Annual Report - HSH Nordbank

Transcription

Annual Report
2000
Annual Report 2000
Head Office:
20095 Hamburg,
Gerhart-HauptmannPlatz 50
Representative
Offices:
10117 Berlin,
Mohrenstraße 42
19053 Schwerin,
Heinrich-MannStraße 18
Hanoi,
Unit 27, 2/F
Regus Centre
63, Ly Thai To Street
Shanghai 200120,
29/F China Insurance
Building
166, Lu Jia Zui East Road
Pudong
2
Branches:
Subsidiaries:
London EC2M 6XB,
Moorgate Hall,
155 Moorgate
Hamburgische Landesbank
(Guernsey) Limited
Elizabeth House,
Les Ruettes Brayes,
St. Peter Port GY1 1EW,
Guernsey
Hong Kong,
26th. Floor
Cheung Kong Center
2, Queen’s Road
Central
Hamburgische LB Finance
(Guernsey) Limited
Arnold House,
St. Julian’s Avenue,
Singapur 039190,
3, Temasek Avenue #32-03 St. Peter Port GY1 3DA,
Guernsey
Centennial Tower
Hamburgische Landesbank 2000
Bank
Group
end 2000
% change
€ million against 1999
end 2000
% change
€ million against 1999
Total assets
80,725
8.6
85,635
9.2
Volume of business
94,144
11.7
97,581
10.1
Loan volume
90,264
11.4
93,480
9.7
Receivables from customers
33,473
3.6
38,170
3.8
Receivables from banks
19,199
8.7
19,331
12.2
Securities portfolio
24,545
14.5
25,117
14.5
Debt securities issued
13,613
15.7
16,927
24.9
Liabilities to customers
22,810
13.5
23,497
13.6
Liabilities to banks
32,216
-3.4
31,919
-5.7
4,931
13.1
5,657
11.3
Operating result before risk provisions
419
24.7
424
25.8
Dividend payout on dormant equity holding
124
100.0
124
100.0
55
10.0
60
17.6
2,132
7.9
2,394
7.0
Equity capital
Balance sheet profit 1)
Staff
1)
Including share of dormant partner.
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Annual Report 2000
Foreign trade has always played an essential role for Hamburg’s economy.
Accordingly, Hamburgische Landesbank’s clientele is very international in
nature (the picture shows the main entrance at Gerhart-Hauptmann-Platz of
Hamburgische Landesbank). This is also reflected in our business activities, as
illustrated in this year’s special topic on the development of our presence
beyond Germany. In supplementation, we have also dedicated the illustrations
of our Annual Report to our foreign Branches and Representative Offices.
4
Index
Page
Board of Managing Directors
6
Board of Managing Director’s Report
On General Economic Development
9
Management and Group Management Report
of Hamburgische Landesbank
19
Hamburgische Landesbank in the Markets
Hamburgische Landesbank’s Operating Bases Abroad
55
2000 Annual Accounts
Condensed Balance Sheet as at 31 December 2000, Bank
64
Condensed Profit and Loss Account
for the Period from 1 January to 31 December 2000, Bank
66
Condensed Balance Sheet as at 31 December 2000, Group
68
for the Period from 1 January to 31 December 2000, Group
70
Condensed Appendix
73
Auditor’s Certificate
107
Proposal for the Application of Profits
108
Report of the Supervisory Board
109
Report of the Shareholder’s Assembly
110
5
Annual Report 2000
Board of Managing Directors
Alexander Stuhlmann
Chairman
Peter Rieck
Deputy Chairman
Christian Baldenius
(until 10/4/2000)
Ulf Gänger
Uwe Kruschinski
Hartmut Strauß
(Deputy Member as of 1/4/2000 until 31/3/2001)
6
With a share of total foreign trade meanwhile amounting to one sixth, Asia
has always been a prominent partner for Hamburg’s importers and exporters.
We have already had a presence in Hong Kong, one of the key East Asian
trading centres, since the early 1970s. In September 1999 our Branch moved
into the recently completed Cheung Kong Tower on Hong Kong Island, located
at the site of the former legendary Hong Kong Hilton Hotel.
On General Economic Development
Dynamic growth of
the world economy
The world economy grew by a robust 4.8% in 2000, but lost momentum in the course of the year. Once again, it was the US and its
robust domestic demand that fuelled export growth in the emerging markets of Asia and Latin America, and also in Europe. In the
second half of the year, growth dynamics slowed appreciably in the
US, and other economic regions also recorded a weaker pace of
growth. In Japan the recovery remained fragile due to sluggish consumer demand. In Euroland external sector stimuli still predominated, but here, too, the upturn was based on sound domestic
sector fundamentals. Stimulated by high, dynamic growth in most
regions of the world, global trade rose substantially by some 12% in
real terms (1999: +5%).
The marked increase in oil prices was responsible for the slowdown
in the second half of the year. In late summer, prices of crude oil (of
which inventories were low) peaked at more than US$ 35 per barrel,
representing a three-fold increase on the lows recorded in February
1999. But hopes for a mild winter and the gradual effectiveness of
higher supplies from OPEC caused prices to melt down appreciably
again as of end-November. The high prices caused losses in purchasing power in oil-importing countries. At the same time, consumer
price inflation accelerated. However, severe competition, the costreducing deployment of new technologies and the fact that wage
increases remained moderate helped to keep domestic inflation in
the industrialised countries low.
In spite of the slowdown, in the final quarter of 2000 the US economy still grew by as much as 5%. But the significant increase of
domestic demand caused an enormous import boost as a drawback,
driving the current account deficit to new highs. Starting in midyear, the cycle of interest hikes initiated by the US Federal Reserve
Bank since June 1999 began to show effect. Companies curbed their
investment activity. In addition, consumer demand was dampened
by significant stock market corrections. The situation on the labour
market remained tense, however, while inflation remained within
acceptable limits and even declined towards the end of the year.
Even though the pace of expansion in Euroland declined slightly in
the course of the year, the growth differential to the US has
recently narrowed considerably. In total, Euroland’s gross domestic
product rose by 3.4%, fuelled by booming exports. However,
domestic demand also saw solid growth. Consumption was
favoured by rising employment, and investment by businesses
remained strong; while still the latecomers Germany (+3%) and Italy
(+2.9%) managed to catch up with their European peers, the smallest member states of the Monetary Union managed to record high
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Annual Report 2000
growth levels. Economic development was also satisfactory in the
remaining EU countries. GDP in Great Britain expanded by 3%
despite the tight monetary policy of the Bank of England and the
high exchange rate of the sterling.
Central and Eastern European countries benefited from the
dynamic development of their Western European trading partners
as well as the exceptional expansion in Russia (+7.5%) attributable
to the oil price increase. Following an average growth rate of 2% in
1999, they doubled their pace of growth. Poland and Hungary even
managed to exceed their good prior-year results, recording 4.5%
and 5%, respectively. The Czech economy, remaining afflicted by
structural problems, expanded by a surprising 2.8%.
The Asian emerging markets managed to return to the sort of
growth figures seen prior to the Asian crisis. Thanks to booming
exports to the US, and also to Europe, they increased their output
by 7%. In addition, the People’s Republic of China benefited from
the investment activity stimulated by the forthcoming entry into
the World Trade Organisation (WTO). With a growth rate of 8%,
China stopped the phase of declining growth rates in evidence since
the mid-1990s. South Korea, Malaysia and Singapore also managed
to generate GDP increases of approximately the same order.
Suffering from political constraints Thailand, Indonesia and the
Philippines came in with slightly weaker figures. Trends in Japan
were disappointing. After a pleasing start into the year 2000, the
pace of growth declined markedly in the second half of the year,
once again raising doubts about the sustainability of the economic
recovery.
Latin America presented a very mixed picture. With an average
growth rate of 4%, Latin America as a whole nevertheless witnessed
a substantial improvement on the crisis year 1999. In an exceedingly rapid process of recovery, Brazil managed to raise its aggregate economic output by 4%; Mexico and Chile, stimulated by the
dynamic trends prevailing in the US, achieved growth rates of 7%
and 5.5%, respectively. In contrast, Argentina and Peru suffered
from domestic policy problems, triggering fresh confidence crises
which impacted severely on the economy.
Opposing trends
on the financial
markets
10
The US stock markets were exposed to highly disparate flows in the
course of the year. Following volatile movements, the Dow Jones
more or less matched its starting position (-6%) but the Nasdaq
Composite Index lost two fifths of its value. In the first quarter, the
performance of these stock exchanges had been quite different.
While the Dow Jones, after reaching its all-time high of
General Economic Development
11,700 points, already saw a price decline early in the year, the hightech stocks on the Nasdaq continued to its all-time high of over
5,000 points in March. Even though numerous internet companies
were making losses, high growth expectations continued to push
their prices upward, casting serious doubts on traditional evaluation
methods. In fundamental terms, the high level reached had been
unjustifiable for some time; and when investors became fully aware
of this overvaluation prices went downhill. This was followed by a
sideways movement. Further developments were then determined
by interest rate measures adopted by the Fed and the weakening of
US economic growth. Finally, the oil price hikes and the ensuing
fears of inflation caused market sentiment to deteriorate further.
The European stock markets did not perform much better. The DAX
and Stoxx50 declined by 8 and 4%, respectively. Whereas the DAX
still reached its all-time high of over 8,000 points at the beginning
of the year, the collapse of technology stocks in the US also triggered a downward movement here even though the basis for higher
stock prices in Europe tended to improve. The economy picked up
in the course of the year and corporate earnings became increasingly dynamic. Due to the weakness of the euro and the oil price
related fears of inflation, however, the mood became gloomier. Furthermore, the European Central Bank saw itself compelled to take
action through interest measures; it raised the repo rate to 4.75%
with modest success for the euro. In contrast, positive impetus for
the stock markets came from the tax reduction programmes in the
big countries of the euro zone. In Germany it was especially tax
exemption for profits from sales of participations that stimulated
market assessments.
The bond markets showed a friendly tendency in the year under
review. The yield on ten-year US Treasuries declined by just over
one percentage point, to 5.1%. Each interest hike by the US Fed
was beneficial to long-term interest rates since it reduced fears of
inflation in the US. The Treasury’s repurchase programme, mirroring the surplus situation of the public authorities in the US, also
helped to support prices. Europe’s bond markets followed this
trend. Following an increase at the beginning of the year to 5.7%,
the yield on ten-year German government bonds (Bunds) declined in
the course of the year to 4.8%. The high revenues generated by the
auction of UMTS licences, which reduced the need for public sector
borrowing on the markets in Germany and the UK, were another
supportive factor for the European market. In contrast, the euro
proved to be a strain factor for the bond market. Only when the
US economy showed signs of a slowdown towards the end of the
year the euro recovered again.
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Annual Report 2000
German Interest
rates
10
9
8
7
6
5
4
3
2
1
0
%
1992
1993
1994
1995
1996
1997
1998
1999
2000
Public bond rate
3-month interbank rate
Mortgage rate
Bundesbank Lombard rate *
*) As of 1 January 1999 interest rate for the marginal lending facility. As a
transitional measure, between 4 and 21 January 1999, the interest rate for the
marginal lending facility has been set at a level of 3.25%.
Economic upswing
in Germany
12
In the year 2000 the German economy recorded the highest growth
since the unification boom of the early 1990s. GDP rose by 3% –
following an increase of only 1.6% in the previous year. Expansion
was particularly dynamic in the first half of the year. In the ensuing
period it was dampened by the dramatic increase in oil prices. The
resulting loss in purchasing power ultimately prevented private consumption to rise as sharply as had been expected due to the tax
relief at the beginning of the year and the improvement of conditions on the labour market. The German economy was stimulated to
a high degree by exports (+13%), which were additionally favoured
by the euro’s weakness. Exports grew significantly, in particular to
such overseas countries such as the US, Japan and the emerging
markets of South East Asia. The fact that the German current
account deficit widened nevertheless (-€ 29 billion following € 18 billion in 1999) was attributable to the primarily oil-price related
increase in imports as well as the even wider deficit in the balance of
services. A current account surplus was last recorded in 1990.
The upturn was also underpinned by brisk investment especially in
plant and equipment as well as in other assets, e.g. software, copyrights and licences. In the process, investments brought forward in
the anticipation of the expected deterioration in depreciation
terms as at 1 January 2001 have probably been a contributory factor. In contrast, investment in the construction sector were significantly reduced. Residential housing construction, in particular, fell
sharply – due not least to the reduction of income limits for stateassisted housing grants at the beginning of last year.
Price trends in the year 2000 were influenced by the oil price shock
and the weak exchange rate of the euro. The resulting increase in
import prices – in December they were just over 8% above the previous year’s level – was increasingly passed on to consumers. Due to
the ripple effect, not only oil products but also other imports and
even certain services such as package travel or transport services
became more expensive. Nevertheless, the price rises remained
within tolerable limits since even the moderate wage increases were
offset by productivity gains. And in sectors subject to particularly
intense competition, prices even fell, e.g. telecommunications and
electronic equipment. In the course of the year, the cost of living
rose by 1.9%; excluding heating oil and fuels, the increase in consumer prices would only have amounted to 1%.
At the same time, the labour market witnessed a noticeable revitalisation. Total employment, at 38.9 million by the end of the year,
was 500,000 higher than in the previous year; by December 2000
unemployment declined by 200,000 persons year-on-year, to 3.85
million, bringing down the unemployment rate from 10.3 to 9.3%
within one year. However, the employment increase applied almost
exclusively to Western Germany. Whereas additional human
resources were employed in Eastern Germany’s industry and
services sectors, on balance the ongoing problems in the construction industry caused the level of employment to decline further.
Thus, the unemployment rate, at 17.2%, remains significantly
higher than in Western Germany (7.4%).
Substantial economic growth in
Hamburg
Economic output also rose appreciably in Hamburg last year. Above
all Hamburg’s economy benefited from a favourable world economic climate, which stimulated foreign activities to a sustained
degree in numerous branches. This applies in particular to the
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Annual Report 2000
manufacturing industry, the transport sector and the export
trades. In addition, the gradual revitalisation of domestic demand
underpinned the expansion. Our calculations show an increase in
GDP of just over 3% in real terms. Robust growth of this kind had
not been witnessed in Hamburg since the boom following Germany’s unification in the early 1990s. According to surveys taken
by Hamburg’s Chamber of Commerce, business sentiment was more
upbeat than it had been for a long time.
A substantial contribution towards revitalising the economy was
made by the manufacturing industry, boosting growth significantly. The expansion here was primarily fuelled by the investment
goods sector, particularly by aircraft construction as well as certain
lines of mechanical engineering. However, downstream input suppliers such as metal producers and manufacturers of discrete semiconductors and micro-chips were also quite upbeat. In contrast,
those lines which predominantly produce consumer goods, e.g. the
food and beverage industry showed only few momentum. The
transport and communications sector was also highly dynamic.
Lively global trade and Germany’s sharply expanding exports delivered substantial stimuli especially to internationally oriented traffic
carriers and to the port of Hamburg. Telecommunications, courier,
express and postal services once again saw particularly expansive
demand.
Hamburg’s economy continued to be underpinned by the mass of
various private and public services, which together account for
about half of gross value added, and roughly 430,000 of the total of
approx. 950,000 jobs. Company-oriented services in particular
recorded significant expansion. This agglomeration also includes
the numerous multimedia and internet firms, for which Hamburg
has become a favoured location in Germany. However, trade has
also become brisk for business consultants, software firms, advertising agencies, call centres and temporary work agencies. The
media companies and trade fair and congress organisers reported
favourable business trends. Likewise the financial sector was set for
expansion, banks profited from a substantial increase in borrowing
demand, particularly from companies, but as well from lively
securities trading. In the insurance sector, a marked increase was
recorded both in contracts written and in premium income.
Following the reinforcement of the economic upturn, the labour
market situation continued to improve in Hamburg. Owing to the
increasing demand for personnel, particularly in the dynamic services sectors, the number of persons employed subject to compulsory social insurance grew by 18,000, or 2.5% on average for the
14
year, to approx. 760,000. The number of unemployed fell – for the
first time since 1994 – below the 70,000 level, thus the unemploment rate declined to 10.0% (previous year: 11.7%).
Outlook
Following the extraordinarily dynamic development of the world
economy in the year 2000, the pace of expansion should weaken in
the current year. We are projecting a growth of approx. 3%. The
decisive factor will be the discernible slowdown in economic
growth in the US. However, we do not expect to see a recession.
Nonetheless, the increase in GDP, at 2%, will turn out significantly
lower than in previous years. Our confidence is based not least on
our expectations that the US central bank will be able to avoid a
hard landing by engaging in a forward-looking interest-rate policy.
The interest rate cuts by the Fed at the beginning of this year should
contribute toward stabilising the financial markets and reinforcing
the confidence of consumers and investors alike.
In the euro zone, once the current dip in growth has been overcome, the economy will pick up again on the back of domestic
demand. Private consumption will benefit from an increase in
employment and from the tax relief that has been granted in
several countries. With investment activity remaining lively, the
growth gap to the US should even out.
We perceive the Central and Eastern European countries as being in
a sustained and stable upward trend. On the Asian emerging markets and in Latin America’s economies, however, growth is likely to
decline slightly. And the recovery of the Japanese economy will
continue to be delayed. With a growth rate of as little as 1%, Japan
will once again bring up the rear among the industrialised nations
this year.
The prospects of inflation-free growth have increased to a marked
degree thanks to the substantial oil-price decline in recent months.
After an average price of just under US$ 30 per barrel last year, we
expect crude oil to sell at around US$ 25 in the year 2001; this price
is in the middle of the band laid down by OPEC. In our opinion, the
oil price this year will dampen rather than boost inflation, while
domestic consumer price inflation will increase slightly in the wake
of economic shifts in progress. On balance, inflation rates – measured by annual rates of change in consumer prices – will drop in the
course of the year, however.
On the capital markets, growth of the US economy is likely to
become the key topic in the year 2001. For the time being, we
expect a marked slowdown. However, a more expansive monetary
15
Annual Report 2000
policy stance adopted by the Fed since the beginning of the year
and the massive tax reductions will lead to a revitalisation in the
second half of the year. Accordingly, US long-term interest rates
will increase in the course of the year. In contrast, European rates
will remain at a low level. However, towards the end of the year
2001 we expect a slight increase in interest rates due to an acceleration of growth in Euroland underpinned by ongoing moderate
prices and a stable euro. Overall macroeconomic fundamentals
remain favourable for the stock markets. Resulting from sustained,
strong growth in the euro region, the earnings situation of business
should remain at a high level. By the end of the year 2001, therefore, we expect the DAX to reach a level of 8,000, targeting the
Stoxx50 at 5,300 points. In view of the unfavourable economic environment in the US compared with the euro zone, we anticipate
the Dow Jones to finish the year at only 12,000 points.
Economic growth will also lose momentum in Germany in the year
2001. Nevertheless, we do not expect the economy to cool down
altogether; instead, it will pick up steam again as the year progresses. The fundamentals at any rate are favourable. Notably, the
strains exerted by oil prices will also decline. We expect the tax
relief programme to generate a marked impetus: this alone should
cause GDP to rise by half a percentage point. Thus, GDP may grow
by 2 1/4% in the year 2001. The decisive push factor this year will be
private consumption. Apart from the – rather modest – increase in
wages, the further revitalisation of the labour market will markedly
stimulate consumer spending. On the whole, disposable income
should grow by 3% this year in real terms; consumer spending
might also expand by roughly this margin.
We continue to perceive good prospects for investment activity.
Investment in plant and equipment should be stimulated by the still
quite favourable sales prospects, especially since the degree of
capacity utilisation in industry remains high. The construction sector will remain the latecomer once again this year. The shortfalls in
orders received in the construction industry as well as in construction permits last year do not indicate a trend reversal for the better
for the year 2001. While exports will once again expand substantially, in view of the slower global economy and the recovery of the
euro’s exchange rate the pace of expansion will not be quite as brisk
as last year. Due to robust growth of the domestic economy, the volume of imports will see another strong rise, but the value thereof
will grow considerably less sharply than that of exports. Against this
backdrop, we expect a trade surplus of € 77 billion, which would be
a new record. The current account deficit, at about € 20 billion,
could turn out roughly € 9 billion lower than in the year 2000.
