2009ANNUAL REPORT

Transcription

2009ANNUAL REPORT

2009
ANNUAL REPORT
e Financial Figures
Million €
1.1.–31.12.2009
1.1.–31.12.2008
Real estate finance
5
166
Public finance
2
190
120
237
New commitments
Assets
Liabilities
Mortgage Pfandbriefe
Public-sector Pfandbriefe
250
195
other bonds
2,500
61
other liabilities
1,665
917
1.6
-215.2
Results
Operating income
Net income for the year
1.6
-215.3
Cost/ income ratio
65%
73%
Return on equity
0,5%
-
31.12.2009
31.12.2008
1,796
1,928
17,744
20,082
839
877
9,691
12,226
other bonds/ liabilities
3,764
1,166
24,170
24,466
299
333
7%
9%
Portfolio
Assets
Real estate finance
Public finance
Liabilities
Total assets
Capital and reserves
Core capital (without net income)
Supplementary capital
Core capital ratio
65
74
Solvability ratio
9%
11%
e Management Bodies
Supervisory Board
Board of Managing Directors
Dr. Thomas A. Lange
Dr. Dirk Hoffmann
Chairman
Senior member
Senior member of the Board of
National-Bank AG
Friedrich Munsberg
Dr. Peter Gassmann
Deputy Chairman
Cover pool monitors
from 27 March 2009
Managing Director of
Peter Preuß
Booz & Company GmbH
Lawyer
Dr. Andreas Früh
Wolfgang Barchewitz
Deputy Chairman
Lawyer
to 27 March 2009
Divisional Board of Management
of the UniCredit Bank AG
Executive Vice Presidents
Dr. Kai Franzmeyer
Michael Bleiker
to 27 March 2009
Member of the Board of
Hypo Real Estate Holding AG
Paul Hagen
from 27 March 2009
HSBC Trinkaus & Burkhardt AG
Christian Sewing
Director Deutsche Bank AG,
Dr. Eberhard Weber
Auditor
Jürgen Jung
PeTe FotoDesign Peter Teschner
Report of the Supervisory Board
Report of the Supervisory Board
DEAR LADIES AND GENTLEMEN,
2009 was year of great challenge for the
liquidity. Overall, the privately-owned
financial sector, just like the year 2008
banking sector provided funds of
before it. The global financial system
€ 1.57 bn. By 1 March 2009, the deposit
was severely put to the test by the storm
protection agency had provided € 770 m
on the international financial markets,
as a cash injection in addition to a gua-
particularly after the collapse of Leh-
rantee of € 300 m. Moreover, a syndicate
man Brothers, the US investment bank.
of banks provided additional liquidity of
This was exacerbated by the significant
€ 500 m to Düsseldorfer Hypotheken-
deterioration in the wider economy.
bank.
This left its mark in both the real estate
sector and in public sector financing.
During the past fiscal year we perfor-
Düsseldorfer Hypothekenbank was con-
med the tasks incumbent upon the
fronted by these major challenges posed
Supervisory Board, presiding commit-
by the wider environment over the
tee, risk committee and Board of Mana-
course of the reporting year.
ging Directors according to the law, the
articles of association and rules of pro-
After the Bank was reorganised in 2008,
cedure. We advised the Board of Mana-
both at shareholder level and at a per-
ging Directors and monitored its execu-
sonal level, the Board of Managing
tive activities. In particular, we analysed
Directors and the Supervisory Board
in detail the commercial and financial
worked on further stabilising the posi-
developments, the stabilisation and
tion of the institution. The application
future of the Bank. Another focal point
for stabilisation funds under Sec. 6
was implementing the minimum requi-
FMStFG [“Finanzmarktstabilisierungs-
rements on risk management. We were
fondsgesetz”: Law on the fund to stabi-
involved in all significant decisions.
