cost allocation and the
restructuring fee are recalculated regularly on the basis of the weighted average coverage periods.
RZVK assumes the total expense of 7.75% to be sufficient to attain a sustainable and constant
allocation and restructuring fee. Additional pension contributions (Art. 64 of the articles of RZVK) to
cover the step-by-step transition to a funded plan are not currently being levied. The total expenses
arising from membership in RZVK in fiscal year 2010 amount to EUR 3.4 million (prior year: EUR 3.0
million). The qualifying emoluments amount to EUR 43.4 million (prior year: EUR 43.6 million).
In the fiscal year the allocation key for membership in ZVK Cologne was 5.8% (prior year: 5.8%), of
which 0.3% is paid by the employee. An additional contribution has been levied since 1 January 2003
to make the transition to a funded plan. In the past fiscal year, this additional contribution amounted to
3.2% (prior year: 3.2%). It is assumed that the total burden will remain constant at 9.0%. In the distant
future (from the year 2030 onwards) it is assumed the burden will fall markedly due to the funded plan.
The total expenses arising from membership in ZVK in fiscal year 2010 amount to EUR 12.2 million
(prior year: EUR 12.1 million). The qualifying emoluments amount to EUR 134.3 million (prior year:
EUR 134.0 million).
Given the risks associated with the allocation method and demographic developments, a funding
deficit or an increase in the contributions for the pension obligations of Sparkasse KölnBonn cannot be
ruled out.
74
In order to determine the unfunded portion of the pension obligations arising from the scheme, the
unfunded obligations of the scheme attributable to Sparkasse KölnBonn were calculated by identifying
the net present value of the current plan deficit and crediting the fictitious funded portion. The
calculations were based on the tables issued by RTZVK (ZVK), that were newly developed in fiscal year
2009 from the portfolios of the supplementary welfare fund of Bavarian municipalities and their
cooperation partners, referring also to the 1998 mortality tables issued Klaus Heubeck (RZVK) as well
as to an interest rate of 2.25% (prior year: 2.25%) according to the articles of association of RZVK and
ZVK.
As at closing date 31 December 2010, the value of all pension obligations arising from the RZVK and
ZVK pension schemes calculated in this way amounts to EUR 405.7 million (prior year:
EUR 398.4 million). After deducting the funded portion of 19.0% (RZVK) and 23.0% (ZVK) (prior
year: 19.0% (RZVK) and 22.2% (ZVK)), the obligation amounts to approximately EUR 317.2 million
(prior year: EUR 313.8 million).
With regard to the comparability of the interest rate used to calculate the plan deficit with the direct
benefit obligations we also disclose for informative purposes the amount that would have resulted
using an interest rate of 4.97%. The sum in this case amounts to EUR 261.1 million or, after deducting
the present value of the funded portion of 28.0% (RZVK) and 36.3% (ZVK), to approximately EUR 173.0
million.
The possible obligations upon termination of the respective membership are reviewed regularly by
Sparkasse KölnBonn.
[30]
Other Provisions
The Sparkasse KölnBonn Financial Group has recognised other provisions for contingencies towards
third parties and onerous contracts at the amount that is likely to be needed to settle the obligation
taking account of the discernible risks and uncertainties. Non-current provisions are discounted if the
effect of the time value of money is material. Moreover, this item contains provisions for welfare
services and long-service bonuses.
Additions of such provisions are posted through the corresponding item in the income statement for
which the provision was created. Releases are reported in other operating income. Provisions for credit
risks in off-statement of financial position lending business are credited to the risk provision for
lending business and released there as well.
In addition, other provisions contain obligations towards employees who have entered into phased
retirement arrangements (Altersteilzeit). Any expenses arising from additions are charged to personnel
expenses. The accounting of the phased retirement arrangements complies with Practice Statement
HFA 3 issued by the Institute of Public Auditors in Germany, Düsseldorf (IDW) on 18 November 1998.
Restoration and rebuild obligations towards third parties originating from leases are covered by
corresponding provisions and by increasing the cost of the assets associated with restoration and
rebuild obligations. They are expensed via the depreciation of the assets over their useful lives as well
as via the discounted amounts of provisions shown at their present value.
75
[31]
Financial Guarantee Contracts
Financial guarantees are contracts which arise from a guarantee issued by the Sparkasse KölnBonn
Financial Group to cover any default on a debt instrument issued to a third party. As consideration for
the guarantee the Group generally receives a commission paid in instalments over the term of the
guarantee. The net method is used when accounting for these guarantees.
The commission is recognised in commission income on the date it falls due. In the event that a
guarantee is likely to be drawn on, a provision of a corresponding amount is recognised and measured
in accordance with IAS 37. In this case, no further commission income is recognised.
[32]
Subordinated Capital
Subordinated liabilities and hybrid financial instruments are accounted for as subordinated capital.
Please see Note [71] for more information on the hybrid components. Premiums and debt discounts
increase or decrease the historical cost of such capital and are spread over the term of the instrument
in net interest income. After initial recognition at cost, such instruments are subsequently measured at
amortised cost unless the fair value option has been applied.
[33]
Deferred and Current Taxes
Current tax receivables and liabilities are calculated using the current tax rates to arrive at the amount
that can be expected to be paid or received from the tax authorities.
Deferred taxes must be recognised on any temporary differences between the carrying amounts in the
IFRS accounts and the tax base. Deferred taxes are calculated on the basis of the tax rate that is likely to
apply on the date they reverse. Deferred tax liabilities are recognised for temporary differences which
will lead to a tax expense upon reversal. A deferred tax asset is recognised if the reversal of a temporary
difference is likely to lead to a tax credit in future. Deferred tax assets and deferred tax liabilities are
not discounted.
Together with current taxes, the income and expenses from deferred taxes are recorded in the income
statement under “Income taxes”. Deferred taxes on temporary differences that arose without effect on
income are also recognised without effect on profit and loss in the revaluation reserve.
Deferred tax assets are recognised on unused tax losses if it is likely they will be used in a future
period. The recoverability of deferred tax assets from temporary differences and unused tax losses is
reviewed each closing date.
Deferred tax assets and deferred income tax liabilities are offset, if the Sparkasse KölnBonn Financial
Group has a legally enforceable right exists to set off deferred tax assets against deferred tax liabilities
and the taxes relate to the same taxation authority.
76
Notes to the Consolidated Income Statement
[34]
Net Interest Income Prior to Risk Provisions
Interest income and interest expenses break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Interest income from loans
945,000
1,021,299
-7.5
Interest income from debentures and other fixed-interest
securities
100,745
153,476
-34.4
118
32
>100.0
8,356
11,436
-26.9
370
2,447
-84.9
Other interest income
5,734
12,692
-54.8
Total interest income
1,060,323
1,201,382
-11.7
Interest expenses from savings and deposits
162,625
249,881
-34.9
Interest expenses from debentures and hybrid financial
instruments issued
289,250
377,354
-23.3
51,286
53,558
-4.2
2,444
1,001
>100.0
Other interest expenses
183,788
134,633
36.5
Total interest expenses
689,393
816,427
-15.6
Net interest income
370,930
384,955
-3.6
Interest income
Dividends
Income from equity investments
Income from affiliated companies
Interest expenses
Interest expenses on subordinated capital
Interest expenses on provisions
Total interest income on assets that are not allocated to the AFV category amounts to
EUR 951,821 thousand (prior year: EUR 1,034,224 thousand). Total interest expenses which are not
allocated to the LFV category amount to EUR 530,780 thousand (prior year: EUR 693,860 thousand).
Interest income from unwinding claims on which risk provisions have been recognised is included in
interest income from loans. In the reporting year income from unwinding came to EUR 11,248
thousand (prior year: EUR 7,944 thousand).
The components of net interest income originating from derivatives are contained in other interest
income and other interest expenses respectively. In net terms, interest from derivatives led to an
expense of EUR 125,238 thousand in the year under review (prior year: interest expense from
derivatives of EUR 72,983 thousand). In gross terms, interest income from derivates amounts to
EUR 885,247 thousand (prior year: EUR 1,175,490 thousand) and interest expenses from derivatives to
EUR 1,010,485 thousand (prior year: EUR 1,248,473 thousand).
77
The spreads are as follows:
in percent
2010
2009
on the basis of the average positions that must be credited
1.93
1.86
on the basis of total assets on closing date
1.24
1.26
[35]
Risk Provisions
Income and expenses attributable to the risk provision for the lending business developed as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Additions to the risk provision
-179,948
-185,154
-2.8
Releases of the risk provision
101,576
66,665
52.4
Direct write-downs
-16,823
-17,134
-1.8
9,081
13,598
-33.2
-86,114
-122,025
-29.4
Expenses related to the creation of provisions for off-statement
of financial position lending business
-5,397
-2,713
98.9
Income related to the release of provisions for off-statement of
financial position lending business
775
868
-10.7
-90,736
-123,870
-26.7
Collections of receivables previously written off as bad
Risk provisions for lending business in the statement of
financial position
Total risk provisions
The development of provisions for risks related to the off-statement of financial position lending
business is shown in Note [67] b).
78
A breakdown of additions to the risk provision and the direct write-offs in the lending business on the
face of the statement of financial position is as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
121,559
128,923
-5.7
Additions to specific valuation allowances
71,252
83,994
-15.2
Additions to portfolio-based allowances for impairment
44,726
40,025
11.7
5,581
4,904
13.8
Risk provisions for loans to private customers (LAR)
75,182
69,824
7.7
55,806
52,645
6.0
8,134
4,949
64.4
11,242
12,230
-8.1
30
3,541
-99.2
Risk provisions for loans to corporate customers (LAR)
Direct write-downs
Direct write-downs
Risk provisions for loans and advances for claims to banks
(LAR)
Direct write-downs
Total
-
-
.
30
3,541
-99.2
-
-
.
196,771
202,288
-2.7
The effect on profit or loss from the releases of the risk provision is broken down in the schedule of risk
provisions under Note [52]. The total impairment loss on financial assets is shown under investment
income (Note [38]).
79
[36]
Net Commission Income
Commission income and commission expenses break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
95,885
89,621
7.0
8,357
11,409
-26.8
Security and investment portfolio business
43,306
35,859
20.8
Other commission business
30,239
27,366
10.5
Total commission income
177,787
164,255
8.2
73,821
76,731
-3.8
Current account and monetary transactions
9,417
9,170
2.7
Lending business
1,004
664
51.2
Security and investment portfolio business
4,247
4,272
-0.6
630
764
-17.5
15,298
14,870
2.9
1,025
671
52.8
162,489
149,385
8.8
Commission income from
Current account and monetary transactions
Lending business
of which commission from financial instruments not measured
Commission expenses from
Other commission business
Total commission expenses
of which commission from financial instruments not measured
Net Commission Income
Commission income includes income from trust activities of the Sparkasse KölnBonn of EUR 112
thousand (prior year: EUR 131 thousand). Commission income includes expenses from trust activities
of the Sparkasse KölnBonn of EUR 0 thousand (prior year: EUR 0 thousand).
[37]
Gain or Loss on Financial Instruments Measured at Fair Value through
Profit or Loss
The gain or loss on financial instruments measured at fair value through profit or loss breaks down as
follows into the gain or loss on designated as at fair value transactions and the trading result.
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Gain or loss on transactions designated as at fair value
21,485
117,417
-81.7
Trading result
51,105
-45,922
.
Financial instruments measured at fair value through profit
or loss
72,590
71,495
1.5
80
The gain or loss on transactions designated as at fair value breaks down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
-9,907
-2,594
>100.0
Claims on banks (AFV designated)
-315
3.981
.
Financial assets (AFV designated)
33,603
132,832
-74.7
Liabilities to customers (LFV designated)
-9,728
-266
>100.0
-718
-1,998
-64.1
Debt instruments issued by the Bank (LFV designated)
4,847
-12,091
.
Subordinated capital (LFV designated)
3,703
-2,447
.
21,485
117,417
-81.7
Gain or loss on measurement of disposal of
Claims on customers (AFV designated)
Liabilities to banks (LFV designated)
Gain or loss on transactions designated as at fair value
All financial instruments in the AFV category are measured at fair value. Fair value is measured using
prices quoted on public exchanges. The fair value of products that are not listed on a public exchange is
determined using suitable present value or option price models. In addition to the recognised gain or
loss, the trading result also recognises the net measurement gain or loss in trading activities.
The trading result breaks down as follows:
Gain or loss from securities in the trading portfolio (AFV/LFV
trading)
Income from derivatives
Thereof: result of derivatives not used for trading purposes
Foreign exchange gain
Trading result
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
7,594
23,332
-67.5
33,875
-62,248
.
10,147
-97,575
.
9,636
-7,006
.
51,105
-45,922
.
The derivatives that are not held for trading stand in an economic relationship to financial instruments
used under the fair value option.
81
[38]
Investment Income
Investment income reports the gain or loss on those financial assets, which correspond to the
“Financial assets” item in the statement of financial position and can be allocated to the LAR and AFS
category. In addition, the following table shows the gains and losses recorded in profit and loss from
measuring long-term investments (not including financial assets designated as at fair value), shares in
non-consolidated subsidiaries, and associates and investments not accounted for using the equity
method.
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Gain or loss from LAR financial assets
1,650
-1
.
Gain on disposal
1,650
-
.
Loss on disposal
-
1
-100.0
Impairment losses
-
-
.
Reversals of impairment losses
-
-
.
947
-265
.
Gain on disposal
3,982
33,455
-88.1
Loss on disposal
330
16,521
-98.0
2,705
17,199
-84.3
-
-
.
52
270
-80.7
2,545
-536
.
Gain or loss from AFS financial assets
Impairment losses
Reversals of impairment losses
Expenses from loss absorption
Investment Income
82
[39]
Result of Associates Recognised at Equity
The result of associates recognised at equity originates from carrying forward associates at equity with
the associated gains and losses posted either directly to equity or to profit and loss:
2010
2009
EUR ’000
EUR ’000
25,491
33,481
Additions
-
-
Disposals
-109
-1,012
Carrying amount rolled forward not affecting profit and loss
-860
-2,008
Dividends
-
-
Reclassifications between non-current assets held for sale and
associates
-
-
Other adjustments not affecting profit and loss
2
-
-967
-3,020
1,471
-4,970
2
-
1,469
-4,970
25,993
25,491
Carrying amount as at 1 January
Changes in carrying amount not affecting profit and loss
Sub-total of changes in carrying amount not affecting profit and loss
Changes in the carrying amount through profit or loss
Share in the profit or loss for the year
Impairments
Sub-total of changes in carrying amount through profit or loss
Carrying amount as at 31 December
83
[40]
General Administrative Expenses
General administrative expenses break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Personnel expenses
259,252
264,818
-2.1
Non-personnel expenses
192,406
203,289
-5.4
22,093
18,983
16.4
473,751
487,090
-2.7
Depreciation and amortisation
Total
Personnel expenses, non-personnel expenses and depreciation and amortisation break down as
follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
195,486
204,861
-4.6
56,563
55,650
1.6
5,034
1,956
>100.0
Personnel expenses
Wages and salaries
Social security
Post-employment expenses
Other personnel expenses
Total
2,169
2,351
-7.7
259,252
264,818
-2.1
Social security includes expenses for defined contribution plans of EUR 15,534 thousand (prior
year: EUR 15,079 thousand). Please see the disclosures on provisions in Note [67] a) for more
information on the presentation of pension expenses for defined benefit plans as defined by
IAS 19.120A (g).
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
32,180
29,112
10.5
31,894
28,869
10.5
286
243
17.7
Rent and rent incidentals
22,027
23,827
-7.6
IT costs
49,308
54,170
-9.0
Non-personnel expenses
Rental expenses
of which unconditional rental expenses
of which conditional rental expenses
Other non-personnel expenses
Total
88,891
96,180
-7.6
192,406
203,289
-5.4
84
Other non-personnel expenses include expenses for advertising, PR and promotion of
EUR 12,325 thousand (prior year: EUR 13,176 thousand), mandatory contributions and corporate
expenses of EUR 8,070 thousand (prior year: EUR 8,425 thousand) and legal expenses, consulting fees
and audit fees of EUR 7,096 thousand (prior year: EUR 7,899 thousand) and services of EUR 32,589
thousand (prior year: EUR 38,664 thousand). In addition, other non-personnel expenses include
expenses for training of EUR 2,019 thousand (prior year: EUR 2,451 thousand), expenses for savings
bank cards and credit cards of EUR 7,950 thousand (prior year: EUR 7,804 thousand) and
communication expenses and transport of EUR 6,577 thousand (prior year: EUR 6,556 thousand).
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
19,798
16,502
20.0
Depreciation of property, plant and equipment
Amortisation of intangible assets
Total
2,295
2,481
-7.5
22,093
18,983
16.4
Write-downs of investment properties are reported under other operating expenses (Note [42]).
Impairment losses on Property, plant and equipment (Note [57]) and Investment property (Note [58])
were recognised in fiscal year 2010. Impairment losses on Intangible assets were not recognised in the
reporting year (Note [59]). These losses are disclosed in the notes to these assets.
85
[41]
Other Operating Income
Other operating income consists of:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
187
30
>100.0
36,152
72,506
-50.1
-
-
.
16
396
-96.0
47,855
35,906
33.3
1,871
455
>100.0
39,623
29,204
35.7
6,361
6,247
1.8
2,287
57,190
-96.0
Write-ups of property, plant and equipment
1,229
52,779
-97.7
Write-ups of investment properties
1,058
4,366
-75.8
Write-ups of intangible assets
-
45
-100.0
Income from employee transfers
10,750
11,316
-5.0
Income from land and buildings held for sale
11,338
7,507
51.0
3,502
18,535
-81.1
-
-
.
Income from facility management services for film and
television productions
37,848
37,841
0.0
Sundry other operating income
47,465
60,251
-21.2
197,400
301,478
-34.5
Gain on the sale of property, plant and equipment, intangible
assets, and investment properties
Income from the reversal of other provisions
Income from the release of provisions for pensions and similar
obligations
Income from the repurchase of liabilities in the category OFL
Rental income
of which rental income from property, plant and equipment
of which rental income from investment properties
of which rental income from other rental agreements
Write-ups
Income from the release of accruals
Income from claims waived
Other operating income
Rental income breaks down into non-conditional rental payments of EUR 47,653 thousand (prior year:
EUR 35,825 thousand) and conditional rental payments of EUR 202 thousand (prior year:
EUR 81 thousand).
Rental income from other rental agreements which were previously contained in the rental income from
investment properties and sundry other operating income is now presented separately from fiscal year
2010 onwards. The prior-year figures have been adjusted accordingly.
86
[42]
Other Operating Expenses
Other operating expenses consist of:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
61,255
93,801
-34.7
3,909
4,220
-7.4
Depreciation of investment properties
35,759
80,148
-55.4
of which systematic depreciation
15,581
9,231
68.8
of which impairment losses
20,178
70,917
-71.5
2,651
2,120
25.0
147
350
-58.0
4,501
7,677
-41.4
Expenses for real estate and project developments
10,885
9,041
20.4
Expenses from facility management services for film and
television productions
22,503
11,439
96.7
Sundry other operating expenses
43,650
60,374
-27.7
185,260
269,170
-31.2
Additions to other provisions
Expenses for purchased services
Losses on the repurchase of liabilities in the category OFL
Losses on the sale of property, plant and equipment, intangible
assets, and investment properties
Donations
Other operating expenses
The additions to other provisions chiefly comprise expenses for the “Rheinparkmetropole” project of
EUR 21,350 thousand (prior year: EUR 40,244 thousand). These are explained in the segment reporting
on the Location development/restructuring segment.
From fiscal year 2010, facility management expenses related to film and TV productions, which had
been included in the expenses for purchased services before, have been reported separately. The prioryear figures have been adjusted accordingly.
87
[43]
Income Taxes
Tax income breaks down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
-3,398
-26,876
-87.4
-2,037
-24,218
-91.6
Deferred income taxes
21,747
48,206
-54.9
Income taxes
18,349
21,330
-14.0
Current income taxes
Of which from other periods
The following table reconciles the imputed tax expense to the reported income tax expense:
2010
2009
EUR ’000
EUR ’000
57,676
21,677
Applicable tax rate
31.68%
31.6%
Theoretical income tax expense
-18,272
-6,850
4,883
30,374
-4,822
-17,956
6,553
-
Change in trade tax base
-3,439
-9,715
Recognition of deferred taxes not recognised in prior years
43,920
61,345
Current taxes relating to other periods
-2,037
-24,218
Other tax effects
-8,437
-11,650
Income taxes
18,349
21,330
Earnings before tax
Zero-rated income (in particular income pursuant to § 8b KStG)
Non-deductible operating expenses
Effects of change in tax rates
Deferred income taxes were calculated in 2010 using a combined income tax rate of 32.29% (prior
year: 31.58%). This rate comprises corporate income tax (15.00%) plus the solidarity surcharge (5.50%
of corporate income tax) plus trade tax of 16.46%. The difference between the applicable tax rate and
the combined tax rate results from the changes in the trade tax rate that will take effect in the fiscal
year 2011.
After offsetting recognised deferred tax assets against deferred tax liabilities, the deferred tax assets
resulting from tax loss carryforwards and temporary differences remaining for the Group as at
31 December 2010 amount to EUR 225,368 thousand.
88
Deferred taxes are measured on the basis of the earnings projections for the following fiscal year to the
extent that taxable income will be generated by the Group entity concerned against which the
respective deferred taxes from tax loss carryforwards and temporary differences can be used. Deferred
taxes were not recognised on loss carryforwards at Group entities of EUR 201,827 thousand for
corporate income tax purposes and EUR 318,482 thousand for trade tax purposes (prior year:
EUR 187,025 thousand for corporate income tax purposes and EUR 306,116 thousand for trade tax
purposes).
As the parent company of the Group, Sparkasse KölnBonn basically assumes that all tax claims can be
realised over the course of time. However, a longer planning horizon is necessary to determine this.
Owing to the uncertainties related to the development of the financial markets and the general rise in
planning uncertainty over the course of time, appropriate risk discounts were made also for planning
years beyond the 5-year projection period when measuring the deferred tax assets of Sparkasse
KölnBonn. The various annual risk discounts consider the rise in planning uncertainty over the course
of time. Due to rising uncertainty forecasts will not be made for more than 10 years. At the level of
Sparkasse KölnBonn, the amount of net deferred tax assets recognised was EUR 223,845 thousand
(prior year: EUR 206,000 thousand) at 31 December 2010.
89
Segment Reporting
[44]
Notes on Segment Reporting
As in prior years, Sparkasse KölnBonn has also applied IFRS 8 “Operating Segments” in 2010. Following
the management approach of IFRS 8 the results reported in the segment reporting are based on the
operating segments contained in the internal management reporting system of Sparkasse KölnBonn.
This reflects the organisation and reporting structures of Sparkasse KölnBonn and assists the “chief
operating decision makers”, the Board of Management, in measuring results and allocating resources.
The operating business of Sparkasse KölnBonn is divided into the following segments:
•
Individual customers
•
Private customers
•
Corporate customers
•
Location development / restructuring
•
Equity investments
•
Corporate Center
The business activity of Sparkasse KölnBonn is concentrated on the economy of the Cologne/Bonn
region due to the regional structure of the organisation. As reporting on the basis of geographical
segments generally corresponds with the Group’s segment reporting by operating activities, no
disclosure has been made on geographical segments.
Due to the fact that Sparkasse KölnBonn does not earn more than 10% of its entire income from just
one customer and is therefore not in a dependent relationship pursuant to IFRS 8.34, no breakdown
has been made of major customers.
The Individual customers segment comprises the activities of Sparkasse KölnBonn in the fields of
private banking and institutional customers. These activities include consulting of both wealthy private
customers and also institutional customers, such as municipal organisations and insurers.