16
The price climate will ease again in the course of this year. In the
first several months, however, the annual inflation rate should
remain slightly higher than 2% due to the third stage of the ecology
tax reform and price increases following the hike in oil prices last
year. Early in summer, however, declining oil prices and the appreciation of the euro should cause the monthly annual inflation rate
to decline gradually. On an annual average, we forecast an increase
in the cost of living by 1.5%; by year-end, the inflation rate should
even be below 1%. The revitalisation on the labour market will
continue. Amid the slightly lower pace of economic growth,
employment will probably not expand as sharply as last year (we
expect 450,000 new jobs, compared to 600,000 last year). However,
the number of unemployed will decline from 3.9 to 3.6 million on
average for the year, resulting in an unemployment rate of 8.5%.
Hamburg’s economy will not be able to resist the general trend of a
moderate slowdown. Still, we expect the upturn in the City of
Hamburg to continue at a respectable pace of growth. Factors to
substantiate this, among others, are the surveys taken by Hamburg’s Chamber of Commerce, revealing optimistic expectations of
the business community towards the end of the year. We expect
Hamburg’s GDP in the year 2001 to grow by 2 1/2% in real terms.
The number of persons employed will increase yet again (by about
1.5%), leading to further reduction of unemployment. On an annual
average, the number of unemployed should decline to a figure of
67,000 – a level last recorded in 1993.
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Annual Report 2000
Our London Branch has been in existence since the late 1980s. We are
located in Moorgate Hall, right in the heart of London’s banking centre in
the “City”. We do not only use the financial location of London for our
international refinancing requirements, but also for local lending and trade
financing transactions.
18
Management and Group Management
Report of Hamburgische Landesbank
On Performance
A successful start
to the new century
We made good progress during the fiscal year 2000. The opening year
of the new century saw Hamburgische Landesbank achieving new
record levels both in terms of volume and earnings. Total assets and
business performance rose strongly. Against the backdrop of satisfactory global economic development worldwide, volatile financial
markets and sensitive exchange rates, the Bank managed to record
growth in virtually all business sectors. Relying on a state-of-the-art
corporate concept, a sophisticated and finely-tuned operational
structure and a sizeable team of committed and well-trained employees, we managed to improve our market position not only in the
traditional core areas, such as credit investments, real estate, leasing
and ship financing, but also succeeded in establishing ourselves in
up and coming business areas such as international real estate
financing, aircraft financing, and corporate finance. These achievements are all the more remarkable because competition in financial
markets and between Germany’s commercial banks continued to
intensify in the course of the year under review – indicated not at
least by the aggressive tone used when issues relating to banking policy were discussed in public. Backed by a significantly broader capital
base and grounded solidly by long-term relationships with customers, the Bank while maintaining due caution with respect to the
many risks went looking for opportunities and seized them.
Hamburgische Landesbank’s consolidated financial statements
include Hamburgische LB Finance (Guernsey) Ltd., Hamburgische
Landesbank (Guernsey) Ltd., Hamburgische Wohnungsbaukreditanstalt, Hamburg (WK), and Kommanditgesellschaft Altstadt Verwaltungsgesellschaft & Co. Grundstücksgesellschaft, Hamburg. The
Bank will continue to ensure that its consolidated foreign subsidiaries
meet their financial obligations at all times. Unless stated otherwise,
the following explanations about business performance relate to the
Bank, since the consolidated annual financial statements are primarily determined by the Bank’s annual financial statements.
Balance sheet move- The movements in the balance sheet are indicative of the gratifying
growth in our operations. Total assets grew by 8.6%, to reach
ments on schedule
€ 80.7 billion. The strong increase in avals, loan commitments and
credit-equivalents from off-balance sheet derivatives meant that
business volume grew slightly more strongly than total assets, by
11.7% to € 94.1 billion. However, the volume of lending also
increased markedly, by 11.4%, to reach € 90.3 billion.
Total Group assets came to € 85.6 billion as at the balance-sheet
date. They grew by 9.2%, similar to the growth in total assets of the
Bank. Business volume expanded by 10.0% to € 97.6 billion. Lending
volumes showed a growth rate of 9.7% to reach € 93.5 billion.
19
Annual Report 2000
Portfolio of holdings The sustained growth of our holding portfolio demonstrates the
increasing importance we attach to the Bank’s holdings and interests. With regard to its entrepreneurial holdings, the Bank retained
its 45% share in AGV Anlagen- und Grundstücksvermietungsgesellschaft, Wiesbaden, via its subsidiary Leashold Verwaltungs
GmbH & Co. KG. AGV managed to increase new business by more
than € 500 million, with its order book totalling almost € 3 billion.
This trend was primarily due to the expansion in the growth segments “new media” and “licenses” as well as real estate leasing. The
Bank’s activities in connection with holdings in real estate project
developments were chiefly focused on the management and control
of projects already under way during the year under review. The
total volume of projects managed was around € 800 million. In the
area of investments in real estate companies, the Bank continues to
hold a 15% share in GEHAG Holding Verwaltungs GmbH, which in
turn holds 75% of shares in the former non-profit-making Wohnungsbaugesellschaft GEHAG Aktiengesellschaft, Berlin. The business performance of GEHAG was very encouraging during the year
under review. Housing portfolio has been further optimised. In
addition, the Bank holds a 5% share in Deutsche Real Estate AG, a
company dealing exclusively in real estate; during fiscal year 2000
this company continued on its expansionary path of business.
With the establishment of the portfolio segment for investmentoriented holdings (private equity), we intend to achieve high
returns while diversifying our risks. During the year under review,
the Bank’s executive bodies approved up to € 500 million for investment in private equity. Within this framework, approval was given
for a total investment volume of about € 100 million in 11 fund
companies; most of this is invested in equity capital of non-listed
companies via first-rate European and US fund management companies. These funds cover a broad spectrum of the private equity
market, ranging from start-ups all the way to management buyouts. To a lesser extent the Bank also invested directly in selected
companies.
The third segment – the biggest in terms of volume – comprises
strategic equity interests. These may be investments covering
special business segments, commitments we enter into in order to
achieve synergies, or to support the interests of Hamburg as an economic location. The large volume of this portfolio segment is due to
the holding of 82% of shares in Hamburgische Wohnungsbaukreditanstalt (WK), which is engaged in the maintenance and modernisation of housing as well as in urban development and environmental
projects in the Hamburg region. Our totally owned subsidiary HGA
Capital and Katharinen Verwaltungs GmbH, active in the establish-
20
ment, sale and management of closed-end real estate funds, has
been given a new strategic orientation. This has already resulted in
optimisation of property-buying activities, which were expanded to
include other European countries and the USA. Apart from attractive public investment funds, there are plans to include special
funds and private placements in the future product range. A public
investment fund involving a Berlin hotel was established in October
2000 with the aim of raising € 60 million in equity capital and was
fully subscribed by the end of the year.
We are pursuing the development of e-commerce and e-banking
services in close cooperation with one of our shareholders, Landesbank Schleswig-Holstein Girozentrale (LB Kiel). Together with other
companies, Hamburgische Landesbank and LB Kiel are shareholders
in the civil-law company S-Online Schleswig-Holstein GbR (S-Online), a company engaged in the setting up of virtual markets
through its wholly owned subsidiary SNetline GmbH. The company
operates the schleswig-holstein.de portal, for example. E-BankingServices Nord GmbH (eBS), in which S-Online, LB Kiel and Hamburgische Landesbank each hold a third of equity, provides electronic
banking services and know-how in the service centre, product management and sales support areas. The year under review saw the
establishment of hamburg.de GmbH & Co. KG, the company operating the ’citizen’s portal’ hamburg.de. Shareholders in this company,
apart from Hamburgische Landesbank, are the Free and Hanseatic
City of Hamburg, Hamburger Sparkasse and Sparkasse HarburgBuxtehude, along with SNetline GmbH, which provides the technical competence in the area of virtual markets.
Following the decision of DSGV (German Savings Banks Organisation) of November 2000 not to turn the WertpapierService Bank
(WPS Bank) into the ’joint securities bank’ for the savings banks
organisation for the time being, the shareholders of WPS Bank
agreed on a strategic re-orientation on 7 February 2001. The previous plan was to link the securities trading services of WPS Bank in
Düsseldorf and of Hamburgische Landesbank in Hamburg using a
uniform software platform, resulting in an aggregation of the trading volumes of the savings banks. Since the decisions made by the
savings banks organisation removed the basis for proceeding with
this plan the shareholders of WPS Bank decided to continue backoffice operations for securities-trading in Düsseldorf and Hamburg
in their current, legally independent constellations for the time
being, but to cooperate wherever possible in the areas of software
and professional expertise. Regarding the processing of securities
deals, our once again expanded EWSPlus service helped us to
achieve a record 77% increase in growth for the year under review,
21
Annual Report 2000
with a total of 4.3 million transactions processed. The number of
securities accounts rose to more than 500,000, compared to 350,000
in 1999. Mergers between four participants resulted in a reduction
in the total number to a current 79.
Changes in relation
to 1999,
in € million
Assets
Liquid funds
Securities
Shares in affiliated undertakings
Compensation receivables
Other items
Total assets
Liabilities
Certificated liabilities
Capital with participation rights
and subordinated liabilities
Equity
Other items
Total liabilities and capital
The following figures are provided
purely for information purposes:
Volume of business
Loan volume
Steady growth
in lending
22
Bank
-323.3
1,538.5
1,155.8
3,108.0
69.5
-15.4
863.0
6,396.1
Group
-323.5
2,099.3
1,387.4
3,173.9
19.5
-15.3
895.3
7,236.6
-1,126.8
2,706.0
3,932.8
-1,929.5
2,819.5
5,458.7
535.8
19.3
329.0
6,396.1
535.8
20.2
331.9
7,236.6
9,849.4
9,243.9
8,910.6
8,269.7
Loans to banks and other companies continued to grow steadily in
the reporting year. However, growth rates differed for the various
maturity ranges. In the interbank business, for example, short-term
loans went up. Maturities of less than three months and between
one and five years were especially popular, while longer-term business remained virtually flat. In contrast, lending to companies was
characterised by a marked decline in short-term loans, but significant growth occurred in the medium and long-term maturities, due
not least to the low interest rates. In lending to public authorities
it was the medium and long-term loans that dominated the market.
Securitised lending expanded once again by a substantial 14% to
almost € 24 billion. Credit equivalents from off-balance-sheet derivatives increased markedly in fiscal year 2000, of which short-term
papers were in greater demand than long-term paper.
Within the Group as a whole, new long-term loans played a greater
role than in the Bank itself due to the dominance of such loans in
WK’s financing business.
Trend towards
securitisation in
corporate customer
business
Our traditional corporate banking business for the year under
review was satisfactory. Utilisation amounted to € 5.2 billion as of
the balance sheet date. Due to internal restructuring measures, the
year-end portfolio cannot be compared to the one a year ago. Overall lending was up by about 8% going along a slight increase in margins. Lending to the manufacturing sector and to transport
companies showed some life again for the first time. It is likely that
these sectors benefited not least from the favorable export climate.
In the course of 2000 the trend towards more complex financing
solutions and securitisation on the part of major corporations was
confirmed. In contrast, for many customers in the meat processing
sector an already tense situation worsened by year-end with the
onset of the BSE crisis. Lending to warehouse and logistics companies located in Northern Germany was gratifying. The Bank also
supported the trend towards the internationalisation of port services. We managed to maintain our leading position as a partner for
importers and exporters in Northern Germany, with lending performing satisfactorily in line with the positive climate in the foreign
trade sector. A further focus of business during last year was
financing of companies in the communications and information
technology sector. Demand here continues to be strong, although
the risks involved tempered our activities in this segment. We were
extremely successful in the growth market of equity and bridge
finance and managed to strengthen our links to reputable equity
investment companies during the year under review. Lending to
other banks expanded strongly, with the volume of new loans
reaching about € 410 million, with total year-end commitment
amounting to € 1.9 billion.
Market performance topped again
in leasing financing
Growth in our leasing financing operations was again well above
the market average. As a result, we built on our position as one of
Germany’s biggest providers of finance to non-captive leasing companies. With new business valued at € 1.2 billion, we were able to
extend our portfolio in this segment by 13% to € 3.7 billion. The
increase was particularly pronounced in the area of moveables leasing, where media technology assets and intangible assets, such as
software, also gained in importance alongside ’traditional’ assets
such as machinery, vehicles and IT equipment. In the so-called bigticket segment, which includes real estate and aircraft, new business was somewhat muted due to changes to taxation legislation.
23
Annual Report 2000
Development of
lending business
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Real estate financing, one of the core business areas for
Hamburgische Landesbank, once again contributed considerably to
the growth of the Bank. Mortgage lending expanded by 9% to
€ 9.9 billion. Business with real estate companies remained lively
throughout the year, with the number of newly established property companies increasing further. We consolidated and expanded
our links with important investors in this sector. The upward trend
continued in the segment of project developments. In our target
markets of Hamburg and Berlin, we participated in financing great
number of projects, including shopping centres, residential and
office buildings and hotels. In choosing our partners we concentrate on project developers and investors who have many years of
experience in their field; very often we are approached by partner
banks with offers to participate in syndicated loans. Companies in
the construction sector continued to suffer from a demand slump.
As the margins on loans in this market segment are not acceptable
as they are, we decided not to increase the volume of lending. We
still managed to profit from our close contacts with the major construction groups which are increasingly acting as project develop-
ers themselves. The construction management area calmed somewhat. Investors tended to favour objects in high-demand locations;
other projects were forced to make concessions on price. Accordingly, we applied great caution in choosing our commitments. In
the investment fund segment, the move was mainly towards offering property funds focused on returns and dividends. The lack of
potent subscribers meant that the placement remained muted, and
the initiators were increasingly looking for hotels and retirement
complexes. Competition in rental housing construction remained
fierce. Based on our years of experience, we still managed to
expand our lending business according to plan.
The international real estate financing business again performed
remarkably well in 2000, and we managed to expand our commitment in this sector – especially in the United States. In joint ventures with powerful partners we increasingly entered into
commitments for long-term projects in the United States; most of
these projects are commercial properties in outstanding locations.
In Europe our focus remained on the target markets of France,
Spain, the Netherlands and Great Britain, with the latter market
covered successfully by our London Branch. We also followed
developments in Poland with great interest but were cautious
about taking on fresh commitments due to conflicting trends in the
market. Overall our portfolio of international real estate financing,
including our branches in Hong Kong and London as well as our subsidiary on Guernsey, grew by a good 50% to € 2.1 billion.
Strong momentum
sustained in ship
lending
Hamburgische Landesbank continues to be one of the most important international ship financers. We managed to consolidate our
position during the year under review without compromising our
cautious lending policy. As the crises in the emerging markets subsided, we benefited from the return to growth in world trade and
the associated revival in the shipping markets. Demand for container ships – Hamburgische Landesbank finances a sixth of all ships
worldwide in this segment – improved markedly; charter rates
bounced back strongly. The situation in bulk cargo shipping also
recovered significantly. The main contribution here was made by
the economic recovery in Asia, the most important region for these
types of ships. The tanker segment experienced a veritable boom
during the year under review. Charter rates rose continually during
the entire year. Demand centred on more modern ships, which in
turn led to an increase in the scrapping of ships and orders for new
ships. The favourable market conditions as well as our own farsighted lending policy meant that there were only isolated
instances of delays in repayments. The volume of deferred and outstanding repayments could thus be kept to a mere 0.3% of the
25
Annual Report 2000
From our Representative Office in Berlin – located at the Gendarmenmarkt –
we primarily cater for lending against commercial real estate and residential
properties in the region. Since Germany’s unification, the real estate business
around the country’s capital has developed very dynamically; thanks to
our Representative Office on site, we successfully managed to participate
in this trend.
26
entire volume of ship-lending. With a volume of new loans amounting to € 2.9 billion, the portfolio of shipping loans grew by 19% to
reach € 9.1 billion. Due to the high proportion of loans denominated in US dollars, the currency commonly used in shipping markets, the lending volume is naturally subject to fluctuations in the
exchange rate of the US dollar. Exchange rate effects accounted for
a good 5 percentage points; corrected for these effects, our lending
volume on ships was therefore up by 14%.
Aircraft financing
with a new set-up
Last year we responded to the increasing importance of the growing
market of aircraft financing and established an independent ’Airlines’
department on 1 April 2000. This department is dedicated to looking
after airline companies as well as aircraft manufacturers and their
predominantly long-term investments. This sector, one in which the
Bank has become more active since the early 90s, has developed
strongly and successfully. High unscheduled repayments meant that
our financing volume in this sector was up only 9% to € 2 billion.
Even if not all airline operators have successfully managed to implement their sometimes radical cost-cutting and restructuring programmes to date, the financial situation of the sector as a whole has
stabilised. We participated in the financing of more than 60 aircraft,
so by year-end the Bank had a fleet of 270 aircraft on its books.
Success in crossselling with private
customers
The comprehensive range of services provided to our private customers in one single location proved to be a winning concept again
in the first full year of operation of the responsible department.
Cross-selling was a success both with private customers and with
small to medium sized corporate customers and also allowed us to
gain new clients. In the lending business, which in the private customer segment relies heavily on construction financing, inflows of
repayments were on balance offset. Given the general weakening of
demand for private property financing, this can be considered a
good result. Total lending remained steady at € 1.2 billion. However, the volume of the securities portfolio expanded strongly by
no less than 24% to € 2.9 billion as a result of the volatilities of the
stock exchanges. The demand from private investors for advice in
this area increased markedly.
Expansion into
foreign markets
according to plan
We proceeded with the expansion in foreign markets as planned.
Ensuring balanced risk diversification, we increased the level of
our activities in other Western European countries, in selected
markets in Latin America and in the Asia-Pacific region. In Asia we
benefited from having our own representatives, strengthening our
position during the fiscal year 2000. Opened in February, our
Shanghai Representative Office already succeeded in attracting
new customers. The new branch office in Singapore opened for
27
Annual Report 2000
business in September. At the same time, business of our Hong
Kong branch expanded slightly; our trade-related financing activities increasingly focussed on major corporations. Initial successes
were already achieved in close co-operation with the just newly
established branches in the region; the acquisition of substantial
deposits from Asian banks in particular made a contribution to
securing the basis for our refinancing activities. Business performance was also dynamic for our London branch, with growth underpinned by brisk interbank corporate and real estate business, in
some cases acting as lead-manager. Local money-market and currency trading performed well. Our subsidiary bank on Guernsey
also turned in a promising performance in fiscal year 2000. Asset
swaps and loan derivatives, corporate customers and treasury
business were the main contributors to its expansion. As the high
level of business activity necessitated an increase in capital, capital resources were doubled to € 110 million.
Refinancing
activities
reorganised
28
The newly created department of Asset Liability Management is
responsible for optimising refinancing activities and liquidity
management within the Bank. The department joins together refinancing requirements stemming from lending and securities
investment activities. Considering the prevailing situation in the
capital markets, the current liquidity position of the Bank and,
these requirements are then restructured accordingly in terms of
volumes, maturities and currencies. They are finally forwarded to
the departments responsible for carrying out the required refinancing. By the end of 2000 total funding had reached approximately € 71 billion. Of this, about € 28 billion, or 39%, was raised
in the money-market and about € 43 billion in the capital market.