lise the financial markets] which the
Bank submitted to SoFFin [“Sonder-
The Board of Managing Directors infor-
fonds Finanzmarktstabilisierung”: a
med the Supervisory Board regularly
federal agency to manage the special
and comprehensively in writing, elec-
fund to stabilise the financial markets]
tronically and verbally about all mate-
made in 2008, was approved on
rial developments at the Bank. The key
12 March 2009. The Supervisory Board
points of the reporting were:
approved a contract with SoFFin on
4 March 2009. The funds received from
this measure have made a major contribution to improving the liquidity position of the Bank. Prior to the guarantee
from SoFFin, the Bank was granted support from its shareholders to secure its
e the business policies and other fun-
I reported on each of the meetings to the
damental management and strategy
full Supervisory Board.
issues
Meetings of the Supervisory Board
There were six meetings of the Super-
e development of liquidity
The regular reporting of the Board of
visory Board in the reporting period
e the development of counterparty
Managing Directors is conducted on a
and two telephone conferences. The
default risks, market risks and liquidity
quarterly basis and includes compre-
members of the Supervisory Board
risks and the measures taken to mana-
hensive documentation, analyses and
were provided with the documents
ge them
reports on the development of earnings
needed to prepare them for their mee-
e investments in MBS and their valua-
and net assets developed from the inter-
tings.
tion
nal accounting of the Bank comparing
e the development of the sales process
them to the prior year and to budget.
All members of the Supervisory Board
for both Düsseldorfer Hypothekenbank
The risk position of the Bank is also
participated in the meetings.
and the Bankhaus Bauer branch
presented quarterly in great detail and
e further developments with regard to
comprehensively. The reports include:
the new building in Berliner Allee erec-
The following issues were discussed in
greater detail at the meetings and
ted after a decision made in 2006
e the credit risk report on capital mar-
resolutions passed after more detailed
e events which were of material signi-
ket business
analysis and a critical review:
ficance for the Bank.
e the credit risk report on property
finance in risk categories IV to VI
The Board of Managing Directors also
e
communicated important events to the
sures in property finance
ness development over the course of
Supervisory Board between the fixed
e the report on public sector loans of
the year 2008. The external auditors
meetings, in writing, electronically and
more than € 25 m and other exposures
appointed by the annual general mee-
of more than € 15 m
ting attended this meeting. Mr. Dirk
e cash flow projections.
Müller-Tronnier and Martin Werth-
orally.
the report on the ten largest expo-
At the first meeting on 23 January
Moreover, as the Chairman of the Super-
2009 we received the report on busi-
mann, auditors from Ernst & Young
visory Board, I had Dr. Hoffmann report
The Supervisory Board received infor-
GmbH
to me constantly on the latest business
mation on the actions taken by the
schaft, submitted a report on the sta-
development, any significant transac-
Board of Managing Directors to cope
tus of the audit of the financial state-
tions and the economic performance
with the consequences of the current
ments. All questions posed by the
and financial development of the Bank.
distortions on the financial markets.
Supervisory Board were answered in
Wirtschaftsprüfungsgesell-
Independent of these reports, I also
depth. Thereafter the mid-term plan-
communicated with Mr. Munsberg and
ning was discussed in detail and the
other managers about the development
liquidity position addressed. In this
of the Bank. Finally, I met regularly with
regard, the Bank’s application to the
the shareholder representatives and the
SoFFin for guarantees from the stabili-
representatives of the external auditor
sation fund pursuant to the FMStFG
appointed by the annual general mee-
was spoken about.
ting. In the vast majority of cases, both
the discussions with the representatives
of the shareholders and the discussions
with the representatives of the auditors
of the financial statements were held
without any members of the Board of
Managing Directors or other employees
of Düsseldorfer Hypothekenbank being
in attendance.
4|5 Report of the Supervisory Board
Finally, the Supervisory Board was
The resolutions proposed for the
The main item at the meeting on
informed of the status of the project to
agenda and the report of the Supervi-
5 May 2009 was a detailed discussion
roll-out the COR-PARIS IT system and
sory Board to the annual general mee-
of business development in the first
of the significant delays and cost-over-
ting were passed. In addition, the
quarter. At the same time the Board of
runs at the new building in Berliner
Board of Managing Directors explai-
Managing Directors presented its fore-
Allee 41.