The revenue streams in the Individual customers segment are as follows:
EUR million
2010
2009
Lending business
37.1
36.8
Deposit business
19.3
21.2
Securities
11.9
14.8
Monetary transactions
3.0
2.5
Other
2.0
3.2
73.3
78.5
Total income
The Private customers segment comprises customer business at all branches, asset management
centres and real estate centres of the Group. Sparkasse KölnBonn provides its private customers,
wealthy customers and smaller businesses an entire portfolio of primary banking business.
90
The revenue streams in the Private customers segment are as follows:
EUR million
2010
2009
Lending business
114.1
107.1
Deposit business
85.0
95.4
Securities
32.2
36.2
66.1
62.7
Other
32.3
24.9
329.7
326.3
Total income
The Corporate customers segment includes all activities of Sparkasse KölnBonn with medium-sized to
large corporate customers. In addition to lending business, this segment also includes hybrid and
derivative products.
The revenue streams in the Corporate customers segment are as follows:
EUR million
2010
2009
Lending business
128.0
123.1
Deposit business
24.3
26.2
4.3
6.0
13.5
13.2
8.6
6.2
178.7
174.7
Securities
Other
Total income
Investments in real estate which are aimed at improving the quality of the region in which Sparkasse
KölnBonn does its business are generally allocated to the Location development/restructuring
segment. These are either held directly by Sparkasse KölnBonn or indirectly by its subsidiaries. In light
of the conscious concentration of the Group on its core banking business, the Board of Management of
Sparkasse KölnBonn decided to downsize this segment. Moreover, this segment does not meet the
criteria to qualify as non-current assets held for sale or a disposal group under IFRS 5. If individual
assets meet these criteria, they are reported under 7 “Non-current assets available for sale”. The
Location development/restructuring segment also includes those expenses incurred under IAS 1.86,
more information can be found in Note [42].
In the Investments segment a distinction is made between the investments held for strategic purposes
by Sparkasse KölnBonn Financial Group and those held for profit and loans qualifying as equity
substitutes. A significant contribution to earnings in 2010 was generated by the significant increase in
the price of the shares of GAG AG. As a result, it was possible to avoid recording a corresponding
impairment loss within the equity investments of the Sparkasse.
The Corporate Center segment includes the corporate management function of Sparkasse KölnBonn.
The main revenue and cost streams related to the Corporate Centre are the yield on equity, the
maturity transformation and streams from the Bank’s own deposits and overheads that cannot be
allocated to any other operating segment.
91
[45]
Calculation of Segment Results
The segment information disclosed in this report is mainly based on the management reporting system
used for internal controlling purposes, the profit and loss accounts of the segments. This is based on
the accounting standards applying to a comparison of operations which are oriented on the guidelines
of the Sparkasse KölnBonn Financial Group. The valuation techniques used to compare operations are
identical to those used in German HGB.
As a consequence, there are measurement and reporting differences between the segment result and
the consolidated net profit or loss under IFRS. A reconciliation of segment results to the results of the
Group under IFRS can be found in the separate reconciliation below.
Income and expenses are allocated to segments on the basis of their point of origin. Net interest
income is broken down using the market interest rate method. As a result of this approach, no separate
presentation of interest income and interest expenses has been made. Moreover, net interest income
represents the main revenue stream of Sparkasse KölnBonn.
General administrative expenses contain personnel expenses, other administrative expenses and nonpersonnel related items, depreciation and amortisation as well as any impairment losses recorded on
intangible assets and property, plant and equipment. Intersegment results are considered on the basis
of transfer prices that were set previously.
The distribution of the risk provisioning of lending exposures to the various segments is performed
with the aid of a risk database which allocates the costs of risk to the point of origin.
Segment assets contain the cash reserve, claims on banks and customers, trading assets, financial
assets and shares in associates. The segment assets reported for the Location
development/restructuring segment are the fair values of the assets reported to the chief decision
makers.
Expenses of internal functions that are not allocated to their own profit centre are generally allocated
to the operating segments on the basis of volume-oriented or product-oriented allocation algorithms
or fixed percentages.
92
[46]
Segment Reporting
Segment Reporting of the Sparkasse KölnBonn Financial Group 2010
EUR million
Individual
customers
Private
customers
Corporate
customers
55.1
195.0
142.8
-3.4
-27.4
-30.8
-44.3
Net interest income
after risk provisions
27.7
164.2
Net commission
income
16.5
Net interest income
Risk provision /
measurement
Gain or loss on
measured at fair
value through profit
or loss*)
Investment income
Administrative
expenses
Net other operating
income/expenses
Operating result
Segment assets
(gross)
Location
development /
restructuring
Equity
investments
Corporate
Center
Total
reported
segments
3.0
35.3
427.8
-15.6
-15.1
29.1
-104.1
98.5
-19.0
-12.1
64.4
323.7
120.4
33.5
-.-
-.-
2.2
172.6
1.0
2.7
0.4
-.-
-.-
20.8
24.9
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-20.9
-284.7
-58.2
-0.1
-0.7
-69.2
-433.8
0.7
11.6
2.0
-7.1
3.9
-55.5
-44.4
25.0
14.2
76.2
-26.2
-8.9
-37.3
43.0
4,467.9
7,058.5
9,206.5
92.1
807.3
7,608.8
29,241.1
Corporate
Center
Total
reported
segments
*) in the segments reported here this corresponds to the net result from financial transactions under HGB.
Segment Reporting of the Sparkasse KölnBonn Financial Group 2009
EUR million
Individual
customers
Private
customers
Corporate
customers
56.2
198.4
140.1
-10.8
11.1
53.2
448.2
-23.8
-29.2
-56.3
-90.3
-73.8
10.9
-262.5
Net interest income
after risk provisions
32.4
169.2
83.8
-101.1
-62.7
64.1
185.7
Net commission
income
16.3
101.1
30.3
-.-
-.-
1.5
149.2
5.3
14.5
2.2
-.-
-.-
2.0
24.0
-.-
-.-
-.-
-.-
-.-
-.-
-.-
-24.2
-292.3
-61.4
-0.3
-0.5
-76.2
-454.9
0.6
12.3
2.0
-19.4
57.9
-56.2
-2.8
30.4
4.8
56.9
-120.8
-5.3
-64.8
-98.8
4,623.6
7,675.8
9,765.2
116.5
780.2
6,916.3
29,877.6
Net interest income
Risk provision /
measurement
Gain or loss on
measured at fair
value through profit
or loss*)
Investment income
Administrative
expenses
Net other operating
income/expenses
Operating result
Segment assets
(gross)
Location
development /
restructuring
Equity
investments
93
[47]
Reconciliation and Consolidation
The internal management reporting system of Sparkasse KölnBonn is not based on IFRS accounting
standards. For this reason, reconciliation to the result of the Group under IFRS is required. In addition,
in the internal management reporting system, the Location development/restructuring segment and
the Equity investments segment also report the results of subsidiaries included in the consolidated
financial statements. Thus, the results of the subsidiaries concerned need to be eliminated in the
course of the reconciliation.
The reconciliation for fiscal year 2010 is as follows:
EUR million
Net interest income
Total reported
segments
Reclassifications
Measurement
and
consolidation
Total
for the Group
427.8
15.0
-71.9
370.9
-104.1
14.7
-1.3
-90.7
Net interest income after
risk provisions
323.7
29.7
-73.2
280.2
172.6
-14.1
4.0
162.5
24.9
10.9
36.8
72.6
-.-
-62.0
66.0
4.0
-433.8
6.5
-46.5
-473.8
-44.4
-23.8
80.4
12.2
43.0
-52.8
67.5
57.7
29,241.1
-.-
4.8
29,245.9
Risk provision /
measurement
Gain or loss on financial
instruments measured at
fair value through profit or
loss*)
Investment income**)
Administrative
expenses***)
Net other operating
income/expenses****)
Consolidated net profit or
loss for the year
before income taxes
Segment assets (gross)
**) including the result of associates of EUR 1.5 million
***) including depreciation of property, plant and equipment of EUR 19.8 million.
****) including depreciation of investment properties of EUR 35.8 million.
94
The reconciliation for fiscal year 2009 was as follows:
EUR million
Net interest income
Total reported
segments
Reclassifications
Measurement
and
consolidation
Total
for the Group
448.2
-2.4
-60.9
384.9
-262.5
168.9
-30.3
-123.9
Net interest income after
risk provisions
185.7
166.5
-91.2
261.0
149.2
-8.8
9.0
149.4
24.0
-29.6
77.1
71.5
-.-
-47.1
41.6
-5.5
-454.9
-3.5
-28.7
-487.1
-2.8
-82.7
117.9
32.4
-98.8
-5.2
125.7
21.7
29,877.6
-.-
-20.8
29,856.8
Risk provision /
measurement
Gain or loss on financial
instruments measured at
fair value through profit or
loss*)
Investment income**)
Administrative
expenses***)
Net other operating
income/expenses****)
Consolidated net profit or
loss for the year
before income taxes
Segment assets (gross)
**) including the result of associates of EUR -5.0 million
***) including depreciation of property, plant and equipment of EUR 16.5 million.
****) including depreciation of investment properties of EUR 80.1 million.
The net interest income of the reporting segments in fiscal year 2010 amounts to EUR 427.8 million
(prior year: EUR 448.2 million). At Group level the net interest income after reclassifications and the
effects of measurements and consolidation adjustments amounts to EUR 370.9 million (prior year:
EUR 384.9 million). The reclassifications are due to differences in the presentation between the internal
management reporting system, which is based on German HGB, and the IFRSs. Generally, these relate
to interest income from derivatives that are allocated to the gain or loss on financial instruments
measured at fair value through profit or loss in the reporting segments. In addition, measurement
effects result from the different policies applied under HGB and IFRS, in particular with regard to the
different accounting treatment of profit participation rights (effect of EUR -23.7 million). In addition,
income of EUR 11.3 million arises from unwinding impairments recognised under IAS 39 (prior year:
EUR 7.9 million). The effect of measuring claims and receivables at amortised cost results in EUR 14.0 million (prior year: an expense of EUR -27.6 million). Moreover, a measurement effect of EUR 0.4
million (prior year: EUR 11.0 million) is due to the amortisation of hedge adjustments associated with
the adoption of IFRS pursuant to IFRS 1 IG 60A. Other effects totalling EUR -6.0 million (prior year:
EUR -6.2 million) originate from the interest expense that needs to be reported under IFRS for
properties acquired under finance leases. These properties do not need to be recognised under the
German Commercial Code. Consequently the related expenses are posted to general administrative
expenses. Other measurement effects total EUR -6.2 million (prior year: EUR 7.9 million). The
consolidation of the interest items of subsidiaries results in measurement effects of EUR -28.7 million
(prior year: EUR -18.4 million).
95
The risk provision for the reporting segments amounts to EUR -104.1 million (prior year: EUR 262.5 million). Reclassification effects from IFRS originate mainly from differences in the presentation
of write-downs of securities (gain or loss on financial instruments measured at fair value through profit
or loss) and investments (net result of financial investments). The measurement differences are
primarily due to lower specific valuation allowances (prior year: higher specific valuation allowances)
under IFRS and higher portfolio-based allowances under IFRS in comparison to the general valuation
allowances under HGB (prior year: higher portfolio-based allowances).
The net commission income in the reporting segments totals EUR 172.6 million (prior year:
EUR 149.2 million). The difference of EUR -14.1 million (prior year: EUR -8.8 million) results mainly from
the different treatment of expenses for derivatives used to hedge lending activities. The net effect from
remeasurements and purchase accounting amounts to EUR 4.0 million (prior year: EUR 9.0 million) and
results primarily from the inclusion of fully consolidated entities.
The gain or loss on financial instruments measured at fair value through profit or loss amounts to
EUR 24.9 million (prior year: EUR 24.0 million) in the reporting segments and corresponds to the net
result from financial transactions reported under the German Commercial Code. The most significant
effect from reclassifications arises from the different presentation of write-downs on financial
instruments carried under assets. These are presented in the reporting segments under risk provisions.
Required reclassifications result from the different treatment of interest expenses from derivatives, the
net result of selling shares and special funds and the expenses for iTraxx hedge derivatives.
Measurement changes amount to a total of EUR 36.8 million (prior year: EUR 77.1 million) and are due
to the measurement of derivatives at fair value (EUR 22.3 million; prior year: EUR -99.9 million), of
securities carried under assets (EUR 17.6 million; prior year: EUR 156.2 million), designated bond
issues in the LFV category (EUR -1.9 million; prior year: EUR -16.8 million) and loans denominated in
foreign currency (EUR -9.9 million; prior year: EUR -2.6 million). Other measurement and consolidation
effects total EUR 8.7 million (prior year: EUR 40.2 million).
In the reporting segments, investment income is primarily allocated to risk provisions and therefore
needs reclassification during the reconciliation to consolidated IFRS figures. In addition the net results
from the sale of shares and special funds need to be reclassified from the net result from measuring
financial instruments at fair value through profit and loss. In addition, the result of associates is
allocated to investment income in the segment reporting. It amounts to EUR 1.5 million in fiscal year
2010 (prior year: EUR -5.0 million) and reflects investment income from the associate CORPUS SIREO
Holding GmbH & Co. KG valued at-equity.
96
General administrative expenses in the reporting segments total EUR 433.8 million (prior
year: EUR 454.9 million). The reclassification of EUR 6.5 million (prior year: EUR -3.5 million) can be
primarily explained by rental expenses that are contained as a net figure under other operating income
and expenses in the reporting segments. The main impact from measurement and consolidation
adjustments in the reporting year of EUR -38.8 million (prior year: EUR -32.1 million) is attributable to
the inclusion of administrative expenses of subsidiaries. Further measurement differences total EUR 7.7 million (prior year: EUR 3.4 million).
The balance of other operating income and expenses amounts to EUR -44.4 million (prior year: EUR 2.8 million) in the reporting segments and results from measuring securities in the investment book
and also from interest income and expenses from other periods. These items need to be reclassified to
risk provisions, administrative expenses and net interest income in the income statement when
reconciling segment reporting to IFRS. The impact of remeasurements and purchase accounting comes
to a sum total of EUR 80.4 million (prior year: EUR 117.9 million). This includes the one-off special
effect of EUR 41.5 million from implementing the changes introduced by BilMoG.
The measurement effect affecting segment assets results mostly from two opposing issues. Firstly, the
internal reporting offsets current receivables and liabilities to a greater extent than IFRS, which results
in the claims in the internal reporting being lower than under IFRS. On the other hand, the claims
determined under IFRS are lower than in German HGB owing to different recognition of the collection of
debt discounts. Cumulatively the effect amounts to EUR 4.8 million (prior year: EUR -20.8 million).
97
Notes to the Consolidated Statement of Financial Position – Assets
[48]
Cash Reserve
The cash reserve comprises the following items:
Cash on hand
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
107,255
154,438
-30.6
Balances at Deutsche Bundesbank
221,141
537,453
-58.9
Cash Reserve
328,396
691,891
-52.5
The minimum reserve requirement at the end of December 2010 came to EUR 288,496 thousand (prior
year: EUR 280,235 thousand).
[49]
Claims on Banks
Claims on banks break down by type of transaction and category as follows:
Fixed term and sight deposits
Fixed term and sight deposits (LAR)
Fixed term and sight deposits (AFS)
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
1,788,161
905,596
97.5
622,248
905,596
-31.3
-
-
.
1,165,913
-
.
288,813
361,990
-20.2
Loans and advances (LAR)
199,713
218,662
-8.7
Loans and advances (AFS)
7,751
7,384
5.0
81,349
135,944
-40.2
Fixed term and sight deposits (AFV designated)
Loans and advances
Loans and advances (AFV designated)
Other receivables
575,371
383,020
50.2
Other receivables (LAR)
6,318
362,727
-98.3
Other receivables (AFS)
-
-
-
569,053
20,293
>100.0
2,652,345
1,650,606
60.7
Other receivables (AFV designated)
Claims on banks
This statement of financial position item includes receivables of EUR 265,236 thousand (prior
year: EUR 317,072 thousand) which are expected to be settled in more than twelve months.
The total includes subordinated claims on banks of EUR 0 thousand (prior year: EUR 3,304 thousand).
Savings bonds account for EUR 5,886 thousand (prior year: EUR 8,157 thousand) of other receivables.
Please see Note [52] for information on portfolio-based allowances recognised on claims on banks in
the fiscal year.
98
[50]
Claims on Customers
Claims on customers break down by the type of transaction and financial asset category (IAS 39) as
follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
1,321,035
2,563,946
-48.5
Fixed term and sight deposits (LAR)
1,321,035
2,563,946
-48.5
Fixed term and sight deposits (AFS)
-
-
.
Fixed term and sight deposits (AFV designated)
-
-
.
19,372,221
18,647,138
3.9
Loans and advances (LAR)
19,238,535
18,456,493
4.2
Loans and advances (AFS)
-
-
.
133,686
190,645
-29.9
1,880
1,868
0.6
Other receivables (LAR)
1,880
1,868
0.6
-
-
.
Other receivables (AFV designated)
-
-
.
20,695,136
21,212,952
-2.4
Loans and advances
Loans and advances (AFV designated)
Other receivables
Claims on customers
This statement of financial position item includes receivables of EUR 16,674,126 thousand (prior year:
EUR 17,075,563 thousand) which are expected to be settled in more than twelve months. Claims on
customers
includes
subordinated
claims
of
EUR 30,954 thousand
(prior
year:
EUR 27,077 thousand). Claims on customers secured by mortgages amount to
EUR 9,244,265 thousand (prior year: EUR 8,807,389 thousand). In addition, an amount of
EUR 1,655,516 thousand (prior year: EUR 2,159,414 thousand) is attributable to loans to
municipalities.
Please see Note [52] for information on specific valuation allowances and portfolio-based allowances
recognised on claims on customers in the fiscal year. Please see Note [90] with regard to claims on nonconsolidated subsidiaries, associates, equity investments and associates not accounted for at equity.
99
[51]
Lending Volume
The lending volume of the Sparkasse KölnBonn Financial Group breaks down as follows:
Claims on banks
Claims on customers
Guarantees and warranties
Total
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
2,652,345
1,650,606
60.7
20,695,136
21,212,952
-2.4
676,382
745,497
-9.3
24,023,863
23,609,055
1.8
Claims on banks and customers contain the amounts extended by the Sparkasse KölnBonn Financial
Group in the course of its banking business. These claims are recognised when they are paid out to the
recipient. Claims are derecognised when they are redeemed, utilising any existing risk provisions or by
recording a direct impairment. Loans and receivables in the LAR category are recognised at amortised
cost without considering any valuation allowances that have been recorded. Valuation allowances are
reported separately under “Risk provisions”.
Valuation allowances of EUR 30 thousand were recognised on claims on banks in the fiscal year 2010
(prior year: EUR 3,541 thousand). In fiscal year, additions to provisions for claims on banks amount to
EUR 179,918 thousand (prior year: EUR 181,613 thousand). Guarantees and warranties are accounted
for using the net method pursuant to IAS 39. The figures disclosed here therefore relate to the nominal
value of the agreements.
100
[52]
Risk Provisions
If there are any doubts about the recoverability of a claim, this is provided for recognising a specific
valuation allowance. To the extent that payments are no longer expected to be collected beyond any
reasonable doubt, the claim is written off as a bad debt. Uncollectible receivables for which a valuation
allowance has already been recognised are written off by debiting the provision. If no provision has
been recognised for such a claim, it is written off directly through profit and loss. Write-offs are also
recorded directly in profit and loss if Sparkasse KölnBonn waives a portion of the claim or enters a
factoring arrangement and the proceeds are lower than the carrying amount of the claim.
The specific valuation allowance is measured using the net present value of the cash flows expected in
future from the claim using the effective interest rate of the claim. Provided that the expected cash
flows remain unchanged, this will result in an unwinding effect each closing date to adjust the provision
for the annual interest portion. This is recorded in interest income.
The risk provisioning covers all discernible credit risks from the lending business. Any impairment of
claims that have occurred as at closing date but have not yet been individually identified are covered by
recognising valuation allowances on a portfolio basis.
31.12.2009
Realisation
01.01.2010
EUR ’000
EUR ’000
EUR ’000
Loans and advances to corporate
customers
274,340
-129
274,211
Specific valuation allowances
204,289
1,767
206,056
Portfolio-based allowances
70,051
-1,896
68,155
Loans and advances to private
customers
98,416
1,178
99,594
90,949
-833
90,116
7,467
2,011
9,478
8,929
167
9,096
-
-
-
8,929
167
9,096
20
-20
0
-
-
-
20
-20
0
263
-263
-
-
-
-
263
-263
-
381,968
933
382,901
Claims on banks
Loans on promissory notes
Country-risk provisions
Total
The realisation mentioned above is founded in reclassifications of sub-items in the statement of
financial position for non-interest and low-interest-bearing claims on customers of EUR 933 thousand
as well as transfers between the Corporate customers and the Private customers segments, and
breakdown of promissory note loans and country risk provisions into Corporate customers, Private
customers and Claims on banks.
101
In the fiscal year, specific valuation allowances, portfolio-based valuation allowances and provisions on
off-statement of financial position lending business are presented separately in accordance with IFRS
7.16 and developed as follows:
All figures in EUR ’000
Opening
balance
Additions
Utilisation
Reversal
Unwinding
01.01.2010
Closing
balance
31.12.2010
customers
274,211
115,978
57,636
58,892
8,676
264,985
206,056
71,252
57,636
17,003
8,676
193,993
68,155
44,726
-
41,889
-
70,992
customers
99,594
63,940
16,615
33,957
2,572
110,390
90,116
55,806
16,615
27,386
2,572
99,349
9,478
8,134
-
6,571
-
11,041
9,096
30
-
8,727
-
399
-
-
-
-
-
-
9,096
30
-
8,727
-
399
382,901
179,948
74,251
101,576
11,248
375,774
Provisions for credit risks related to
the off-statement of financial
position lending business
4,203
5,397
-
775
-
8,825
Risk provisions including lending
business provisions
387,104
185,345
74,251
102,351
11,248
384,599
Claims on banks
The reversal of the portfolio-based allowances recognised on claims on banks of EUR 8,727 thousand
originates from a change in the estimated probability of default.
In fiscal year 2010, Sparkasse KölnBonn reports risk provisions of EUR 2,617 thousand for related
parties (prior year: EUR 3,660 thousand). An amount of EUR 1,239 thousand (prior year: EUR 451
thousand) was added to the provisions in the year and EUR 247 thousand released (prior year: EUR
1,232 thousand). Please see Note [90] for additional information on related entities.
For quantitative information and explanations on provisions for off-statement of financial position risks
please see Note [67]b).
102
During the prior year, the risk provision developed as follows:
Opening
balance
Additions
Utilisation
Reversal
Unwinding
01.01.2009
Closing
balance
31.12.2009
customers
257,216
124,019
44,720
56,430
5,745
274,340
195,458
83,994
44,720
24,698
5,745
204,289
61,758
40,025
-
31,732
-
70,051
customers
75,505
57,594
22,457
10,027
2,199
98,416
69,143
52,645
22,457
6,183
2,199
90,949
Claims on banks
Loans on promissory notes
Country-risk provisions
6,362
4,949
-
3,844
-
7,467
5,481
3,541
-
93
-
8,929
-
-
-
-
-
-
5,481
3,541
-
93
-
8,929
38
-
-
18
-
20
-
-
-
-
-
-
38
-
-
18
-
20
360
-
-
97
-
263
-
-
-
-
-
-
360
-
-
97
-
263
338,600
185,154
67,177
66,665
7,944
381,968
Provisions for credit risks related to
the off-statement of financial
position lending business
2,358
2,713
-
868
-
4,203
Risk provisions including lending
business provisions
340,958
187,867
67,177
67,533
7,944
386,171
103
[53]
Assets held for trading break down as follows:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
%
-
320,017
-100.0
Positive fair value of trading derivatives (AFV trading)
293,679
578,558
-49.2
Positive market value of interest derivatives for which the fair
value has been exercised (AFV trading)
995,990
572,261
74.0
7,000
634,639
-98.9
18,833
23,499
-19.9
4,307
1,190
>100.0
-
-
-
1,319,809
2,130,164
-38.0
Sight deposits and fixed-term deposits (AFV trading)
Bonds and other interest-bearing securities (AFV trading)
Loans on promissory notes (AFV trading)
Shares and other variable-yield securities (AFV trading)
Other assets held for trading (AFV trading)
Delta
Assets held for trading includes financial instruments of EUR 1,173,598 thousand (prior year:
EUR 1,151,547 thousand) which are expected to be settled in more than twelve months.