More than two-thirds of the funds raised in the money-market,
some € 21 billion, are call money or term deposits. Money-market
paper made up about € 5 billion, while € 2 billion was refinanced
with the European Central Bank. Just over 60% of the money-market funds were denominated in foreign currencies. Among the
refinancing funds raised in the capital market, the largest share of
€ 29 billion was in the form of borrower’s note loans and registered paper, with Pfandbriefe adding another € 7 billion and security bonds and municipal bonds making up the remainder of € 6
billion. This means that at 40%, borrower’s note loans and registered paper made the biggest contribution to the Bank’s funding
operations. The Bank’s own issues also represented an important
source of funding, providing about one-fifth of the total, with
unsecured paper playing an increasingly important role. As part of
our EMTN (European Medium-Term Note) programme, we
expanded our presence in the international capital market further. The first-time issue of a 5-year euro benchmark bond was a
great success, with a volume of € 1 billion being placed in the market.
At present less than 10% of funding is raised through issues under the
EMTN programme, but there is an upward trend in this area.
Our financing subsidiary on Guernsey, Hamburgische LB Finance
(Guernsey) Ltd, is used to raise long-term funding on the international capital market. Once again we managed to expand our international funding activities significantly. Confirmation of the
ratings of our long-term liabilities – AAA from Fitch, Aa1 from
Moody’s – as well as the AA rating issued by Standard & Poor’s at
the beginning of 2001 provides a sound basis for the Bank’s successful issuing activities to continue.
Development
of borrowing
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To improve the ratio between funds raised in the money and capital
markets, respectively we increasingly shifted the focus of our funding operations from short-term to long-term maturities in the year
under review. This was reflected in the portfolios, as deposits from
banks showed a significant reduction while medium- and long-term
liquidity on a three-month rollover basis went up correspondingly.
Repo business, which was commenced only last year, expanded
according to plan, with Pfandbrief and corporate bonds trading
developing particularly lively. Interest-rate swaps were used as an
29
Annual Report 2000
instrument for hedging interest rate risks and for managing maturity structures.
30
Currency trading
with higher
momentum again
The highly volatile exchange rate between the US dollar and the
euro allowed us to improve on the already good results achieved in
currency trading the previous year. Revenues from interbank cash
transactions were up by a quarter. The fact that we act as market
maker for small and medium-sized banks in the trade with euro, US
dollar and Japanese yen turned out to be in our favour. In currency
swaps and options, we managed to boost revenues further, topping
the already excellent result of the previous year yet again. Customer trading was extraordinarily successful because customers
used the movements of the dollar to hedge long-term maturities.
New customers were gained in these segments.
Securities trading
dominated by
equities business
The Equities business was characterised by the euphoria on the
equity markets in the first months of the year. We managed to
exploit the high volatility of the markets and achieved a good trading result. Trade in fixed-income products was relatively subdued as
a result of steady markets. In fiscal year 2000 under review, interest-rate derivatives were increasingly used to hedge our portfolios.
Trade in swaptions, caps and floors almost tripled. Swap transactions, which we use mainly to guard against interest rate movements as part of our funding operations, recorded a significant
expansion. Both organisational changes and increased demand
from customers resulted in a substantial increase in the volume of
swaps and in the number of transactions. With regard to capital
invested services operations, the volume of stocks traded on behalf
of our customers was up considerably compared to the previous
year. By contrast, trading volumes for fixed-income securities of
our customer were rather flat reflecting market trends. A remarkable success in services operations was recorded with the acquisition of new special funds mandates. Our Sigma technical bond
model turned in a mixed performance due to sideways trends prevailing in the bond markets. However, successful new acquisitions
meant that the volume under management remained high. Activities in the syndication business picked up. In one IPO operation
Hamburgische Landesbank acted as lead manager. Despite the deteriorating conditions over the course of the year, this placement on
the Neuer Markt (German new economy) was a success. Additionally, we managed to further improve our market position in this
field by participating in several IPO syndicates. As a designated
Xetra sponsor, the Bank successfully manages four shares at present
– an activity that in future will become a major support for corporate finance. During the first three quarters of the year, refinancing
operations were characterised by a certain restraint among
investors. However, by year-end deposit-taking had picked up
markedly. The trend towards liquid, high-volume bonds and structured products once again determined deposit-taking business in the
reporting year and on balance resulted in a marked jump in revenue.
Credit investments
a success
The nominal volume of receivables from securities and loans in connection with credit investments reached € 22.0 billion by year-end,
an increase of 20% compared to the previous year. Commitments in
the form of loan derivatives amounted to a nominal value of € 4.8
billion, a decline of 15% compared to the previous year. In this segment new business was not able to offset the high volume of maturities in the year 2000 because the achievable premiums were too
small. Receivables from government and quasi-government debtors
and banks with an excellent rating in EU or OECD countries
accounted for the biggest proportion of this portfolio segment. As
in the previous year, the Bank again managed to expand its portfolio of asset backed securities at an above-average rate. The portfolio grew to more than € 3.3 billion and consists predominantly of
securities backed by receivables from securities or loans as well as
mortgage backed securities. Weighed against the risks, we consider
this securitised assets to provide the best earnings potential. With
very few exceptions all the titles acquired have an investmentgrade rating issued by at least one of the internationally recognised
rating agencies. Last year we chose once again to invest very little
in corporate bonds as we still consider this sector to be exposed to
relatively high risks such as takeovers or high capital spending
requirements on the part of the companies.
Derivatives
We continued to expand our business with other derivative instruments to meet special financial requirements on the part of customers, to minimise risk and to exploit market opportunities. As at
the balance sheet date, the volume of swaps – the sum total of
interest, currency and interest currency swaps – was worth
€ 65.5 billion, an increase of almost 12%. Interest rate futures in the
form of forward rate agreements grew strongly, adding almost one
sixth to reach € 11.5 billion. We attach prime importance to containing and monitoring the risks involved with derivatives.
Equity base
strengthened
further
The Bank’s subscribed capital currently stands at € 1,884.4 million.
A sum of € 25 million was transferred to the Fund for General Banking Risks on 31 December 2000. A further € 23 million is being transferred from the Bank’s distributable profit to its revenue reserves.
This means that the Bank has total equity capital of € 2,621.9 million. The Free and Hanseatic City of Hamburg (FHH) and LB Kiel have
each held a share of 49.5% since 1997. HLB Beteiligungsgesellschaft
mbH, a company owned by FHH, holds a further 1% share in the
31
Annual Report 2000
Bank. After allocation to revenue reserves, the Group has total
equity of € 3,641.3 million, of which € 292.5 million is held by nonGroup shareholders.
The Bank’s liable equity capital as defined in the German Banking
Act – including supplementary capital – increased by € 571.1 million to € 4,930.7 million; of this, € 2,711.9 million constitutes core
capital. The Group’s liable equity capital rose by almost the same
amount (€ 576.0 million) and stands at € 5,657.3 million; of this,
€ 3,438.5 million represents core capital.
32
Risk provisions
We again adhered to our proven strict risk criteria in 2000. As in the
previous year, risk-provisioning concentrated predominantly on
domestic borrowers. Provisioning for foreign loan commitments
and the securities portfolios – the latter continuing to be valued
according to the minimum value principle – did not represent a
significant burden for the Bank. As in the past, we formed sufficient
provisions for all discernible and future risks.
Substantial growth
in operating profits
Our earnings situation continued to improve in line with the expansion of business. Net interest was once again the main source of
earnings; the 17% increase was primarily due to the growth in interest-bearing operations. The consistent application of matching
maturities in our refinancing activities allowed us to profit from the
stable margins prevailing in our traditional business. Net commission income improved most satisfactorily thanks to the gratifying
overall performance – particularly in securities business. Net
income from financial transactions improved from a low level.
Growth in administrative expenditure – necessitated by spending
on staff as well as on technical resources – was disproportionately
low with a 7% increase over the previous year. At € 419 million last
year’s satisfactory earnings before risk provisioning and valuation
were exceeded by more than a quarter overall. We transferred
€ 25 million to the Fund for General Banking Risks, thereby raising
our core capital. Expenditure for net risk-provisioning and valuation remained just below the level of the previous year. Income
from the writeback of the special item with an accrual character
was met by increased valuation charges for securities and equity
interests, reduced risk provisioning compared to the previous year
and the increased formation of supplementary capital. Income
taxes are one third higher than in the previous year. Following the
partial profit transfer of € 122 million, a doubling over the previous
year, the Bank’s profit for the year – taking into account the share
held by the atypical dormant shareholder – exceeds that of the previous year by more than one-tenth.
From Schwerin, capital of Mecklenburg-Vorpommern (Mecklenburg-West
Pomerania), we support North-East German activities, particularly in the field
of real estate finance. Our offices are located in impressive surroundings with
a view of the splendid building of Schwerin Castle.
33
Annual Report 2000
The Bank’s earnings situation continues to be reflected in Group
earnings. Operating profit before risk-provisioning and valuation,
tax charges and profit for the year is almost identical. Deviations in
individual income and expenditure items result predominantly from
Hamburgische Wohnungsbaukreditanstalt’s promotion business
which, on balance, does not have any effect on net earnings. Hamburgische Landesbank (Guernsey) Ltd. made a significant contribution to Group earnings for the first time; we anticipate a steady,
positive development in this respect.
Substantial
provisions for the
future
As part of the provisioning for future requirements of banking
operations, the deployment of qualified staff once again received
special attention during the year under review. The boost in
employee numbers – an ongoing requirement for the incomegenerating expansion of business – went according to plan, and by
the end of 2000 personnel had increased by 156 to a total of
2,132 employees. Our foremost concern remains that our employees be provided with an extensive staff development programme
which allows them to acquire qualifications commensurate with
the level of the financial services offered by our Bank. The continuious upgrade of technical systems to meet the required capacity levels also necessitated renewed and considerable expenditure.
Items on the technology agenda, apart from IT support for customer and group limits, were the implementation of new systems
supporting trading transactions, some of which are now accessible
via the Internet. The development and implementation of IT application systems is being undertaken in close cooperation with LB
Kiel. Centres of competence for individual functions are being
established at the respective locations. The application of new
online banking technologies was pursued vigorously, especially in
private customer business. In addition to the electronic payment
system featuring our S-Firm and Multicash products, customers can
now conduct their banking via the Internet using the HBCI security
protocol.
The project “strategic and organisational orientation of Hamburgische Landesbank”, which began in 1999, was successfully integrated into the operational structures and procedures of the Bank
and is already showing great promise. Preparations for the completion of the European Monetary Union are proceeding without problems, all the more so since the impending changeover to the new
tender will have a lesser impact, relatively speaking, on the Bank
due its particular business structure. In the course of the gradual
expansion of business, which also included an increase in staff
34
numbers, the Bank was once again forced to expand office space.
During the year under review, an additional new building was completed and occupied in the centre of Hamburg. All these capital
investment measures are in line with our objective of maximising
the efficiency of our resource deployment, and this is evident in the
positive trend in our cost-income ratio, which dropped from 43.6%
to 38.7% in the year under review.
Outlook
We expect sustained positive performance in the course of 2001.
Even though economic momentum will slow somewhat – more so
on a worldwide scale than in Europe – we consider the Bank’s great
number of long-term relationships with its customers to form a
solid and reliable basis on which to proceed with a steady expansion, both in terms of substance and quality. In corporate customer
business, for example, planned capital spending on the part of our
port clientele, not only in Hamburg, promises opportunities for
financing, as do new commitments in the media sector and in
telecommunications. It goes without saying that we are proceeding
very selectively and with caution in the latter sectors. We anticipate a considerable resurgence in the financing of equity acquisitions. Prospects for the food trade have continued to deteriorate,
however. Customers in the meat-processing sector in particular,
who were already forced to cope with structural adjustments in
recent years, have been hard hit by the twin BSE and piggery crises.
We have provisioned adequately for these commitments.
In the leasing financing segment, we expect a continuation in the
expansion above the general market trend for 2001, both in the
leasing of property and in the broad spectrum of moveables leasing.
The Bank’s traditional property financing business promises a modest level of expansion at best, since we will continue to adhere to
our quality criteria in our lending policy. We anticipate additional
activities in the area of financial support for project developments,
and in individual cases we may continue to look at commitments in
the form of equity interests. The market for property companies is
still considered attractive; new taxation provisions coming into
force in the current year promise good opportunities for business in
this segment. In the financing of international real estate objects,
where the support of domestic customers in international markets
remains a focus of our operations, all the signs are pointing to continued growth. While the US segment will develop less vigorously in
this respect due to the economic climate, the valuation of contracts already signed will ensure some growth in the portfolio. In
the European markets the Bank will be looking to expand its activities in France and in the Netherlands in particular, and – through
our London Branch – in the United Kingdom.
35
Annual Report 2000
Satisfactory business is expected in the shipping markets despite
the fact that world trade is expanding at a reduced rate. We predict
strong growth in our portfolio for 2001 not least due to the volume
of open lending commitments. We will also increase the volume of
our aircraft financing business. In this segment the Bank is concentrating on the leading names in the airline sector, corporations that
have a stable financial situation and for which we see a considerable need for financing due to new orders already issued and due to
ongoing capital spending plans. In the private customer segment,
we plan to seize new business opportunities through targeted
acquisitions and through a gradual broadening in our product
range. The introduction of browser-based internet banking planned
for 2001 will provide these customers with additional facilities for
accessing our range of products and services.
Our trading activities will be conducted in a calmer climate. In the
short-term segment, our money-market activities will increasingly
focus on building up our foreign customer base in the homogenous
euro market, and in currency trading, for which we anticipate
strengthening demand on the part of our import customers, particularly in light of a more stable euro. In securities business we expect
the volume of share trading to go up as a result of the improving
outlook for the European markets. The anticipated steepening of
the yield curve will shift the focus of business in fixed-interest securities towards shorter maturities. Increased marketing activities and
new products, not least in the swap business, will expand the range
of our services. Acquisition of special funds and Sigma orders will
represent a significant part of our activities. In addition, this year
will see the introduction of our “TopStocks” technical share selection and timing model. In the IPO business, where we plan to further expand our activities, we see promising opportunities once the
climate for IPOs recovers sufficiently. Following the success of our
benchmark bond in October 2000, we are planning to employ this
funding method again in the year 2001. The Bank will continue to
build its portfolio of private equity through investments in firstrate investment funds and through selected equity interests.
Competitive pressure on pricing is forming not only in the
establishment of business leads but also in the processing of financial transactions. The Bank is making every effort to realise
economies-of-scale effects in this area through the bulk processing
of transactions. For example, we are currently investigating alternative methods for handling domestic and international payment
transactions in particular, as well as for documentary transactions,
and we are in talks with allied banks with the objective of determin-
36
ing the best-possible concentration of transactions. During all necessary steps in the process, customer satisfaction and quality of
services remain our top priority.
Hamburgische Landesbank’s presence in international markets will
continue to be boosted according to plan in the current financial
year. To strengthen our international refinancing base and to
exploit demand for credit in the US market, we are planning to
establish a representative office in New York.
In future we will also have a presence in Warsaw, as the Polish
market with its close economic ties to Hamburg holds the promise
of substantial long-term business opportunities.
37
Annual Report 2000
We opened our latest Branch last year in the city state of Singapore, from
where we want to continue expanding our refinancing activities in the AsianPacific region. In addition, with the support of local know-how, we want to
engage in commodity trade financing operations, for which Singapore is a key
trading location.
38
On Risk Management
Hamburgische Landesbank attaches crucial importance to active
risk management as part of its group business policy. Consequently,
risk measurement, monitoring and controlling procedures and
methods are subject to ongoing review. Against this backdrop, we
attach great importance to regular training for all employees and
executives responsible for managing and controlling the different
risk categories.
The Bank’s shareholders have defined the basic framework for its
risk policy for the Bank and its subsidiaries in the “Guidelines for
Banking Business”. Among other things, these guidelines specify the
reporting obligations towards the Supervisory Board as well as
those transactions requiring the Supervisory Board’s approval. The
Bank is represented in the corporate-governance bodies of its consolidated subsidiaries, which are additionally integrated in the
Bank’s ongoing equity-interest controlling procedures.
Using the “Guidelines for Operating Banking Business” as a basis,
the Bank’s Board of Managing Directors determines risk policy
including the risk measurement, monitoring and controlling methods and procedures to be applied. Implementation of risk policy
and co-ordination of risk management is supported by the crossdepartment committees – “International Business”, “Liquidity Management” and a committee responsible for strategic investments in
market-risk positions. By continually developing our risk management procedures as a dual-type controlling system based on economic risk parameters and regulatory requirements, we are able to
integrate risks efficiently in the overall management of the bank. As
a result, the management of business activities in the light of their
specific risk-return is increasingly growing in importance.
Risk management
We define risk as the possibility of unfavourable future developments which may effect the Bank’s earnings position either immediately or with some a delay in the longer term effect. A distinction is
made between credit, liquidity, market, operational and miscellaneous risks. All exposure is subject to the higher-ranking principle
of overall risk capacity limitation. The overall risk capacity limitation results in a strict limit on all risks arising from our business
operations. Risks are limited on the basis of quantitative risk
parameters as well as extensive qualitative analyses of riskexposed processes and market developments as part of our business
decisions. The total overall risk capacity is regularly defined to
allow for market and credit-risks. The Board of Managing Directors
is responsible for budgeting risk capital and hence limiting risk
positions.
39
Annual Report 2000
The risk management process involves identifying, monitoring and
managing risks. The information and decision-making processes for
risk management are clearly defined across the entire Bank. There
are clearly defined authorisation levels and reporting duties for the
approval and acceptance of business. Before introducing new or
modified products, formalised examination processes must be complied with. Products exhibiting fundamentally new characteristics
may only be offered after they have been approved by the Board of
Managing Directors and integrated in the Bank’s risk management
system and accounts. The Central Risk Controlling unit develops
methods to measure, monitor and manage risks. The Board of Managing Directors lays down risk management methods and standards
both for head office and the branches on the basis of proposals submitted by Central Risk Controlling. Hamburgische Landesbank’s
business segments are managed according to the global head principle. Each global head has responsibility for his or her business segment worldwide, including risk management. The Board of
Managing Directors defines frameworks for managing risk either in
the form of global or individual limits or by defined authorisation
levels. The Audit Department is responsible for independently reviewing the risk management system, performing regular checks to verify
the suitability and efficiency of risk management processes.
Credit-risk
Credit-risk is defined as loss potential caused by the default of business partners or countries. In addition to the credit-risk in the narrower sense and the counterparty risk as part of the credit-risk, and
country risk, we also include shareholder risk here.
Credit-risk in the narrower sense refers to loss potential caused by a
business partner defaulting. This risk is managed using credit-risk
limits defined by the Board of Managing Directors as well as clearly
defined authorisation levels governing the approval of credit-risks.
The Bank has a system of internal credit-risk classes linked to external rating systems. Classifying credit-risks helps to assess creditstanding risk and therefore plays a key role in determining the risk
margin in the course of preliminary calculations. The Bank’s Supervisory Credit Committee is kept regularly informed of existing
credit-risks. Major new loans must be submitted to the Supervisory
Credit Committee either for information purposes or for approval.
Counterparty risk is defined as loss potential arising from the deterioration of the credit standing or the default of a business partner
with whom financial futures transactions with a positive market
value have been entered. The counterparty risk is restricted by
means of limits based on credit standing. Counterparty risks arising
from derivatives are measured with respect to their inclusion in the
40
internal limit system using the market-to-market method . As at the
end of 2000, the nominal value of the Group’s derivatives stood at
€ 100.06 billion (1999: € 87.32). The Bank has entered into collateral
and netting agreements with a number of key counterparties to
hedge counterparty risks. Allowing for these netting agreements,
the replacement costs of derivatives as at the end of the year stood
at € 1,564 million (1999: € 896 million). The replacement costs are
the notional expenditure which would be required to reinstate the
position by means of a replacement transaction in the event of the
counterparty defaulting. We are currently rolling out an integrated
credit and counterparty risk management system to further
enhance risk management operations.
Country risk is the risk, over and above credit-risk, in as much as if
a country imposes currency transfer restrictions preventing existing payment obligations in that country from being met. A ratingbased country limit system restricts country risks on the level of the
Bank in total, forming the basis for their structured management.