ned the business development of the
cast for the economic and financial
Bank up until 28 February 2009 and
development of the Bank for the cur-
During the telephone conference of the
provided their outlook for the current
rent fiscal year. Other issues discussed
Supervisory Board on 17 February
fiscal period. The meeting also paid
in detail were the sales process and
2009, which was held without the par-
special attention to the presentation of
the extensions to the application to
ticipation of any members of the Board
the liquidity position and report on the
SoFFin. Other discussions involved the
of Managing Directors, we focused on
measures taken under Sec. 6 FMStFG.
investments in Banque Bauer (Suisse)
the application submitted to the SoF-
In accordance with the application
S.A. and the Swiss bank, Bauer AG,
Fin and the on-going measures taken
made by the Bank, SoFFin approved
with regard to the development of the
to sell the Bank. Furthermore, with
guarantees totalling € 2.5 bn of which
Glarus European municipal and mort-
our lawyers we discussed the prelimi-
50% have a term of 12 months and
gage bond.
nary findings of the legal review of
50% a term of 24 months. The appro-
claims for damages against the former
val of the Supervisory Board required
The meeting on 18 August 2009
members of the Board of Managing
for the subsequent issue was obtained
addressed in detail the business deve-
Directors of the Bank.
in advance, in writing, by circularisa-
lopment as of 30 June 2009 and the
tion. The vote was confirmed at the
forecast for the rest of the year. Special
At the meeting on 27 March 2009 we
meeting and ratified. Finally, the
attention was paid to the results of
approved the financial statements for
Board of Managing Directors once
operations and the interest earnings
the fiscal year 2008 which are there-
again reported on the migration to the
projections for the coming five years.
with ratified. Moreover, the annual
COR-PARIS system. As is customary,
In addition, we subjected the liquidity
report and the proposal for the appro-
Dirk Müller-Tronnier and Martin
of the Bank to a more intensive plausi-
priation of retained earnings were
Werthmann attended this meeting as
bility check. The auditors, Dirk Müller-
discussed by the Board.
representatives of the auditors. They
Tronnier and Holger Lösken from
presented the findings of their audit
Ernst & Young GmbH Wirtschaftsprü-
and answered our questions in depth
fungsgesellschaft, participated in the
and comprehensively. An additional
meeting and presented their review of
participant in this meeting was the
the interim financial statements for
lawyer, Mr. Cornelius Kessel.
the first six months. All questions were
answered in depth and to our satisfac-
At
its
constituent
meeting
on
tion. Other standard issues were the
27 March 2009, which was held imme-
status of the sale process for the Bank,
diately after the annual general mee-
the migration to the COR-PARIS
ting of the shareholders, the Supervi-
system and the construction project at
sory Board elected its chairman and
Berliner Allee 41. Finally, the meeting
deputy chairman and also elected the
addressed the Bankhaus Bauer branch
members of the presiding committee
in Stuttgart and Banque Bauer (Suisse)
and the risk committee. This is repor-
S.A. in Geneva.
ted under personal issues.
At the last meeting for the year, held
Risk committee
Personal issues
report of the Board of Managing Direc-
The risk committee met three times in
During its telephone conference on
tors on business development up until
the reporting period. The meetings
17 February 2009, which was held
30 September 2009 and their forecast
were attended by all members. The
without any participation by the Board
for the end of the year. In addition, the
main focus of the discussions was on
of Managing Directors, the Supervi-
business and risk strategy was ratified
the risk strategy and all general risks
sory Board passed a resolution to pro-
after intensive discussion and after it
to the Bank, with special emphasis on
long the appointment of Dr. Hoffmann
was approved by resolution of the risk
credit, market and liquidity risks. The
from 1 April 2009 to 30 June 2009 and
committee on 26 November 2009. The
operating risk profile was analysed. In
his contract accordingly. At the mee-
same applies to the business plan and
addition, reports on notable exposures
ting of the Supervisory Board on 5 May
financial planning for the years 2010
were discussed at all meetings. Finally,
2009 the appointment and related
to 2013. At the wish of the Supervisory
the committee addressed those expo-
contract with Dr. Hoffmann was rene-
Board Holger Lösken, representing the
sures with high or elevated risks that
wed for the period from 1 July 2009 to
auditors, issued a statement on the
needed to be submitted to it under the
31 December 2009. The limited appo-
risk management of the Bank. Another
terms of the law or the rules of proce-
intments, which are nevertheless typi-
focus of discussion was on the conse-
dure and issued its approval where
cal for stock corporations, were due
quences of the revised version of the
this was needed. The Supervisory
solely to the fact that the sale process
Minimum Requirements on Risk Ma-
Board was informed of the activities of
of the Bank was repeatedly delayed
nagement issued on 14 August 2009
the committee.