[54]
Non-current Assets Held for Sale
In the course of the consolidation and downsizing of the investment business, the Sparkasse KölnBonn
Financial Group has an intention to dispose of a number of non-current assets in the sense of IFRS 5.
Assets that are classified as held for sale mainly include real estate, investments as well as shares in
affiliated companies. In addition to non-consolidated entities, consolidated entities also fall within the
scope of IFRS 5. Individual assets as well as entire companies are intended to be sold. According to
IFRS 5.4 BioCampus Cologne Grundbesitz GmbH & Co. KG, SAVOR Verwaltung GmbH & Co. Objekt Kalk
KG and SKI Standort Köln-Immobilien GmbH & Co. Projekt Butzweilerhof KG meet the criteria for
recognition as a disposal group.
Based on the provisions of IFRS 5.38, non-current assets held for sale must be presented separately to
the other assets. Liabilities of the disposal groups are presented as a separate line item. It is not
permitted to offset assets against liabilities. These must be reported in a separate line item of the
statement of financial position. It is not necessary to measure them separately. These values should be
reported prior to consolidation to ensure a true and fair view. Disclosures on this entity are made under
“Location development/restructuring” in the segment reporting. Please see Note [73] for more
information on liabilities held for sale.
Overall, five non-consolidated equity investments measured pursuant to IAS 39 as well as three
associates recognised pursuant to IFRS 5 were classified as held-for sale with a total carrying amount of
EUR 244,343 thousand. The revaluation reserve contains an amount of EUR 38,842 thousand
attributable to these assets. In the segment reporting, the disclosures on these entities could be found
in the section on “Equity investments”. Investments in the company moderne stadt Gesellschaft zur
Förderung des Städtebaues und der Gemeindeentwicklung mbH have been disposed of in the
meantime.
104
In the prior year, Kredit-Serviceagentur Rheinland in Siegburg GmbH & Co. KG, a limited partnership
which was consolidated using the equity method, and the investment in KSA Verwaltungsgesellschaft
mbH, which was measured pursuant to IAS 39, met the criteria of non-current assets held for sale for
the first time after the reporting date as at 31 December 2009. The intention to sell these entities is
likewise associated with the consolidation and resizing of the investment business of the Sparkasse
KölnBonn Financial Group. In the segment reporting, the disclosures on these entities could be found
in the section on “Equity investments”. The Group has not managed to realize the sale as planned on
account of tax and corporate law issues. However, the Sparkasse KölnBonn Financial Group maintains
its intention to sell these assets. In this regard, both entities are reported under “Non-current assets
held for sale” on the reporting date.
In addition to KSA Verwaltungsgesellschaft mbH, two other non-consolidated entities were classified as
held-for-sale and measured in accordance with IAS 39. The carrying amount of the shares of these
affiliates carried under assets held for sale comes to a total of EUR 1,053 thousand. The revaluation
reserve contains an amount of EUR 1,004 thousand attributable to these assets. In the segment
reporting, the disclosures on these entities could be found in the section on “Equity investments”.
Due to the adverse market, it was not possible to realise the sale of two mainly commercial properties
in Cologne by HC Bauprojektentwicklung GmbH & Co. KG in the reporting year. The intention to sell
remains within Sparkasse KölnBonn Financial Group, even after the closing date. The criteria of IFRS 5
are met. As in the prior year, the properties with a book value of EUR 5,190 thousand are reported
under “Non-current assets held for sale”. Scheduled depreciation of EUR 56 thousand was not recorded
in the reporting period on account of IFRS 5.25. Disclosures on this entity are made under “Location
development/restructuring” in the segment reporting.
In addition, there are diverse other properties in Cologne, most of which are used for commercial
purposes, which the Group intends to dispose of in the terms of IFRS 5. In addition to the disposal
groups, diverse plant, property and equipment, investment properties, land and buildings carried
under inventories and other assets totalling EUR 143,475 thousand were classified as held-for-sale.
Scheduled depreciation of EUR 830 thousand was not recorded in the reporting period on account of
IFRS 5.25.
105
Non-current assets held for sale break down as follows:
Investment properties
Intangible assets
Financial assets
Other assets
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
5,757
-
.
103,534
5,190
>100.0
-
-
.
245,396
-
.
39,374
-
.
394,061
5,190
>100.0
The equity investment held in neue leben Pensionsverwaltung AG, which is not consolidated, met the
criteria for recognition as non-current assets held for sale for the first time after the reporting date as
at 31 December 2009. The equity investment was sold in the course of the reporting year.
There is also an intention to sell further real estate and equity investments measured under IAS 39 as
well as fully-consolidated subsidiaries. However these sales will not be realised until fiscal year 2012.
Entities which the Group intends to dispose of are endorsed separately in the list of shareholdings.
Please see Note [95] for further information.
The Aachener Strasse real estate complex did not meet the criteria to be classified as a non-current
asset held for sale until after the reporting date as at 31 December 2010. The intention to sell this
investment is likewise analogous to the consolidation and resizing of the investment business of the
Sparkasse KölnBonn Financial Group. Disclosures on these properties can be found in the section on
“Equity investments” in the segment reporting.
106
[55]
Financial Assets
Financial assets break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
3,371,388
3,438,634
-2.0
Bonds and other interest-bearing securities (LAR)
1,200
-
-
Bonds and other interest-bearing securities (AFS)
-
-
-
Bonds and other interest-bearing securities (AFV
designated)
3,370,188
3,438,634
-2.0
46,855
43,420
7.9
-
-
-
46,821
43,392
7.9
Bonds and other interest-bearing securities
Shares and other non-fixed interest securities
Other variable-yield securities (LAR)
Shares and other variable-yield securities (AFS)
Pension funds (AFV designated)
Equity investments and shares in non-consolidated
subsidiaries and associates not recognised at equity (AFS)
Equity investments and associates not recognised at equity
(AFS)
Shares in non-consolidated subsidiaries (AFS)
Other financial assets (AFS)
Financial assets
34
28
21.4
400,668
647,245
-38.1
391,771
627,147
-37.5
8,897
20,098
-55.7
11,241
11,181
0.5
3,830,152
4,140,480
-7.5
This statement of financial position item includes financial assets of EUR 3,504,937 thousand (prior
year: EUR 4,015,788 thousand) which are expected to be settled in more than twelve months. Bonds
and other interest-bearing securities of EUR 282,163 thousand (prior year: EUR 237,609 thousand) are
due in the year 2011. There are subordinated financial assets of EUR 65,644 thousand (prior year:
EUR 57,832 thousand).
Moreover, financial assets also include the mandatory contribution to the Rhineland Savings Banks
Association (Rheinischer Sparkassen- und Giroverband (RSGV)). This contribution is mandatory under
the terms of the Savings Bank Act. It is not possible to sell this equity investment. However, it has been
classified in the AFS category owing to a lack of any other possible classification. The carrying amount
of the mandatory contribution is EUR 349,807 thousand (prior year: EUR 349,807 thousand). The
mandatory membership grants Sparkasse KölnBonn a number of advantages, such as the use of
trademarks, whose value cannot be exactly quantified. Consequently, the mandatory membership has
been recognised at cost in accordance with IAS 39.46c.
The resulting adjustment to the financial assets was reported in investment income (see Note [38]).
Seven entities which had been included in the consolidation in 2009 were liquidated and
deconsolidated in fiscal year 2010: the security-based funds INKA–SK 1 to 5 and the security-based
funds INKA-SK 66 and 67. After liquidating the portfolio of securities and subsequent return of the
share certificates, a cash distribution of EUR 262,132 thousand was made. All the funds were closed on
30 April 2010. The special investment fund INKA-SK 6 had already been closed in the prior year. After
liquidating the portfolio of securities and subsequent return of the share certificates, a cash
distribution of EUR 15,837 thousand was made.
107
[56]
Investments in Associates Recognised at Equity
The combined information on associated entities accounted for using the equity method pursuant to
IAS 28.37(b) is as follows:
Associates
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Total assets
971,276
1,115,295
-12.9
Total liabilities
868,351
1,020,273
-14.9
Ordinary income
271,208
286,954
-5.5
Equity
102,925
95,022
8.3
5,856
-19,880
-
Net profit or loss for the period
The total assets of associates includes assets of EUR 482,435 thousand (prior year:
EUR 512,871 thousand) which are expected to fall due in more than twelve months. Total liabilities
include liabilities of EUR 630,445 thousand (prior year: EUR 706,825 thousand) which are expected to
fall due in more than twelve months. Associates report contingent liabilities of EUR 7,177 thousand
(prior year: EUR 11,349 thousand).
Please see Note [39] for more information on the development of the carrying amounts of associates
recognised at equity.
108
[57]
Property, plant and equipment can be broken down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Land and buildings (legal ownership)
34,258
34,683
-1.2
Land and buildings (finance lease)
43,618
96,574
-54.8
Furniture and fixtures
57,415
60,499
-5.1
3,181
3,358
-5.3
138,472
195,114
-29.0
Payments on account and assets under construction
Depreciation of property, plant and equipment is reported under general administrative expenses
(Note [40]). Please see Note [83] for the net carrying amounts of property, plant and equipment
acquired under finance leases.
The carrying amounts were adjusted to lower realisable value accordingly in case of an impairment in
the sense of IAS 36. These properties are generally measured on the basis of independent appraisals
although, due to the current condition of the properties and the situation on the market, the fair value
of the properties has been determined using a variation of the discounted cash flow method
(capitalised earnings method). Where no up-to-date reports were available for individual properties,
their carrying amounts were rolled forward from the previous fair value. There are no restrictions on the
sale of property, plant and equipment. In addition, expenses for assets under construction of
EUR 2,913 thousand (prior year: EUR 296 thousand) were capitalised in fiscal year 2010.
With effect from 1 January 2010, leases for finance lease properties of MMC GmbH were reduced
significantly. Due to the fact that the revaluation of the leases required in this regard did not lead to
any other assessment, the fall in the liability was posted directly against the carrying amount of
property, plant and equipment without affecting profit and loss.
109
In comparison to the prior year, the historical cost and accumulated depreciation can be summarised as
follows:
Land and
buildings
(legal
ownership)
Land and
buildings
(finance
lease)
Furniture and
fixtures
Assets under
construction
Total
0
0
0
0
0
52,087
158,260
203,723
6,264
420,334
Additions
54
-
13,451
425
13,930
Disposals
5,165
-
29,195
2,006
36,366
Changes in the consolidated group
-
-
-62
32
-30
Reclassifications including
reclassifications to non-current assets
held for sale and investment
properties
-
3,916
-
-138
3,778
46,976
162,176
187,917
4,577
401,646
Historical cost
1 January 2009
31 December 2009
Additions
7,827
-
8,283
3,008
19,118
Disposals
5,217
50,551
3,248
23
59,039
-
-
-
-
0
reclassifications to investment
properties and to non-current assets
held for sale
-6,551
-1,278
-1,138
-3,097
-12,064
31 December 2010
43,035
110,347
191,814
4,465
349,661
17,029
107,982
149,671
5
274,687
1,721
3,529
10,038
-
15,288
-
-
-
1,214
1,214
Write-ups
1,056
48,014
3,709
-
52,779
Disposals
5,401
-
28,538
-
33,939
-
-
-44
-
-44
held for sale
-
2,105
-
-
2,105
12,293
65,602
127,418
1,219
206,532
Scheduled depreciation
1,431
3,484
10,412
-
15,327
Impairment losses
4,401
-
-
70
4,471
Write-ups
-
1,229
-
-
1,229
Disposals
4,947
-
2,864
-
7,811
-
-
-
-
-
-4,401
-1,128
-567
-5
-6,101
8,777
66,729
134,399
1,284
211,189
2009
34,683
96,574
60,499
3,358
195,114
2010
34,258
43,618
57,415
3,181
138,472
1 January 2009
Impairment losses
31 December 2009
held for sale
31 December 2010
110
[58]
Investment Property
The relevant figures for investment properties in fiscal years 2010 and 2009 are as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Rental income
39,623
29,204
35.7
Direct operating expenses
42,026
13,130
>100.0
39,998
11,877
>100.0
2,028
1,253
61.9
-
1
-100.0
Of which rented investment properties
Of which unoccupied investment properties
Proceeds from sales
The direct operating expenses disclosed do not comprise systematic depreciation or impairment
losses. These are explained in Note [42] as well as in the following summary.
Invest property can be broken down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
69,003
184,345
-62.6
Investment property (finance lease)
311,299
325,895
-4.5
380,302
510,240
-25.5
Investment property (legal ownership)
The investment properties’ fair value comes to EUR 563,150 thousand (prior year:
EUR 574,179 thousand) including assets held for sale as defined by IFRS 5. The fair values correspond
to the capitalised earnings value of the properties. These properties are generally measured on the
basis of independent appraisals although, due to the current condition of the properties and the
situation on the market, the fair value of the properties has been determined using a variation of the
discounted cash flow method (capitalised earnings method). Where no up-to-date reports were
available for individual properties, their carrying amounts were rolled forward from the previous fair
value.
111
In comparison to the prior year, the historical cost and accumulated depreciation for investment
properties can be summarised as follows:
Investment
properties
Investment
properties
(legal ownership)
(finance lease)
Total
Historical cost
1 January 2009
327,621
53,690
381,311
Additions
822
341,387
342,209
Disposals
90
-
90
-
-
-
9,362
-3,915
5,447
337,715
391,162
728,877
Additions
3,242
-
3,242
Disposals
3,165
-
3,165
-
-
-
-159,756
1,277
-158,479
178,036
392,439
570,475
114,831
28,099
142,930
7,478
1,753
9,231
32,636
38,281
70,917
Write-ups
3,606
760
4,366
Disposals
5
-
5
-
-
-
2,036
-2,106
-70
153,370
65,267
218,637
Reclassifications including reclassifications
to non-current assets held for sale and
property, plant and equipment
31 December 2009
31 December 2010
1 January 2009
Impairment losses
31 December 2009
4,993
10,588
15,581
16,021
4,157
20,178
Write-ups
1,058
-
1,058
Disposals
2,826
-
2,826
Impairment losses
-
-
-
-61,467
1,128
-60,339
31 December 2010
109,033
81,140
190,173
Carrying amount as at 31 December 2009
184,345
325,895
510,240
Carrying amount as at 31 December 2010
69,003
311,299
380,302
Additions of EUR 0 thousand (prior year: EUR 341,387 thousand) are attributable to acquisitions and
EUR 3,242 thousand (prior year: EUR 822 thousand) are due to subsequent historical cost recognised
as assets.
112
The “Rheinparkmetropole” project (redevelopment of the old exhibition grounds in Cologne-Deutz to
create an office and commercial park) was completed in 2009 and handed over to the tenants. The
addition resulting from its completion can be attributed to primary historical cost. Expenses from
rental agreements will be incurred for these properties over a period of 21 years. These expenses are
offset by rental income from sub-leases for the property. These rental agreements qualify as finance
leases under IAS 17.20 et seq. As at the reporting date, the carrying amount was EUR 294,271 thousand
(prior year: 303,107 thousand).
The impairment losses recorded on the properties to which the Group has legal title are primarily a
result of adjustments to future earnings projections and also accumulated renovation and maintenance
obligations.
Depreciation of Investment property is reported under other operating expenses (Note [42]). Please
see Note [83] for the net carrying amounts of investment properties acquired under finance leases.
[59]
Intangible Assets
Intangible assets acquired for a consideration and internally-generated assets break down as follows:
Intangible assets acquired for a consideration
Internally generated intangible assets
Goodwill
Intangible assets
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
5,163
5,457
-5.4
931
1,001
-7.0
-
-
-
6,094
6,458
-5.6
In the year under review, development expenses of EUR 0 thousand (prior year: EUR 411 thousand)
were expensed through profit or loss.
As at the closing date, there were commitments for the acquisition of intangible assets as defined by
IAS 38.122e of EUR 2,154 thousand (prior year: EUR 0 thousand).
Amortisation of intangible assets is reported under general administrative expenses (Note [40]).
113
The following table shows the changes in historical cost and accumulated amortisation in comparison
to the prior year:
Measured at amortised cost
Intangible assets
Internally
acquired for a
generated
consideration
intangible assets
(software)
(software)
Goodwill
Total
Historical cost
1 January 2009
26,887
381
94,454
121,722
Additions
2,353
987
-
3,340
Disposals
2,054
-
-
2,054
-17
-
-2,147
-2,164
Reclassifications
-
-
-
-
31 December 2009
27,169
1,368
92,307
120,844
Additions
3,518
222
-
3,740
Disposals
3,612
5
-
3,617
-
-
-90,095
-90,095
Reclassifications
-14
-
-
-14
31 December 2010
27,061
1,585
2,212
30,858
21,131
164
94,454
115,749
2,278
203
-
2,481
-
-
-
-
Write-ups
45
-
-
45
Disposals
1,635
-
-
1,635
-17
-
-2,147
-2,164
Reclassifications
-
-
-
-
31 December 2009
21,712
367
92,307
114,386
2,008
287
-
2,295
Impairment losses
-
-
-
-
Write-ups
-
-
-
-
Disposals
1,808
-
-
1,808
-
-
-90,095
-90,095
Reclassifications
-14
-
-
-14
31 December 2010
21,898
654
2,212
24,764
2009
5,457
1,001
-
6,458
2010
5,163
931
-
6,094
1 January 2009
Impairment losses
114
[60]
Current Tax Assets
Current tax assets in fiscal year 2010 amount to EUR 28,796 thousand (prior year: 48,126 thousand).
Current tax assets are generally due within twelve months of the obligation originating.
[61]
Deferred Tax Assets
Deferred tax assets break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
178
503
-64.6
Claims on customers
41,672
35,116
18.7
Trading assets and liabilities
74,582
286,694
-74.0
Financial assets
74,039
75,705
-2.2
9,424
277
>100.0
2,809
613
>100.0
10,187
8,878
14.7
-
-
.
1,648
1,582
4.2
167,518
133,624
25.4
61,691
53,142
16.1
3,934
3,442
14.3
Other statement of financial position items
32,684
64,617
-49.4
Tax loss carryforwards
25,988
18,697
39.0
506,354
682,890
-25.9
-280,986
-478,823
-
225,368
204,067
-
Claims on banks
Other assets
Provisions
Pension obligations
Subtotal
Offsetting according to IAS 12.71 et seq.
Deferred tax assets (as reported)
As at closing date, the sum of deferred tax assets (+) and deferred tax liabilities (-) charged directly to
equity amounted to EUR -3,638 thousand (prior year: EUR -3,193 thousand).
The Sparkasse KölnBonn meets the criteria of IAS 12.71 et seq. for offsetting its deferred tax assets
against deferred tax liabilities. Consequently the net figure is reported in the statement of financial
position.
115
[62]
Other Assets
Other assets include the following items:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
40,999
85,848
-52.2
8,975
10,436
-14.0
35,745
36,736
-2.7
Rescue acquisitions
696
1,372
-49.3
Collection papers
375
184
>100.0
1,145
1,114
2.8
Other assets
68,162
57,823
17.9
Other assets
156,097
193,513
-19.3
Inventories
Deferred items (prepayments)
Exemptions
Shares in cooperative societies (AFS)
Inventories are generally composed of construction projects for land and buildings held for sale.
Inventories are measured at the lower of cost and net realisable value. Due to the fact that they are
classified as current assets, inventories are not subject to systematic depreciation. However, if there
are indications of impairment, an impairment loss is recorded.
The change in inventories is primarily due to the reclassification into non-current assets held for sale
(Assets item 7). These assets are a component of the disposal groups pursuant to IFRS 5.4.
The rescue acquisitions relate to properties which are not intended to be kept for the long-term by the
Sparkasse KölnBonn Financial Group.
Other assets include receivables of EUR 87,132 thousand (prior year: EUR 77,713 thousand) which are
expected to be settled in more than twelve months.
116
Notes to the Consolidated Statement of Financial Position –
Liabilities and Equity
[63]
Liabilities to Banks
Liabilities to banks break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
299,483
161,238
85.7
Fixed term and sight deposits (OFL)
198,759
161,238
23.3
Fixed term and sight deposits (LFV designated)
100,724
-
.
3,518,027
3,891,896
-9.6
Issued registered bonds and money market instruments
(OFL)
3,446,194
3,815,781
-9.7
(LFV designated)
71,833
76,115
-5.6
789,563
1,138,834
-30.7
779,850
1,128,988
-30.9
9,713
9,846
-1.4
1,137,723
1,080,165
5.3
1,128,233
1,071,391
5.3
9,490
8,774
8.2
5,744,796
6,272,133
-8.4
Promissory note loans extended to the Group
Promissory note loans extended to the Group (OFL)
Promissory note loans extended to the Group (LFV
designated)
Other liabilities
Other liabilities (OFL)
Other liabilities (LFV designated)
Please see Note [90] with regard to liabilities to non-consolidated subsidiaries, associates, equity
investments and associates not accounted for at equity.
This statement of financial position item includes liabilities of EUR 5,015,376 thousand (prior
year: EUR 5,445,090 thousand) which are expected to be settled in more than twelve months.
Please see Note [84] with regard to the liabilities from non-recourse repurchase transactions contained
in this item.
117
[64]
Liabilities to Customers
Liabilities to customers are primarily composed of sight deposits and fixed term deposits, savings
deposits, securitised registered bonds, loans on promissory notes, and other liabilities. They break
down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Fixed term and sight deposits (OFL)
9,112,704
8,690,112
4.9
Savings deposits (OFL)
5,188,444
5,221,205
-0.6
2,772,665
2,773,597
0.0
(OFL)
2,450,858
2,453,446
-0.1
(LFV designated)
321,807
320,151
0.5
362,953
331,680
9.4
Promissory note loans extended to the Group (OFL)
200,434
153,598
30.5
Promissory note loans extended to the Group (LFV
designated)
162,519
178,082
-8.7
517,707
597,150
-13.3
513,477
593,187
-13.4
4,230
3,963
6.7
17,954,473
17,613,744
1.9
Promissory note loans extended to the Group
Other liabilities
Other liabilities (OFL)
Other liabilities (LFV designated)
Please see Note [90] with regard to liabilities to non-consolidated subsidiaries, associates, equity
investments and associates not accounted for at equity.
Liabilities include liabilities from finance leases of EUR 413,799 thousand
EUR 475,038 thousand). Please see Note [83] for more information on leases.
(prior
year:
This statement of financial position item includes liabilities of EUR 3,556,489 thousand (prior year:
EUR 4,499,493 thousand) which are expected to be settled in more than twelve months.
118
[65]
Liabilities Held for Trading
Liabilities held for trading break down as follows:
Negative market value of derivatives held for trading (LFV
trading)
Negative market value of interest derivatives designated as fair
value (LFV trading)
Other liabilities held for trading (LFV trading)
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
297,669
594,626
-49.9
1,418,466
995,263
42.5
-
303,158
-100.0
1,716,135
1,893,047
-9.3
This statement of financial position item includes financial instruments of EUR 1,592,908 thousand
(prior year: EUR 1,471,682 thousand) which are expected to be settled in more than twelve months.