Aggregate foreign exposure is limited to a certain proportion of
total lending as part of management of the loans-portfolio structure. All positions exposed to country risks are regularly monitored
by the International Business Committee, which particularly analyses the risk situation and submits recommendations regarding the
portfolio-structure proposals to the Board of Managing Directors.
Central Risk Controlling is also represented on this committee. The
following table breaks down country-risk exposure. Foreign exposure is the unsecured share of credit and counterparty-risk exposure, i.e. the aggregate for the facility in question less collateral not
exposed to country risks. Risk management limits foreign exposure
for each country on a risk-adjusted basis.
Foreign exposure
by region
as at year end
Region
African countries
Asia-Pacific
International organisations
Latin America
Central and Eastern Europe
Middle East
North America
Western Europe
Total
2000
0.1%
8.3%
1.3%
0.7%
1.4%
0.1%
13.9%
74.2%
100%
Percentage of
foreign exposure
1999
0.1%
7.2%
0.9%
0.7%
1.2%
0.1%
15.5%
74.3%
100%
Shareholder risk is the risk of loss arising from the provision of
equity by the Bank to third parties. This primarily entails risks in
41
Annual Report 2000
connection with our holdings. Against the backdrop of the volume
growth and individual objectives of the Bank’s participation, we
have laid down holdings controlling procedures to manage business
and risks. The key element here is to categorise the entire portfolio
into strategic, operative and investment-oriented investments so
that they can be included in the Bank’s overall budgeting operations and profit & loss allocations. The operative and investmentoriented holdings are managed by the responsible departments as
part of the Bank’s overall budgeting operations on a profit & loss
and risk-oriented basis, while strategic holdings are the responsibility of the Board of Managing Directors. Prior to holdings being
made, a due-diligence review is performed to assess the associated
risks. A seat on the companies’ corporate-governance bodies forms
a key factor in managing this risk. This is the case with the main
strategic and operative holdings, ensuring access to extensive information on their business and commercial performance and greater
ability to influence them. Further shareholder influence can be
exerted by defining the transactions necessitating consent as well
as the majorities required in the companies’ by laws.
The following figures on credit-risk testify to our cautious business
policy. Actual defaults as a ratio of total lending volumes (default
rate) amounted to 0.17% in 2000 (1999: 0.03%) and has averaged
0.08% over the past five years. Year-end risk provisioning against
the risk of loan defaults (provisions set directly against claims and
general loan loss provisions) amounted to € 672 million (1999:
€ 775 million). In terms of total lending volumes, this translates into
a provisioning ratio of 0.74% (1999: 0.96%). General loan loss provisions were € 44 million (1999: € 31 million). We are currently in the
process of extending our credit-risk measurement and management
operations – not least of all against the backdrop of the revised
Basle capital-adequacy standards. The existing rating systems are
being further enhanced. In addition, further internal rating modules specifically tailored to the Bank’s individual loan segments will
be implemented step by step. Furthermore, we have modified
administrative and IT structures to permit extensions to credit-risk
measurement and lending-portfolio management.
Liquidity risk
42
Hamburgische Landesbank’s risk management system covers both
the long-term and short-term aspects of liquidity risk. The Board of
Managing Directors is responsible for defining the underlying conditions for liquidity management. The management operations
implemented subject to these conditions are geared to ensuring
that daily and future payment obligations can be met (liquidity-risk
management in the narrow sense) and to adjust our funding basis in
the light of liquidity requirements (funding-risk management).
Operative liquidity management within the Bank is handled by FX &
Money-market Department. Structural short-term and long-term
liquidity planning is delegated to Asset Liability Management.
Strategies for managing liquidity risk are regularly defined by the
cross-department “Liquidity Management” committee.
FX & Money-market Department is responsible for overseeing dayto-day compliance with the Bank’s payment obligations. To this
end, daily liquidity outflow statements and cash flow summaries
are used for the main funding currencies either in the Bank’s FX &
Money-market Department or in the individual foreign branches in
accordance with local regulatory requirements. The individual divisions keep FX & Money-market Department regularly informed of
any major transactions impacting on liquidity. Asset Liability
Management is responsible for monitoring compliance with
regulatory rules. Liquidity Convention II of the Bundesaufsichtsamt
für das Kreditwesen (German Supervisory Office for the Banking
Sector) was complied with at all times during the fiscal year. As at
31 December 2000, the liquidity coefficient according to Convention II of KWG (German Banking Act) stood at 1.5 (1999: 1.6), i.e.
well above the minimum requirement of 1.0.
Amounts
according to
principle II
as at year-end
2000
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Asset Liability Management compiles a detailed monthly liquidity
statement for the Bank, documenting all known maturity dates and
value dates for lending and deposit-taking business for the next
12 months. All maturities of existing holdings or value dates of new
43
Annual Report 2000
business known are examined to determine their impact on the
Bank’s liquidity and liquidity structure as well as compliance with
the liquidity convention. Liquidity status is regularly reported to
the Board of Managing Directors and the departments represented
on the Liquidity Management committee. Our strong and diversified position in national and international markets safeguards dayto-day compliance with payment obligations as well as access to
short-term liquidity. Additional reserves are available from the
extensive holdings of liquid securities in the liquidity reserve as well
as paper eligible for inclusion in collateral pools which may be used
for repo transactions with the European Central Bank at all times.
Asset Liability Management reports to the Liquidity Management
committee on proposals to manage funding risk and hence to safeguard a balanced funding basis. The committee formulates the
Bank’s forward funding plans on the basis of a long-term strategy.
By defining liquidity limits and notional liquidity costs, the committee ensures a balanced funding structure. The sources of funding
available to the Bank and the cost of such funding are underpinned
by our stable business relations with national and international
customers, our innovative products finding high market acceptance as well as the high ratings by leading international agencies,
which we want to use to tap additional funding potential in foreign
markets in particular.
The market-liquidity risk is the risk of only being able to settle or
liquidate positions at a loss due to market imperfections such as
insufficient depth, breadth or regenerative potential. Exposure to
market-liquidity risks is curtailed by means of the rules concerning
approval of trading in new products and markets as well as existing
product and country limits. In compliance with its internal rules,
Hamburgische Landesbank’s trading operations are primarily limited to liquid markets. Potential losses arising from disruptions to
market-liquidity are allowed for by means of Value-at-Risk (VaR)
evaluations and risk capital budgeting. Regular stress-testing measures risk acceptability in exceptional market conditions, including
potential losses arising from disruption to market-liquidity.
Market-risk
44
Market-risks entail potential losses to which our position is exposed
as a result of forward fluctuations in market value as a result of a
change in interest structure (interest risks), exchange rates (currency risks), equity prices (equity risks) as well as the prices of
precious metals, commodities, funds and other tradable items (miscellaneous price risks). Positions with an option component entail
additional risks arising from fluctuations in price volatility (volatility risks). The Board of Managing Directors defines the risk-measure-
ment, limiting and management methods and processes, budgeting
a separate risk capital amount as the maximum loss limit for market-risks in response to a proposal submitted by Central Risk Controlling. In this connection, risks arising from trading and strategic
business are minimised by a dynamic system of result-oriented VaR
limits. The Capital Markets Department and the FX & Money-market
Departments are responsible for managing market-risks arising from
trading positions. Asset Liability Management defines and manages
interest risks for the entire Bank’s euro payment flows. VaR limits
for both the FX & Money-market Department and the Capital
Markets Department are derived from the VaR limit for trading business. Special VaR limits based on the limit for strategic positions are
spread across various divisions for strategic positions. The dynamic
VaR limits are reviewed at least once a quarter in the light of
prevailing trends in the capital markets, the Board of Managing
Directors’ risk assessment and the Bank’s earning position. Central
Risk Controlling is responsible for developing methods for measuring and limiting market-risks and for analysing risks arising from
new products. To this end, it defines standardised parameters to
ensure a uniform approach across the Bank’s head office and its foreign branches. Operative risk measurement and limit monitoring is
performed independently of the operative departments by a special
Risk Controlling in the Trade Administration Department. Here, the
market-risks of all of the Bank’s positions are quantified and
charged to the corresponding VaR limits, after which compliance
with the limits is monitored. The risk parameters of business performed by the foreign branches are recorded locally and forwarded
to the Trade Administration Department. As a fundamental principle, it is not permissible for limits to be exceeded. If they are, however, the procedures and defined authorisation levels laid down in
internal instructions must be followed.
Trade Administration Department reports on market-risks arising
from trading and strategic positions, ensuring that the Board of
Managing Directors and the operative departments are kept regularly informed on the extent of risk exposure and limit utilisation
for both individual parts of the portfolio and for the total Bank. In
addition, Central Risk Controlling performs a monthly analysis illustrating and explaining movements in limit utilisation in trading
business performed by the Capital Markets and FX & Money-market
Departments as well as in strategic positions in the course of the
month. All market-risks are condensed across the Bank as a whole
and compared with budgeted risk capital. Strategic positions
exposed to market-risks are kept under constant observance by the
“Investment Strategy-Committee”. This central committee forms
part of the risk management system, submitting proposals to the
45
Annual Report 2000
Board of Managing Directors for engaging in or winding up strategic positions on the basis of current market assessments and against
the backdrop of the prevailing risk situation. The administrative
“firewall” between risk monitoring and risk management stipulated
by the regulative framework of the German Minimum Requirements
for Performing Trading Business is in place right up to level of the
Board of Managing Directors.
Our system of measuring and managing market-risks is based on the
VaR approach. Market-risks are identified on the basis of risk
parameters calculated by Central Risk Controlling according to the
Basle capital-adequacy standards on the basis of historical market
fluctuation. To this end, a confidence interval of 99%, a retention
period of 10 days (for trading positions) and 20 days (for strategic
positions) and a historical observation period of 250 trading days
are assumed. The VaR calculated on the basis of these parameters
therefore represents loss potential which with a likelihood of 99% is
not exceeded if a position is held over the 10 or 20-day period. Separate risk parameters are identified for interest, equity and currency
risks to allow for the individual determinants and are updated at
least once a quarter. They are also back-tested at least once a quarter to determine the historical reliability of the market-risk parameters used.
The utilisation level of the VaR limits compares the VaR calculated
with the current VaR limits corrected for unrealised or realised
profit & losses. The following chart sets out VaR for trading transactions in the course of 2000. The minimum and maximum values
Value-at-Risk for
trading positions in
the course of 2000
25
20
15
10
5
0
mn
€
46
3/1/00
3/4/00
Daily
Maximum
Minimum
Average
3/7/00
2/1/00
29/12/00
delineate the range for potential loss risk. The VaR with trading
transactions was between € 8 million and € 23 million (previous
year: € 5- € 23 million). The VaR for trading transactions as at
31 December 2000 stood at € 10 million (previous year: € 23 million).
The following illustration shows that VaR for strategic positions in
fiscal 2000 exhibited a range of between € 92 million and € 145 million. The VaR for strategic transactions stood at €115 million at
year-end 2000.
Value-at-Risk for
strategic positions
in 2000
150
140
130
120
110
100
90
80
mn
€
3/1/00
3/4/00
3/7/00
2/10/00
29/12/00
Daily
Maximum
Minimum
Average
The VaR limit for market-risks arising from trading and strategic
positions (including charges to profit & losses) came to € 267 million
and risk to € 125 million at year-end 2000. This is equivalent to 47%
utilisation of the VaR limit for the entire Bank. The following table
breaks down VaR by interest, currency, equity and miscellaneous
price risks as at the end of the year.
47
Annual Report 2000
Value-at-Risk
year-end 2000
Trading
Interest risks
Currency risks
Equity and
miscellaneous price risks
Total
Value-at-Risk
(in € mn)
Strategic
business
Value-at-Risk
(in € mn)
Total
Value-at-Risk
(in € mn)
4.7
2.2
42.6
15.3
47.3
17.5
3.2
10.1
56.7
114.6
59.9
124.7
Utilisation of risk capital for trading business in the Capital Markets
and FX & Money-market Departments as well as for all strategic
positions in the course of 2000 is set out in the following chart.
Value-at-Risk
utilisation in
the course of
fiscal year 2000
90
80
70
60
50
40
30
20
10
0
% 3/1/00
3/4/00
3/7/00
2/10/00
29/12/00
FX & Money-market
Capital Markets
Strategic Positions
Average daily performance of trading transactions exposed to
interest risks improved sharply over the previous year. Exposure to
currency risks also resulted in higher gains. By contrast, the average performance of trading transactions exposed to equity and
miscellaneous price risks was down on the previous years. The
following table breaks down the respective average daily perform-
48
ance figures as well as the VaR for trading transactions in 2000 and
1999 according to the individual market-risk types.
2000
Average daily figures
Performance 1) Value-at-Risk 2)
(in € ’000)
(in € ’000)
Average daily
performance in
2000 and 1999
Interest risks
9
Currency risks
50
Equity-price and
Miscellaneous price risks 26
1999
Average daily figures
Performance 1) Value-at-Risk 2)
(in € ’000)
(in € ’000)
9,428
1,047
- 46
37
7,701
805
4,169
76
3,941
1) Operational profit contribution of trading business
2) Average calculation based on 254 trading days
The performance and market-risks of derivatives – particularly
volatility risks under options – are included in the figures quoted.
The following chart sets out the frequency distribution of trading
income in fiscal 2000. Loss was no higher than € 5 million on any
single trading day. At the same time, the VaR calculated was not
exceeded on any day.
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Distribution of
daily performance
of trading transactions in 2000
o_
In accordance with the German Minimum Requirements for
Performing Trading Business, the Bank backs up daily risk measurement operations by means of quarterly stress tests to examine the
impact of exceptional market fluctuation on market-risk. The stress
parameters used are calculated and regularly updated by Central
Risk Controlling. The Board of Managing Directors is informed of
the results of stress-testing in the monthly analysis report. Stresstesting performed in 2000 resulted in only a single case of a bud-
49
Annual Report 2000
geted VaR limit being potentially by a very small margin exceeded.
By comparison, risk capital for market-risks had been consistently
within defined limits in the previous year even under unfavourable
market conditions. The Bank complies with the regulatory requirements provided for in the German Banking Act by calculating on a
monthly basis the amount of equity capital necessary to cover
market-risks on the basis of the standard procedures stipulated or
optional according to Principle I. None of these limits were
exceeded in 2000. All powers, procedures, definitions and all other
necessary rules related to risk controlling are set out in internal instructions and documents, which are updated as and when required.
Central Risk Controlling is involved either directly or indirectly.
Operational risk
Hamburgische Landesbank defines operational risk as the risk of an unforeseen direct or indirect loss caused by human conduct, shortcomings in processes or controlling procedures, technological problems or
external factors. At the present time, operational risks are identified,
measured and managed on a decentralised basis for the most part.
Last fiscal year, the Bank took numerous measures to minimise
operational risks and to ensure smooth business operations. To
avert technical risks, it is particularly necessary to ensure that all
systems are fully operational and that all data is backed up. To this
end, all data is backed up daily on data media stored at secure
separate locations. A secondary mainframe is available in the event
of a system failure. Data is regularly mirrored between the primary
and secondary data system to prevent any loss of data in the event
of one of the systems failing. The secondary computer system is
located in a physically separate building for security reasons.
Moreover, there are extensive service contracts for the mainframe
systems as well as a contract with a specialist company for the
provision of alternative computer resources for use in emergencies.
Annual tests are performed to determine the availability of alternative facilities and to simulate the transfer of outsourced data and
emergency procedures. The principle of hardware redundancy is
also applied in the trading departments to ensure continued
operations in the event of an emergency. Thus, Hamburgische
Landesbank has a second trading room in a different building outside its head office so trading can be continued in an emergency
with only minimal delay. Maintenance contracts have been signed
with the responsible producers and software companies for both
the trading platform and the programs for securities, derivatives,
money-market and FX products. The IT-related measures are
designed to reduce technical risks. In addition, the physical separation of back-up facilities averts the risk caused by external determinants such as fire or natural disasters.
50
In order to reduce human risks, the Bank has implemented suitable
programs for selecting, training and deploying staff as well as for
staff promotion and development aimed at maximising professional
and personal potential. The Bank’s low employee fluctuation rate
testifies to the success of our endeavours to reduce personnel risks.
Separate units are responsible in conjunction with Internal Auditing
for monitoring statutory provisions relating to compliance and
laundering. Internal controlling systems based on individual business processes are used to avert the risk of fraud or litigation (risks
resulting from errors or inefficient processing). Internal Auditing
assists in establishing controlling systems when new or modified
products are launched. It regularly reviews existing systems and
monitors the implementation of possible improvements. This also
entails examining access systems and their actual use in the IT
infrastructure in the light of data security and consistency
requirements.
Internal Auditing operates as an independent entity on behalf of
the Board of Managing Directors, performing one or three-year
reviews in the areas described in the German Minimum Requirements for Performing Trading Business, with crucial aspects examined once a year. All of the Bank’s other processes are examined in
accordance with a risk-oriented schedule. The parameters used to
compile this schedule are:
• the importance for the Bank of the object to be reviewed
(holdings, trading volumes, costs/income),
• the related product or business risk
(complexity, contractual, credit-standing and market-risks),
• possible operating and error risks
(personnel resources, resources available to the internal
controlling system) and
• the amount of time which has lapsed since the last review.
Special measures have also been taken for project risks. Projects
performed within the Bank are subject to consistent risk management, beginning with the decision on whether to approve a project
and continuing throughout the performance of the project. A project committee decides on whether projects are to be implemented
on the basis of application forms setting out the objective as well as
details of the structure of the project, expected benefits, the
budget, schedule and risk factor based on the relationship with
other projects, possible contractual penalties and experience
gained from similar projects. During the project-implementation
51
Annual Report 2000
phase, the project manager compiles monthly status reports presented at regular intervals to the project committees for decisionmaking and management purposes. The quality of project results is
permanently monitored by review teams. In addition, the project
manager is responsible for identifying and evaluating risks throughout the entire duration of the project. Details of the results and the
measures taken must be submitted to the project committees. Upon
the completion of projects, experience gained is documented in the
form of a closing report and is available for future projects.
The management of legal risks is organised by means of institutionalised processes. Hamburgische Landesbank’s Legal Department has
suitably qualified experts for all aspects of the Bank’s business. All
contracts used by the Bank are subject to detailed legal examination
and monitoring to limit legal risks. In addition, the Legal Department
provides considerable advice prior to the signing of contracts. The
Bank uses internationally acknowledged standardised contractual
documentation for virtually all derivatives, specifically the master
contracts of the International Securities Market Association (ISMA)
and the International Swaps and Derivatives Association (ISDA), to
ensure efficient handling of international business, reducing legal
risks effectively. Although the Bank also engages in derivatives business with institutional customers (e.g. insurance companies), the
bulk is handled with professional interbank partners.
In addition, further steps are to be taken to extend the management system for operational risks in the next fiscal year. The aim is
to introduce a uniform score-based early-warning system for
depicting and evaluating the various risk types across all units as a
basis for regular, bank-wide uniform reporting on operational risks.
Miscellaneous risks
52
We define miscellaneous risks as loss potential caused by strategic
activities implemented, planned or neglected. They are analysed
and managed by special project teams as part of Hamburgische
Landesbank’s strategic planning process. Last year, we aligned the
Bank’s strategy and organisational structure on the basis of results
gained from a project commenced in 1999. Thus, all divisions were
restructured according to customer or product responsibility. In
the securities-trading area, the content and structure of trading and
sales activities were reorganised. In addition, risk and profit & loss
oriented decisions for the entire Bank’s euro payment flows were
assigned to the new Asset Liability Management department subject
to a VaR limit. The planning process for the entire Bank was successfully restructured during the year under review in the light of
the requirements of our profit-centre accounting system. We
expect these as well as further strategic measures which are either
planned or have already been implemented to stimulate our future
business and minimise potential loss arising from so-called miscellaneos risks.