due to unforeseen circumstances. At
on 30 November 2009, we received the
and the law on the appropriateness of
the meeting of the Supervisory Board
the compensation paid to members of
on 18 August 2009 the appointment of
Boards of Managing Directors. The
Dr. Hoffmann which was due to expire
rules of procedure were amended at
at the end of the year was renewed
the Supervisory Board meeting on
until 30 June 2011. Likewise the appo-
12 March 2010.
intment of Mr. Munsberg, which was
due to expire on 20 February 2010,
During a telephone conference on
was renewed until 31 March 2011.
22 December 2009 we discussed in
depth the sale of the Bankhaus Bauer
The appointments of all members of
branch and passed the required reso-
the Supervisory Board expired on
lutions. Frank Herrmann from Ernst &
27 March 2009. At the suggestion of
Young GmbH Wirtschaftsprüfungsge-
the Supervisory Board, the annual
sellschaft participated in the telephone
general meeting on 27 March re-
conference in his capacity as an advi-
appointed Dr. Andreas Früh, Dr. Peter
sor on the sales process as well as the
Gassmann, Dr. Thomas A. Lange,
lawyers, Dr. Roland Hoffmann-Thei-
Mr. Christian Sewing and Dr. Eberhard
nert and Ünsal Demir from the law
Weber to the Supervisory Board.
firm Görg.
Mr. Paul Hagen was appointed as a
new member of the Supervisory
Board. He replaces Dr. Kai Wilhelm
Franzmeyer, who chose not to stand
for election following his appointment
Finally, the responsibilities of Dr. Hoff-
to the management board of Hypo Real
mann and Mr. Munsberg were real-
Estate AG and the resulting burden
located as the duties of the members of
The accounting records, the financial
this would place on his available time.
the Board of Managing Directors were
statements, and the management
The Board of Managing Directors and
reassigned. As the senior member of
report for the year 2009 were revie-
the Supervisory Board would like to
the Board of Managing Directors, Dr.
wed by the independent auditors elec-
thank Dr. Franzmeyer for his commit-
Hoffmann took responsibility for busi-
ted by the annual general meeting,
ment, responsible approach, and eff-
ness planning, business management,
Ernst & Young AG Wirtschaftsprü-
orts on the Board during these difficult
personnel, the internal audit, coordi-
fungsgesellschaft, Düsseldorf.
times.
nation, committee work, public repre-
Financial statements
sentation, the Banque Bauer (Suisse)
The audit culminated in an unqualified
Following the annual general meeting,
unit, lending business/ default risk
audit report. Based on its own exami-
the Supervisory Board, chaired by its
management (Transaction Manage-
nations, the Supervisory Board appro-
longest serving member, Dr. Weber,
ment), money and capital markets
ved of the findings of the audit of the
reappointed Dr. Lange as the Chair-
(Transaction Management), risk con-
financial statements by the indepen-
man. Under the chairmanship of
trolling, information management,
dent auditor. Moreover, the Supervi-
Dr. Lange, Dr. Gassmann was appoin-
and legal matters / money laundering /
sory Board reviewed the financial sta-
ted Deputy Chairman.
compliance. Mr. Munsberg is responsi-
tements and the management report
ble for public sector financing (Trea-
for compliance with the legal require-
According to § 1 of the rules of proce-
sury), other financing (Treasury), capi-
ments and has raised no objections.
dure for the presiding committee and
tal markets/ treasury, banking opera-
the risk committee, the Chairman of
tions/ organisation, own real estate/
Today the Supervisory Board approved
the Supervisory Board is automatically
construction projects, property finan-
the financial statements prepared by
appointed Chairman of the presiding
cing (Real Estate – Origination),
the Board of Managing Directors.