[66]
Securitised Liabilities
Securitised liabilities include bonds, including registered covered bonds (Namenspfandbriefe), and
other money market papers such as certificates of deposit, euro-notes or commercial papers.
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
1,557,339
1,839,332
-15.3
Mortgage bonds (Hypothekenpfandbriefe)
479,205
519,830
-7.8
Public sector bonds (Öffentliche Pfandbriefe)
488,976
495,084
-1.2
Other bonds
589,158
824,418
-28.5
126,887
403,333
-68.5
Mortgage bonds (Hypothekenpfandbriefe)
-
-
-
Public sector bonds (Öffentliche Pfandbriefe)
-
137,377
-100.0
126,887
265,956
-52.3
Other securitised liabilities (OFL)
-
-
-
Other securitised liabilities (LFV designated)
-
-
-
1,684,226
2,242,665
-24.9
Debt securities issued (OFL)
Debt securities issued (LFV designated)
Other bonds
In the fiscal year bonds issued by the Bank of EUR 62,898 thousand were repurchased (prior year:
EUR 128,271 thousand). There have been repayments of EUR 742,018 thousand (prior year:
EUR 1,277,779 thousand). In addition, bonds of EUR 49,580 thousand (prior year: EUR 159,118
thousand) have been reissued.
year: EUR 1,719,540 thousand) which are expected to be settled in more than twelve months.
119
[67]
Provisions
Provisions break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
60,952
60,224
1.2
8,825
4,203
>100.0
Other provisions
258,438
259,263
-0.3
Provisions
328,215
323,690
1.4
Provisions for pensions and similar obligations
Provisions for off-statement of financial position lending
business
The discount rate defined by an independent actuary according to IAS 19.78 was applied to measure
pension obligations
a)
Provisions for pensions and similar obligations
Provisions for pensions and similar obligations developed as follows in the reporting year:
Balance
as at
Additions
Utilisation
Reversal
Other
changes
Balance
as at
01.01.2010
31.12.2010
Provisions for pensions and
similar obligations
60,224
4,962
4,234
-
-
60,952
Total
60,224
4,962
4,234
-
-
60,952
Provisions for pensions and similar obligations developed as follows during the prior year:
Balance
as at
Additions
Utilisation
Reversal
Other
changes
01.01.2009
Balance
as at
31.12.2009
Provisions for pensions and
similar obligations
58,967
5,009
3,726
-
-26
60,224
Total
58,967
5,009
3,726
-
-26
60,224
The item “Provisions for pensions and similar obligations” includes pension provisions for direct
pension obligations of EUR 56,081 thousand (prior year: EUR 55,761 thousand) and for the welfare
fund “S-BonusVorsorge” of EUR 4,871 thousand (prior year: EUR 4,463 thousand). The provisions are
based on the rulings of the respective benefit plan which generally depends on the date the employee
entered service.
120
Expenses from additions to provisions for pensions and similar obligations are posted to personnel
expenses (Note [40]) under “General administrative expenses”. Income from the release of provisions
for pensions and similar obligations is posted to other operating income (Note [41]).
The most significant statement of financial position obligations are indirect pension obligations to the
current and former members of the Board of Management and their surviving dependents.
An independent actuary calculated the obligations towards members of the Board of Management
using the following parameters in his report. In comparison to the prior year, these developed as
follows:
2010
2009
in percent
in percent
Interest rate used to discount the obligation
4.97
5.80
Future salary and benefit increases
3.00
3.00
Rate of pension increase
2.00
2.00
Churn rate
0.00
0.00
Compared to the prior year, the net present value of the obligation (DBO) has developed in the fiscal
year as follows:
2010
2009
EUR ’000
EUR ’000
54,764
53,881
Current service cost
1,273
1,424
Interest cost
3,066
2,971
less actuarial gains (plus losses)
2,906
219
-
-
Defined benefit obligations as at 1 January
Additions
Past service cost
Utilisation
Benefits paid
4,184
3,705
Transfer payments
-
-
Reversal
-
-
-
-26
57,825
54,764
Defined benefit obligation as at 31 December
The defined benefit obligation (net present value of the obligation) has developed as follows:
121
31.12.2010
31.12.2009
31.12.2008
31.12.2007
31.12.2006
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
57,825
54,764
53,881
49,235
55,377
Gains/losses due to experience
adjustments of the obligation
1,980
-793
-1,984
-2,033
-490
Gains/losses due to changes in
the parameters used
-4,886
574
-3,481
9,235
685
Defined benefit obligation
The following table reconciles the defined benefit obligation to the obligation from defined benefit
plans recognised in the statement of financial position:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
Net present value of plan deficits *)
57,825
54,764
plus unrecognised actuarial gains (less losses)
-1,415
1,490
-329
-493
56,081
55,761
Unrecognised past service cost
Provisions for pension obligations
*) Defined benefit obligation (DBO)
The actuarial report used to determine the defined benefit obligation from the funds-based pension
plan is based on an interest rate of 5.35% (prior year: 5.80%). No deductions for employee churn were
considered due to the nature of the obligations.
In the actuarial report on the defined benefit obligation a distinction is made between the actuarial
calculations of the guaranteed pension obligation and the variable portion. The latter are derived from
the market developments of the reference assets.
2010
2009
EUR ’000
EUR ’000
2,655
2,349
192
226
Interest cost
152
133
17
-18
Effects of curtailments and settlements
-2
-
-
-
60
35
Defined benefit obligation as at 31 December (guaranteed portion)
2,954
2,655
Defined benefit obligation as at 1 January (variable portion)
3,133
2,325
Expected changes in reference assets
519
535
264
295
-2
-
-
-
49
22
Defined benefit obligation as at 31 December (variable portion)
3,865
3,133
Defined benefit obligation (total)
3,865
3,133
Defined benefit obligation as at 1 January (guaranteed portion)
Additions
Other additions
Utilisation
Benefits paid
Additions
Effects of curtailments and settlements
Other additions
Utilisation
Benefits paid
122
The defined benefit obligation (net present value of the obligation) has developed as follows:
31.12.2010
31.12.2009
31.12.2008
31.12.2007
31.12.2006
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
2,954
2,655
2,349
2,073
2,112
Carrying amount of defined
benefit obligation
(guaranteed portion)
Delta DBO – Expected DBO
Carrying amount of defined
benefit obligation
(variable portion)
17
-18
-132
-539
-5
3,865
3,133
2,325
3,009
2,667
264
295
-1,346
-363
-5
3,865
3,133
2,349
3,009
2,667
Delta DBO – Expected DBO
Total obligation
The provision for the funds-based "S-BonusVorsorge" retirement benefits (a pension plan based on
deferred compensation) can be derived from the defined benefit obligation as follows. If the variable
portion of the pension obligation exceeds the guaranteed portion, it becomes the definitive factor in
determining the provision for the defined benefit obligation.
2010
2009
EUR ’000
EUR ’000
2,954
2,655
610
650
Provision for the guaranteed portion of the obligation
3,564
3,305
Defined benefit obligation (variable portion)
3,865
3,133
1,006
1,330
Provision for the variable portion of the obligation
4,871
4,463
of which additional obligation from over-performance of the reference
assets
1,307
1,158
Provision for the S-BonusVorsorge
4,871
4,463
Defined benefit obligation (guaranteed portion)
123
The expense for defined benefit plans as defined by IAS 19.120A(g) is presented in the following table:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
4,503
4,559
1,273
1,424
Interest cost
3,066
2,971
Pension obligations
Actuarial gains/losses
-
Past service cost
164
164
459
450
Expected change in reference assets
519
535
Partial amortisation of accumulated gains and losses
-60
-85
4,962
5,009
S-BonusVorsorge
Expenses according to IAS 19.120A (g)
b)
Provisions for off-statement of financial position lending business
The provision for the risks of off-statement of financial position lending business developed as follows:
Balance
as at
Additions
Utilisation
Reversal
Other
changes
Balance
as at
01.01.2010
31.12.2010
Provision for credit risks
related to the off-statement
of financial position lending
business
4,203
5,397
-
775
-
8,825
Total
4,203
5,397
-
775
-
8,825
The values developed as follows during the prior year:
Balance
as at
Additions
Utilisation
Reversal
Other
changes
Balance
as at
01.01.2009
31.12.2009
Provision for credit risks
related to the off-statement
of financial position lending
business
2,358
2,713
-
868
-
4,203
Total
2,358
2,713
-
868
-
4,203
Expenses for additions to provisions for off-statement of financial position lending business and gains
from the release of such provisions are posted to risk provisions in the income statement. Please see
Note [35] for more information.
124
c)
Other provisions
Development of the other provisions in the reporting year:
Balance
as at
Additions
Utilisation
Reversal
Other
changes
Balance
as at
01.01.2010
31.12.2010
Provisions for other
obligations towards
employees
33,259
9,222
10,042
35
-
32,404
Provisions for onerous
contracts
33,725
5,696
1,791
-
-
37,630
Provisions for welfare
assistance and long-service
bonuses
11,281
4,335
1,199
14
-
14,403
3,430
-
6
3
821
4,242
Sundry other provisions
177,568
55,559
26,841
36,100
-427
169,759
Total
259,263
74,812
39,879
36,152
394
258,438
Provisions for restoration
and rebuild obligations
Other provisions developed as follows during the prior year:
Balance
as at
Additions
Utilisation
Reversal
Other
changes
Balance
as at
01.01.2009
31.12.2009
Provisions for other
obligations towards
employees
30,529
9,642
6,837
75
-
33,259
Provisions for onerous
contracts
19,463
33,725
-
19,463
-
33,725
Provisions for welfare
assistance and long-service
bonuses
12,194
869
1,782
-
-
11,281
2,981
-
-
162
611
3,430
Sundry other provisions
205,443
60,076
35,701
52,806
556
177,568
Total
270,610
104,312
44,320
72,506
1,167
259,263
Provisions for restoration
and rebuild obligations
Other provisions include a provision for the long-service bonuses owed to employees of Sparkasse
KölnBonn of EUR 798 thousand (prior year: EUR 1,233 thousand) which have been calculated on the
basis of an external actuarial report using an interest rate of 2.79% (prior year: 5.80%). In contrast to
pension provisions, the actuarial gains and losses for this type of obligation are posted directly
through profit or loss in keeping with IAS 19.
125
The sundry other provisions include provisions of EUR 109,774 thousand for the “Rheinparkmetropole”
project (prior year: EUR 124,178 thousand). Please see Note [34] for more information on interest
effects (IAS 37.84e). The interest effects related to the provisions for phased retirement arrangements
of EUR 908 thousand (prior year: EUR 2,443 thousand) are included in personnel expenses.
Additions to provisions for other obligations towards employees and provisions for welfare assistance
and long-service bonuses are posted to personnel expenses in the line item “General administrative
expenses” (see Note [40]). All other additions are posted to the line item “Other operating expenses”
(see Note [42]).
Other changes to other provisions include EUR 45 thousand from unwinding provisions for restoration
obligations (prior year: EUR 167 thousand) and EUR 2,399 thousand (prior year: EUR 834 thousand) for
sundry other provisions, additions of EUR 776 thousand to restoration obligations posted directly to
equity (prior year: EUR 443 thousand), changes to the consolidated group of EUR 15 thousand (prior
year: EUR -277 thousand) and reclassifications to “Other liabilities" of EUR -2,841 thousand (prior year:
EUR 0 thousand). Changes in interest rates as defined by IAS 37.84e in the reporting year amounted to
EUR 2,935 thousand. These are included in the additions.
It is more likely than not that all provisions will be utilised. The cash outflows for welfare assistance and
long-service bonuses are spread over a period of up to 40 years. The last phased retirement scheme
will expire in 2017. Early retirement agreements and phased retirement schemes are contained in the
provision for other obligations towards employees. It is expected that the provisions for restructuring,
onerous contracts, and sundry other provisions, with the exception of the “Rheinparkmetropole”
project, will be utilised in the coming 12 months. Due to the uncertainties associated with the
“Rheinparkmetropole” project, estimating the timing of the cash outflows is uncertain. As the
consumption is not unlikely within the next 12 months, the provision has not been discounted. After
taking account of contractually agreed renewal options, the due dates for the restoration and rebuild
obligations extend through to the year 2040.
126
[68]
Current Tax Liabilities
Total current tax liabilities (income tax liabilities) in the year under review amount to
EUR 17,750 thousand (prior year: EUR 15,285 thousand). Current tax liabilities are generally due within
twelve months of the obligation originating.
[69]
Deferred Tax Liabilities
Deferred tax liabilities originate from the following statement of financial position items:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
1,329
1,588
-16.3
51,653
5,108
>100.0
-
244,433
-100.0
Financial assets
50,320
52,205
-3.6
11,715
-
.
14,917
31,087
-52.0
94,095
91,450
2.9
Claims on banks
Claims on customers
Trading assets and liabilities
239
211
13.3
7,266
5,866
23.9
Provisions
15,313
1,056
>100.0
Other statement of financial position items
34,139
45,819
-25.5
280,986
478,823
-41.3
-280,986
-478,823
-
-
-
-
Offsetting according to IAS 12.71 et seq.
The Sparkasse KölnBonn Financial Group meets the criteria of IAS 12.71 et seq. for offsetting its
deferred tax assets against deferred tax liabilities. Consequently the net figure is reported in the
statement of financial position.
127
[70]
Subordinated Capital
The following table shows the composition of subordinated capital:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Subordinated savings certificates
269,949
285,943
-5.6
Subordinated savings certificates (OFL)
261,850
276,882
-5.4
8,099
9,061
-10.6
Subordinated promissory note loans
131,182
153,715
-14.7
Subordinated promissory note loans (OFL)
110,177
132,337
-16.7
21,005
21,378
-1.7
Hybrid financial instruments
518,118
480,564
7.8
Hybrid financial instruments (OFL)
518,118
480,564
7.8
-
-
-
Other subordinated liabilities
191,267
233,992
-18.3
Other subordinated liabilities (OFL)
171,043
211,338
-19.1
20,224
22,654
-10.7
1,110,516
1,154,214
-3.8
Subordinated savings certificates (LFV designated)
Subordinated promissory note loans (LFV designated)
Hybrid financial instruments (LFV designated)
Other subordinated liabilities (LFV designated)
year: EUR 1,078,671 thousand) which are expected to be settled in more than twelve months. In the
fiscal year subordinated liabilities of EUR 1,550 thousand were repurchased (prior year:
EUR 4,918 thousand). There have been repayments of EUR 74,778 thousand (prior year:
EUR 48,672 thousand). In addition, subordinated capital of EUR 0 thousand (prior year: EUR 61,486
thousand) has been reissued.
The figures disclosed below are disclosures to meet regulatory requirements. For this reason, it is not
possible to reconcile them with the statement of financial position items of the same name.
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
Subordinated liabilities
576,384
606,833
-5.0
Unused but eligible third-tier capital
-22,733
-
-
454,441
483,800
-6.1
1,008,092
1,090,633
-7.6
Total
According to §10 Sec. 5a KWG, subordinated liabilities qualify as “own funds” of the institution under
regulatory requirements. The subordination is based on the hierarchy of creditors in the event of
insolvency or illiquidity. In this case, subordinated liabilities are only settled after the claims of all other
creditors above them in the hierarchy have been settled.
Hybrid financial instruments qualify as additional liable capital under §10 KWG. Hybrid financial
instruments are characterised by the fact that they contain features of both debt capital and equity.
128
The debt servicing associated with these hybrid financial instruments is contractually attached to a net
profit being reported in the German HGB annual financial statements of Sparkasse KölnBonn as a
standalone entity. In case of a loss carried forward according to German HGB, hybrid financial
instruments participate in the loss carried forward of Sparkasse KölnBonn.
According to the annual financial statements of Sparkasse KölnBonn for the year 2010 pursuant to the
German commercial code, the profit participation capital reported under subordinated capital was fully
replenished after being depleted by the amount it shared in the Bank’s net loss for the year 2009. No
interest payments were made in 2010 as the prior duty was to replenish profit participation capital that
had been consumed in prior years. Overall, the debt capital components of the hybrid financial
instruments lead to an aggregate claim for interest of EUR 27,775 thousand (prior year:
EUR 13,887 thousand) under commercial law.
The following table summarises the most significant issues of hybrid financial instruments by the
Sparkasse KölnBonn as at the closing date:
ISIN
Issuer
Year of
issuance
Nominal value in
EUR ’000
Interest rate
Maturity
XF0004200048
Sparkasse KölnBonn
2007
23,000
5.74 %
2017
XF0004200063
Sparkasse KölnBonn
2007
10,000
5.82 %
2017
XF0004200071
Sparkasse KölnBonn
2007
20,000
5.79 %
2017
XF0004200105
Sparkasse KölnBonn
2007
10,000
5.70 %
2017
XF0004200196
Sparkasse KölnBonn
2007
20,000
5.82 %
2017
XF0004200204
Sparkasse KölnBonn
2007
10,000
5.81 %
2017
XF0004200436
Sparkasse KölnBonn
2007
15,000
5.79 %
2017
XF0004200725
Sparkasse KölnBonn
2007
20,000
6.36 %
2017
XF0004200808
Sparkasse KölnBonn
2007
20,000
6.54 %
2020
XF0004202507
Sparkasse KölnBonn
2008
10,000
6.97 %
2018
XF0004202515
Sparkasse KölnBonn
2008
16,000
6.97 %
2018
XF0004202598
Sparkasse KölnBonn
2008
10,000
7.02 %
2018
XF0004202846
Sparkasse KölnBonn
2008
10,000
6.91 %
2018
129
[71]
Hybrid Financial Instruments
The classification of equity and debt instruments is based on IAS 32 taking account of the Accounting
Practice Statement RS HFA 9 issued by the IDW governing the accounting of financial instruments
under IFRS dated 12 April 2007. According to IAS 32.11 and 32.16 a financial instrument must be
allocated to equity when it:
•
evidences a residual interest in the assets of an entity after deducting all of its liabilities
(IAS 32.11) and
•
does not contain a contractual obligation to deliver cash or another financial instrument to
another entity (IAS 32.16).
The terms of the contracts of hybrid financial instruments drawn by Sparkasse KölnBonn lead to the
following accounting treatment and measurement in the consolidated financial statements:
As compound financial instruments pursuant to IAS 32.28 tranches of profit participation capital must
be split into their equity and their debt components (split accounting). In the process, the fair value of
the debt components of the financial instrument must be determined by discounting the nominal value
of the compound financial instrument using a market interest rate for comparable terms without
considering any spread for the risks specific to the participation in profits. They are disclosed under the
Statement of Financial Position item Subordinated capital (see Note [70]). The debt components are
unwound in the subsequent periods. The resulting expense is posted to net interest income. The equity
components, which constitute a residual interest in the sense of IAS 32.11, correspond to the net
present value of the expected future distributions and are reported under equity. The debt servicing
associated with these hybrid financial instruments is contractually attached to a net profit for the year
being reported in the German HGB annual financial statements of Sparkasse KölnBonn as a standalone
entity.
At the end of 2010 the following hybrid financial instruments were in circulation:
ISIN
Issuer
Date of
issuance
Nominal value in
EUR ’000
Interest rate
Maturity
420502
Sparkasse KölnBonn
22.12.2008
150,000
8.00 %
30.06.2014
420503
Sparkasse KölnBonn
22.12.2008
150,000
8.00 %
30.06.2014
130
The hybrid capital tranches shown in the table participated in the net loss for the year of Sparkasse
KölnBonn in 2008 and 2009. Consequently, the equity component is reduced by their share in the loss.
According to the 2010 annual financial statements of Sparkasse KölnBonn pursuant to the German
commercial code, a total of EUR 47,236 thousand has been paid back into profit participation capital.
No interest payments were made in 2010 as the prior duty under German commercial law was to
replenish profit participation capital that had been consumed in prior years. The replenishment of
profit participation capital was allocated to the equity components of the instruments as the share in
losses was charged against these components.For fiscal year 2010, the creditor extending the hybrid
capital has a right to receive interest of EUR 24,000 thousand (prior year: EUR 24,600 thousand) and
also received the right to replenishment of the equity component by an amount of EUR 10,195
thousand (prior year: EUR 57,431 thousand).
Fiscal year
Nominal value
Obligation to replenish
Interests in arrears
(All figures in EUR ’000)
2008
300,000
40,588
600
2009
300,000
16,843
24,000
57,431
24,600
Subtotal
2010
300,000
Total
-47,236
24,000
10,195
48,600
The development is shown in the following table. All other components of the hybrid capital tranches
qualify as debt capital.
The hybrid capital breaks down as follows:
31.12.2010
31.12.2009
31.12.2008
EUR ’000
EUR ’000
EUR ’000
300,000
300,000
300,000
-57,431
-40,588
-
242,569
259,412
300,000
Debt component before loss participation
250,484
240,642
240,642
Unwinding of debt components before loss
participation
10,245
9,842
-
Unwound debt components before loss
participation
260,729
250,484
240,642
Debt component after loss participation
260,729
250,484
240,642
Equity component before loss participation
2,141
18,770
59,358
Unwound equity capital before loss
participation
2,141
18,770
59,358
-
-16,843
-40,588
47,236
-
-
-
214
-
49,377
2,141
18,770
Nominal value of hybrid capital
less loss participation prior years
Nominal amount adjusted for loss participation prior year
of which:
less loss participation share in
net loss for the year of Sparkasse KölnBonn
plus replenishment according to the annual
financial statements of Sparkasse KölnBonn
prepared in accordance with German commercial
law
Other
Equity component after loss participation
131
[72]
Other Lliabilities
Other liabilities include the following items:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
46,455
111,979
-58.5
Accrued liabilities for bonus payments
939
2,504
-62.5
Deferred obligations for vacation accrued and overtime credits
542
604
-10.3
8,319
10,354
-19.7
75,532
95,257
-20.7
131,787
220,698
-40.3
Accrued liabilities for unpaid invoices
Payment obligations
Sundry other liabilities
Total
An accrued liability of EUR 5,260 thousand (prior year: EUR 81,861 thousand) was recognised to cover
the risks associated with WestLB.
Other liabilities include liabilities of EUR 41,119 thousand (prior year: EUR 107,679 thousand) which
are expected to be settled in more than twelve months.
The accrued liabilities for bonus payments, vacation accrued and overtime credits, which were
previously recorded under sundry other liabilities will be reported separately from fiscal year 2010
onwards. The prior-year figures have been adjusted accordingly.
[73]
Liabilities Held for Sale
The liabilities associated with assets held for sale in prior year relate to liabilities of fully consolidated
subsidiaries which are to be treated as a disposal group pursuant to IFRS 5.38. Please see Note [54] for
more comments.
The liabilities held for sale break down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
72,540
-
-
50,003
-
-
4,234
-
-
126,777
-
-
Other liabilities
Total
132
[74]
Equity
The components of the equity of the Sparkasse KölnBonn Financial Group are explained below.
In fiscal year 2009, Zweckverband Sparkasse KölnBonn, as the responsible body for Sparkasse
KölnBonn, granted silent participation of EUR 350,000 thousand (Statement of Financial Position item
12a), the value of which was reduced by EUR 19,522 thousand to EUR 330,478 thousand on account of
the share in the losses made in fiscal year 2009 allocable to the participation. The silent participation
meets the definition of equity found in IAS 32.11.
The revenue reserves (Statement of Financial Position 12.b) comprise the security reserve and the
other revenue reserves. In keeping with § 25 of the Savings Bank Act (Sparkassengesetz) of North
Rhine-Westphalia the security reserve is created from retained earnings. The other revenue reserves
are all voluntary reserves. They consist of additions to equity upon the adoption of International
Financial Reporting Standards pursuant to IFRS 1 as of 1 January 2006 and retained earnings that have
not been added to the security reserve.