A current complaint of the EU Commission concerns the existence
of institutional liability (Anstaltslast) and guarantor’s liability
(Gewährträgerhaftung) as traditional report mechanisms on behalf
of public banks in Germany. Given the current status of the debate
(three different possible solutions), it is currently not possible to
identify the impact which this might have on Hamburgische
Landesbank. However, the possibility of changes affecting the
Bank’s future cannot be ruled out. In addition, the EU Commission
has asked for a statement of the German Federal Government
concerning the transfer of in-kind capital in the form of residential
housing assets to the Landesbanken. Hamburgische Landesbank is
also involved in answering this request for information.
Successful risk
management
With the completion of our project strategic and organisational
orientation of the Bank, which was commenced in 1999, we have
created a viable basis for the continued successful performance of
our fields of business. By setting up central profit-centre accounting, integrated planning spanning the entire Bank as well as personal objective agreement and assessment processes, we have taken
major steps to enhance earnings transparency and ensure reliable
budgeting. Numerous other projects involving the entire Bank are
being implemented to ensure that any negative trends in risk structures are detected at an early stage and allowed for in risk management. The Bank’s risk strategy was again characterised by our
traditionally cautious business policies in 2000. There were no material changes in the risk-weighting of portfolio components with
respect to market and counterparty risks. We continued to apply
stringent criteria, taking sufficient precautions again for all discernible and future risks. Provisions for counterparty risks across
the Bank as a whole (provisions set directly against claims and general loan loss provisions) stood at € 672 million at year-end (1999:
€ 775 million). We substantially exceeded the minimum requirements for liquidity management, achieving a liquidity ratio (Convention II of the German Banking Act) of 1.5 on December 29, 2000.
We have not modified our cautious approach to exposure in illiquid
markets. At year-end 2000, the Bank’s liable equity capital according to KWG – including supplementary capital – amounted to
€ 4,930.7 million (1999: € 4,359.6 million), resulting in a tier I
coefficient of 11,6% (as a ratio of weighted risk assets including
market-risk positions to liable equity capital).
The charts and the pictures are not part of the management report.
53
Annual Report 2000
In order to support the Bank in international securities, lending and
refinancing operations, in 1998 we established two subsidiaries on the
Channel Isle of Guernsey. Hamburgische Landesbank (Guernsey) Ltd. is headquartered in Elisabeth House in St. Peter Port.
54
Hamburgische Landesbank in the Markets
Hamburgische Landesbank’s Operating Bases Abroad
Hamburgische Landesbank defines its role as that of an internationally oriented commercial bank with a clear focus on the economic
region of Hamburg. The Bank’s intimate knowledge of this location,
characterised as it is by a rather unique set of opportunities and
risks, is largely responsible for its strong position in the market. The
importance of Hamburg as a centre for foreign trade and as a
principal transport hub – not only for the Federal Republic of Germany, but for all of Northern and Central Europe – grew rapidly following the end of the confrontation between East and West. The
increased global orientation of many Hamburg based companies
was a natural consequence, the internationalisation of their business activities resulting in a marked shift in their banking requirements. The corporate structure of Hamburgische Landesbank has
always reflected the international orientation of Hamburg’s
economy. Supporting our customers in their foreign trade activities
not only from our headquarters, but maintaining a presence in
important international financial and economic centres therefore
became a necessity over the years. Ever increasing international
competition in the banking sector also meant that opportunities
abroad simply had to be seized.
Hamburg’s economy characterised
by foreign trade
Hamburg’s economy has always been characterised by its strong
commitment to foreign trade. Today more than 2 000 local companies are active in foreign trade, and about one tenth of jobs in the
city are directly dependent on exports, imports and/or the transit
trade. Thanks to its high-capacity sea port – the fourth-biggest
maritime port in Europe, and the ninth-ranking container port in
the world – the numerous shipping lines covering all corners of the
globe, the excellent transport infrastructure extending both into
the hinterland and into neighbouring countries, as well as the
broad range of supporting services of all kinds, Hamburg provides
ideal conditions for conducting international trade. In 2000, goods
to the value of approx. € 100 bn passed through the city’s customs
facilities – the equivalent of about 9 per cent of Germany’s foreign
trade volume.
The nature of the business activities of Hamburgische Landesbank
are a consequence of the foreign trade orientation of Hamburg’s
economy: from foreign trade financing and foreign payments
business, customised swap facilities and foreign currency financing
to hedging of specific risks related to foreign trade. Even though
most of our business activities still centre on the Hamburg region, we
are now present in important international banking centres such as
London, Hong Kong, Singapore, Guernsey and Shanghai; in addition,
we have at our disposal a closely-knit network of correspondent
banks. Our local representatives actively support our customers in
55
Annual Report 2000
the processing of documentary operations and payment flows,
providing them with our proven range of expertise, the network of
correspondent banks as well as our technological infrastructure.
A further example of the growing need for an international presence is ship financing. The port of Hamburg and the shipping lines
based here have always played an important role in the Bank’s business activities. In the area of ship financing, in particular, our customers today require the type of structured financing packages
that can no longer be put together in the domestic market alone.
Additionally we supply them with the wide range of our tailored
banking services. Hamburgische Landesbank enjoys great popularity as a provider of financial services for domestic and foreign shipping lines. This is true both for direct customers and in our role as a
partner in syndicated financing deals put together for complex
financing projects, partly under our own management. Over the
years, then, the Bank has developed from a strictly regional
provider of ship financing into an internationally recognised and
leading address in this field.
The wealth of information generated through our international
contacts and the expertise developed as a result also benefit our
regional customers, since the increasing convergence of the markets means that new kinds of financial products become available
in the German market as well. Meeting the varied needs of customers in our cross-border banking business therefore requires
extensive knowledge of international finance operations. After all,
it is not only our customers, but also the competition in the financial sector that present the Bank with new challenges every day,
and we successfully tackle these challenges thanks to the support
of our operating bases worldwide.
Present in Asia
since 1972
56
Hamburgische Landesbank’s presence in Asia has already had a
considerable history. As far back as 1972, the Bank established a
base in Hong Kong, one of the key locations for finance and trade
in South East Asia. Initially the Bank took an indirect stake in the
Hongkong-based Asian Pacific Merchant Finance Company and in
1979, following a full takeover, the company was renamed
HAMBURG LB INTERNATIONAL Ltd.. To supplement this subsidiary, a
legally dependent Branch was also established in Hong Kong in
1982. In the intervening period it became apparent that the subsidiary was no longer needed, and the company was consequently
wound up. In September 1999 the Branch took up offices in the
newly built Cheung Kong Tower on Hong Kong Island, located on
the former site of the legendary Hong Kong Hilton. Currently
employing a staff of 85, of which three members were sent from
Hamburgische Landesbank’s
Operating Bases Abroad
Germany, total assets of the Branch amounted to € 10 bn at the end
of the year 2000.
In the early days the Hong Kong Branch above all looked after the
import and export business of our German customers operating in
the Asian region. Today our customers also include Hong Kong trading companies, most of which maintain commercial relations with
Germany or with Europe. Like our Head Office, the Branch offers
these clients the full range of customary banking services. The
Branch also engages in the lively interbank business, and on a selective basis participates in syndicated loans for major corporations
based in the region. Money-market and securities investments are
also provided for Hong Kong’s high net-worth individuals.
Support in Hanoi
As a result of the positive long-term economic outlook for South
East Asia as a whole, Hamburgische Landesbank decided in recent
years to strengthen its presence in the region further. During the
summer of 1999, a Representative Office was established in the
Vietnamese capital, Hanoi. This decision was influenced in particular by the increased interest that companies from Northern
Germany have been showing in Vietnam, both as a sales market of
great promise and as a favourable production location. For the time
being, our activities consist mainly of assisting our customers with
consultancy services, by conducting research and highlighting
business opportunities.
...Shanghai...
Two more locations were established in the Far East in the year
2000. In February of this year the Central Bank of China granted
approval to establish a presence of Hamburgische Landesbank in
Hamburg’s partner city Shanghai, the ancient and newly blossoming financial centre of China. Based in Pudong, Shanghai’s banking
area, the Representative Office supplements the activities of our
Hong Kong branch and generally supports the China business
through research and by establishing local business links. In addition, the office caters for customers with a range of services relating to payment transactions as well as trade financing, already
resulting in the first customer acquisitions. The Representative
Office also promotes the establishment and reinforcement of links
with Chinese banks and public authorities of China.
...and Singapore
On 1 September 2000, our Singapore Branch commenced operations. This investment was prompted by a certain shift, at Hong
Kong’s expense, in the relative importance of refinancing centres
for the Asian markets. This is because – as a result of its return to
China – the international rating agencies had downgraded the
former crown colony in their country risk assessment. Conse-
57
Annual Report 2000
The enormous interest of Northern Germany companies in the emerging market
of Vietnam and its good long-term development potential induced us to open a
Representative Office in Hanoi as well, where we assist our customers
particularly in initiating business; in addition, we acquire refinancing funds
from local banks at this location for our Hong Kong Branch.
58
quently Singapore, with its favourable country risk rating, gained
in importance as a recognised banking location in this region. It is
envisaged that a proportion of the refinancing funds for our Asia
business should in future be acquired from the Asian as well the
Australian and New Zealand markets via this location. In our view,
potential investors will primarily be central and commercial banks,
but also corporate customers, institutional investors and high networth individuals. Apart from deposit-taking and money and
FX-trading, intended future operations include short- and mediumterm lending to selected customers as well as the establishment of a
ship financing portfolio for local companies. Commodity trade
financing is of particular importance, as Singapore is a supraregional hub with respect to this specialised field of business. Our
entry into this market segment was facilitated through the
takeover of the well-established and competent commodity trade
finance unit of a French bank, after that bank closed all overseas
branches as a result of a re-orientation of its corporate policy. The
Branch currently has a staff of 26.
London Branch with In Europe, Hamburgische Landesbank is represented in London, the
most important financial centre in Europe, and on the Channel
broad spectrum of
island of Guernsey. Via our London Branch, we offer our customers
activities
a wide spectrum of specific banking services. The Bank takes advantage of the London location as a financial centre of international
importance primarily for the purpose of our foreign-currency
refinancing business. A significant proportion of Hamburgische
Landesbank’s loan portfolio is denominated in US dollars, currencymatched refinanced from London. Of similar importance is the
issuance of short-dated certificates of deposits – predominantly in
US dollars – and in future also of commercial paper. All these activities – specifically those in US dollars – are supported by an own
FX & money-market division in London. In addition, the London
Branch is engaged in lending operations for corporate customers,
with a special focus on trade and real estate financing, as well as
syndicated loans to companies in Britain. Over the past few years,
the Branch has also become one of the most significant international-scale lenders in Iceland. What is noteworthy in this context is
that the Branch not only services Icelandic banks, but that it provides services directly to major Icelandic companies. London
Branch has also played a major role in the successful expansion of
our commitment in the international ship credit markets over
recent years. And finally, the placing of money-market-investments
in London on behalf of our Hamburg customers remains a traditional focus of our London-based activities. London Branch was
established in 1989. Employing a staff of 58, total assets came
approximately to € 16 bn.
59
Annual Report 2000
Successfully
finance and banking subsidiaries on
the Channel Isle
of Guernsey
In 1998, Hamburgische Landesbank established two subsidiary companies on the British Channel Isle of Guernsey: Hamburgische
Landesbank (Guernsey) Limited, and Hamburgische LB Finance
(Guernsey) Limited. These subsidiaries are intended to supplement
and expand the international business activities of the Bank.
Hamburgische Landesbank (Guernsey) Ltd. holds a full banking
license and is mainly active in asset swaps – that is, in dealing in
investment securities acquired subject to swap arrangements – and
in asset backed securities and corporate bonds, i.e. involving securitised credit-risks. In this particular field of business, known as
credit investments, Hamburgische Landesbank is one of the major
players in Germany. The Guernsey office serves to strengthen this
role, among other things. The deposit-taking and lending business is
also actively pursued in Guernsey. Of lesser importance are the normal banking services, such as payment transactions and custodial
services. The Branch currently has a staff of seven, all of them local
employees, with the exception of the German branch manager.
Hamburgische LB Finance (Guernsey) Ltd. is dedicated exclusively to
the raising of long-term refinancing funds on the international capital market. The Bank uses the LB Finance to launch international
bond issues as part of its Euro Medium-Term Note (EMTN) programme. In autumn of last year, with the aim of taking more advantage opportunities for refinancing offered in the international
capital markets, we used our Finance subsidiary to launch for the
first time a so-called euro benchmark bond – an unsecured 5-year
fixed-income issue worth roughly € 1 bn. This issue, which was well
received in the euro markets, represented a very successful placement for us and our lead managers.
New Representative The increasing requirements of our Hamburg customers and the
Offices in New York intensifying competitive pressures force us to reassess the Bank’s
location policy continually in terms of its contribution to the overand Warsaw
all success of our operations. In our view, the US market will be a
very promising source of refinancing in the long-term, and, based
on our positive rating, we will therefore endeavour to acquire an
increasing volume of deposits there. To this end, we are currently
preparing to establish a Representative Office in New York, the
financial and economic centre of the US. This base will also be of
particular significance for our real estate financing operations.
Over the past several years, we have strongly promoted international business in this area. In the meantime, loans for US projects
are making up a significant proportion of our international real
estate loan portfolio. Proceeding with due caution, we will try to
acquire new corporate customers as well as partner banks for syndicated financing deals. Aside from acquiring new business contacts,
60
the local office will initially be conducting research and evaluating
projects on offer in the local market. A further field of activity that
will benefit from a local presence in the US is aircraft financing.
Almost one fifth of our current commitments in this area involves
North American companies.
The Bank also has plans for setting up a Branch in Poland. In Europe
it is the growing market in the reform countries of Central and Eastern Europe in particular that are offering the most potential for
profitable lending commitments, and neighbouring Poland is the
most prominent of these. Economic ties between Hamburg and
Poland have enjoyed very dynamic growth over the past few years.
With the port of Hamburg gaining in importance as a transit hub
for Poland’s overseas trade, business links between companies in
Poland and Hamburg are intensifying accordingly. In order to
actively support our customers in their Polish business ventures,
and to be closer to the local market ourselves, the Bank is planning
to set up a local office in Warsaw, Poland’s economic, political and
administrative centre. Using a cautious approach, the branch will
endeavour to expand the real estate and corporate customer business over time. Unlike New York, however, the focus here will be on
the establishment of lending operations – the opening up of new
sources for refinancing will not be a priority for the time being.
International
points of presence
in the future
While the cross-border operations of Hamburgische Landesbank
originally served to support the international activities of our
Hamburg customers, offering a comprehensive range of services to
customers of financial centers abroad has become an absolute
necessity in modern times. Acquiring a thorough knowledge of local
markets and structures based on first-hand experience and being
regarded as a competent partner in local operations has proven to
be an important factor of our success in today’s climate of intense
competition. If we are to maintain and expand our position as a
customer-oriented commercial bank in the foreign trade metropolis
of Hamburg, our international points of presence will continue to
be of fundamental importance for the fortunes of Hamburgische
Landesbank.
61
Annual Report 2000
In February 2000 we opened an office in Pudong, the old and revitalised
financial centre of Shanghai. We were very soon in a position to launch initial
business contacts in Hamburg’s partner city, with which numerous fields of
activity have resulted in ties that are not only economic in nature.