committee and the risk committee and
accounting and the Bankhaus Bauer
The
the Deputy Chairman is automatically
business unit. The above allocation of
are therefore ratified pursuant to
appointed deputy chairman of the pre-
duties
Sec. 172 AktG.
siding committee.
responsibility for the Bank under stock
notwithstanding,
overall
corporation law lies with both persons.
annual
financial
statements
The Board of Managing Directors pre-
At the proposal of Dr. Lange, the
pared a report pursuant to Sec. 312
Supervisory
appointed
AktG on relationships to affiliated
zMr. Sewing as the third member of
companies and submitted this to the
the presiding committee. In addition to
Supervisory Board together with the
the Chairman and the Deputy, the
auditor’s report. The Supervisory
Supervisory Board elected Mr. Hagen
Board reviewed the report of the
and Mr. Seing as further members of
Board of Managing Directors and sub-
the risk committee.
sequently approved it and the audit
Board
opinion rendered by the auditor. The
latter states, “Based on our audit,
which was carried out according to
professional standards, we confirm
firstly, that the actual disclosures in
The Supervisory Board is regularly
the report are accurate, and that
informed of the work of the commit-
secondly, the consideration paid by the
tees.
Company in the transactions listed in
the report were not inappropriately
The Supervisory Board would like to
high or that disadvantages were com-
thank the members of the Board of
pensated, and that thirdly, there are
Managing Directors and all employees
no indications with regard to the mea-
for their services over the past year,
sures listed in the report that any other
which they once again performed with
assessment than that made by the
great courage in very difficult circum-
Board of Managing Directors is justi-
stances.
fied.” Based on the final conclusion of
its review, the Supervisory Board did
As in the past, year, thanks also go to
not raise any objections to the report
the shareholders for their support in
of the Board of Managing Directors on
facing the continuing challenges as
relationships to affiliated companies.
this has played a major role in stabilising the Bank, also with regard to the
sales process.
Conflicts of interest and their
treatment
Düsseldorf, Germany, 12 March 2010
The Supervisory Board
Both the Supervisory Board and the
committees have addressed the issue
of loan approvals under Sec. 15 KWG.
This did not reveal any conflicts of
interest with regard to the members of
Dr. Thomas A. Lange
the Supervisory Board.
Chairman
With regard to the sales process which
has been initiated for the Bank, the
respective members of the Supervisory
Board have not participated in the
consulting sessions or resolutions
which could have led to a conflict of
interest with regard to their main field
of professional activity.
Apart from their activities on the
various committees of the Bank, the
members of the Supervisory Board
have not provided the Bank with any
other consulting services.
MANAGEMENT REPORT
Business developments
Development of risk
Development of earnings
Outlook
MANAGEMENT REPORT
Business developments
Development of risk
Development of earnings
Outlook
e Business developments
The wider environment
Inflation in the euro area remained at
market continued to remain sluggish
an extremely low level, in harmony
and generally limited to short terms.
After the global economy was hit in the
with the weak economic performance.
The 3-month EURIBOR rate dropped
first quarter of 2009, the 12th year of
The consumer price index in the euro
significantly from 2.859% at the be-
the Düsseldorfer Hypothekenbank, by
area calculated by EUROSTAT fell
ginning of the year to 0.700% as at
the worst recession since the Second
from 1.6% at the beginning of the year
31 December 2009.
World War, most industrial nations
(annual rate) to its low for the year of
managed to return to growth in the
-0.7% in September, finally closing the
Surprisingly, the ECB announced in
later course of the year, propped up by
year at 0.9%. The rise in the last
June that it would initiate a pro-
comprehensive government interven-
months of the year was primarily due
gramme to buy covered bonds of
tion and monetary policies aimed at
to a renewed rise in the price of energy
€ 60 bn. This ushered in a sustained
fostering growth.
and commodities, particularly since
decline in the risk premiums for
the price of a barrel of crude oil (WTI)
Pfandbriefe and other covered bonds
In a surprising development for many,
nearly doubled over the course of the
and a revival of new issues on the pri-
Germany returned to modest growth
year from USD 46 to USD 80 and the
mary market.