The fund for general banking risks (Statement of Financial Position 12.c) has been recognised pursuant
to § 340g HGB to cover the special risks that lending institutes are exposed to. As this fund qualifies as
equity under the definition of International Financial Reporting Standards, it is reported as a
component of equity in the Consolidated Statement of Financial Position.
The revaluation reserve (Statement of Financial Position 12.d) consists of changes in the market value
of available for sale (AfS) financial instruments taking account of the related changes in deferred taxes,
all of which are posted directly to equity. The changes are not posted through profit or loss until the
asset is sold or written down due to an impairment loss. Furthermore, the revaluation reserve contains
the results of rolling forward the carrying amounts of entities measured using the equity method which
are not posted through profit or loss. With regard to equity instruments, it should be noted that later
reinstatements to reverse an impairment loss may only be posted to the revaluation reserve without
affecting income.
Please see Note [71] for more details on hybrid financial instruments (Statement of Financial Position
item 12.e).
Minority interests in the equity of subsidiaries not attributable to the parent company are reported as
minority interests under Group equity (Statement of Financial Position item 12.f) unless they qualify as
a liability under IAS 32.
For the development of equity, please refer to the statement of changes in equity.
133
Other Disclosures
[75]
Quantitative Disclosures on Risk Management
A detailed presentation of the measurement, management, and controlling of the risks confronting the
Sparkasse KölnBonn Financial Group is included in the Risk Report section of the Group Management
Report. The following section also contains additional quantitative disclosures on the credit risk. Please
see Note [80] for information on the liquiditiy risk.
The credit risk, or default risk, refers to the risk that a contractual partner of the Sparkasse KölnBonn
Financial Group does not honour its obligations from a business transaction and the Sparkasse
KölnBonn Financial Group suffers a financial loss as a result. The default risk includes the risks of
counterparty default from the lending business, the risk that the issuer of a security defaults on the
instrument, counterparty default in trading business and also the country risk.
As defined by the Sparkasse KölnBonn Financial Group, financial instruments that result in a credit
exposure for the Group are all transactions that could result in a loss because a business partner of the
Sparkasse KölnBonn Financial Group fails to honour its (contractual) obligations. This also includes
risks that are not captured in the statement of financial position. The calculation of the gross amount of
financial instruments representing an exposure for the Group does not consider any collateral or other
agreements that would mitigate the risk and therefore represents the maximum credit risk of the
Sparkasse KölnBonn Financial Group. The amounts represent the carrying amounts after deduction of
any specific or portfolio-based allowances.
134
The gross amount of financial instruments exposed to the default risk is as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
2,651,946
1,641,657
61.5
827,880
1,478,036
-44.0
7,751
7,384
5.0
1,816,315
156,237
>100.0
Claims on customers
20,319,761
20,840,196
-2.5
Loans and receivables (LAR) less risk provision
20,186,075
20,649,551
-2.2
-
-
.
133,686
190,645
-29.9
3,830,152
4,140,480
-7.5
1,200
-
.
3,370,188
3,438,634
-2.0
46,821
43,392
7.9
34
28
21.4
391,771
627,147
-37.5
8,897
20,098
-55.7
11,241
11,181
0.5
1,319,809
2,130,164
-38.0
-
320,017
-100.0
Positive fair value of trading derivatives (AFV trading)
293,679
578,558
-49.2
Positive market value of interest derivatives for which the fair
value has been exercised (AFV trading)
995,990
572,261
74.0
7,000
634,639
-98.9
18,833
23,499
-19.9
4,307
1,190
>100.0
-
-
.
676,382
745,497
-9.3
2,047,723
1,836,961
11.5
-
-
.
30,845,773
31,334,955
-1.6
Claims on banks
Loans and receivables (LAR) less risk provision
Loans and receivables (AFS)
Loans and receivables (AFV designated)
Loans and receivables (AFS)
Loans and receivables (AFV designated)
Financial assets
Bonds and other interest-bearing securities (LAR)
Bonds and other interest-bearing securities (AFV designated)
Shares and other variable-yield securities (AFS)
Pension funds (AFV designated)
Equity investments and associates not recognised at equity
(AFS)
Shares in non-consolidated subsidiaries (AFS)
Other financial assets (AFS)
Sight deposits and fixed-term deposits (AFV trading)
Bonds and other interest-bearing securities (AFV trading)
Loans on promissory notes (AFV trading)
Shares and other variable-yield securities (AFV trading)
Other assets held for trading (AFV trading)
Guarantees and warranties
Irrevocable loan commitments
Other financial instruments exposed to the default risk
Total
The Sparkasse KölnBonn Financial Group requires collateral to reduce its credit risk. For claims on
customers, the collateral primarily consists of land charges but also guarantees and warranties. Credit
Default Swaps (CDS) are used to secure individual financial assets. As at the reporting date, the nominal
value of these CDS comes to EUR 92,000 thousand (prior year: EUR 92,000 thousand).
Financial instruments subject to the default risk which do not meet the criteria for impairment under
IAS 39 in spite of being in arrears are listed in the table below.
135
Non-performing financial instruments at default risk
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
408,768
397,599
2.8
between 3 and 6 months
41,835
22,614
85.0
65,805
61,928
6.3
more than 12 months
446,777
232,506
92.2
Deposits available for offsetting
194,351
228,013
-14.8
3 months or less
87,607
110,577
-20.8
63,661
32,056
98.6
7,355
9,764
-24.7
more than 12 months
4,564
8,229
-44.5
6,516
-
-
-
-
-
-
-
-
more than 12 months
-
-
-
3 months or less
502,891
508,176
-1.0
105,496
54,670
93.0
73,160
71,692
2.0
more than 12 months
451,341
240,735
87.5
Deposits available for offsetting
194,351
228,013
-14.8
Overdrafts (LAR)
3 months or less
Loans (LAR)
Loans (AFV)
3 months or less
Total
The customary collateral demanded by the bank was also obtained for these receivables. The fair value
of the collateral was not determined on the grounds that the costs would outweigh the benefits. The
deposits available for offsetting relate to the deposits as defined by §10 RechKredV.
If the conditions or terms of repayment of the claims at default risk were restructured due to the creditrating of the counterparty the Sparkasse KölnBonn Financial Group has provided adequately for the
default risk by means of a specific valuation allowance.
As at the closing date, the Sparkasse KölnBonn Financial Group had restructured financial instruments
of EUR 488,390 thousand (prior year: EUR 591,552 thousand) in its portfolio.
136
Losses that are more likely than not as at closing date and that are founded in economic reasons at this
date, are covered by specific valuation allowances or by writing down the instrument directly. The
measurement of risk provisions considers both the amount and timing of future cash flows that are
expected from the borrower and any possible use of collateral by discounting them to net present
value. Financial instruments for which a specific valuation allowance has been created are revalued on a
regular basis.
The amortised cost of those financial instruments for which a specific valuation allowance has been
recognised are presented by the Sparkasse KölnBonn Financial Group below prior to risk provisioning,
along with the valuation allowances, and the net present value of any collateral.
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
530,558
510,217
4.0
14,856
69,500
-78.6
545,414
579,717
-5.9
302,167
299,441
0.9
2,564
17,019
-84.9
304,731
316,460
-3.7
228,391
210,776
8.4
-
-
.
228,391
210,776
8.4
Amortised cost prior to risk provisions
Claims on customers (LAR)
Equity investments, shares in non-consolidated subsidiaries
and associates not recognised at equity
Risk provision / Provisions for lending business / direct
write-offs (AFS)
Present value of available collateral
Further explanations on the development of the risk provision, categorised by product, can be found in
the “Risk provisions” item in the statement of financial position (Note [35]) and in the notes on the
accounting and measurement methods that have been applied.
137
[76]
Net Result of Measurement Categories under IAS 39
The net result of IAS 39 categories breaks down as follows:
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
-86,114
-122,025
-29.4
17,312
-2,376
.
947
-265
.
of which not affecting profit and loss
16,365
-2,111
.
Financial assets/liabilities at fair value through profit or loss
(AFV/LFV designated)
72,590
71,495
1.5
of which AFV/LFV trading
51,105
-45,922
.
of which AFV/LFV designated
21,485
117,417
-81.7
Other financial liabilities (OFL)
-2,635
-1,724
52.8
1,153
-54,630
.
Loans and receivables (LAR)
Available-for-sale (AFS)
of which through profit or loss
Total
The presentation of the net results is independent of the type and function of the financial instrument
and based solely on their categorisation under IAS 39. This includes all components of the result
originating from the gain or loss on financial instruments measured at fair value through profit or loss,
investment income and other operating income and expenses.
138
[77]
Fair Value of Financial Instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm's length transaction.
If there are any quoted prices from an active market available, these are taken to determine fair value. If
no active market is available, fair value is determined using suitable valuation techniques whose input
parameters are based on observable market data. Generally, the discounted cash flow model and
option pricing models are used as well as other valuation techniques used by market players.
The carrying amount of claims on customers and banks and liabilities to customers and banks with a
residual term of less than 12 months is assumed to be an adequate estimate of their fair value as an
accounting convenience if there is no such value for this financial instrument. In such cases, no
separate calculation of market value has been made.
The fair values of each category of financial assets and financial liabilities are as follows:
31.12.2010
31.12.2009
Book value
Market value
Book value
Market value
EUR ’000
EUR ’000
EUR ’000
EUR ’000
828,279
832,645
1,486,985
1,490,514
Claims on customers
20,561,450
20,470,311
21,022,307
20,632,977
Total assets
21,389,729
21,302,956
22,509,292
22,123,491
5,553,036
5,556,110
6,177,398
6,155,456
17,465,917
17,559,818
17,111,548
17,195,676
1,557,339
1,563,477
1,839,332
1,873,541
Subordinated liabilities
1,061,188
1,065,140
1,101,121
1,202,596
25,637,480
25,744,545
26,229,399
26,427,269
Assets
Claims on banks
The table above only contains those financial instruments which are not already measured at fair value.
On the assets side, this concerns financial assets in the category “loans and receivables” (LAR) and
under liabilities the category “other financial liabilities” (OFL).
The fair values of claims on customers and liabilities to customers also contain the net present value of
any cost or profit margins. Where the resulting fair value is in excess of historical cost (for financial
assets) or below it (for financial liabilities), the difference is not recorded directly but as a component of
the interest payments over the term of the instrument.
139
[78]
Disclosures on the Fair Value Hierarchy Pursuant to IFRS 7
Pursuant to the amended disclosures required by IFRS 7, Sparkasse KölnBonn has to classify fair value
measurements of all financial instruments accounted for at fair value (measurement category AFV, AFS
and LFV) using a fair value hierarchy that reflects the significance of the inputs used in making the
measurements. As a result, financial instruments measured at fair value are classified pursuant to the
three-level hierarchy in the sense of IFRS 7.27A as follows:
—
Level 1 – Financial instruments for which fair value is measured on quoted prices (unadjusted) in
active markets for identical assets or liabilities.
—
Level 2 – Financial instruments for which no quoted prices for identical instruments are available
on active markets and fair value is established using a valuation technique. The valuation
techniques applied include comparisons with quoted prices of similar financial instruments on
active markets, comparisons with quoted prices of identical or similar financial instruments on
inactive markets as well as the use of valuation techniques for which all significant inputs are
observable for the asset or the liability, either directly (as prices) or indirectly (derived from
prices).
—
Level 3 – Financial instruments measured by using valuation techniques for which inputs for the
asset or liability are not based on sufficiently observable market data and these inputs affect their
fair value in a not insignificant way. Estimates and assumptions made are based on historical
experience and other factors which seem to be appropriate under the given circumstances.
Realisable fair values that would be determined at a later point in time may differ from estimated
fair values.
Financial instruments accounted for at fair value are disclosed by class of financial instruments. The
hierarchy shall consider whether measurement was based on quoted prices (Level 1), whether the
valuation technique used was based on observable market data (Level 2) or on inputs that are not
observable on the market (Level 3).
140
The following table shows the book value of the financial instruments measured at fair value using the
fair value hierarchy:
31.12.2010 (Reporting Year)
Quoted prices on
active markets
(Level 1)
Valuation
techniques based
on observable
market data
(Level 2)
Valuation
techniques based
on not observable
market data
(Level 3)
Financial assets measured at fair value
Fair value through profit or loss
1,281,350
4,470,553
888,448
-
1,816,315
-
-
133,686
-
3,988
911,493
404,328
1,277,043
1,609,059
484,120
Fair value not through profit or loss
63,878
-
649,144
-
-
7,751
60,162
-
185,234
3,716
-
455,014
Assets held for trading (AFV trading)
Claims on banks (AFS)
Non-current assets held for sale (AFS)
Financial assets (AFS)
-
-
1,145
1,345,228
4,470,553
1,537,592
-
2,362,625
210,041
(LFV designated)
-
191,760
-
(LFV designated)
-
488,556
-
Liabilities held for trading (LFV trading)
-
1,506,094
210,041
Securitised liabilities (LFV designated)
-
126,887
-
Total financial assets measured at fair value
Financial liabilities measured at fair value
Subordinated (LFV designated)
Total financial liabilities measured at fair value
-
49,328
-
-
2,362,625
210,041
141
In the prior year, the fair value hierarchy of financial instruments measured at fair value was as follows:
31.12.2009 (Prior Year)
Quoted prices on
active markets
(Level 1)
Valuation
techniques based
on observable
market data
(Level 2)
Valuation
techniques based
on not observable
market data
(Level 3)
1,655,649
3,422,341
837,718
-
156,237
-
-
190,645
-
116,487
1,774,642
239,035
1,539,162
1,300,817
598,683
42,911
1
667,404
Claims on banks (AFS)
-
-
7,384
42,911
1
658,906
-
-
1,114
1,698,560
3,422,342
1,505,122
-
2,929,577
16,827
(LFV designated)
-
94,735
-
(LFV designated)
-
502,196
-
Liabilities held for trading (LFV trading)
-
1,876,220
16,827
Securitised liabilities (LFV designated)
-
403,333
-
Subordinated (LFV designated)
-
53,093
-
-
2,929,577
16,827
Total financial assets measured at fair value
Financial liabilities measured at fair value
Total financial liabilities measured at fair value
Level 1 contains equity instruments, corporate bonds and government bonds listed on major public
exchanges. The majority of OTC derivates are classified as Level 2. Level 3 contains OTC derivatives with
input parameters based primarily on their credit-ratings, asset-backed securities not actively traded
and equity investments and shares in affiliated companies.
142
The disposals and additions from reclassifications of financial instruments measured at fair value in
Levels 1 and 2 are presented in the following table at their fair value at the beginning of the reporting
period:
2010 (Reporting Year)
Disposal
from Level 1
Disposal
from Level 2
Addition to
Level 1
Addition to
Level 2
292,557
28,347
28,347
-
-
-
-
-
-
-
-
-
-
-
292,557
28,347
28,347
292,557
-
-
-
-
-
-
-
-
292,557
28,347
28,347
292,557
292,557
The following table shows the reclassification in the prior fiscal year:
2009 (Prior Year)
Disposal
from Level 1
Disposal
from Level 2
Addition to
Level 1
Addition to
Level 2
67,775
410,549
420,572
68,939
11,656
6,510
6,510
11,656
-
-
-
-
-
-
-
-
56,119
404,039
414,062
57,283
-
-
-
-
-
-
-
-
67,775
410,549
420,572
68,939
Reclassifications between Level 1 and Level 2 exclusively consist of financial assets (AFV designated).
These reclassifications are due to the fact that these financial instruments are not measured on the
basis of the prices observed on an active market but on the results of valuation techniques using inputs
that are generally observable. On account of the partial recovery of the financial markets, some
financial assets were once again measured on the basis of the prices observed on the market. This
resulted in reclassifications from Level 2 to Level 1.
143
The following table shows the reconciliation of Level 3 financial instruments between the periods for
the 2010 reporting year:
All figures in
EUR ’000
Opening
balance
Additions
Disposals
Valuation
Transfers to
(+) or out
(-) of Level 3
Closing
balance
Assets
Assets held for
trading
239,035
319
31,872
128,425
68,421
404,328
Claims on banks
7,384
-
-
367
-
7,751
Financial assets
(securities)
636,212
1,000
134,165
24,178
-
527,225
Financial assets
(special funds)
2,881
-
2,881
-
-
-
Non-current assets
held for sale
(investments)
-
184,181
-
-
-
184,181
Non-current assets
held for sale
(shares in affiliated
companies)
-
1,053
-
-
-
1,053
587,217
1,303
190,338
-6,411
-
391,771
Financial assets
companies) 1) 2)
20,098
710
12,224
313
-
8,897
Financial assets
(other financial
assets)
11,181
29
1,145
1,176
-
11,241
1,114
-
-
31
-
1,145
16,827
685
9,109
27,827
173,811
210,041
Financial assets
(investments) 1)
Other assets
Obligations
Liabilities held for
trading
1) Disposals including reclassifications to „Non-current assets available for sale”.
2) Disposals including disposals from the first-time consolidation of S MittelstandsKapital KölnBonn GmbH.
144
The following table shows the reconciliation in the prior year:
All figures in
EUR ’000
Opening
balance
Additions
Disposals
Valuation
Transfers to
(+) or out
(-) of Level 3
Closing
balance
Assets
Assets held for
trading
204,544
313
17,320
51,498
-
239,035
Claims on banks
7,034
-
-
350
-
7,384
Claims on banks
(special funds)
88
-
88
-
-
-
Financial assets
(securities)
709,348
-
25,934
-47,202
-
636,212
Financial assets
(special funds)
23,428
-
9,987
315
-10,875
2,881
Financial assets
(investments)
627,881
1,165
29,328
-12,501
-
587,217
Financial assets
companies)
23,738
-
136
-3,504
-
20,098
Financial assets
(other financial
assets)
20,519
-
9,475
137
-
11,181
1,105
-
-
9
-
1,114
18,692
1,636
7,425
3,924
-
16,827
Other assets
Obligations
Liabilities held for
trading
The reclassifications in 2009 of financial assets from Level 3 to higher levels are generally due to the
recovery of market conditions (principally the liquidity of the market) and the related improvement in
observable valuation parameters.
Gains or losses on the financial instruments disclosed here are posted through profit or loss under the
line item “Gain or loss on financial instruments measured at fair value through profit or loss”. The
increase or decrease in the fair value of financial instruments not affecting profit and loss and
reclassified to the AFS category is disclosed in investment income. Gains and losses posted directly to
equity can be found in the statement of comprehensive income.
The measurement effects from valuing assets and liabilities held for trading, financial assets (securities
and investment funds) as well as claims on the banks of the investment funds at fair value are all posted
to other comprehensive income through profit or loss. Other measurement effects are posted directly
to other comprehensive income without affecting profit and loss.
145
The following summary shows the impact on the consolidated income statement and on other
comprehensive income (OCI) as shown in the consolidated statement of comprehensive income that
would arise if the value of Level 3 financial instruments developed positively or negatively, i.e. where
one or more inputs change for the better or worse when making reasonable possible alternative
assumptions.
Positive case
Income
statement
Negative case
OCI
Income
statement
OCI
Assets
5,848
-
-26,021
-
Claims on banks
-
160
-
-240
Financial assets
(securities)
33,386
-
-50,721
-
Financial assets
(investments) 1)
-
67,999
-2,400
-49,887
Financial assets
(shares in affiliated companies) 1)
-
1,019
-
-1,457
Financial assets
(other financial assets)
-
1,696
-905
-444
Other assets
-
5
-
-8
331
-
-2,027
-
Obligations
The sensitivity analysis of assets held for trading has been performed by analysing the impact of creditrating induced factors on the market value of the derivative financial instruments held in the category.
For financial assets (securities) the scenarios have been developed on the basis of alternative
assumptions, derived primarily from the parameters used in the valuation techniques applied. The
scenarios for equity investments and shares in affiliated companies are based on different assumptions
for the earnings developments of the entities concerned. The remaining items are treated similarly.
146
[79]
Reconciliation Pursuant to IFRS 7.28
Pursuant to IAS 39 the fair value of financial instruments generally corresponds to the transaction
price. If, however, there are any differences between the fair value and the transaction price, these are
not posted through profit or loss immediately upon acquisition in accordance with IAS 39 AG76A
(see Note [11] b)).
The differences that have not yet been posted through profit or loss break down as follows:
Unrecognised differences at the beginning of the period
Additions from new business
31.12.2010
31.12.2009
EUR ’000
EUR ’000
39,570
48,208
1,713
1,457
Differences recognised through profit or loss in the fiscal year
12,440
10,095
Unrecognised differences at the end of the period
28,843
39,570
[80]
Maturity Analysis
The following comments contain additional disclosures related to the reporting requirements for the
liquidity risk as defined by IFRS 7.34 in conjunction with IFRS 7.B10 and IFRS 7.B11 et seq. The liquidity
risk is defined as the risk of not being able to meet obligations that have been entered into in relation
to financial liabilities that must be settled in cash or other financial assets. A quantitative presentation
has been made in the form of residual maturities.
Maturity is deemed to be the period between the closing date and the contractual date on which the
asset falls due. In the process, the maturities of financial instruments that are paid or are payable in
instalments are broken down into the respective instalments.
Instalments refer to payments of both principal and any contractually agreed interest payments. The
spot rates on closing date are used to determine the undiscounted cash flows from floating rate
receivables and liabilities.
The cash flows from financial receivables and liabilities without any predetermined due date – primarily
current account loans and sight deposits – are allocated to the first maturity band, in accordance with
IFRS. This treatment possibly results in overstating some cash inflows and outflows, as generally a
portion of these liabilities are non-current in nature despite being on-call in a legal sense.
The maturity analysis includes significant items of the structure of the statement of financial position.
Maturities in connection with leases are presented in Note [83].
The Sparkasse KölnBonn Financial Group can service its payment obligations to its counterparties by
taking out money market loans, utilising credit lines at Westdeutsche Landesbank AG arranged to aid
cash management, refinancing via open market transactions at Deutsche Bundesbank, and also selling
its liquid financial assets on the capital market. Moreover, there is a possibility of availing itself - for the
short-term - of any deposits in excess of the minimum reserve.
147
The contractually agreed residual terms for financial liabilities on a cash flow basis pursuant to
IFRS 7.39c in conjunction with IFRS 7.B11E are presented in the following table:
Reporting year
Assets
Cash reserve
Claims on banks
Less than 1
month
Total
3 months to
1 year
1 year to 5
years
More than 5
years
Total
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
328,396
-
-
-
-
328,396
1,696,197
637,913
59,672
151,539
126,887
2,672,208
-
-
-
-
-
-
6,028
23,431
67,145
732,529
69,063
898,196
2,030,621
661,344
126,817
884,068
195,950
3,898,800
Financial assets
Up to three
months
The above mentioned line items mainly include financial instruments used for cash management
purposes by Sparkasse KölnBonn. This includes cash, cash equivalents and other highly liquid assets.