62
2000 Annual Accounts
Annual Report 2000
Condensed Balance Sheet
as at 31 Dezember 2000
Bank
Assets
31/12/1999
€ ’000
€ ’000
€ ’000
€ ’000
64,736
388,048
1,843
–
19,198,782
1,023,636
16,636,688
17,660,324
33,472,758
32,316,956
22,871,467
201
19,211,246
539,106
19,750,553
1,673,906
1,686,843
7. Investments
664,517
682,108
8. Shares in affiliated undertakings
186,361
99,283
9. Trust assets
213,139
153,317
–
15,345
27,939
26,376
2,088,116
1,274,719
261,204
274,798
80,724,768
74,328,670
1. Liquid funds
2. Debt certificates issued by public bodies and bills of
exchange eligible for refinancing with central banks
3. Receivables from banks
a) Due at sight
b) Other receivables
2,480,392
16,718,390
4. Receivables from customers
Thereof:
Secured by property mortgages
(1999:
Community loans
(1999:
€
€
€
€
8,486,666)
7,665,543)
4,413,649)
6,754,463)
5. Debt securities and other fixed-interest securities
a) Money-market funds
b) Bonds and debt securities
c) Own debt securities
107
22,427,547
443,813
6. Shares and other variable-yield securities
10. Compensation receivables from public bodies,
including debt securities arising from their exchange
11. Tangible fixed assets
12. Other assets
13. Prepaid and deferred expenses
Total
64
Bank
Liabilities
31/12/1999
€ ’000
1. Liabilities to banks
a) Payable on demand
b) With an agreed term or notice period
€ ’000
€ ’000
€ ’000
32,216,296
1,831,780
31,511,324
33,343,104
2,010,491
30,205,805
2. Liabilities to customers
a) Savings deposits
b) Other liabilities
ba) Payable on demand
bb) With an agreed term or notice period
82,493
88,980
3,515,679)
19,211,790)
22,809,962
2,753,138
17,261,859
20,014,997
20,103,977
17,825,791
11,763,770
2,129,252
13,893,022
213,139
153,317
1,902,985
1,714,654
242,586
253,708
363,934
126,599
64,405
74,865
265,869
58,367
94,694
1,434,922
959,115
912,536
852,536
90,000
65,000
22,727,469
3. Certificated liabilities
a) Debt securities issued
b) Other certificated liabilities
13,612,607
4,213,184
4. Trust liabilities
5. Other liabilities
6. Deferred income
7. Accrued expenses
a) Pensions and similar accruals
b) Tax accruals
c) Other accrued expenses
138,526
145,947
79,461
8. Special item with accrual character
9. Subordinated liabilities
10. Capital with participation rights
11. Fund for general banking risks
12. Equity
a) Subscribed capital
b) Capital reserves
c) Revenue reserves
ca) Legal reserves
cb) Other reserves
1,884,380
445,602
1,884,380
445,602
142,855
126,056
2,654,250
142,855
106,734
249,589
603
49,500
2,629,674
80,724,768
74,328,670
–
6,141,801
–
2,733,752
–
4,464,389
–
1,931,601
268,911
907
54,450
d) Revenue share of dormant partner
e) Profit for the year
Total
Liabilities on endorsements of rediscounted bills
Liabilities on guarantees, endorsements of bills and cheques, and on warranties
Placement and acceptance commitments
Irrevocable lines of credit granted
65
Annual Report 2000
for the Period from 1 January to 31 December 2000
Bank
1999
€ ’000
1. Interest income from
a) Loans and money-market transactions
b) Fixed-interest securities and debt securities
€ ’000
€ ’000
€ ’000
477,879
2,631,881
852,195
3,484,076
3,087,787
396,289
82,938
78,174
2,283
3,401
83,858
–
–
2,991,409
1,228,709
4,220,118
3,742,239
2. Interest expenses
3. Income from
a) Shares and other variable rate securities
b) Investments
c) Shares in affiliated undertakings
77,799
4,859
280
4. Income from profit transfers and partial profit transfer agreements
5. Commission income
116,776
6. Commission expenses
82,122
23,627
93,149
16,199
65,923
7,872
5,352
8. Other operating income
41,065
38,450
9. Income from special item with accrual character
36,327
–
239,652
89,190
34,557
123,747
99,149
222,896
11. Amortisation and depreciation of intangible and tangible fixed assets
16,737
17,576
12. Other operating expenses
26,848
12,744
455,993
336,656
7. Net income from financial operations
10. General administrative expenses
a) Personnel expenses
aa) Wages and salaries
ab) Social security contributions, pension and welfare expenses
b) Other administrative expenses
Carry forward
66
98,475
38,414
136,889
102,763
Bank
1999
€ ’000
€ ’000
Carry forward
13. Write-downs of and provisions against receivables and certain securities
and additions to accruals relating to the credit business
14. Income from reversals of write-downs of receivables and certain securities
and income from reversal of accruals relating to the credit business
17. Income from reversal of write-downs of investments, shares in affiliated
undertakings and securities treated as fixed assets
€ ’000
455,993
336,656
115,842
111,645
–
15. Transfer to funds for general banking risks
16. Write-downs of and provisions against investments, shares in affiliated
€ ’000
115,842
–
111,645
24,750
26,387
39,201
–
–
39,201
82,821
82,821
18. Expenses from loss transfers
–
–
19. Transfer to special item with accrual character
–
94,694
276,200
186,751
20. Result from normal operations
21. Extraordinary income
–
–
22. Extraordinary expenses
–
22
23. Result from extraordinary operations
24. Taxes on income
25. Other taxes
–
97,343
22
74,249
97,789
375
74,624
122,110
61,279
1,851
1,326
54,450
49,500
–
–
30. Profit for the year
54,450
49,500
Profit distribution:
Dividends paid to the City of Hamburg and to Landesbank Schleswig-Holstein
Increase in capital stock
Allocation to reserves (including dormant partner)
31,700
–
23,000
30,400
–
19,300
26. Profit transferred as a result of a partial profit transfer agreement
27. Revenue entitlement of dormant partner
28. Net profit
29. Transfer from net profit into revenue reserves
446
67
Annual Report 2000
Group
Assets
31/12/1999
€ ’000
€ ’000
€ ’000
€ ’000
64,836
388,314
1,843
–
19,331,409
1,023,484
16,208,643
17,232,127
38,170,444
36,782,953
23,442,548
201
19,716,447
539,106
20,255,754
1,673,906
1,686,843
7. Investments
65,527
83,119
8. Shares in affiliated undertakings
75,569
38,491
256,053
195,466
–
15,345
275
282
143,889
129,247
2,145,254
1,313,111
263,163
277,035
85,634,716
78,398,087
1. Liquid funds
2. Debt certificates issued by public bodies and bills of
exchange eligible for refinancing with central banks
3. Receivables from banks
a) Due at sight
b) Other receivables
2,520,726
16,810,683
4. Receivables from customers
Thereof:
Secured by property mortgages
(1999:
Community loans
(1999:
€
€
€
€
12,563,277)
11,411,861)
4,907,249)
7,218,351)
5. Debt securities and other fixed-interest securities
a) Money-market funds
b) Bonds and debt securities
c) Own debt securities
107
22,995,609
446,832
)
6. Shares and other variable-yield securities
9. Trust assets
10. Compensation receivables from public bodies,
including debt securities arising from their exchange
11. Immaterial assets
12. Tangible fixed assets
13. Other assets
14. Prepaid and deferred expenses
Total
68
Group
Liabilities
31/12/1999
€ ’000
1. Liabilities to banks
a) Payable on demand
b) With an agreed term or notice period
€ ’000
€ ’000
€ ’000
31,919,432
1,801,585
32,047,359
33,848,944
2,041,682
29,877,750
2. Liabilities to customers
a) Savings deposits
b) Other liabilities
ba) Payable on demand
bb) With an agreed term or notice period
82,493
88,980
3,539,985
19,874,542
23,497,020
2,759,705
17,828,830
20,588,535
20,677,515
21,140,434
13,522,445
2,129,252
15,681,697
4. Trust liabilities
256, 053
195,466
5. Other liabilities
2,021,903
1,838,258
243,803
255,446
386,605
141,912
64,405
78,985
285,302
58,367
94,694
1, 434,922
959,115
10. Capital with participation rights
912,536
852,536
11. Fund for general banking risks
90, 000
65,000
23,414,527
3. Certificated liabilities
a) Debt securities issued
b) Other certificated liabilities
16,927,250
4,213,184
6. Deferred income
7. Accrued expenses
a) Pensions and similar accruals
b) Tax accruals
c) Other accrued expenses
154,423
146,183
85,999
8. Special item with accrual character
9. Subordinated liabilities
12. Equity
a) Subscribed capital
b) Capital reserves
c) Revenue reserves
ca) Legal reserves
cb) Other reserves
d)
e)
f)
g)
1,884,380
445,602
142,855
126,900
3,673,641
142,855
106,734
249,589
721,073
603
50,344
292,523
3,644,114
85,634,716
78,398,087
3,395,021
4,041,305
3,351,456
3,388,529
269,755
721,073
907
59,401
292,523
Exceptional amount due to capital consolidation
Revenue share of dormant partner
Profit for the year
Adjustment item for shares of other stockholders
Total
Contingent liabilities
Other commitments
1,884,380
445,602
69
Annual Report 2000
Group
1999
€ ’000
1. Interest income from
a) Loans and money-market transactions
b) Fixed-interest securities and debt securities
€ ’000
€ ’000
€ ’000
621,159
2,929,082
864 425
3,793,507
3,257,524
535,983
82,938
78,174
2,283
3,401
83,858
–
–
3,305,740
1,261,810
4,567,550
3,946,391
2. Interest expenses
3. Income from
a) Shares and other variable rate securities
b) Investments
c) Shares in affiliated undertakings
77,800
4,859
279
4. Income from profit transfers and partial profit transfer agreements
5. Commission income
126,115
6. Commission expenses
92,130
23,449
102,666
16,139
75,991
7,896
5,373
8. Other operating income
44,255
42,057
9. Income from promotion business
87,240
86,667
10. Income from special item with accrual character
36,327
–
252,687
99,200
38,368
137,568
98,096
235,664
12. Amortisation and depreciation of intangible and tangible fixed assets
21,504
21, 024
13. Other operating expenses
27, 647
13,049
14. Expenses for promotion business
219, 868
223,185
Carry forward
460,775
337,007
7. Net income from financial operations
11. General administrative expenses
a) Personnel expenses
aa) Wages and salaries
ab) Social security contributions, pension and welfare expenses
b) Other administrative expenses
70
108,762
43,456
152,218
100,469
Group
1999
€ ’000
€ ’000
Carry forward
15. Write-downs of and provisions against receivables and certain securities
and additions to accruals relating to the credit business
16. Income from reversals of write-downs of receivables and certain securities
and income from reversal of accruals relating to the credit business
19. Income from reversal of write-downs of investments, shares in affiliated
€ ’000
460,775
337,007
115,437
111,403
–
17. Transfers to fund for general banking risks
18. Write-downs of and provisions against investments, shares in affiliated
€ ’000
115,437
–
111,403
24,750
26,387
39,201
–
–
39,201
82,821
82,821
20. Expenses from loss transfers
–
–
21. Transfer to special item with accrual character
–
94,694
281,387
187,344
22. Results from normal operations
23. Extraordinary income
–
–
24. Extraordinary expenses
–
22
25. Result from extraordinary operations
26. Taxes on income
27. Other taxes
28. Profit transferred as a result of a partial profit transfer agreement
29. Revenue entitlement of dormant partner
30. Net profit
31. Portion of profit carried forward
32. Profit for the year
–
97.579
22
74,235
446
98,025
375
74,610
122,110
61,279
1,851
1, 326
59,401
50,107
–
237
59,401
50,344
71
Condensed Appendix
Annual Report 2000
Condensed Appendix
Shareholders of Hamburgische Landesbank
– Girozentrale – are the Free and Hanseatic
City of Hamburg, 49,5 %, and Landesbank
Schleswig-Holstein Girozentrale, 49,5 %.
1 % is being held by a dormant partner,
HLB-Beteiligungsgesellschaft mbH.
The Ministry of Finance of the Free and
Hanseatic City of Hamburg provides
governmental supervision.
Hamburgische Landesbank –Girozentrale –,
being a member of the SparkassenStützungsfonds (savings banks’ deposit
guarantee fund) of Hanseatischer
Sparkassen- und Giroverband, is affiliated
to the security system of the German
savings organisations. The affiliated
The range of
consolidated
companies
institutes are secured by this system their
liquidity and solvency being guaranteed
in particular.
Moreover, Hamburgische Landesbank’s
liabilities are guaranteed jointly and
severally by the unlimited support of its
owners.
The financial statements of Hamburgische
Landesbank for the year ending
31 December 2000 have been prepared in
accordance with the provisions of the
German Commercial Code (HGB) and the
Rules for the Preparation of Financial
Accounts by Banks. For a better comparability, prior year results have been
converted into €.
The range of companies consolidated hasn’t
been changed compared to the previous
year.
Name and registered address
of included companies
Capital share
(%)
Hamburgische Wohnungsbaukreditanstalt, Hamburg
82
Hamburgische Landesbank (Guernsey) Ltd., Guernsey
100
Hamburgische LB Finance (Guernsey) Ltd., Guernsey
100
Kommanditgesellschaft Altstadt Verwaltungsgesellschaft & Co.,
Grundstücksgesellschaft, Hamburg
100
Hamburgische Landesbank’s shareholding
in companies according to § 313 para. 2
No.1 HGB, which due to subordinate
importance are not included in the
accounting, the consolidated account and
the annual financial statements according
to § 296 para. 2 HGB, is shown a follows:
74
Capital share
(%)
ALIDA Grundstücksgesellschaft mbH & Co. KG, Hamburg
90
ALIDA Grundstücksverwaltungs GmbH, Hamburg
90
Condensed Appendix
Capital share
(%)
Altstadt Verwaltungsgesellschaft mbH, Hamburg
100
AMC Asset-Management-Consulting GmbH, Hamburg
100
ANTHIA GmbH, Hamburg
100
ARCHIMEDES Gesellschaft für Computerhandel mbH, Hamburg
100
ARCHIMEDES Gesellschaft für Maschinenhandel mbH, Hamburg
100
ATOSSA GmbH, Hamburg
100
BINNENALSTER-Beteiligungsgesellschaft mbH, Hamburg
100
BTO Grundstücksvermietungsgesellschaft mbH & Co. Verwaltungs KG,
München
94
BURGVILLE INVESTMENTS LIMITED, London
100
EALING INVESTMENTS LIMITED, London
100
EQUILON GmbH, Hamburg
100
FARONA GmbH & Co. KG, Hamburg
100
Grundstücksgesellschaft Porstendorf mbH & Co. KG, Hamburg
100
GVT Grundstücksgesellschaft Taucha mbH & Co. KG, Hamburg
100 1)
HAMBURG LB INTERNATIONAL Ltd. i.L., Hong Kong
100
Hamburgische Betriebsverwaltungsgesellschaft
am Gerhart-Hauptmann-Platz mbH, Hamburg
100
HERMIA GmbH, Hamburg
100
HGA 425 fifth Avenue GmbH, Hamburg
100
HGA Capital Grundbesitz und Anlage GmbH, Hamburg 2)
100
HGA New York GmbH & Co. KG, Hamburg 3)
100
HGA Objekt Hamburg 4 GmbH & Co. KG, Hamburg 4)
100
75
Annual Report 2000
HGA Objekt Hamburg 7 GmbH & Co. KG, Hamburg
100
HGA Objekt Hamburg 8 GmbH & Co. KG, Hamburg
100
HGA Objekte Hamburg und Hannover GmbH & Co. KG, Hamburg
80,48
HSG Hamburgische Städtebauförderungsgesellschaft mbH, Hamburg
100
JANTAR Verwaltungsgesellschaft mbH, Hamburg
100
JUPITER Verwaltungsgesellschaft mbH, Hamburg
100
KAPLON GmbH & Co. KG, Hamburg
100
“Katharinen” Verwaltungsgesellschaft mbH, Hamburg
100
Kommanditgesellschaft ARCHIMEDES
Gesellschaft für Computerhandel mbH & Co., Hamburg
100
Leashold Verwaltungs-GmbH & Co. KG, Hamburg
100
LIBELLE GmbH, Hamburg
100
Melusina Pictures B.V., Rotterdam
100
METACOS GmbH & Co. KG, Hamburg
100
MINIMOA GmbH, Hamburg
100
MONTALE Grundstücksverwaltungsgesellschaft mbH & Co. Projekt Nr. 3 KG,
München
100
NEREUS Verwaltungsgesellschaft mbH, Hamburg
100
NIEDERELBE Verwaltungsgesellschaft für Beteiligungen mbH, Hamburg
100
ORSOF Verwaltung GmbH & Co., Vermietungs KG, München
76
Capital share
(%)
98
PL Projekt-Anlagen Leasing GmbH i.L., Germering
100
PREGU GmbH, Hamburg
100
RELAT Beteiligungs GmbH & Co., Vermietungs KG, München
100
Condensed Appendix
Capital share
(%)
ROSENSTRASSE 35 Beteiligungsgesellschaft mbH, Hamburg
100
SAPPHO GmbH, Hamburg
100
SCHU-WES Verwaltung GmbH & Co., Objekt Schenefeld KG, München
95
SHIPEXPRESS SHIPPING ENTERPRISES Limited, Limassol/Zypern
100 1)
Taggert Enterprises Inc., Monrovia/Liberia
100
TERRANUM Gewerbebau Verwaltungs GmbH, Hamburg
100
TERRANUM Gewerbebau GmbH & Cie., Hamburg
100
Unterstützungs-Gesellschaft der Hamburgischen Landesbank mbH, Hamburg
100
YONDAN GmbH, Hamburg
100
1)
95 % share of capital of single institute
formerly: Hamburgische Grundbesitz und Anlage GmbH, Hamburg
3)
formerly: HGA Objekt Hamburg 5 KG, Hamburg
4)
formerly: HGA Objekt Hamburg 4 KG, Hamburg
2)
Methods of
consolidation
The individual accounts of the companies
included in the consolidated account are
stated in accordance with the accounting
and valuation methods of Hamburgische
Landesbank (group parent company). The
annual financial statements of these enterprises and the consolidated account refer
to the same reporting date. Where necessary annual financial statements have been
adjusted to the forms required for banks.
In the consolidation of capital the book
value of share holdings has been offset
against equity capital following the book
Accounting and
valuation methods
Tangible fixed assets whose use is limited by
time are written off on the basis of systematic depreciation in accordance with the
applicable taxation regulations. Low-value
assets are written off in full in the year of
acquisition.
value method in accordance with § 301
para. 1 No. 1 HGB. The effective date for the
first consolidation is the date of the first
application of the regulation on group
accounting (1/1/1993) or the date of first
inclusion into the group consolidation
(Art. 27 para. 2 EG HGB resp. § 301 para. 2
HGB).
Claims and liabilities as well as expenses
and income between included companies
have been consolidated.
Shares and investments in affiliated companies are shown at their purchase cost or the
lower applicable value.
All securities forming part of the Bank’s
fixed assets, liquid reserves and trading
portfolio are shown in accordance with the
77
Annual Report 2000
strict minimum value principle. Economically related financial instruments have
been combined in separate valuation units,
which also include parts of our derivatives
portfolio. As far as valuations have to be
made, valuation gains and losses are offset
within these units. The formation of valuation units is in accordance with the one
used by the Bank’s risk management.
A large proportion of the securities
within the trading book has been subject
to portfolio valuation. Therefore, securities
including financial derivatives have been
divided into four portfolios. Revenue
peaks in the portfolio have been ignored
in the portfolio valuation.
Options acquired by the Bank are shown at
their purchase cost. Where necessary, the
effects of the minimum value principle as
well as position risks resulting from options
sold are covered by means of provisions for
anticipated losses from uncompleted transactions. Options with identical base values
are partly combined in separate valuation
units. Received or paid option premiums
will only affect net income at the time of
the onward sale of the option right at close
out or with the maturity or exercise of the
option.
78
Where, in the case of derivatives, the
variation margin system is used, the
imparity principle is covered by carrying
the margin as an asset or laliability. If
necessary, provisions are set up a well.
Receivables are shown at their nominal
value resp. purchase costs or at their lower
applicable value in accordance with the
strict minimum value principle.
Credit-risks have been covered by effecting
individual value adjustments or by setting
up provisions a well a by making
lump-sum valuation allowances for bad
debts. General provision for contingent
loan losses, as opposed to specific
provisions are set apart from the net book.
The strict requirement to reinstate original
values implemented by the Tax Relief Law
1999/2000/2002 is applied to commercial as
well as to tax-based valuation.
Liabilities are shown at the amount to be
repaid.
Provisions are set up on the basis of a
reasonable commercial appraisal of the
foreseeable risk.
Condensed Appendix
Provisions for
pension liabilities
Provisions for pension liabilities are based
on actuarial computation and new mortality
charts and carried at the partial value
permissible under commercial law for liabilities for current pension payments and
pension rights. Additional pension obligations totalling € 322,195.18 (previous year:
€ 401,629.49) are not carried as liabilities,
they are subject to the prohibition of recapturing for taxation purposes. Additional provisions have been set up to cover the earlyretirement scheme provided for in collective
agreements. In addition, there are indirect
pension-like liabilities pursuant to Section
28 (2) EG HGB totalling € 11,649,112.50
(previous year: € 11,246,264.13).
Currency
translation
principles
Currency conversions are subject to § 340 h
HGB as well as BFA 3/95.
temporis and are shown in the net interest
income.
Foreign currency assets and liabilities are
translated at the mean spot rates prevailing
on 31 December 1999. Where these are
treated as fixed assets, they are shown at
their historic purchase price. Uncompleted
spot deals are translated using the spot
exchange rate applicable on the closing
date, while uncompleted forward transactions are translated at the forward rate
applicable on the closing date of this
balance sheet. Differences resulting
from the conversion of hedged balance
sheet items and their respective hedging
transactions are shown netted against
other assets. Swap expenditures and
revenues resulting from these hedging
transactions are accrued pro rata
Balance sheet items in foreign currency and
pending current asset transactions are
classified and assessed in accordance with
§ 340 h para. 2 entence 2 HGB. In principle, therefore, all expenditure and
revenue resulting from currency conversions are shown in the profit and loss
account according to § 340 h para. 2
sentence 1 and 2 HGB.
Foreign-currency assets and liabilities total
€ 29,844 million and € 21,246 million,
respectively (previous year:
€ 24,959 million and € 15,426 million,
respectively), in the group € 30,296 million
and € 21,845 million (previous year:
€ 25,218 million and € 15,557 million).
79
Annual Report 2000
Notes on the balance sheet and the consolidated balance sheet
Assets
Receivables from
affiliated savings
banks
The item “Receivables from
banks” includes receivables from
affiliated savings banks.
€ ‘000
2000
Bank
€ ‘000
1999
Group
€ ‘000
1999
€ ‘000
2000
1,489,276 1,806,515 1,490,425 1,808,790
Associated
companies
Companies in
which investments
are held
The following items include receivables from associated companies in the
Item 3
Item 3 a
Item 3 b
Due at sight
Other receivables
Item 4
form of both loans granted and bond
holding:
158
87,559
24
393,175
–
–
–
–
413,819
207,430
307,278
117,174
Receivables from companies in which
investments are held are set out in the
following item of the balance sheet:
Item 3
Item 3 a
Item 3 b
Due at sight
Other receivables
156,139
557,035
3,953
250,651
148,910
502,097
2,720
186,557
Item 4
615,155
698,001
615,155
698,001
129,966
208,088
129,966
208,088
Item 5
Debt securities and other
fixed-interest securities
Item 5 bb Bonds and debt securities
Subordinated assets
Subordinated assets are included in the following items:
Item 3
Item 3 b
Other receivables
767
767
767
767
Item 4
540
2,066
540
2,066
565,910
331,685
565,910
331,685
Item 5
Debt and securities and other
Item 5 bb Bonds and debt securities
80
Condensed Appendix
Item 6
Details of securities
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
29,206
33,744
29,206
33,744
Money-market funds marketable and quoted on a stock
exchange
107
35
107
35
Money-market funds marketable on a stock exchange but
not quoted
–
166
–
166
Shares and other
variable-yield securities
Additional details of the securities are
contained in the items set out below:
Item 5
Item 5 a
Debt securities and other
Money-market funds
This item includes:
Item 5 b
Bonds and debt securities
This item includes:
Bond and debt securities
marketable and quoted on
a stock exchange
Bond and debt securities
marketable on a stock
exchange but not quoted
Item 5 c
16,489,450 14,513,686 16,984,280 15,018,887
5,938,098
4,697560 6,011,329 4,697,560
Own debt securities
This item includes:
Debt securities
exchange
Debt securities
391,650
435,921
394,669
435,921
52,163
103,185
52,163
103,185
81
Annual Report 2000
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
Shares and other variable-yield
securities marketable and
quoted on a stock exchange
64,676
111,094
64,676
111,094
securities marketable on a stock
5,714
6,500
5,714
6,500
Of the bonds and other fixed-interest securities shown,a total of € 1,656,690 k (group
€ 1,656,690 k) will be maturing in 2001.