in the second quarter of the year alre-
CRB commodity price index in the
ady, growing by 0.3% on the prior
same period rose from 230 to 283. The
The stock markets also enjoyed a
quarter. At the same time, German
exchange rate of the euro did not have
strong recovery. The main German
GDP growth in 2009 remained disap-
any major impact on price develop-
stock market index, the DAX, clambe-
pointing, falling 5% in a year-on-year
ments as the exchange rate to the USD
red from its low for the year of
comparison. The same applies to GDP
only fluctuated slightly, starting the
3,666 points recorded on 6 March
growth in other states within the euro
year at USD 1.40 and finishing at
2009 to 5,957 points at the end of the
area and also in the USA, with GDP fal-
USD 1.43.
year, a rise of 67%. The European
ling at an estimated 4% in Europe and
index, the Stoxx 50, also climbed 64%
2.5% in the USA. The main cause for
The economy undoubtedly received
from its low for the year of 1,810,
the weak economic output in the mem-
substantial stimulus from the Euro-
recorded on 9 March 2009, to close at
ber states of the euro area was the
pean Central Bank, which slashed the
2,965 points.
dramatic slump in capital expenditure
key rate a total of four times in the first
and also in exports, with public spen-
six months of 2009, from 2.5% to a
In a mirror image of the developments
ding and private consumption remai-
historical low of 1% while simultane-
on the share market, the yields on ten-
ning relatively stable, the latter shored
ously injecting liquidity into the ban-
year German government bonds,
up by state incentives, primarily in the
king sector of an amount never seen
which serve as the benchmark for the
form of cash incentives to scrap old
before. All ECB refinancing transac-
European bond market and had hit a
cars to subsidise the purchase of new
tions were carried out as a bulk tender
historic low in the previous year, rose
ones. As can be expected, the weak
with a full allotment and, for the first
from 2.96% at the beginning of the
economy placed a burden on the natio-
time in its history, with a term of one
year to close the year at 3.39%. By con-
nal markets, primarily in Spain and
year. In addition, the ECB serviced the
trast, the yield on two-year German
Ireland, where the strong recession in
huge demand for liquidity in USD and
government bonds, which stand in clo-
the -intensive construction industry
CHF by entering into currency swaps
ser proximity to the money market,
led to unemployment rates of 19.5%
on a regular basis. The interbank mar-
slid from 1.73% to 1.33% with the yield
and 12.5% respectively. In Germany,
ket, which came to a standstill at times
curve steepening as a result.
by contrast, the state-sponsored redu-
in the past year, profited significantly
ced working hours schemes and the
from these measures without actually
The market for corporate bonds and
responsible attitude to labour policies
managing to return to normal. Unse-
credit derivatives, which suffered in
taken by many private enterprises
cured trade on the interbank money
the first few months of the reporting
benefited the labour market greatly:
period from a general risk aversion
after adjusting for seasonal effects, the
among investors, developed in much
unemployment rate rose by just 0.4%
to 8.1%.
better fashion over the course of the
Restructuring of Düsseldorfer
The following cornerstones and goals
year. The iTraxx Europe (5 year term)
Hypothekenbank
are fundamental to the new business
which presents the average risk pre-
strategy:
mium for 125 large European compa-
The fiscal year 2009 did not bring any
e The primary business objective is
nies with an investment grade rating,
change in the ownership of Düs-
to restructure the Bank as a focused
fell back from the peak it reached at
seldorfer Hypothekenbank, as the pro-
operation that can return a profit over
the beginning of March of 208 bp to
cess initiated in the year 2008 to sell
the long-term.
74 bp at the end of the year. The iTraxx
Düsseldorfer Hypothekenbank by the
e The Bank concentrates on finan-
Crossover Index (5 year term), which
end of 2009 had not been concluded.
cing commercial real estate as its core
competence and in particular on buil-
reflects the default risk of 50 European
companies with a non-investment
As a result, 94% of the shares in the
ding up its specific expertise in busi-
grade rating, also fell markedly. After
Bank
Resba
ness acquisition, product strategies
reaching a historic high in March of
Beteiligungsgesellschaft mbH, a subsi-
and the design of processes as well as
1,088 bp, by the end of the year it had
diary of Bundesverband deutscher
risk management.
fallen to 435 bp.