In the prior year, the contractually agreed residual terms for financial liabilities broke down as follows:
Prior year
Assets
Less than 1
month
Up to three
months
3 months to
1 year
1 year to 5
years
More than 5
years
Total
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
Cash reserve
691,891
-
-
-
-
691,891
Claims on banks
948,575
26,488
122,008
196,509
121,164
1,414,744
320,017
-
-
-
-
320,017
4,968
6,228
6,508
631,803
59,937
709,444
1,965,451
32,716
128,516
828,312
181,101
3,136,096
Financial assets
Total
148
The contractually agreed residual terms for financial liabilities on a cash flow basis break down in fiscal
year as follows:
Reporting year
Less than 1
month
Up to three
months
3 months to
1 year
1 year to 5
years
More than 5
years
Total
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
247,522
203,172
460,645
3,972,909
1,465,594
6,349,842
7,968,037
5,771,550
829,853
1,938,024
2,631,800
19,139,264
Assets held for trading (net
settlement)
15,221
34,399
7,194
3,498
7,864
68,176
(gross settlement*)
68,537
78,551
338,894
787,018
174,885
1,447,885
49,876
131,549
243,195
1,452,210
842,008
2,718,838
118,413
210,100
582,089
2,239,228
1,016,893
4,166,723
-
-
-
-
-
-
1,933
494,992
182,067
941,788
193,044
1,813,824
563
4,396
64,514
852,823
617,551
1,539,847
46,891
2,731
44,321
10,803
30,410
135,156
8,641
-
-
-
-
8,641
2,047,723
-
-
-
-
2,047,723
10,405,068
6,589,791
1,927,488
8,506,863
5,121,148
32,550,358
Cash inflows
Cash outflows
Other liabilities held for
trading
Other liabilities
Financial guarantees
Irrevocable loan
commitments
Total
In the prior year, the residual terms broke down as follows:
Prior year
Less than 1
month
Up to three
months
3 months to
1 year
1 year to 5
years
More than 5
years
Total
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
EUR ’000
314,537
211,983
453,779
3,018,026
3,819,185
7,817,510
7,761,486
4,864,141
741,345
2,672,326
2,195,053
18,234,351
Assets held for trading (net
settlement)
8,054
11,203
54,906
9,086
73,046
156,295
(gross settlement*)
52,724
63,487
295,324
483,995
82,599
978,129
Cash inflows
22,306
70,106
148,197
1,547,581
1,130,175
2,918,365
Cash outflows
75,030
133,593
443,521
2,031,576
1,212,774
3,896,494
3,158
-
300,000
-
-
303,158
30,488
87,226
436,056
1,582,714
284,852
2,421,336
Other liabilities held for
trading
Other liabilities
Financial guarantees
Irrevocable loan
commitments
Total
563
3,756
134,283
710,990
854,220
1,703,812
74,412
6,133
31,995
76,717
31,441
220,698
3,944
-
-
-
-
3,944
1,836,961
-
-
-
-
1,836,961
10,086,327
5,247,929
2,447,688
8,553,854
7,340,396
33,676,194
*) Reports contractual cash flows from interest rate-hedging derivatives pursuant to IFRS 7.39(b), IFRS 7.B11B and IDW RS
HFA 24 item 60. The prior year’s figures were adjusted as given in gross terms.
149
[81] Disclosures on the Use of the Fair Value Option for Financial Assets and
Financial Liabilities
The Sparkasse KölnBonn Financial Group applies the fair value option to avoid or reduce an
accounting mismatch in the recognition of securities and loans that are hedged by interest
derivatives.
The designated assets include receivables of EUR 1,950,001 thousand (prior year:
EUR 346,882 thousand). Of their change in fair value in the year under review, an amount of
EUR -1,896 thousand (prior year: EUR -1,249 thousand) is caused by changes in credit ratings. Taken
together, the changes in fair value due to changes in credit ratings amount to EUR -3,542 thousand
(prior year: EUR -1,646 thousand).
The changes in the fair value of receivables due to changes in credit risks were determined by taking
the change in fair value and subtracting the change resulting from general market parameters.
The portfolio of securities includes debt instruments of EUR 541,643 thousand (prior
year: EUR 633,180 thousand) from securitised debt transactions which generally meet the criteria for
allocation to the LAR category but have been measured at fair value by exercising the fair value option.
Due to new ratings, the fair value of these debt securities changed in fiscal year by
EUR 13,095 thousand (prior year: EUR 836 thousand). Changes in value were first recorded in 2007.
The fair value of liabilities voluntarily designated as at fair value amounts to EUR 856,531 thousand
(prior year: EUR 1,053,357 thousand) at closing date. The settlement amount for these financial
liabilities amounts to EUR 858,762 thousand (prior year: EUR 1,208,183 thousand),
In March 2010 the external rating agency Moody's has adjusted Sparkasse KölnBonn’s rating (from Aa2
to A1 long-term, from C to D- financial strength, P-1 short-term (no adjustment)). This resulted in
changes in the fair values of the designated financial liabilities of EUR 1,396 thousand (prior year:
EUR 0 thousand).
150
[82]
Contingent Liabilities and other Commitments
Contingent liabilities and other commitments of the Sparkasse KölnBonn Financial Group primarily
contain potential future liabilities of the Group. These liabilities relate to guarantees entered into and
credit lines granted to customers but not availed of yet. If the credit lines granted, and the guarantees
issued, are availed of, the possible obligation of the Sparkasse KölnBonn Financial Group would be
reflected in the following figures.
31.12.2010
31.12.2009
Delta
EUR ’000
EUR ’000
%
-
-
-
From guarantees and warranties
676,382
745,497
-9.3
Loan guarantees
146,244
216,962
-32.6
14,276
22,469
-36.5
515,862
506,066
1.9
2,047,723
1,836,961
11.5
9,837
8,857
11.1
2,733,942
2,591,315
5.5
Contingent liabilities
From negotiated and discounted bills of exchange
Documentary credits
Other guarantees and warranties
Irrevocable loan commitments
Other contingent liabilities
Contingent liabilities
151
[83]
a)
Notes to Leases
The Group as Lessee - Finance Leases
The Sparkasse KölnBonn Financial Group acts as a lessee in a number of finance leases for real estate.
These leases are for properties which are either subleased under operating leases or are used by the
Group for its own activities. The residual terms of the leases range from eight to twenty years. There are
options to renew the leases but no purchase options. These renewal options cannot be exercised
before 2018. The agreed rental payments are partly pegged to changes in the consumer price index.
The net carrying amounts of the properties covered by finance leases are shown in the following table:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
43,618
96,574
311,299
325,895
Net carrying amount of properties acquired under finance leases
354,917
422,469
The assets disclosed as property, plant and equipment and investment properties have been passed on
to third parties within the framework of non-cancellable sub-leases. This results in expected future
minimum lease payments of EUR 512,118 thousand (prior year: EUR 541,609 thousand).
The liabilities from finance leases break down by residual term as follows:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
39,738
29,758
Between one and five years
158,954
158,404
Due in more than five years
460,404
497,270
Total
659,096
685,432
Minimum lease payments
Due in less than one year
The difference between the minimum lease payments and their net present value results from
discounting at the imputed interest rate inherent in the leases.
31.12.2010
31.12.2009
EUR ’000
EUR ’000
38,395
28,684
133,720
133,720
257,717
279,905
Total
429,832
442,309
Net present value of minimum lease payments
152
The lease payments posted through profit or loss in the reporting period break down into
unconditional lease payments and conditional lease payments as follows:
Breakdown of lease payments recorded through profit or loss
Unconditional lease payments (minimum lease payments)
Conditional lease payments
Total
31.12.2010
31.12.2009
EUR ’000
EUR ’000
29,861
21,404
16
-
29,877
21,404
Please see Notes [57] and [58] for the development of investment properties acquired under finance
leases.
b)
The Group as Lessee - Operating Leases
Sparkasse KölnBonn acts as a lessee in a number of operating leases, primarily for real estate. These
leases are for properties which are either subleased to third parties or are used by the Group for its own
activities. The properties used by the Group are partially a result of sale and lease back transactions in
the sense of IAS 17.61 Clause 1. The residual terms of the leases are from one month to 20 years or run
for an indefinite period of time. There are options to renew the leases but no purchase options. These
renewal options cannot be exercised before 2011. The agreed rental payments are partly pegged to
changes in the consumer price index.
In addition, the Sparkasse KölnBonn Financial Group has entered a number of operating leases for real
estate, automatic teller machines, vehicles, advertising space and hydroculture plants.
Total future minimum lease payments on non-cancellable operating leases, where the Group acts as
the lessee, is as follows:
Future minimum lease payments from operating leases
31.12.2010
31.12.2009
EUR ’000
EUR ’000
Residual term
41,702
37,722
129,515
132,278
198,682
217,295
Total
369,899
387,295
Some of the leased assets have been passed on to third parties under non-cancellable sub-leases. This
results in expected future minimum lease payments of EUR 31,337 thousand (prior year: EUR 32,431
thousand).
153
The payments posted through profit or loss in the reporting period pertaining to lease instalments and
sublease payments are as follows:
Breakdown of lease and sub-lease payments through profit or loss
31.12.2010
31.12.2009
EUR ’000
EUR ’000
37,570
35,065
270
243
Total
37,840
35,308
of which relating to sub-leases
27,785
24,482
Differences between the reported rental expenses for properties covered by operating leases and the
rental expenses presented in Note [40] result in a release of the provision created for this purpose.
c)
The Group as Lessor - Operating Leases
Sparkasse KölnBonn acts as a lessor in a number of operating leases, primarily for real estate. These
leases are for properties which are either subleased to third parties or are held by the Group. There are
leases with fixed prices, leases with progressive rent increases and leases that are pegged to the
consumer price index. The residual terms of the leases range from one month to 22 years or for an
indefinite period. There are options to renew the leases but no sale options. These renewal options
cannot be exercised before 2011.
Expected future minimum lease payments from non-cancellable
leases
31.12.2010
31.12.2009
EUR ’000
EUR ’000
49,209
36,333
167,804
163,682
370,765
407,828
Total
587,778
607,843
The minimum lease payments from operating leases posted as income break down into unconditional
lease payments and conditional lease payments as follows:
Income from operating leases
Total
31.12.2010
31.12.2009
EUR ’000
EUR ’000
47,653
35,825
202
81
47,855
35,906
154
The following table shows the development of leased assets and investment property in accordance
with IAS 17.57 in connection with IAS 16.73e and IAS 40.79d:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
801,592
460,415
Additions
5,749
345,045
Disposals
3,165
90
Reclassifications
1,333
-3,778
-
-
Gross book value as at 31 December
805,509
801,592
Accumulated depreciation as at 1 January
216,630
142,947
Additions scheduled
19,993
9,242
Additions unscheduled
Gross book value as at 1 January
Change in consolidation group
20,178
70,917
Disposals
2,825
5
Reclassifications
1,128
-2,105
-
-
Change in consolidation group
Write-ups
1,058
4,366
Accumulated depreciation as at 31 December
254,046
216,630
Net book value as at 1 January
584,962
317,468
Net book value as at 31 December
551,463
584,962
[84]
Securities Sale and Repurchase Transactions
Within the framework of non-recourse repurchase transactions, Sparkasse KölnBonn buys and sells
bonds and other interest-bearing securities with pre-agreed repurchase or surrender commitments
(repurchase agreements).
As at closing date, the only transactions of this nature were ones in which Sparkasse KölnBonn acts as
the cash provider. Due to the fact that the substantial risks and awards of these securities remain with
the cash borrower pursuant to IAS 39.AG40(a), they are not deemed to have been disposed of in the
sense of IAS 39.17. Consequently, the financial assets offered as security pursuant to IAS 39.20(b), IAS
39.29 and IAS 39.AG51(a) must still be recognised by the cash borrower. As a result, Sparkasse
KölnBonn does not recognise any repurchase transactions as at closing date.
According to IAS 39.29, the duty to return the payment received must be recognised by the cash
borrower as a financial liability of an amount equal to the amount received. At the same time, Sparkasse
KölnBonn, as the cash provider, recognizes a receivable of the same amount. These instruments are
presented under Other claims on banks (LAR), see Note [49]. Please see Note [87] for additional
information on the collateral received.
Sparkasse KölnBonn does not enter into any repurchase transactions with an attached right of
recourse.
155
[85]
Securities Lending Transactions
Sparkasse KölnBonn also enters into securities lending transactions with banks and customers related
to bonds and other fixed-interest securities. In these arrangements, the lender is obliged to return
securities of the same kind, quality and volume at the end of the lending period. Sparkasse KölnBonn
does not act as the lender in any securities lending transactions.
Securities that are lent out are generally still recognised among the assets of the lender because the
substantial risks and rewards of ownership of the securities remain with the lender. Thus there is no
disposal of the assets in the sense of IAS 39.15 et seq., IAS 39.AG51(a) and (b).
As in the prior year, there were no securities lending transactions as at the closing date.
[86]
Assets Pledged as Security
Within the framework of securities transactions on the Eurex, open market transactions with Deutsche
Bundesbank, and within the terms of the German Pfandbrief Act (Pfandbriefgesetz), assets were
transferred to secure the securitized liabilities of the Group. As at the closing date, public sector bonds
and mortgage bonds in the “Other financial liabilities” (OFL) category of a nominal value of
EUR 1,539,800 thousand (prior year: EUR 1,526,300 thousand) were issued. In the “Financial liabilities
(designated) at fair value through profit or loss” (LFV) category they come to EUR 191,000 thousand
(prior year: EUR 330,925 thousand).
The carrying amount of the transferred assets of EUR 2,371,512 thousand (prior year:
EUR 3,014,436 thousand) related to the financial assets item in the statement of financial position.
Assets with a carrying amount of EUR 1,111,321 thousand (prior year: EUR 1,181,124 thousand) were
deposited into a barred special purpose account to serve as collateral to cover both public sector bonds
and mortgage bonds (Pfandbriefe) in keeping with the German Pfandbrief Act.
Securities of EUR 1,185,751 thousand (prior year: EUR 1,731,210 thousand) were deposited in a
pledged account at the European Central Bank to serve as collateral for open market transactions. In
addition, Sparkasse KölnBonn has pledged collateral of EUR 32,301 thousand (prior year:
EUR 60,729 thousand) for transactions conducted on the Eurex.
Moreover, collateral agreements for securities in the amount of EUR 159,600 thousand (prior year:
EUR 180,800 thousand) and cash guarantees amounting to EUR 540,145 thousand (prior year:
EUR 485,524 thousand) were entered into.
156
[87]
Assets Pledged as Collateral
As the cash provider, the Sparkasse KölnBonn Financial Group has received collateral within the
framework of non-recourse repurchase transactions which it can use even without any default on the
part of the cash borrower. The fair value of this collateral amounts to EUR 561,087 thousand as at
closing date (prior year: EUR 350,694 thousand). The financial instruments covered by these
transactions continue to be recognised as assets by the cash borrower.
The need to use the collateral received in terms of a sale or as collateral in other transactions did not
arise as at closing date.
The repurchase transactions mentioned above, in which the Sparkasse KölnBonn Financial Group acts
as the cash provider, are subject to the terms of the German master agreement for financial futures.
Furthermore, Sparkasse KölnBonn held cash collaterals in the amount of EUR 14,500 thousand (prior
year: EUR 18,100 thousand) within the framework of collateral agreements.
157
[88]
Capital Management
The objective of the capital management of the Sparkasse KölnBonn Financial Group is to provide
adequate risk coverage potential to cover the risks of its business activities both on and off the
statement of financial position. Details on risk tolerance are presented in the consolidated financial
statements, Part D., Risk Report, section on risk tolerance.
A strict condition on the business activities of the Sparkasse KölnBonn Financial Group is the Capital
Requirements Directive issued by the European Council codified into German law by the Solvency
Regulation on 1 January 2007.
According to the Solvency Regulation, the Sparkasse KölnBonn group of institutions is obliged to
quantify its exposure to default, its operating risks, and its market price risk position and to cover this
with own funds. On this basis, the ratio between the own funds of the Sparkasse KölnBonn group of
institutions and the total amount calculated for the default risks, its operating risks, and its market risk
must, in each case, be at least 8.0% (own funds ratio). Own funds comprise the core capital, additional
capital and third-tier capital. The risk exposures must be covered with core capital by a ratio of at least
4.0% (core capital ratio). The core capital ratio of the Sparkasse KölnBonn group of institutions is
defined as the ratio of its core capital to its risk positions (default risks, operational risks and market
risks).
Currently, the own funds of the Sparkasse KölnBonn group of institutions which includes Sparkasse
KölnBonn and its group companies pursuant to KWG is still calculated in keeping with the provisions of
German Commercial Code (HGB).
The core capital of the Sparkasse KölnBonn group of institutions corresponds to the security reserve,
the silent participations and the paid-in capital plus the revenue reserves of the Group. Internal
positions such as loss carryforwards are deducted from this as required by banking law. Additional
capital comprises hybrid financial instruments and non-current subordinated liabilities. The third-tier
capital contains the qualifying portion of subordinated liabilities. Core capital, additional capital and
third-tier capital must be reduced by the items defined in the German Banking Act KWG.
158
The liable capital of the Sparkasse KölnBonn group of institutions pursuant to the German Banking Act
(KWG) is derived from the equity of the Sparkasse KölnBonn Financial Group in the following table. The
liable capital of the Sparkasse KölnBonn group of institutions pursuant to regulatory requirements is
calculated on the basis of the individual financial statements of all the entities included in the
Sparkasse KölnBonn group of institutions prepared pursuant to the provisions of German Commercial
Code (HGB) as at 31 December.
31.12.2010
31.12.2009
EUR ’000
EUR ’000
990,571
896,847
less consolidated profit carried forward
28,781
79,379
less the revaluation reserve
80,434
66,322
21
130
less deductions required by banking regulations
729,762
656,970
plus differences between HGB and IFRS and differences in the
consolidated group between IFRS and KWG
915,050
1,089,628
a) Accounting equity after adjustments
1,066,665
1,183,934
1,110,516
1,154,214
-
-
less deductions required by banking regulations
14,944
-
less differences between HGB and IFRS
64,747
63,581
Accounting equity pursuant to IFRS
plus minority interests
less subordinated liabilities with a residual term of less than 2 years /
less market smoothing option
b) Other accounting components of liable capital under banking
regulations
1,030,825
a) + b) Total capital under banking law
2,097,490
2,274,567
of which core capital under banking law
1,089,528
1,184,051
345,829
283,824
1,398,374
1,478,770
Silent participations
330,478
350,000
Deductions under banking regulations
729,632
656,853
-255,521
-271,690
of which additional capital
999,140
1,075,767
454,441
483,800
Non-current subordinated liabilities
576,384
606,833
31,685
14,866
(31,555)
(14,749)
8,822
14,749
(22,733)
(-)
2,097,490
2,274,567
Paid-in capital
Revenue reserves (after eliminating intercompany results)
Consolidation of the shares in Group companies
Deductions under banking regulations
of which third-tier capital
Eligible third-tier capital
Unused but eligible third-tier capital
Total liable capital under banking law
1,090,633
159
Silent participations in the amount of EUR 330,478 thousand were added to the liable capital of the
Sparkasse KölnBonn group of institutions as at the reporting date of 31 December 2010. The
contributions of the silent participation, originally amounting to EUR 350,000 thousand were reduced
by EUR 19,522 thousand in 2009 to cover the share in the loss of Sparkasse KölnBonn reported in the
Bank’s HGB annual financial statements.
As in the prior year, the minimum capital requirements of the Federal Banking Supervisory Agency
(BaFin) were met.
[89]
Risk Positions and Solvency Indicators
Since 1 October 2007, the Sparkasse KölnBonn group of institutions applies the new capital
requirements stipulated by the German Solvency Regulation. Under the law, financial institutions must
cover their risk position by own funds by at least 8.0% (overall ratio). The own funds consist of core
capital, additional capital (liable capital) and third-tier capital. Core capital is generally composed of the
security reserve, the silent participations and the reserves less the deductions required by law. The
ratio of core capital must always be at least 4.0%. Additional capital includes hybrid financial
instruments and long-term subordinated liabilities. The eligible tier 3 capital is subordinated capital.
The unused eligible 3 tier capital is the remaining subordinated capital after capping 3 tier capital
pursuant to § 10 Sec. 2c Clause 1 No. 3 KWG
The Bank’s own funds as defined by the Solvency Regulation/standard credit risk approach as at
31 December 2010 break down as follows:
31.12.2010
31.12.2009
EUR ’000
EUR ’000
1,279,502
1,443,039
101,543
105,881
12,351
28,398
1,089,528
1,184,051
999,140
1,075,767
Own funds requirements for
Default risk
Operational risks
Own funds requirements for
Market risk position
Core capital
Tier 2 capital
Tier 3 capital
8,822
14,749
2,097,490
2,274,567
6.26
6.12
Own funds ratio in percent (modified, available equity)
12.10
11.67
Solvency ratio in percent
12.04
11.54
Eligible equity
Core capital ratio in percent
On 31 March 2011, the solvability ratio for the Sparkasse KölnBonn group of institutions came to
12.8% (prior year: 11.4%) and the core capital ratio to 6.8% (prior year: 6.0%).
At the level of Sparkasse KölnBonn as a standalone institution, the solvency ratio stood at 13.2% (prior
year: 12.5%) and the core capital ratio at 7.3% (prior year: 6.9%) on 31 March 2011. On
31 December 2010 they came to 13.0% (prior year: 12.3%) and 7.2% (prior year: 7.0%).
160
[90]
Related Entities
Sparkasse KölnBonn maintains business relations to its subsidiaries, joint ventures and associates, and
to its responsible body, Zweckverband Sparkasse KölnBonn, and its members, the City of Cologne and
the Federal City of Bonn as well as to related entities which consist of equity investments of the City of
Cologne and the Federal City of Bonn. All of these entities qualify as related entities.
A list of the equity investments of the Sparkasse KölnBonn Financial Group can be found in the list of
shareholdings .
As at 31 December 2010, the total amount of loans and advances granted, guarantees and irrevocable
credit commitments as well as deposits to Sparkasse KölnBonn was as follows:
Nature of the relationship
Loans and advances
Guarantees,
irrevocable credit
commitments
Deposits
1,747
19
5,475
Subsidiaries (not consolidated)
Other related entities
191,847
52,947
24,760
1,235,300
151,004
559,087
463,791
71
367,755
1,892,685
204,041
957,077
Zweckverband Sparkasse KölnBonn
and members of the special-purpose
association (Zweckverband)*
Total
*) The deposits of Zweckverband Sparkasse KölnBonn and members of the special-purpose association include the silent
participations of Zweckverband Sparkasse KölnBonn totalling EUR 330,478 thousand.
As at the closing date of 31 December 2009, the total amount of loans and advances granted and
deposits was as follows:
Loans and advances
Guarantees,
irrevocable credit
commitments
Deposits
1,820
19
5,605
237,962
3,898
14,070
1,075,750
16,229
312,073
491,579
71
393,159
1,807,111
20,217
724,907
Subsidiaries (not consolidated)
Zweckverband Sparkasse KölnBonn
and members of the special-purpose
association (Zweckverband)*
Total
*) The deposits of Zweckverband Sparkasse KölnBonn and members of the special-purpose association include the silent
participations of Zweckverband Sparkasse KölnBonn totalling EUR 330,478 thousand
Loans to related entities were granted with a maximal maturity up to 2052. Effective interest rates
ranging from 0.2% to 8.4% were agreed for loans to related entities. 83% of the secured portion of the
loans to related entities is covered by warranties and 17% by encumbrances on land. Loans extended
in the course of current account transactions generally display effective interest rates ranging between
0.6% and 18.7%. Deposits made in the current account business generally bear effective interest rates
in a range between 0.0% and 1.0%. Other deposits bear interest in a corridor of between 0.1% and
4.2%.
161
Transactions according to IAS 24.20 which were entered into between related entities during the
reporting year are as follows:
Type of transactions
Payments made
Payments received
01.01.-31.12.2010
01.01.-31.12.2010
1,585
10,203
Not consolidated subsidiaries
Business services
Leases
434
156
Internal transactions
-
-
Acquisitions or sales
11
179
Other claims / liabilities
69
105
2,099
10,643
Business services
5,722
26,425
Leases
1,497
798
-
-
860
-
-
-
8,079
27,223
Business services
114
2,507
Leases
Subtotal
Subtotal
Zweckverband Sparkasse KölnBonn and members of the
special-purpose association (Zweckverband)
293
-
-
4
-
860
-
-
407
3,371
Business services
7,421
39,135
Leases
2,224
954
Subtotal
Totals
-
4
871
1,039
69
105
10,585
41,237
Total volume of transactions
Non-consolidated subsidiaries have extended loans to other related entities for a total volume of
EUR 3,137 thousand and received interest of EUR 216 thousand. In addition, non-consolidated
subsidiaries received loans from other related entities of EUR 3,146 thousand and paid interest on
these loans amounting to EUR 153 thousand Associates received loans from other related entities of
EUR 10,205 thousand and paid interest on these loans amounting to EUR 212 thousand.