Item 6
securities
Genuine securities
repurchase
agreements
Repo transactions with banks, in which the
Bank acts as pledgor, amount to € 568,400 k
in nominal terms; those in which the Bank
acts as pledgee amount to € 100,000 k.
Investments/Shares
in affiliated
undertakings
The items “Investments” and “Shares in
affiliated undertakings” do not contain any
shares marketable on a stock exchange,
apart from a 5 % state in Deutsche Real
Estate Aktiengesellschaft which is quoted
on a stock exchange.
Shareholdings
In addition to the shares in affiliated enterprises Hamburgische Landesbank’s and the
Group’ shareholding in enterprises – to the
extent not considered of subordinate
importance (§ 285 No.11 and § 313 para. 2
No.4 HGB) – is shown as follows:
AGV Anlagen- und Grundstücksvermietungsgesellschaft mbH & Co. KG,
Wiesbaden 1)
NEA Norddeutsche Energieagentur
für Industrie und Gewerbe GmbH,
Hamburg
PGF Entwicklungsgesellschaft
Falkenried mbH, Hamburg
1)
2)
82
Equity Capital
as at 31/12/1999
(€ mn)
–
2)
Capital share
1999 result
(%)
(€ mn)
45
– 2)
5.4
40
0.52
0.43
25
-0.03
Indirect holding via Leashold VerwaltungsGmbH & Co. KG, Hamburg.
No details according to § 313 para.2 No. 4 sentance 3 HGB.
Condensed Appendix
Assets held in trust
Assets held in trust are divided into the
following categories:
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
942
212,197
942
152,375
942
255,111
942
194,524
53,320
25,620
53,320
25,620
905,205 1,240,922
891,219
433,152
198,636
476,629
214,912
3,828
24,005
3,828
24,005
–
–
28,617
30,393
133,443
15,752
133,443
15,752
Claims on the tax office and the
Federal Finance Office
77,193
18,669
77,193
18,669
Investments in specific property funds
20,636
21,108
20,636
21,108
Rescue aquisitions
18,407
26,895
18,407
26,895
Receivables from the realisation
of collaterals
18,797
26,033
18,797
26,033
Other assets
This item primarily includes:
Receivables under options,
swaptions, initial margin
Swap deferrals
Adjustment item arising from
foreign currency conversion
Premium deferrals due to interest
options, swaptions and interest limiting
agreements
Receivables due from Free and Hanseatic
City of Hamburg in respect of its support
of housing programmes in the City
Collection papers, bonds, debt
securities due for repayment as well
as interest and dividend coupons
due for repayment
1,256,234
83
Annual Report 2000
Prepaid and
deferred expenses
This item includes
prepaid discounts on liabilities
and bonds issued
and deferred premiums received on
receivables
Tangible fixed
assets
The real property and buildings included in
this item are largely leased to third parties.
Unexpired terms
The following balance sheet items are
classified according to their unexpired
terms:
Item 3 b
Item 4
1)
84
Receivables from banks 1)
– less than three months
– three months or more
but less than one year
– one year or more
but less than five years
– more than five years
– indeterminated term
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
73,964
61,653
75,193
64,057
18,054
25,352
18,054
25,352
All operating and business equipment is
used by the Bank itself.
6,733,554 6,110,185 6,853,484 5,834,699
1,608,660 1,744,411 1,622,505 1,654,352
4,560,548 4,511,396 4,543,974 4,484,103
3,813,550 4,268,668 3,788,641 4,233,461
4,916,393 5,861,033 5,024,028 5,886,371
2,877,611 3,121,204 3,018,755 3,255,110
9,648,130 8,488,720 10,437,975 9,107,555
14,792,924 13,707,283 18,451,986 17,395,201
1,237,700 1,138,716 1,237,700 1,138,716
Does not contain balances with building and loan associations.
Condensed Appendix
Fixed assets
Bank
Securities
Historical
Additions /
acquisition appreciation
cost as of
in value
1/1/2000
€ ‘000
€ ‘000
Disposals / Accumulated Depreciation
transfers depreciation
2000
as of
31/12/2000
€ ‘000
€ ‘000
€ ‘000
Book value
as of
31/12/2000
Book value
as of
31/12/1999
€ ‘000
€ ‘000
13,246,505
4,458,092
4,146,985
9,930
507
13,547,682
13,233,094
682,263
32,916
14,137
36,526
36,372
664,516
682,108
99,577
90,708
51
3,873
3,579
186,361
99,283
Real estate
10,659
0
0
7,511
136
3,148
3,284
Office furniture and fixtures
90,480
18,407
1,412
82,684
16,601
24,791
23,092
14,129,484
4,600,132
4,162,585
140,524
57,195
14,426,498
14,040,861
Disposals / Accumulated Depreciation
transfers depreciation
2000
as of
31/12/2000
€ ‘000
€ ‘000
€ ‘000
Book value
as of
31/12/2000
Book value
as of
31/12/1999
€ ‘000
€ ‘000
Investments
Total
Fixed assets
Group
Securities
Historical
Additions /
acquisition appreciation
cost as of
in value
1/1/2000
€ ‘000
€ ‘000
13,734,378
4,499,586
4,192,108
9,929
507
14,031,927
13,720,967
Investments
83,273
32,916
14,137
36,526
36,372
65,526
83,119
38,786
40,443
51
3,609
3,579
75,569
38,491
Real estate
140,563
16,500
670
43,932
2,391
112,461
99,020
Office furniture and fixtures
111,426
20,365
3,071
97,291
19,033
31,429
30,227
1,407
82
233
980
80
276
283
14,109,833
4,609,892
4,210,270
192,267
61,962
14,317,188
13,972,107
Immaterial fixed assets
Total
85
Annual Report 2000
Liabilities
Liabilities to
associated savings
banks
Liabilities to
affiliated
companies
The item liabilities to banks includes
liabilities to associated savings banks.
Payable on demand
With an agreed term
or notice period
Item 2
Item 2 ba Payable on demand
Item 2 bb With an agreed term
or notice period
Item 3
Item 3 a
€ ‘000
2000
Group
€ ‘000
1999
126,753
421,498
126,753
421,498
312
6,143
–
88
3,350,094 1,785,037
–
–
26,214
8,288
21,406
6,393
25,414
13,777
25,414
13,777
–
–
–
–
335,399
53,530
335,399
28,201
559,266
725,664
848,247
741,519
14,902
10,256
14,902
10,256
40,078
39,893
40,078
39,893
667,322
60,903
757,955
60,903
The liabilities to companies in which
shares are held are set out in the
following balance sheet item:
Item 1
Item 1 a
Item 1 b
Payable on demand
With an agreed term
or notice period
Item 2
Item 2 ba Payable on demand
Item 2 bb With an agreed term
or notice period
Item 3
Item 3 a
86
Bank
€ ‘000
1999
Liabilities to affiliated companies
(certificated and non certificated)
are included in the following items:
Item 1
Item 1 a
Item 1 b
Companies in which
shares are held
€ ‘000
2000
Condensed Appendix
Assets used as
security
As of the closing day of this balance sheet,
receivables totalling € 320,440 k (previous
year € 472,866 k) had been assigned to
third parties. € 82,573 k nominal in
collateral security was deposited to enable
the Bank to participate in stock exchange
and clearing facilities.
Liabilities held
in trust
Liabilities held in trust are divided as
follows:
Other liabilities
Swap deferrals
Liabilities under options, swaptions
and other derivative instruments
Security commitments
Reserve Fund of Free and
Hanseatic City of Hamburg
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
942
212,197
942
152,375
17,368
238,685
19,786
175,680
95,579
78,791
95,579
78,791
930,191
830,089
932,992
825,724
69,795
57,393
69,795
57,393
678,581
654,900
678,581
654,900
–
–
124,802
125,414
110,850
121,101
110,850
121,101
5,580
4,846
5,608
4,921
This item contains:
Prepaid discounts on receivables
Deferred premiums on liabilities and
debt securities issued
Special item with
accrual character
€ ‘000
2000
This item contains:
Interest payable on subordinated liabilities
and dividends on participating certificates
not yet distributed
Deferred income
As at the reference date a securities
account amounting to € 5,838,036 was
pledged to the ECB against which
€ 1,800,000 was utilized within the scope
of open-market operations.
In accordance with the Tax Relief Law 1999/
2000/2002 and § 280 para.1 HGB the Bank
exercised 1999 write-ups on assets. They
were partly allocated to the special item
with accrual character (§ 273 HGB resp. § 52
para.16 EstG), which will be released in the
year 2000 – 2003.
87
Annual Report 2000
Subordinated
liabilities
Debt securities
issued
Subordinated liabilities amounting to
€ 1,434,922 k (previous year € 959,115) have
original terms of between 2 and 40 years.
They bear interest between 2.4 % and
12.9 % p.a.. Subordinated funds amounting
to YEN 24.1 billion have been raised, all
other funds being denominated in German
marks and euros. The term of these and
Of the debt securities issued and shown in
the balance sheet, a volume valued at
Contingent
liabilities
In relation to equity, there are liabilities
for unsubscribed nominal capital in the
field of equity investment in the amount
of € 84 million.
It is the Bank's policy to ensure that
subsidiaries abroad will be able to fulfil
their obligations.
Unexpired terms
Expenditure for subordinated liabilities
amount to € 44,149 k (previous year
35,842 k).
€ 3,213,633 k (group: € 3,992,327 k) will be
maturing in 2001.
€ ‘000
2000
Liabilities on guarantees
and guarantees agreement
Other financial
obligations
the other subordinated funds comply with
§ 10 para. 5a of the German Banking Act
(Kreditwesengesetz).
€ ‘000
2000
Group
€ ‘000
1999
6,141,801 4,464,389 3,395,021 3,351,456
Moreover, the Bank has signed a long-term
lease with variable rentals with KG Altstadt,
Hamburg. KG Altstadt is an affiliated
company. In addition, there are further
long-term lease contracts with enterprises
not belonging to the Group. Further
financial commitments of the Group consist
of promised subsidies by Hamburgische
Wohnungsbaukreditanstalt totalling
€ 2.5 billion.
The following balance sheet items are classified according to their unexpired terms:
€ ‘000
2000
Item 1b
88
Bank
€ ‘000
1999
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
12,867,474 14,743,827 13,229,411 14,033,412
3,592,833 4,458,668 3,257,231 4,320,744
9,414,106 7,948,204 7,993,821 8,461,078
4,331,393 4,360,625 5,397,287 5,232,126
Condensed Appendix
Item 2 ab – less than three months
Item 2 bb Other libilities
Item 3 b
Other certificated liabilities
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
547
518
547
518
488
508
488
508
2,455
93
2,608
156
2,455
93
2,608
156
8,325,366 8,099,183 8,533,763 8,183,993
630,969 1,073,650
666,577 1,106,385
3,611,295 2,625,644 3,868,475 2,766,761
6,644,160 5,463,382 6,805,727 5,771,691
3,218,513 1,749,951 3,218,513 1,749,951
994,671
379,301
994,671
379,301
89
Annual Report 2000
Notes on profit and loss account
Following positions of the Bank’s and the
Group’s profit and loss account are shown
by geographical markets:
Bank
2000
Asia
FRG
Europe
without FRG
405,230
423,566
2,742,438
429,338
312,300
82,938
–
–
83,858
–
–
Commission income
106,132
5,923
4,721
74,123
3,821
4,178
Net income from
financial operations
3,935
1,433
2,504
5,698
1,033
-1,379
39,767
1,279
19
38,065
349
36
in € ‘000
Interest income
Income from shares
and other variable
rate securities,
investments and shares
in affiliated
undertakings
Other operating
income
90
FRG
Europe
without FRG
3,391,322
1999
Asia
Condensed Appendix
Group
2000
Asia
FRG
Europe
without FRG
446,254
423,566
3,044,367
436,840
312,300
82,938
–
–
83,858
–
–
Commission income
114,812
6,582
4,721
83,861
4,091
4,178
Net income from
financial operations
3,935
1,457
2,504
5,698
1,054
-1,379
42,976
1,260
19
41,731
291
35
in € ‘000
Interest income
FRG
Europe
without FRG
3,697,731
Income from shares
and other variable
rate securities,
investments and shares
in affiliated
undertakings
Other operating
income
Other operating
income
1999
Asia
This item primarily covers:
Reimbursed costs
Refunds from the tax office
Current income from electronic data processing services
€ 13,729 k
€ 9,573 k
€ 5,093 k
€ 5,603 k
Other operating
expenses
Expenses are mainly due to rescue
axquisitions and tax payments to the tax
office.
Items relating to
another business
year
The amount of income tax stated was
influenced by subsequent tax payments
(€ 28,528 k) and credits for previous years
(in € 52,259 k). Other operating income
includes tax credits for previous years
amounting to € 889 k. Other operating
expenses include voluntary once-off payments within scope of trust initiative of the
German business community, “Reminiscences, responsability and future” amounting € 1,566 k.
Deferred taxes
A reserve amounting to € 5,789 k was set
up for deferred taxes (previous year:
€ 7,394 k). Deferred taxes relating to
assets have not been set off against those
relating to liabilities.
91
Annual Report 2000
Other information
Capital and
reserves
Taking into account the allocation to
reserves in the annual financial statement
2000 a well as the allocation of the fund
for general banking risks liable equity
capital amounts to € 4,930.7 million,in the
Group to € 5,657.3 million.
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
1,884.4
1,884.4
1,884.4
1,884.4
445.6
445.6
445.6
445.6
142.9
149.0
142.9
126.0
142.9
154.8
142.9
126.8
–
–
721.1
721.1
90.0
65.0
90.0
65.0
–
–
-0,3
-0,2
Core capital
2,711.9
2,663.9
3,438.5
3,385.6
Tier II Capital
2,221.5
1,698.4
2,221.5
1,698.4
2.7
2.7
2.7
2.7
4,930.7
4,359.6
5,657.3
5,081.3
Subscribed capital
Capital reserves
Revenue reserves
by operation of law 1)
other
Exceptional amount
due to capital consolidation
Fund for general banking risks
Immaterial assets
Investments according to
§ 10 para. 6 sentence 1 No.1 and No. 4 KWG
Liable equity capital
1)
92
Formed according to the law on Hamburgische Landesbank – Girozentrale – valid until 1997.
Condensed Appendix
Reporting
by segment
Segment reporting, the presentation of
which is effected closely in line with
German Accounting Standard No. 3-10 on
segment reporting by banks, provides
further particulars on specific corporate
divisions of the Group as a whole.
The following segments were formed:
• Corporate Banking. Corporate Banking
comprises lending and deposit-taking,
mortgage loans and commercial foreign
operations of corporate customers as well
as leasing, ship and aircraft financing.
• Investment Banking. Under this head,
asset investments, corporate finance and
global equities are summarized, i.e.
essentially the results of structured
financing operations and own-account
trading in stocks, bonds, derivatives as
well as money and forex trading.
• Private Banking. The segment of private
Banking comprises lending, deposittaking and services operations to private
customers throughout the Group.
• FX. This segment is represented by our
Group subsidiary Wohnungsbaukreditanstalt.
Elements of the operating result are presented, with net interest income generated
by specific segments being determined
according to the market interest method.
Segment assets include balance sheet assets
of the prevailing segment. Risk positions are
presented in accordance with supervisory
regulations in place. The tied core capital is
based on balance sheet related equity
captial less Group earnings, the share of
earning of the atypical dormant shareholder and the adjustment item for shares
of other stockholders plus the fund for
general banking risks. In addition, the costincome-ratio is stated, determined as a
quotient of administrative expenses and the
earning surplus, along with the return on
equity, which reflects the operating result
after risk provisioning/ valuating in relation
to the tied core capital.
93
Annual Report 2000
Segmentation according to fields of activity (primary segmentation)
Landesbank
total
FX
Others /
consolidation
Landesbank
group
20.1
143.5
97.4
704.1
22.5
6.5
8.7
31.5
102.7
0.0
7.9
0.0
0.0
0.0
7.9
13.8
0.0
0.0
0.0
-132.5
16.0
-116.5
Administrative expenses
256.4
38.1
55.0
17.9
20.2
143.0
274.2
Operating result before
risk provisions
419.2
272.1
141.8
8.7
0.0
1.4
424.0
Risk provisions / valuation
118.7
46.7
23.1
1.0
0.0
47.5
118.3
Operating result after
risk provisions
300.5
225.4
118.7
7.7
0.0
-46.1
305.7
Assets
80,724.8
29,203.9
47,649.2
1,438.9
4,756.4
2,586.3
85,634.7
Risk positions
41,103.3
26,549.1
13,786.4
924.0
3,627.0
-887.5
43,999.0
Tied core capital
1,849.6
1,194.7
620.4
41.6
163.2
1,390.9
3,410.8 *
Return on equity
16.2%
18.9%
19.1%
18.5%
–
–
9.0% *
Cost-income-ratio
38.0%
12.3%
27.9%
67.3%
–
–
Corporate
Banking
Investment
Banking
Private
Banking
560.8
276.7
166.4
93.1
33.5
Result of financial operations
7.9
Balance of other
operating income / expenses
Net interest income
Net commission income
39.3%
* Including equity capital not underpinned with transactions at present, along with non-profitable capital elements acquired due to non-cash contributions.
94
Condensed Appendix
The allocation of figures according to geographic characteristics is dependent on the
country in which the Group member
company or the Branch is headquartered.
Reporting includes the operating result, risk
provisions, risk positions in accordance
with supervisory regulations, the tied core
capital and the cost-income-ratio.
Segmentation according to geographic criteria (secondary segmentation)
Germany
Europe
without
Germany
Asia
Others /
consolidation
Landesbank
group
Operating result before
provisions for risks
362.5
37.3
24.2
0.0
424.0
Risk provisions /
valuation
122.0
- 4.7
1.0
0.0
118.3
Operating result after
provisions for risks
240.5
42.0
23.2
0.0
305.7
37,170.0
4,825.0
6,612.0
-4,608.0
43,999.0
Fixed core capital
1,672.7
217.1
297.5
1,223.5
3,410.8
Cost-income-ratio
40.8%
23.6%
32.6%
–
39.3%
Risk positions
95
Annual Report 2000
Staff
Bank
male
Full time
Part time
Trainees
Total
Annual average 2000
female
total
Group
1999
male
Annual average 2000
female
total
1999
951
30
766
219
1,717
249
1,616
234
1,061
33
891
237
1,952
270
1,854
255
981
985
1,966
1,850
1,094
1,128
2,222
2,109
33
53
86
83
37
57
94
91
1,014
1,038
2,052
1,933
1,131
1,185
2,316
2,200
Remuneration paid
to the Board of
Managing Directors
and the Supervisory
Board
Total remuneration paid to the Board of
Managing Directors in 2000 came to € 1,987 k
(previous year: € 1,791 k).Remuneration
paid to the members of the Supervisory
Board amounted to € 92 k (previous year:
€ 91 k). As at 31 December 2000, € 6,291 k
had been transferred to the Bank’s reserves
to cover pension liabilities towards former
members of the Board and their dependants
(previous year: € 5,413 k). Pension payments
made in the business year under review
came to € 639 k (previous year € 549 k).
Advances, loans and other obligations
extended to members of the Board of
Managing Directors equaled € 5,018 k as at
31 December 2000 (previous year € 4,872 k).
Those extended to members of the Supervisory Board equaled € 675 k (previous
year € 1,486 k).