Banken e.V. – Einlagensicherungs-
e With its lean human resources, its
fonds [“Federal Association of German
efficient corporate organisation and
Parallel to this development, the risk
Banks – Deposit Protection Fund”] and
its powerful IT, the Bank is in posses-
premium for public-sector borrowing
6%
Einlagen-
sion of competitive cost structures.
dropped significantly in the reporting
sicherungs- und Treuhandgesellschaft
The aim is to retain this competitive
period, even though the spreads failed
mbH, a deposit protection agency of
advantage and to extend it.
to match those prior to the financial
Prüfungsverband deutscher Banken
e The Bank has qualified personnel,
crisis. The risk premium for five-year
e.V. [“Audit Association of German
particularly since the takeover of the
credit default swaps on German
Banks”].
Bank by the current owners, the key
are
of
the
still
held
shares
by
by
employees have been retained and
government bonds, for example, fell
over the course of the year from 48 bp
In the meantime, the new business
competent new staff recruited. Clearly
to 26 bp and for US treasuries from
and risk strategy passed by a resolu-
the ambitious new business goals can
69 bp to 38 bp. By the end of the year,
tion
Managing
only be achieved in the sector of com-
however, the markets had become
Directors has specified the new busi-
mercial real estate financing by incre-
increasingly nervous about the high
ness model of the Bank in more detail.
asing human resources (Origination
of
the
Board
of
and Transaction Management staff).
levels of government debt in the more
southern member states of the EU,
This involves
e The Bank will concentrate on
Greece, Italy, Spain, and Portugal, but
e building up the mortgage lending
selected segments in its core business
also in Ireland. The greatest concern
activities for commercial real estate as
(i.e. not be a full range provider but a
was Greece, which reported a budget
the core business of the Bank,
niche player). The activities will there-
deficit of over 12% of its GDP. As a
e scaling back capital market trans-
fore concentrate on certain countries,
result, the risk premium for five-year
actions (including public-sector borro-
products, sales lines and be limited to
credit default swaps on Greek govern-
wing) and only conducting such trans-
a conservative risk profile.
ment bonds reached 283 bp after stan-
actions in future as a complementary
ding at 131 bp at the middle of the
field of business,
year.
e selling off Bankhaus Bauer as a
non-strategic operation that is insignificant (in terms of volume) to the
Bank.
12|13 Management report
Mortgage loans by use of property
Portfolio 31 December 2009
Previous year in brackets
Commercial properties
15% (15%)
Residential
21% (21%)
In the real estate lending business the
Development of commercial real estate
Bank will primarily focus on so-called
markets
permanent financing which will mostly need to be eligible for the cover
In the six most important markets for
pool. The Bank will fund this by using
office space in Germany: Berlin, Düs-
Hypothekenpfandbriefe (German co-
seldorf, Frankfurt, Hamburg, Stuttgart
vered mortgage bonds). The main part
and Munich, total revenues from ren-
of this business will be concentrated in
ted space fell, compared to the prior
Germany. To complement this, the
year, by 27% with the fall ranging bet-
Bank will also conduct its lending
ween 12% in Berlin and 40% in Düs-
business in the European core real
seldorf. The weak demand for office
estate markets and in the USA. The
space and the addition of unrented
Bank will not pursue retail mortgage
space in newly-completed buildings
lending.
led to an increase in average vacancy
rates from 8.9% to 9.9%. At the same
Whereas effort will also be put into
time the top rents on the market conti-
building up the direct business in
nued to slide, most of all in Berlin
Germany, foreign business will conti-
(-9%), Frankfurt (-8%) and Munich
nue to be conducted primarily via our
(-7%).
syndicated partners. The Bank has
Other business
11% (11%)
Office and administration
53% (53%)
been successful with its syndicated
The German investment market recor-
business to date and has built up a
ded a transaction volume of € 10.5 bn,
broad network of partners.
which represents a fall of 49% on the
prior year. However, after the drama-
The Bank, which to date has only had
tic slump in the first quarter, invest-
limited sales of Pfandbriefe, should
ment activity stabilised in the further
therefore be repositioned as an active
course of the year. In conjunction with
investor-orientated established and
the relatively small change in the top
reputable issuer of Pfandbriefe. The
rents for prime locations, this resulted
focus of Pfandbrief issues should be on
in a fall of between 5.1% and 5.5%.
private placements in small batches.