162
Based on its particular contractual constellation and its economic purpose, one foundation has been
classified as a related entity pursuant to IAS 24.10. Sparkasse KölnBonn has issued a letter of comfort
for this foundation. The contributions to the foundation amount to EUR 1,043 thousand and its lending
volume EUR 26,385 thousand. The net balance of derivative financial instruments comes to a positive
market value of EUR 578 thousand. In addition, irrevocable loan commitments amounted to EUR 400
thousand as of the reporting date.
Transactions according to IAS 24.20 which were entered into with related entities during the prior year
are as follows:
Type of transactions
Payments made
Payments received
01.01.-31.12.2009
01.01.-31.12.2009
Business services
6,146
6,066
Leases
1,676
777
232
636
979
-
3,687
3,375
12,720
10,854
2,184
2,459
-
34
75
81
3,851
-
Not consolidated subsidiaries
Subtotal
Business services
Leases
10,474
2
Subtotal
16,584
2,576
Business services
-
-
Leases
-
318
8
44
-
200
-
-
Subtotal
8
562
Zweckverband Sparkasse KölnBonn and members of the
special-purpose association (Zweckverband)
Totals
Business services
8,330
8,525
Leases
1,676
1,129
315
761
4,830
200
14,161
3,377
Total volume of transactions
29,312
13,992
Please see Note [52] for more information on provisions for risks in connection with related entities.
163
[91]
Related Persons
In addition to transactions with related entities, there are also transactions between Sparkasse
KölnBonn and/or its consolidated entities with key management personnel and their close relatives.
Key management personnel are the Board of Management, the appointed substitutes of the Board of
Management as well as ordinary members of the Supervisory Board and their deputies.
Total remuneration of key management personnel breaks down as follows:
Related persons
31.12.2010
31.12.2009
EUR ’000
EUR ’000
Active members of the Board of Management
2,363
2,573
Former members of the Board of Management and their surviving
dependents
3,170
2,688
Post-employment benefits
3,170
2,688
-
-
604
1,420
Appointed substitutes of the Board of Management
1,022
983
Total
7,159
7,664
Termination benefits
Members of the Supervisory Board
In 2010, total remuneration of all active members of the Board of Management breaks down as follows:
Remuneration paid to active
members of the Board of
Management
Basic salary
Chairman’s fees
Other**)
Total *)
Grzesiek, Artur
450
112
106
668
Gröschel, Ulrich, Dr.
390
-
16
406
Schmalzl, Joachim, Dr.
390
-
29
419
Siemons, Christoph, Dr.
390
-
72
462
Voigt, Ulrich
Total
390
-
18
408
2,010
112
241
2,363
*) This total includes tax (gross amount). Remuneration which is not covered in the normal settlement (e.g. attendance
fees, insurance premiums) is not included in these amounts.
**) Includes non-pecuniary benefits (e.g. use of company cars), one off payments and payments in kind pursuant to § 37b
EStG. No profit bonus was paid in 2010.
Total remuneration includes customary non-cash compensation (such as a company car, the tax and
social security due on non-cash compensation) which is to be treated as a pecuniary benefit as well as
welfare assistance payments. The members of the Supervisory Board received attendance fees
amounting to EUR 375 thousand (prior year: EUR 642 thousand). The attendance fees are not included
in the remuneration paid to members of the Supervisory Board mentioned above and include payments
to members on the payroll of the Group and those not on the payroll.
164
In addition, the Sparkasse KölnBonn Financial Group pays insurance premiums for members of its
Boards. A flat-rate premium of EUR 268 thousand (prior year: EUR 183 thousand) was paid for D&O
insurance for Board members. Furthermore, premiums were paid for group accident insurance. The
premiums paid for members of the Board of Management amount to EUR 1 thousand (prior
year: EUR 1 thousand) and EUR 2 thousand (prior year: EUR 2 thousand) for members of the
Supervisory Board. Sparkasse KölnBonn maintains a retirement benefit plan for members of the Board
of Management and former members of the Board of Management and their surviving dependents. For
more information, please see Note [67] with regard to pension provisions.
Vested benefits for members of the Board of Management amount to EUR 5,295 thousand (prior year:
EUR 4.301 thousand). Current pensions amount to EUR 41,924 thousand (prior year:
EUR 40,395 thousand).
As at 31 December 2010, the total amount of loans and advances granted, guarantees and irrevocable
credit commitments as well as deposits was as follows:
Loans and advances
Guarantees,
irrevocable credit
commitments
Deposits
5,406
48
3,646
665
2
1,596
6,071
50
5,242
Key management personnel
Close relatives
Total
As at the closing date of 31 December 2009, the total amount of loans and advances granted and
deposits was as follows:
Loans and advances
Guarantees,
irrevocable credit
commitments
Deposits
Key management personnel
5,049
593
3,144
Close relatives
1,199
2
1,414
Total
6,248
595
4,558
The public body responsible for Sparkasse KölnBonn, “Zweckverband Sparkasse KölnBonn”, Sparkasse
KölnBonn itself and other fully consolidated related entities paid annual fees, attendance fees and
advisory board remuneration totalling EUR 360 thousand to related parties of Sparkasse KölnBonn in
fiscal year 2010. Related parties of the Sparkasse KölnBonn Financial Group received securities written
by the Bank (bearer bonds, profit participation rights) of EUR 776 thousand in the securities portfolios
of Sparkasse KölnBonn.
Loans to related persons were granted with a maximal maturity up to 2060. Effective interest rates
ranging from 2.5% to 7.7% were agreed for loans to related persons. The secured portion of the loans
to related parties and their family members are almost entirely covered by encumbrances on land.
Loans extended in the course of current account transactions generally display effective interest rates
ranging between 6.1% and 14.6%. Deposits made in the current account business generally bear
effective interest rates in a range of between 0.0% and 1.6%. Other deposits bear interest in a corridor
of between 0.3% and 5.0%. The customary fees were charged on these guarantees in keeping with the
general conditions applying to employees of Sparkasse KölnBonn.
165
[92]
Details on German Covered Bonds (Pfandbriefe)
The changes introduced by the BilMoG (the German Accounting Law Modernization Act) have resulted
in additional disclosures pursuant to the rules on the forms used for Pfandbrief banks. Reference is
made to the annual financial statements of Sparkasse KölnBonn pursuant to HGB for fiscal year 2010
for the corresponding disclosures.
As an issuer of Pfandbriefs (a special German form of covered bonds), Sparkasse KölnBonn is obliged to
comply with the transparency requirements of the German Pfandbrief Act (PfandBG). The following
disclosures are presented broken down into Pfandbriefs covered by mortgages
(Hypothekenpfandbriefe) and public sector covered bonds (Öffentliche Pfandbriefe).
The real loans listed in the register of mortgage coverage (Hypothekendeckungsregister)
(EUR 2,512.68 million, prior year: EUR 3,020.91 million) are reported under Claims on customers in the
statement of financial position. The loans included in the official register of cover for public-sector
bonds (Deckungsregister der Öffentlichen Pfandbriefe) are reported under Claims on customers
(EUR 34.73 million, prior year: EUR 61.87 million) and Claims on banks (EUR 160.11 million, prior year:
EUR 227.61 million) in the statement of financial position. The securities used to cover mortgage bonds
(EUR 470.26 million, prior year: EUR 31.00 million) and the securities used to cover public sector bonds
(EUR 432.00 million, prior year: EUR 822.61 million) are presented in the statement of financial
position under Bonds and other interest-bearing securities.
a)
Mortgage Bonds (Hypothekenpfandbriefe)
In the year 2010, Sparkasse KölnBonn issued covered mortgage bonds with a total face value of
EUR 20.00 million (prior year: EUR 519.69 million).
Details of total amount
Nominal value
Present value
(EUR million)
Total value of Pfandbriefs in circulation
(2009:
Total value in cover pool
1)
(2009:
Excess cover in percent
(2009:
Risk-adjusted
value 2)
Risk-adjusted
value 2)
(shift upwards)
(shift downwards)
1,071.30
1,174.54
1,040.46
1,358.26
1,056.30
1,148.40
1,003.96
1,340.31)
2,982.94
3,224.95
2,981.88
3,485.21
3,051.91
3,276.67
3,005.95
3,583.61)
178.44
174.57
186.59
156.59
188.92
185.32
199.41
167.37)
Security excess cover according to
§ 4 PfandBG in percent
2.83
(2009:
2.87)
1)
There were no derivatives in the cover pool.
2)
Static method in accordance with Pfandbrief Net Present Value Directive (PfandBarwertV).
Details of term structure
Term structure of Pfandbriefs in
circulation
(2009:
Term structure in cover pool
(2009:
x < 1 year
1 year < x < 5
years
5 years < x < 10
years
x > 10 years
501.00
9.00
240.30
321.00
0.00
507.00
209.30
340.00)
401.31
1,326.58
990.18
264.87
324.32
1,165.10
1,283.12
279.37)
166
Total amount of claims used as cover 1)
(EUR million)
by size
Total amount
Prior year
Percentage
share
Prior year
x < EUR 300,000
1,198.84
1,420.56
47.71
47.03
EUR 300,000 < x < EUR 5,000,000
1,144.04
1,309.97
45.53
43.36
169.80
290.38
6.76
9.61
Total amount
Prior year
Percentage
share
Prior year
1,350.61
1.618.48
53.75
53.58
x > EUR 5,000,000
by usage (I) in Germany
Residential
Mixed use
397.86
390.57
15.84
12.93
Commercial
764.21
1,011.86
30.41
33.49
Total amount
Prior year
Percentage
share
Prior year
Apartments
356.78
435.30
14.20
14.41
Single-family properties
427.95
497.24
17.03
16.46
Apartment blocks
565.88
685.94
22.52
22.71
Office buildings
156.26
179.62
6.22
5.95
10.47
33.53
0.42
1.10
2.23
2.38
0.09
0.08
981.57
1,169.02
39.06
38.70
11.54
17.88
0.46
0.59
11.53
17.85
0.46
0.59
by usage (II) in Germany 2)
Commercial property
Industrial property
Other commercially used property
Unfinished new-properties not yet
yielding earnings and building sites
of which building sites
1)
Only normal cover reported.
2)
No property cover located outside Germany.
Substitute cover
Percentage share
According to § 19 PfandBG
2.89
(2009:
of which in cover values according to § 4 Sec. 2 PfandBG
2.93)
2.89
(2009:
Outstanding claims
2.93)
Total amount
(EUR million)
Total amount of claims past due by more than 90 days
-.-(2009:
-.--)
167
Other disclosures
Residential
Prior year
Commercial
Prior year
Number of forced sales and forced
administration judgements pending as at
the reporting date
-.--
-.--
-.--
-.--
Number of forced sales effected in the
fiscal year
-.--
-.--
-.--
-.--
Number of properties taken to avoid
losses
-.--
-.--
-.--
-.--
(EUR million)
Total interest past due
-.--
-.--
-.--
-.--
Total repayments through amortisation
70.94
67.16
29.35
32.49
Total amount of other repayments
81.45
54.35
20.54
27.36
b)
Public Sector Bonds (Öffentliche Pfandbriefe)
In the year 2010, Sparkasse KölnBonn did not issue any public sector bonds (prior year: Pfandbriefs
with a total face value of EUR 14.00 million).
Details of total amount
Nominal value
Present value
(EUR million)
Total value of Pfandbriefs in circulation
(2009:
Total value in cover pool 1)
(2009:
Excess cover in percent
(2009:
Risk-adjusted
value 2)
Risk-adjusted
value 2)
(shift upwards)
(shift downwards)
659.50
720.68
670.43
773.29
800.93
868.32
802.76
939.58)
762.45
828.43
773.86
879.51
1,291.87
1,391.49
1,280.37
1,519.27)
15.61
14.95
15.43
13.74
61.30
60.25
59.50
61.70)
Security excess cover according to
§ 4 PfandBG in percent
4.00
(2009:
3.97)
1)
There were no derivatives in the cover pool.
2)
Static method in accordance with Pfandbrief Net Present Value Directive (PfandBarwertV).
Details of term structure
Term structure of Pfandbriefs in
circulation
(2009:
Term structure in cover pool
(2009:
x < 1 year
1 year < x < 5
years
5 years < x < 10
years
x > 10 years
0.00
520.50
34.00
105.00
137.43
520.50
34.00
109.00)
70.63
577.73
86.02
28.07
149.18
640.28
407.83
94.58)
Cover pool
Total amount
(EUR million)
Total amount of claims used for cover pool
762.45
(2009:
1,291.87)
168
Claims used as cover by state and
borrower categories 1)
State
Regional
government
bodies
Local
government
bodies
Other borrowers
10.00
3.00
0.00
652.72
10.00
33.00
29.98
944.94)
-.--
-.--
-.--
41.00
-.--
-.--
-.--
95.00)
-.--
-.--
-.--
-.--
-.--
40.00
-.--
-.--)
-.--
-.--
-.--
36.00
-.--
-.--
-.--
36.00)
-.--
-.--
-.--
-.--
17.50
5.00
-.--
10.60)
-.--
19.73
-.--
-.--
-.--
16.87
-.--
-.--)
-.--
-.--
-.--
-.--
(2009:
-.--
15.00
-.--
-.--)
-.--
-.--
-.--
-.--
(2009:
15.00
-.--
-.--
-.--)
-.--
-.--
-.--
-.--
10.00
-.--
-.--
-.--)
-.--
-.--
-.--
-.--
-.--
10.00
-.--
-.--)
-.--
-.--
-.--
-.--
-.--
2.98
-.--
-.--)
-.--
-.--
-.--
-.--
-.--
-.--
-.--
-.--)
(EUR million)
Federal Republic of Germany
(2009:
Austria
(2009:
Spain
(2009:
Ireland
(2009:
Greece
(2009:
Switzerland
(2009:
Canada
Czech Republic
Poland
(2009:
Portugal
(2009:
Italy
(2009:
Hungary
(2009:
1)
Only normal cover reported.
Substitute cover
Percentage share
According to § 20 Sec. 2 PfandBG
-.-(2009:
of which highest claim
-.--)
-.--
(2009:
Outstanding claims
-.--)
Total amount
(EUR million)
Total amount of claims past due by more than 90 days
-.-(2009:
-.--)
169
[93]
Average Number of Employees
Annual average headcount of the Sparkasse KölnBonn Financial Group:
2010
2009
Full-time employees
3,117
3,257
Part-time employees and casual workers
1,447
1,462
4,564
4,719
217
229
4,781
4,948
Trainees
Total
[94]
Auditors’ Fees
Pursuant to §24 Sec. 3 and §34 of the Savings Bank Act of North Rhine-Westphalia from
18 November 2008 and §340k HGB, the Prüfungsstelle des Rheinischen Sparkassen- und Giroverbands,
Düsseldorf, is the legal auditor of Sparkasse KölnBonn. It is also the statutory auditor of the
consolidated financial statements. In the reporting year fees for the audit of the annual financial
statements of Sparkasse KölnBonn prepared in accordance with the HGB as well as for the audit of the
consolidated financial statements of the Sparkasse KölnBonn Financial Group pursuant to IFRS were
accounted for as follows:
2010
2009
1,244
1,028
114
142
3
-
1,361
1,170
Fees for
Audit of the financial statements
Other audit and valuation services
Other services
Total
170
[95]
Shareholdings
Pursuant to §315a Sec. 1 HGB in connection with §313 Sec. 2 HGB, the Sparkasse KölnBonn Financial
Group has to prepare an overview of its shareholdings (list of shareholdings). This list of shareholdings
is published in the consolidated financial statements.
The following table shows the shareholdings of the Sparkasse KölnBonn Financial Group including
investments in associates in the sense of §313 Sec. 2 No 2 HGB in alphabetical order.
a) Affiliated companies included in the consolidated financial statements
Name and headquarters of the company
Percentage
share
Differing voting
rights
Equity in
EUR ‘000
Result in
EUR ‘000
Fiscal year
BioCampus Cologne Grundbesitz GmbH &
Co. KG, Cologne 1) 13)
100.0
-
1,533.3
-856.0
2010
94.9
-
409.3
142.1
2010
EUROFORUM
Grundstücksentwicklungsgesellschaft
mbH & Co. KG, Cologne 1) 14)
100.0
-
24,210.4
-714.0
2010
GKS – Gesellschaft für KontoService mbH,
Cologne 1)
100.0
-
1,178.1
9.1
2010
GSE Grundstücksentwicklungsgesellschaft
mbH & Co. KG, Cologne 1)
51.0
-
-7,890.1
3,084.3
2010
HC Bauprojektentwicklung GmbH & Co.
KG, Cologne 1) 13)
100.0
-
-1,538.3
-495.8
2010
MMC Independent GmbH, Cologne 1) 14)
100.0
-
-1,791.5
1,078.7
2010
MAGIC MEDIA COMPANY TV Produktionsgesellschaft mbH, Cologne 1)
14)
100.0
-
6,779.4
-170.9
2010
Paglos
Grundstücksverwaltungsgesellschaft mbH
& Co. Objekt Friedensplatz KG, Pöcking
100.0
30.0
17,005.0
-21.0
2010
S RheinEstate Grundbesitz GmbH & Co.
KG, Cologne 9)
100.0
-
7,903.6
-11,765.3
2010
SAVOR Verwaltung GmbH & Co. Objekt
Kalk KG, Cologne 1) 13)
100.0
-
-26,153.7
-7,135.9
2010
SK Equity Investment GmbH & Co. KG,
Cologne 1)
100.0
-
60,842.2
103.1
2010
S MittelstandsKapital KölnBonn GmbH,
Cologne 10)
100.0
-
10,844.3
422.1
2010
SKB Invest GmbH & Co. KG, Cologne
100.0
-
53,159.7
895.1
2010
SKB Kapitalbeteiligungsgesellschaft
KölnBonn mbH, Cologne 9)
100.0
-
-8,764.4
-11,631.8
2010
SKBI Beteiligungsgesellschaft mbH & Co.
KG, Cologne 1)
100.0
-
52,809.0
863.5
2010
SKI Standort Köln-Immobilien GmbH & Co.
KG, Cologne 1)
100.0
-
24,662.4
-4,595.3
2010
Objekt Gottfried-Hagen-Strasse KG,
Cologne 1) 13)
100.0
-
-240.9
-1,127.0
2010
Objekt Im MediaPark KG, Cologne 1) 13)
100.0
-
-1,038.7
-216.9
2010
Projekt Butzweilerhof KG, Cologne 1) 9)
13)
100.0
-
7,169.9
-2,834.8
2010
Campus Grundstücksentwicklungsgesellschaft mbH i. L., Cologne 1)
171
Percentage
share
Differing voting
rights
Equity in
EUR ‘000
Result in
EUR ‘000
Fiscal year
S-ProFinanz KölnBonn GmbH, Cologne 1)
100.0
-
615.2
15.2
2010
SRE GmbH & Co. Immobilien Bonn KG,
Bonn
100.0
-
13,335.0
535.0
2010
b) Associates and joint ventures included in the consolidated financial statements
Percentage
share
Differing voting
rights
Equity in
EUR ‘000
Result in
EUR ‘000
Fiscal year
CORPUS SIREO Holding GmbH & Co. KG
Group, Cologne 1) 6) (associate)
25.0
-
137,628.0
6,999.0
2010
Kredit-Serviceagentur Rheinland in
Siegburg GmbH & Co. KG, Siegburg (joint
venture) 13)
55.0
-
4.2
0.0
2010
c) Affiliated companies not included in the consolidated financial statements
Percentage
share
Differing voting
rights
Equity in
EUR ‘000
Result in
EUR ‘000
Fiscal year
BioCampus Cologne Management GmbH,
Cologne 1)
100.0
-
27.2
0.9
2009
Burg Hemmersbach Betreibergesellschaft
mbH, Kerpen 1) 7)
100.0
-
-572.4
0.0
2009
Campus Zwo Projektentwicklungsgesellschaft mbH i. L., Cologne 1)
100.0
-
-14.2
-36.8
2008
EUROFORUM Verwaltung GmbH, Cologne
1)
100.0
-
60.2
3.7
2009
EWF Immobilien-Beteiligungsgesellschaft
mbH, Cologne 1) 4)
76.0
-
1,672.6
91.0
2009
HC Bauprojektentwicklung Verwaltung
GmbH, Cologne 1)
100.0
-
89.1
5.7
2009
KOPOR Grundbesitzverwaltung GmbH,
Cologne 1) 2) 13)
92.5
-
77.5
7.3
2009
KSA Verwaltungsgesellschaft mbH,
Siegburg 13)
55.0
-
31.4
1.5
2009
MMC Medienproduktions- und
Dienstleistungs GmbH, Cologne 1) 14)
100.0
-
20.6
-0.4
2009
Pilgrim Zweite Vermögensverwaltungsgesellschaft mbH, Cologne 4)
100.0
-
-49.3
-30.1
2009
ProBonnum GmbH, Bonn
100.0
-
4,530.7
30.7
2009
professional eservices GmbH i.L., Cologne
1) 7)
100.0
-
554.9
0.0
2009
rheinlandmobil GmbH, Cologne 1)
100.0
-
-41.8
-50.7
2009
S RheinEstate GmbH, Cologne
100.0
-
907.1
396.1
2009
SAVOR Verwaltung GmbH, Cologne 1) 13)
100.0
-
34.0
-0.4
2009
SK Equity Investments Verwaltung GmbH,
Cologne 1)
100.0
-
34.9
0.0
2009
SK Leasing Invest GmbH, Cologne
100.0
-
23.3
-0.1
2009
SKI Standort Köln-Immobilien Verwaltung
GmbH, Cologne 1)
100.0
-
44.6
3.7
2009
172
d) Associates and investments not included in the consolidated financial statements
Name and headquarters of the
company
Percentage
share
Differing voting
rights
Equity in
EUR ‘000
Result in
EUR ‘000
Fiscal year
AV-Gründerzentrum NRW GmbH,
Cologne 1)
22.7
-
50.0
0.0
2009
AWG Anlagegesellschaft für
Wohnungsbau und Grundbesitz
Stommeln mbH & Co. KG, Pulheim 1)
50.0
-
439.2
76.5
2009
BonnCasa GmbH, Bonn 1)
25.0
-
-113.0
-39.1
2009
CORPUS SIREO Holding GmbH, Cologne
1)
25.0
-
76.6
6.8
2009
Erwerbsgesellschaft der S-Finanzgruppe
mbH & Co. KG, Neuhardenberg 11) 13)
3.2
-
6,085,591.3
-140,523.2
2010
EWF2 Immobilien-Beteiligungsgesellschaft mbH, Grünwald 1)
49.8
-
782.9
-9.2
2009
GAG Immobilien AG, Cologne 1) 3) 6) 13)
10.5
-
443,892.0
31,044.6
2009
GID Gewerbeimmobilien Deutschland
GmbH, Cologne 1)
49.4
-
27.0
0.0
2009
Golding Capital 2 GmbH & Co. KG,
Munich 1)
45.0
-
9,080.7
1,165.4
2009
Grund und Boden GmbH, Cologne 2) 3)
7) 13)
16.2
-
139,367.4
0.0
2009
IAK Dritte Immobilienfonds Köln GmbH,
Cologne 1)
49.4
-
25.8
1.0
2009
IAK Immobilienfonds Köln GmbH,
Cologne 1)
49.4
-
27.4
0.0
2009
IAK Vierte Immobilienfonds Köln GmbH,
Cologne 1)
49.4
-
28.4
-0.1
2009
IAK Zweite Immobilienfonds Köln GmbH,
Cologne 1)
49.4
-
30.2
0.0
2009
IDEENKAPITAL Media Finance AG,
Düsseldorf 1)
25.3
-
106.7
126.1
2009
IS Integrated Solutions GmbH, Cologne
1)
30.2
-
454.8
93.9
2009
mbw Mittelstandsberatung GmbH,
Cologne 1)
50.0
-
76.5
21.8
2009
moderne stadt Gesellschaft zur
Förderung des Städtebaues und der
Gemeindeentwicklung mbH, Cologne 1)
13)
50.0
-
3,269.7
-1,496.3
2009
modernes köln Gesellschaft für
Stadtentwicklung mbH, Cologne 1)
25.0
-
4,039.5
-40.5
2009
msk-colonia Projektentwicklungsgesellschaft mbH, Cologne 1) 13)
29.0
-
284.8
761.7
2009
MUK Kapitalbeteiligungsgesellschaft
mbH i. L., Cologne 1)
43.3
-
2,662.2
-569.7
2009
PROCONSIL GmbH & Co. KG, Bonn 1)
20.0
-
52.0
22.9
2009
PROCONSIL Verwaltungs GmbH, Bonn 1)
20.0
-
28.6
1.0
2009
Projektentwicklungsgesellschaft acht bis
elf mbH, Cologne 1)
49.0
-
51.9
31.4
2009
Prosystems IT GmbH, Bonn 11)
26.4
-
4,745.8
1,745.8
2010
Rathaus-Carrée Saarbrücken
mbH & Co. KG, Cologne 1)
20.0
-
119.6
-10.8
2009
Rathaus-Carrée Saarbrücken
Verwaltung mbH i.L., Cologne 1)
20.0
-
103.0
4.3
2009
173
Name and headquarters of the
company
Percentage
share
Differing voting
rights
Equity in
EUR ‘000
Result in
EUR ‘000
Fiscal year
Region Köln/Bonn-Sparkassen-GbR,
Cologne 8)
33.3
-
5.0
0.0
2009
Rheinland Venture Capital GmbH & Co.