Assignments to
advisory boards
Assignments to advisory boards of big
incorporated firms as at 31 December 2000
(§ 340 a para. 4 No.1 HGB resp.
§ 267 para. 3 HGB) are shown as follows:
Members of the Board of Managing Directors
Alexander Stuhlmann
DGZ · DekaBank Deutsche Kommunalbank, Frankfurt am Main
Member of the Administrative Board
HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsverwaltung mbH, Hamburg
Member of the Supervisory Board
Hamburgische Wohnungsbaukreditanstalt, Hamburg
Member of the Administrative Board
LBS Bausparkasse Hamburg Aktiengesellschaft, Hamburg
Peter Rieck
Despa Deutsche Sparkassen-Immobilien-Anlage-Gesellschaft mbH, Frankfurt am Main
Deutsche Real Estate Aktiengesellschaft, Bremerhaven
96
Condensed Appendix
GEHAG Aktiengesellschaft, Berlin
Deputy Chairman of the Supervisory Board
HBAG Real Estate Aktiengesellschaft, Hamburg
Sprinkenhof AG, Hamburg
WPS WertpapierService Bank Aktiengesellschaft, Frankfurt am Main
Deputy Chairman of the Supervisory Board (until 8/2/2001)
Ulf Gänger
DEUTSCHE FACTORING BANK Deutsche Factoring GmbH & Co., Bremen
VON ESSEN KG Bankgesellschaft, Essen
Chairman of the Administrative Board
HELM AG, Hamburg
Chairman of the Supervisory Board
Uwe Kruschinski
Gudme Raaschou Bankaktieselskab A/S, Kopenhagen
Employees of the Bank
Bernd Helbing
Deka International S.A., Luxemburg
KWG-principles
The bank always complied to German legal
provisions on equity capital and liqudity of
banks as laid down in the Kreditwesengesetz (KWG).
Forward
transactions
As of 31 December 2000, the following
forward transactions were uncompleted.
These can be classified as follows:
1. Forward transactions in foreign currencies
Forward exchange deals/trade transactions
Currency swaps/hedging transactions
Interest and currency waps/hedging transactions
Standby obligation under currency options sold/trade transactions
Standby obligation under currency options sold/hedging transactions
Currency options/trade transactions
Currency options/hedging transactions
97
Annual Report 2000
2. Interest-related forward transactions
Forward transactions with fixed-interest ecurities/trade transactions
Interest futures/trade transactions
Interest futures/hedging transactions
Forward Rate Agreements/trade transactions
Standby obligation resulting from interest options sold/trade transactions
Standby obligation resulting from interest options sold/hedging transactions
Interest options/trade transactions
Interest options/hedging transactions
Interest swaps/trade transactions
Interest swaps/hedging transactions
3. Forward transactions with other price risks
Share related swap/hedging transactions
Standby obligations for share options/trade transactions
Share options/trade transactions
Share options/hedging transactions
Standby obligation resulting from index-linked option sold/trade transaction
Index-linked options/trade transactions
Index-linked options/hedging transactions
Index-linked swap/hedging transactions
4. Credit derivatives
Total return waps/hedging transactions
Standby obligation resulting from credit-spread options/hedging transactions
Derivatives
In the following, the Group’s derivative
transactions are shown. Due to only marginal differences, a corresponding description for the Bank was abstained from.
Hamburgische Landesbank’s derivative
transactions increased by about 15 % on
the reporting date. The increase is mainly
due to the raised portfolio in interest rate
swaps and forward rate agreements.
Derivative financial instruments are being
employed to a considerable degree to
manage risks efficiently and take
advantage of available market opportunities, but also to provide for customers’
specific financing requirements. The
98
nominal volumes of the off-balance sheet
transactions amounted to € 100,062 million
at the end of the year, or 117 % of total
assets. Of this volume, roughly 18 % is
accounted for by trade related business.
About 90 % of our transactions in derivatives have been conducted with banks, and
a further 1 % with public authorities within
the OECD. The credit-risk equivalents
relating to these transactions are determined by the market evaluation method.
For a comprehensive representation of
risks, replacement costs are shown as well.
Replacement costs are the potential
expenditure for a replacement transaction
which would be necessary to re-establish a
Condensed Appendix
position if a counterparty failed to meet its
obligations. Replacement costs refer to
contracts with positive values, and there
has been no setting-off against contracts
with a negative market value. In the breakdown of counterparties, the different
products are set off against each other
respectively in those cases where a netting
agreement exists.
The tables below illustrate the nominal
amounts of the contracts, subdivided into
interest rate risks, currency risks, other
price risks and credit derivatives. The tables
also provide information on the structure
of maturities, on the breakdown of counterparties and on trade related business
involving derivatives.
Derivatives – Volumes –
€ mn
Nominal amounts
2000
1999
Credit-risk
equivalents
2000
1999
Replacement costs
2000
1999
Derivatives transactions with interest rate risks
55,737
47,061 1)
1,727
1,905
–
–
–
–
123
–
–
–
–
–
31
–
–
–
–
–
Caps, Floors
829
829
2
3
4
7
Contracts quoted on exchanges
493
529
–
–
–
–
Other interest rate futures
691
211
1
2
–
5
Interest rate risks – total –
59,631
50,535
422
437
1,506
1,515
Interest rate swaps
FRAs
419
432 1)
1,502
1,503 1)
Interest rate options
– Purchases
– Sales
1)
Previous year adjusted.
Derivatives transactions with exchange rate risks
Forward exchange transactions
21,392
17,156
245
92
851
145
Currency swaps/Cross-currency
interest rate swaps
9,771
9,557
182
158
329
227
1,360
1,162
11
10
27
23
927
993
–
–
–
–
–
–
–
–
–
–
Other forward exchange transactions
–
–
–
–
–
–
33,450
28,868
438
260
1,207
395
Currency options
– Purchases
– Sales
Currency risks – total –
99
Annual Report 2000
Derivatives – Volumes –
€ mn
Nominal amounts
2000
1999
Credit-risk
equivalents
2000
1999
Replacement costs
2000
1999
Derivatives transactions with stock and other price risks
Stock futures
–
1
–
–
–
–
76
147
3
5
5
7
– Sales
6
174
–
–
–
–
9
50
–
–
–
–
Stock options
– Purchases
Other forward transactions
2,576
2,484 1)
136
154 1)
417
519 1)
Stock and other price risks – total –
2,667
2,856
139
159
422
526
1)
€ mn
Nominal amounts
Credit-risk
equivalents
2000
1999
2000
1999
–
–
–
–
Sales
4,314
5,066
5
Credit derivates – total –
4,314
5,066
5
Replacement costs
2000
1999
–
–
5 1)
21
22 1)
5
21
22
Derivatives transactions with credit derivatives
Purchases
1)
100
Condensed Appendix
Derivatives – Structure of maturities –
Nominal amounts
€ mn
Interest rate risks
Currency risks
Stock and
other price risks
2000
1999
2000
1999
2000
1999
– up to 3 months
5,026
6,651
10,408
15,693
245
– up to 1 year
8,936
4,696
14,207
5,462
331
– up to 5 years
20,933
17,636 1)
5,425
4,665
– more than 5 years
24,736
21,552 1)
3,410
Total
59,631
50,535
33,450
Credit derivatives
2000
1999
376
–
–
365
36
–
1,825
1,338 1)
297
124
3,048
266
777 1)
3,981
4,942
28,868
2,667
4,314
5,066
Time to maturity
1)
2,856
Derivatives – Structure of counterparties –
€ mn
Nominal amounts
OECD banks
Non-OECD banks
OECD public authorities
Other counterparties
2)
Total
1)
2)
Credt-risk
equivalents
2000
1999
2000
1999
90,465
78,305
833
162
482
1
1
472
785
–
–
Replacement costs
2000
665 1)
8,963
7,753
170
195
100,062
87,325
1,004
861
1)
1,450
1999
819 1)
3
2
–
–
111
75
1,564
896
Including contracts quoted on exchanges.
Derivatives – Trading deals –
€ mn
Nominal amounts
Credt-risk
equivalents
2000
1999
2000
1999
Interest rate contracts
8,890
5,267
24
Foreign exchange contracts
8,868
7,932
28
Stock contracts
Credit derivatives contracts
Trading deals – total –
Replacement costs
2000
1999
20
81
78
100
73
241
133
308
–
4
1
11
–
–
–
–
–
–
17,786
13,507
124
97
323
222
101
Annual Report 2000
Coverage
€ ‘000
2000
Bank
€ ‘000
1999
€ ‘000
2000
Group
€ ‘000
1999
Coverage for mortgage bonds
Bearer bonds
Registered bonds
Registered bonds released as collateral
1,929,470 1,850,410 1,929,470 1,850,410
1,515,641 1,129,742 1,515,641 1,129,742
60,509
57,009
60,509
57,009
3,505,620 3,037,161 3,505,620 3,037,161
Coverage
–
–
–
–
5,208,513 4,681,523 5,136,493 4,622,342
5,208,513 4,681,523 5,136,493 4,622,342
Surplus coverage
1,702,893 1,644,362 1,630,873 1,585,181
Municipal government coverage
Municipal bearer bonds
Registered municipal bonds
Registered municipal bonds released
as collateral
4,592,611 4,995,877 4,592,611 4,995,877
4,189,039 3,992,189 4,189,039 3,992,189
104,606
121,274
104,606
121,274
8,886,256 9,109,340 8,886,256 9,109,340
Coverage
6,718,005 6,682,146 6,684,771 6,682,146
2,926,795 4,279,986 2,926,795 4,279,986
9,644,800 10,962,132 9,611,566 10,962,132
Surplus coverage
102
758,544 1,852,792
725,310 1,852,792
Condensed Appendix
Executive bodies of the Bank
Shareholder
Assembly
Dr. Dietrich Rümker
Chairman of the Executive Board
of Landesbank Schleswig-Holstein
Chairman
Dr. Ingrid Nümann-Seidewinkel
Senatrice, Head of the Ministry of Finance
of Free and Hanseatic City of Hamburg
Deputy Chairwoman
Hans Berger
Deputy Chairman of Landesbank Schleswig-Holstein
Olaf Cord Dielewicz
President of Sparkassen- und Giroverbandes of Schleswig-Holstein
Dr. Rainer Klemmt-Nissen
Executive Director of Government,
Ministry of Finance of Free and Hanseatic City of Hamburg
Dr. Volkmar von Obstfelder
Director of Finance of Free and Hanseatic City of Hamburg
(until 11/9/2000)
Dr. Peter Ollmann
Managing Director of HGV Hamburger Gesellschaft für Vermögensund Beteiligungsverwaltung mbH
(until 13/08/2000)
Dr. Wolf-Albrecht Prautzsch
Deputy Chairman of Westdeutsche Landesbank Girozentrale
Dirk Reimers
Council of State, Ministry of Finance
Dr. Andreas Reuß
Managing Director of HGV Hamburger Gesellschaft für Vermögensund Beteiligungsverwaltung mbH
(as of 14/8/2000)
Visiting participant:
Claus Möller
Ministry of Finance and Energy of State of Schleswig-Holstein
103
Annual Report 2000
Supervisory Board
Senatrice, Head of the Ministry of Finance
Deputy Chairwoman
Chairman of the Executive Board
of Landesbank Schleswig-Holstein Girozentrale
Chairman
Olaf Behm
Assistand Vice President, Hamburgische Landesbank
Hans Berger
Deputy Chairman of Landesbank Schleswig-Holstein
Dr. Werner Bohl
Accountant, Susat & Partner Wirtschaftsprüfungsgesellschaft
Margitta Dauck
Sparkassenfachwirtin, Hamburgische Landesbank
Olaf Cord Dielewicz
President of Sparkassen- und Giroverband of Schleswig-Holstein
Heinrich Haasis
President of SparkassenVerband Baden-Württemberg
(as of 1/1/2001)
Jens Heiser
Managing Member of the Board of Managing Directors
of Baugenossenschaft Dennerstraße-Selbsthilfe eG
Dr. Thomas Kabisch
Chairman of the Board of Managing Directors of
MEAG MUNICH ERGO AssetManagement Gesellschaft mbH
Jutta Langmack
Vice President, Hamburgische Landesbank
Sven Mahnke
Director of Department, Hamburgische Landesbank
(as of 1/11/2000)
Dr. Werner Marnette
Chairman of Norddeutschen Affinerie AG
104
Condensed Appendix
Dr. Thomas Mirow
Senator, Head of the Ministry of Economics
Claus Möller
Ministry of Finance and Energy of State of Schleswig-Holstein
Alexander Otto
Chairman of the management of
ECE Projektmanagement G.m.b.H. & Co. KG
Dr. Wolf-Albrecht Prautzsch
Deputy Chairman of Westdeutsche Landesbank Girozentrale
Dirk Reimers
Council of State, Ministry of Finance of Free and Hanseatic City of Hamburg
Susanne Rüschmann
Dr. Klaus Schmid-Burgk
Staff Lawyer, Hamburgische Landesbank
Josef Schmidt
President of Badischer Sparkassen- und Giroverband
(until 31/12/2000)
Hans-Joachim Schwandt
Application Programmer, Hamburgische Landesbank
Bernd Steingraeber
Eugen Wagner
Senator, Head of the Ministry of Housing and Construction
Edgar Wollin
Assistant Vice President, Hamburgische Landesbank
(until 31/10/2000)
Carola Zehle
Manager of Carl Tiedemann (GmbH & Co.)
105
Annual Report 2000
Board of Managing
Directors
Alexander Stuhlmann
Chairman
Peter Rieck
Deputy Chairman
Christian Baldenius
(until 10/4/2000)
Ulf Gänger
Uwe Kruschinski
Hartmut Strauß
(Deputy member
as of 1/4/2000 until 31/3/2001)
State Supervision
Ministry of Free and Hanseatic City of Hamburg
Hamburg, 12 March 2001
THE BOARD OF MANAGING DIRECTORS
Stuhlmann
Rieck
Kruschinski
106
Gänger
Strauß
Annual Report 2000
Auditors’ Certificate
We have audited the annual financial statements including the accounts of Hamburgischen
Landesbank – Girozentrale –, Hamburg, along with the consolidated financial statements
prepared by the latter and its report on the situation of the company and the group for the
financial year ended 31 December 2000. According to German commercial law, the legal
repressentative of the company is responsible for preparing and compiling the records in
question. Our task is to provide an assessment, on the basis of the audit we have performed,
of the annual financial statements and the accounting as well as of the consolidated financial statements prepared by the company and its report on the company’s situation and that
of the group.
We conducted our audit in accordance with § 317 of the German Commercial Code, taking
account of the generally in Germany accepted auditing principles laid down by the Institut
der Wirtschaftsprüfer (IDW), a German auditor’s association.
These standards require that we plan and perform the audit to obtain reasonable assurance
as to whether the financial statements are free of material misstatements or violations
impacting on the impression conveyed by the presentation of the financial statements in line
with generally accepted accounting principles applicable in Germany and of the management report relating to the asset, financial and earnings situation. In organising the audit
processes, knowledge of the company’s field of activities and its business and legal environment as well as expectations of possible errors were taken into account. Within the scope of
the audit, the effectiveness of the internal control system as well as vouchers generated in
the process of accounting, the annual and group financial statements and the report on the
situation of the company and the group were largely analysed on the basis of samples taken.
The scope of the audit also included assessing the accounting principles used and significant
estimates by the legal representatives, as well as evaluating the overall presentation of the
annual and group financial statements and the report on the situation of the company and
the group. We are confident that our audit provides a sufficiently sound basis on which to
form our opinion.
Our audit gave rise to no objections.
In our opinion, the financial statements in line with the generally accepted accounting principles prevailling in Germany give a true and fair view of the company’s asset, financial and
earnings situation. The management report gives a true and fair overall view of the comapny’s
situation and appropriately represents the risks that lie ahead in future developments.
Hamburg, 20 March 2001
BDO Deutsche Warentreuhand
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Rohardt
Wirtschaftsprüfer (Auditor)
Erlemann
Wirtschaftsprüfer (Auditor)
107
Annual Report 2000
Proposal for the Application of Profits of Hamburgische Landesbank
Allowing for the distribution of € 122.1 million to the dormant
shareholders and the profit entitlement of the dormant partner
with an atypical silent contribution of € 1.9 million, the Bank
posted net profits of € 54.5 million.
We recommend distributing € 31.7 million to the shareholders and
transferring € 22.8 million to other revenue reserves. Taking into
account the amount transferred form the profit entitlement of the
dormant partner with an atypical silent contribution, revenue
reserves increase by € 23.0 million.
The Board of Managing Directors
108
Report of the Supervisory Board
The Supervisory Board and the Credit Committee formed from its
ranks met their legal and statutory obligations during the year
under review. The Management Board kept both bodies fully informed about the general situation and any developments concerning
the Bank. At their regularly held meetings, these bodies dealt with
all issues of fundamental importance as well as any other important
business events. Both the Supervisory Board and the Credit
Committee were satisfied that the Bank was managed properly.
BDO Deutsche Warentreuhand Aktiengesellschaft examined the
annual financial statements of Hamburgische Landesbank and
issued an unqualified auditor’s certificate. The Supervisory Board
and the Credit Committee formed from its ranks discussed the
auditor’s report in detail and did not raise any objection to the
result of the audit. The Supervisory Board further recommended
to the Shareholders Meeting to accept the annual financial statement and the Group financial statement 2000 compiled by the
Management Board, to approve the Management Report, and to
support the Management Board’s proposal for the application of
unappropriated profit.
Two changes in personnel were recorded during the financial year
2000. Having reached retirement age, Mr Edgar Wollin resigned
from the Board. His successor on the Supervisory Board is Mr Sven
Mahnke. Mr Josef Schmidt, who also reached retirement age, resigned from the Supervisory Board, effective as of 31 December 2000.
His successor is Mr Heinrich Haasis. The Supervisory Board would
like to take this opportunity to thank its retired members for their
excellent contribution.
The Supervisory Board would like to thank the Board of Managing
Directors and the Bank’s staff for their commitment and successful
work.
Hamburg, 2 May 2001
The Chairwoman of Supervisory Board
Senatrice, Head of the Finance Ministry
109
Annual Report 2000
Report of the Shareholders’ Assembly
During the financial year 2000 four meetings of the Shareholders’
Assembly were held. The Assembly performed the tasks entrusted to
it by law and by the Bank’s Character.
Mr Christian Baldenius, Member of the Management Board, retired
as of 10 April 2000. With his personality, his extraordinary expertise
and experience, Mr Christian Baldenius exerted a decisive influence
on the corporate policy and culture of our company.
We express our gratitude and appreciation for his untiring efforts
on behalf of the Bank. The Shareholders’ Meeting appointed
Mr Hartmut Strauß as his successor and Deputy Management Board
member, effective 1 April 2000.
At the recommendation of the Supervisory Board the Shareholders’
Meeting accepted the annual financial statement and the Group
financial statement 2000 compiled by the Management Board,
approved the Management Report, and supported the Management
Board’s proposal for the application of unappropriated profit. The
Shareholders’ Meeting discharged the Management Board and the
Supervisory Board of the Bank for fiscal 2000.
Dr. Volkmar von Obstfelder resigned from the Shareholders’
Meeting during the financial year 2000. Dr. Rainer Klemmt-Nissen,
Managing Director of the Revenue Authority of the City of
Hamburg, was appointed as his successor. Dr. Peter Ollmann also
retired. He is succeeded by Dr. Andreas Reuß, who joined the Shareholders’ Meeting effective as of 14 August 2000. We would like to
take the opportunity to thank these former members for their
expert contributions.
Hamburg 2 May 2001
Chairman of the Shareholders’ Meeting
Chairman of Landesbank Schleswig-Holstein
Girozentrale
110
Photographs:
Several photographers
Printing:
Pergamos-Präzisions-Druckerei GmbH, Hamburg
Printed on chlorine-free paper containing approximately 50 % recycled fibres
ISSN 0944-2715
112

Annual Report - HSH Nordbank

Transcription

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