KG, Cologne 1)
20.0
-
2,596.8
-100.2
2009
Rheinwerk 2 GmbH, Bonn 1)
37.0
-
-391.6
188.9
2009
RSL Rheinische Sparkassen Leasing
Beteiligungsgesellschaft mbH & Co. KG,
Düsseldorf 1) 11) 13)
18.4
16.7
104,634.3
4,496.7
2010
RSOB Rheinische Sparkassen OnlineBroker Beteiligungsgesellschaft mbH &
Co. KG, Düsseldorf
22.5
19.7
-7.8
-7.8
2009
RTZ Rechtsrheinisches Technologie- und
Gründerzentrum Köln GmbH, Cologne 1)
13)
49.6
-
-818.2
-126.2
2009
Schumannstraße Bonn
Immobiliengesellschaft mbH, Bonn 1)
49.0
-
173.6
21.2
2009
Sparkassen-Servicegesellschaft für
Zahlungssysteme und elektronische
Vertriebskanäle mbH & Co. KG,
Düsseldorf 1) 13)
2.9
-
5,381.7
3,528.4
2009
Sparkassen Dienstleistung Rheinland
Beteiligungsgesellschaft mbH,
Düsseldorf
25.0
-
114.8
4.9
2009
Sparkassen Dienstleistung Rheinland
GmbH & Co. KG, Düsseldorf
24.9
-
11,999.4
43.1
2009
Stadtwerke Investitions Gesellschaft
mbH i. L., Düsseldorf 1)
10.0
-
9,104.1
-940.1
2009
VEMAG Verlags- und Medien AG,
Cologne 1) 6) 14)
24.9
-
15,529.9
4,700.5
2009
Verkäufer GbR Köln Arcaden, Essen 1)
21,3
-
n.a.
n.a.
n.a.
VISION Chancenkapital Gesellschaft der
Sparkassen in der Region Bonn/RheinSieg/Ahrweiler mbH & Co. KG i. L., Bonn
40.0
-
1,415.8
-388.2
2009
VISION Chancenkapital
Verwaltungsgesellschaft der Sparkassen
in der Region Bonn/RheinSieg/Ahrweiler mbH i. L., Bonn
50.0
-
38.5
1.0
2009
WMD Medical Software GmbH, Erkelenz
1) 12)
33.1
-
-5,845.4
-3,557.4
2000
WMO-Erste Entwicklungsgesellschaft
mbH & Co. KG, Bonn 1)
49.8
-
-7.497.8
556.4
2009
1) Indirect holding
2) Including shares held indirectly
3) Reporting according to § 340a Sec. 4 No 2 HGB
4) including trusts
5) If SKB holds directly or indirectly more than 50.0% of an entity via subsidiaries, the share percentages of nonsubsidiaries are also added to.
6) Consolidated financial statements
7) Profit and loss transfer agreement
8) Disclosure pursuant to §285 No 11a HGB
9) A letter of comfort has been issued
10) Former SK Unternehmensbeteiligungsgesellschaft Köln mbH, change of company name in 2010
11) The fiscal year deviates from the calendar
12) Company in liquidation
13) There is an intent to dispose of this entity in accordance with IFRS 5 in fiscal year 2011
14) There is an intent to dispose of this entity in accordance with IFRS 5 in fiscal year 2012
174
[96]
Letters of Comfort
Sparkasse KölnBonn has issued letters of comfort to the following related entities in the sense of IAS
24.9. Hereby it has made a commitment to ensure that the beneficiary companies are able to meet their
contractual obligations with the exclusion of any losses due to political risks.
All identifiable risks in connection with these companies have been accounted for in the consolidated
financial statements.
Beneficiary
SKB Kapitalbeteiligungsgesellschaft KölnBonn mbH
S RheinEstate Grundbesitz GmbH & Co. KG
SKI Standort Köln-Immobilien GmbH & Co. Projekt Butzweilerhof KG
175
Supervisory Board
[97]
Board Members
Supervisory Board of Sparkasse KölnBonn until 7 February 2010
Chairman
Members
Deputy Members
Martin Börschel
Member of the
North Rhine-Westphalia Regional
Parliament
Private-practice lawyer
Graduate in Law
Götz Bacher
Of independent means
Telecommunications technician
Johannes Waschek
Of independent means
Fitter and turner / mechanical
engineering technician
Michael Baedorf
Employee of Sparkasse KölnBonn
Staff representative
Banker
Qualified in savings bank business
management
Daniel Falterbaum
Banker
management
Jürgen Biskup
Banker
management
Frank Ewald
Banker
Graduate in Business
Administration
Guido Déus
Civil Servant
Bundesanstalt für
Immobilienaufgaben
Graduate in Finance
Herbert Kaupert
Graduate in Law
Konrad Dröschel
Banker
Josef Breitbach
Banker
Graduate in savings bank business
management
Jörg Frank
Consultant at SAP
HDI-Gerling Leben
Betriebsservice GmbH
(until 31.03.2010)
Manager of the Bündnis 90/Die
Grünen group in the Council of the
City of Cologne
Andreas Wolter
Controller
BRUNATA WärmemesserGesellschaft Schultheiss
GmbH & Co.
Graduate in Business Studies
Ursula Gärtner
Head of Department
Landschaftsverband Rheinland
Graduate in Economics
Andreas Köhler
Managing Director of
Köhler GmbH & Co. KG
Graduate in Business Engineering
Herbert Gey
Pensioner
Qualified insurance agent
Margret Dresler-Graf
Housewife
Graduate in Administration
Winrich Granitzka
Retired police superintendant
Management consultant
Granitzka Security Consult GmbH
Dr. Michael Paul
Official at the Federal Ministry
of the Environment,
Conservation and Reactor Safety
Graduate in Law
First Deputy Chairman:
Wilfried Klein
Teacher
Managing Director of the
Willi-Eichler-Bildungswerk
(Educational Organisation)
Second Deputy Chairman:
Winrich Granitzka
176
Supervisory Board
Members
Deputy Members
Walter Grau
Pensioner
Graduate in Engineering
Telecommunications
Karsten Möring
Teacher
State of North Rhine-Westphalia
Benedikt Hauser
Divisonal Manager
Commerce and HR
Regionalverkehr Köln GmbH
Graduate in Law
Wolfgang Maiwaldt
Pensioner
High-frequency specialist
Werner Hümmrich
Banker
management
Rolf Brief
Banker
management
Axel Kaske
Pensioner
Qualified in business administration
Walter Kluth
Teacher
Rudolf Kipp
Banker
management
Andreas Brünjes
Banker
management
Wilfried Klein
Teacher
Rolf Eichenhorst
Civil Servant of the
Purchasing Office in the
Federal Ministry of Internal Affairs
Graduate in Engineering
Karl Jürgen Klipper
Self-employed tax consultant
Administration
Henricus van Benthem
Self-employed insurance agent
Qualified insurance agent
Irmgard Kroll
Product Manager
Prosystems IT GmbH
Banker
Rainer Schulten
Banker
management
Rudolf Mertens
Banker
management
Hans-Jürgen Vogt
Banker
management
Inge Mohr
Doris Kemen
Banker
177
Supervisory Board
Members
Deputy Members
Barbara Moritz
Teacher
Elisabeth Thelen
Commercial employee
RheinEnergie AG
Teacher
Markus Pohl
Banker
management
Jürgen Didschun
Banker
management
Bärbel Richter
Employee of the Archive of Social
Democracy of the Friedrich-EbertStiftung
Archivist
Erika Coché
Equal Opportunities Officer
at the City of Niederkassel
Graduate in Social Education Work
Tom Schmidt
Manager of Bündnis 90/Die Grünen
group in the Council of the
Federal City of Bonn
Brigitta Poppe
Senior Agricultural Commissioner
Dienstleistungszentrum
Ländlicher Raum WesterwaldOsteifel
Graduate Dietician
Dieter Steffens
Pensioner
Retired soldier
Karl-Wilhelm Starcke
Academic Employee
Fraunhofer Institut für sichere
Informationstechnologie
Banker
Ralph Sterck
Chief Manager of the North
Rhine-Westphalia FDP
Administration
Reinhard Houben
Managing Director of Arnold
Houben GmbH
Administration
Michael Zimmermann
Administrative officer
Manager of the SPD group in the
Council of the City of Cologne
Graduate in Literature
Monika Möller
Teacher
178
Supervisory Board
Supervisory Board of Sparkasse KölnBonn from 8 February 2010
Chairman
Members
Deputy Members
Martin Börschel
Member of the
Parliament
Graduate in Law
Dr. Karlheinz Bentele
Retired President of RSGV
Retired State Secretary
Graduate in Public Administration
Götz Bacher
Pensioner
Jürgen Biskup
Banker
management
Renate Beauboir-Nink
Qualified in retail business
management
Rolf Brief
Banker
management
Inge Mohr
Teacher
Guido Déus
Civil Servant
Bundesanstalt für
Immobilienaufgaben
Graduate in Finance
Herbert Kaupert
Graduate in Law
Jürgen Didschun
Banker
management
Michael Baedorf
Banker
management
Jörg Frank
Consultant at SAP
HDI - Gerling Leben
Betriebsservice GmbH
(until 31.03.2010)
City of Cologne
Andreas Wolter
Controller
GmbH & Co.
Winrich Granitzka
Anna-Maria Henk-Hollstein
Self-employed qualified in business
administration
Qualified in tax and business
consulting
Werner Hümmrich
Banker
management
Johannes Klemmer
Banker
management
Irmgard Kroll
Product Manager
Prosystems IT GmbH
Banker
Rainer Schulten
Banker
management
Guido Déus
Civil Servant
Bundesanstalt für
Immobilienaufgaben
Graduate in Finance
Winrich Granitzka
179
Supervisory Board
Chairman
Members
Deputy Members
Rudolf Mertens
Banker
management
Markus Pohl
Banker
management
Barbara Moritz
Teacher
Kirsten Reinhardt
Freelance business journalist
Administration
Prof. Dr. Karl Mosler
Professor
University of Cologne
Graduate in Mathematics
Ursula Gärtner
Head of Department
Bärbel Richter
Archivist
Wilfried Klein
Teacher
Tom Schmidt
Brigitta Poppe
Dienstleistungszentrum Ländlicher
Raum Westerwald-Osteifel
Graduate Dietician
Dieter Steffens
Pensioner
Retired soldier
Brigitta Jackel
Head of Department
Galeria Kaufhof GmbH
Ralph Sterck
Administration
Reinhard Houben
Houben GmbH
Administration
Michael Zimmermann
Axel Kaske
Pensioner
180
Supervisory Board
Supervisory Board of Sparkasse KölnBonn from 1 January 2011
Chairman
Members
Deputy Members
Martin Börschel
Member of the
Parliament
Graduate in Law
Dr. Karlheinz Bentele
Retired President of RSGV
Retired State Secretary
Graduate in Public Administration
Götz Bacher
Pensioner
Klaus Bersch
Head of Administration of
Rheinischer
Landwirtschafts-Verband e. V.
and Rheinischer LandwirtschaftsVerlag GmbH
Qualified accountant (IHK)
Brigitta Jackel
Head of Department
Galeria Kaufhof GmbH
Guido Déus
Civil Servant
Bundesanstalt für
Immobilienaufgaben
Graduate in Finance
Jürgen Biskup
Banker
management
Renate Beauboir-Nink
Qualified in retail business
management
Winrich Granitzka
Rolf Brief
Banker
management
Inge Mohr
Teacher
Guido Déus
Civil Servant
Bundesanstalt für
Immobilienaufgaben
Graduate in Finance
Dieter Steffens
Pensioner
Retired soldier
Jürgen Didschun
Banker
management
Michael Baedorf
Banker
management
Winrich Granitzka
Anna-Maria Henk-Hollstein
Self-employed qualified in business
administration
Qualified in tax and business
consulting
Werner Hümmrich
Banker
management
Johannes Klemmer
Banker
management
Irmgard Kroll
Product Manager
Prosystems IT GmbH
Banker
Rainer Schulten
Banker
management
181
Supervisory Board
Chairman
Members
Deputy Members
Rudolf Mertens
Banker
management
Markus Pohl
Banker
management
Barbara Moritz
Teacher
Jörg Frank
City of Cologne
Prof. Dr. Karl Mosler
Professor
University of Cologne
Graduate in Mathematics
Ursula Gärtner
Head of Department
Bärbel Richter
Archivist
Wilfried Klein
Teacher
Tom Schmidt
Brigitta Poppe
Dienstleistungszentrum Ländlicher
Raum Westerwald-Osteifel
Graduate Dietician
Ralph Sterck
Administration
Reinhard Houben
Houben GmbH
Administration
Martin Wambach
the auditing and tax consulting
company Rödl & Partner GbR,
Administration
Public auditor
Tax consultant
Environmental verifier
Andreas Wolter
Controller
GmbH & Co.
Michael Zimmermann
Axel Kaske
Pensioner
182
Board of Management
Board of Management of Sparkasse KölnBonn
Chairman
The following Board members and employees of
Sparkasse KölnBonn are members of the
Supervisory Boards of public and private limited
companies in accordance with § 340a Sec. 4 No 1
HGB:
Artur Grzesiek
Members
Dr. Ulrich Gröschel (until 31 December 2011)
Dr. Joachim Schmalzl
Board of Management
Artur Grzesiek
Ulrich Voigt
Dr. Christoph Siemons
—
Member of the Supervisory Board of
Landesbank Berlin Holding AG
—
Landesbank Berlin AG
Ulrich Voigt
—
Vereinigte Bonner Wohnungsbau AG
Employees
Dr. Gereon Sommerhäuser
—
GAG Immobilien AG (until 31.08.2010)
Responsibility Statement of the Board of Management in accordance with §37y No. 1 WpHG in
conjunction with §297 Sec. 2 Clause 4 and §315 Sec. 1 Clause 6 HGB:
To the best of our knowledge, and in accordance with the applicable reporting principles, the Group
Financial Statements give a true and fair view of the assets, liabilities, financial position and profit and
loss of the Group and the Group Management Report includes a fair review of the development and
performance of the business and the position of the Group together with a description of the principal
opportunities and risks associated with the expected development of the Group.
Sparkasse KölnBonn
The Board of Management
Grzesiek
Dr. Schmalzl
Dr. Gröschel
Dr. Siemons
Voigt
183
Auditors’ Report
Auditors’ Report
We have audited the consolidated financial statements prepared by Sparkasse KölnBonn, comprising
the statement of financial position, the statement of comprehensive income, the statement of changes
in equity, the cash flow statement and the notes to the consolidated financial statements, together with
the group management report for the business year from 1 January 2010 to 31 December 2010. The
preparation of the consolidated financial statements and the group management report in accordance
with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant
to § 315a Sec. 1 HGB (German Commercial Code) are the responsibility of the Board of Management of
Sparkasse KölnBonn. Our responsibility is to express an opinion on the consolidated financial
statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB
(German Commercial Code) and German generally accepted standards for the audit of financial
statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we
plan and perform the audit such that misstatements materially affecting the presentation of the net
assets, financial position and results of operations in the consolidated financial statements in
accordance with the applicable financial reporting framework and in the group management report are
detected with reasonable assurance. Knowledge of the business activities and the economic and legal
environment of the Group and expectations as to possible misstatements are taken into account in the
determination of audit procedures. The effectiveness of the accounting-related internal control system
and the evidence supporting the disclosure in the consolidated financial statements and the group
management report are examined primarily on a test basis within the framework of the audit. The audit
includes assessing the annual financial statements of those entities included in consolidation, the
determination of entities to be included in consolidation, the accounting and consolidation principles
used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements and the group management report. We believe that our audit
provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with
IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a
Sec. 1 HGB and give a true and fair view of the net assets, financial position and results of operations of
the Group in accordance with these requirements. The group management report is consistent with the
consolidated financial statements and as a whole provides a suitable view of the Group’s position and
suitably presents the opportunities and risks of future development.
Without however qualifying this opinion, we make reference to the comments of the Board of
Management in the group management report. There, in the risk report, a reference is made to legal
risks relating to a loan exposure of an aggregate amount of EUR 113.0 million at present as well as a
number of individual exposures to fund participation in numerous funds that could have an impact on
the recoverability of the receivables. We would like to emphasize that the evaluation of legal risks,
although the assessment made by Sparkasse KölnBonn can be verified, contains a major degree of
uncertainty.
Düsseldorf, 20 September 2011
Auditing Body of the Rhineland Savings Bank and Giro Association
(Prüfungsstelle des Rheinischen Sparkassen- und Giroverbandes)
Theemann
(Wirtschaftsprüfer)
(German Public Auditor)
Langer
(Wirtschaftsprüfer)
(German Public Auditor)
184
In fiscal year 2010 the Supervisory Board performed the duties incumbent upon it by law and under the
Bank’s articles, and constantly monitored the activities of the Board of Management of Sparkasse
KölnBonn and advised it on all important issues. At a total of thirteen meetings the Board of
Management informed the Supervisory Board on an ongoing basis both in writing and verbally about
the business development, financial position, the risk situation and the risk management of Sparkasse
KölnBonn. At its meetings, the Supervisory Board passed the resolutions required of it by law.
The latest issues were discussed in regular discussions between the Chairman of the Supervisory Board
and the Chairman of the Board of Management of Sparkasse KölnBonn. In addition, these issues were
discussed at eight meetings of the presiding committee of the Supervisory Board (composed of the
Chairman and his First and Second Deputy) and the Chairman of the Board of Management as well as, in
some cases, the Lord Mayors of the Cities of Cologne and Bonn. Thereafter the issues were addressed
at the meetings of the full Supervisory Board.
Focus of the Supervisory Board’s Activities
The Supervisory Board reconstituted after the municipal elections in 2009 and created its committees.
In fiscal year 2010, the Supervisory Board continued to focus a lot of its attention on the investigations
of the EU Commission into the inappropriate use of state aid against the Federal Republic of Germany
and Sparkasse KölnBonn. The conclusions of the investigation pertaining to the Supervisory Board
have already been implemented in due time (increase in the number of external members on the
Supervisory Board, restructuring of committees, etc.). Moreover, the Supervisory Board has
accompanied measures that are within the sphere of the Board of Management of Sparkasse KölnBonn.
Special issues were intensively addressed in 2010 at numerous meetings.
In particular, the Group’s activities concerning various contracts with consultants and service providers
as well as the Rheinparkmetropole development were repeatedly the subject of discussions and
decisions of the Supervisory Board in 2010.
At a number of meetings, the Supervisory Board addressed the reporting duties of Sparkasse KölnBonn
arising from the Transparency Act of the State of North Rhine-Westphalia.
The risk position of the Bank was discussed intensively by the Supervisory Board on the basis of the
regular reports submitted to the Supervisory Board on the risk situation at the Bank.
The Supervisory Board addressed the issue of WestLB and DekaBank at a number of meetings in 2010.
The goal here was to find sustainable solutions for Sparkasse KölnBonn together with its partners in
the savings banks organisation.
The regular reports to the Supervisory Board in accordance with the provisions of MaRisk
(Mindestanforderungen an das Risikomanagement der Kreditinstitute: the minimum requirements for
risk management at financial institutes) were presented to the quarterly meetings of the Supervisory
Board and were the subject of in-depth discussion at its meetings. In the process, great focus was
placed on the risk tolerance of the Bank.
Training Opportunities for Members of the Supervisory Board
Training offered to members of the Supervisory Board was continued with the members attending a
number of seminars hosted by the Rhineland Savings Bank and Giro Association as well as a seminar
for professionals offered by the Federal Financial Supervisory Authority.
Activities of the Internal Audit
Within the framework of the instructions issued by the Supervisory Board, the Internal Audit carried out
inspections of all business lines of Sparkasse KölnBonn and selected subsidiaries without forward
announcement and as scheduled. In the process, the main focus was placed on the functioning of the
internal control system, the orderliness, effectiveness and efficiency of operating procedures and
processes and the monitoring of the lending business. In the reporting year, the Supervisory Board was
informed of the activities of the Internal Audit in fiscal year 2009. In addition, the Internal Audit clarified
the special issues in the reporting year. The Supervisory Board was informed of the respective findings.
185
Audit and Attestation of the Consolidated Financial Statements for Fiscal Year 2010
The Audit Committee of Rheinischer Sparkassen- und Giroverband (RSGV), Düsseldorf, audited the
Consolidated Financial Statements of the Sparkasse KölnBonn Financial Group, as required by law. They
confirmed that the Consolidated Financial Statements comply with legal provisions. The Consolidated
Financial Statements - including the statement of comprehensive income, the consolidated statement
of financial position, the statement of changes in equity, the cash flow statement and the notes – and
the Group Management Report presented for audit purposes by the Board of Management were given
an unqualified opinion.
At the recommendation of the Audit Committee, the Supervisory Board has approved the Consolidated
Financial Statements for fiscal year 2010.
The Supervisory Board would like to express its gratitude and acknowledgement to the Board of
Management and all employees for their services during the year.
Chairman of the
Supervisory Board of Sparkasse KölnBonn
Martin Börschel
186
187
Address:
Sparkasse KölnBonn
Hahnenstrasse 57
50667 Cologne
Postal address:
Sparkasse KölnBonn
50604 Cologne
Contact:
Phone: 0221/226-0
Fax: 0221/226-400400
Email: [email protected]
Commercial Register:
District Court of Cologne HRA 7961
VAT Identification Number pursuant to § 27a UStG:
DE 122661493
Bank Code: 370 501 98
SWIFT Code: COLSDE333

Sparkasse KölnBonn Sparkasse KölnBonn Financial Group

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