The slight improvement in the mood
There are no plans to issue Jumbo-
on the market is also expressed in the
Pfandbriefe.
German property economic index, prepared by a firm of international ex-
In the course of the pending change in
perts, that rose from 40.7 points at the
ownership, the Bank expects a large
beginning of the year to 85.1 points in
injection of new equity capital. This
December 2009.
will bolster the core capital ratio of
the Bank for the long term. In future
By contrast, conditions on the other
the core capital ratio should not fall
European markets for commercial
below 8%.
property remained difficult over the
entire reporting period. The European
Office Property Clock published by
Jones Lang LaSalle (fourth quarter of
2009) revealed that 14 of the 27 markets outside of Germany included in
the analysis were in the “Rents falling”
quadrant and the remaining 13 were
The US commercial property market
in the “Rents bottoming out” quadrant.
also suffered a significant contraction,
The European prime office rental
reflected in rising vacancy rates, fal-
index from Jones Lang LaSalle, which
ling rents and a drop in demand for
weights the trends in office rents from
space. In the office property sector the
24 cities, fell by 13.6% in a year-on-
average vacancy rates at the end of the
year comparison. However, the slide
year rose to 18%, although the metro-
was bottoming out with a fall of just
politan centres New York, Washington
0.8% on the prior quarter, indicating
D.C., Los Angeles and San Francisco
that demand was beginning to stabilise
remained below this average. The ave-
at a low level. The average vacancy
rage yield rose from approximately
rate in Europe reached 10.2% at the
7.5% at the end of 2008 to an average
end of the year, the first time double
of 8.4% in 2009. Due to the falling
digits had been reached since the mid-
demand from abroad, investment
1990s. The highest vacancy rates were
volume remained significantly below
in
the values of the prior year. At
Moscow
(19.6%),
Amsterdam
(17.4%) and Frankfurt (13.6%).
Mortgage loans by property location
Berlin
3% (4%)
Abroad
59% (58%)
East Germany
2% (2%)
USD 29 bn only 25% of the sales
volume generated in 2008 had been
According to a study by CB Richard
generated by September of 2009 (the
Ellis, direct investment in European
last available figure) and 9% of the
commercial property amounted to
sales volume generated in 2007.
€ 69.6 bn in 2009 (a fall of 40%). The
West Germany
36% (36%)
most popular destinations were the
United Kingdom (€ 24.8 bn) and Ger-
Slight reduction in the property
many (€ 10.5 bn). € 9.3 bn or 88% of
financing portfolio
the German investment volume was
accounted for by individual transac-
In light of the, as yet, uncompleted
tions and approximately € 1.3 bn was
sales process and the improvement in
invested in portfolios. According to
the funding situation, albeit with some
BNP Paribas Real Estate, the trans-
qualifications, Düsseldorfer Hypothe-
actions with office real estate amoun-
kenbank opted not to enter into any
ted to € 3.7 bn, followed by retail pro-
new property financing arrangements
perty which came to approximately,
in the reporting year. Only one new
€ 3.3 bn. Only € 0.7 billion, two-thirds
loan commitment of € 5 m was issued
less than the prior year, was due to
for renovation and extensions to an
properties used for logistics.
office property already financed by the
Bank.
Due to this, the entire portfolio of pro-
drop of € 33 m in the portfolio is pri-
Due to the conservative risk policy of
perty financing (excluding Bankhaus
marily due to scheduled repayments
the Bank, the impact of the global
Bauer) and securitised finance in the
but also some unscheduled repay-
financial and economic crisis on the
form of mortgage-backed securities
ments. The MBS portfolio consists ent-
credit rating of the entire property
came to € 1,796 m as at 31 December
irely of single step classical pass-
portfolio of Düsseldorfer Hypotheken-
2009, € 132 m below the figure at the
through structures. The mortgages
bank was moderate. Although the mar-
close of 2008 (€ 1,928 m). As in the
underlying the portfolio serve solely to
ket value of a number of properties
prior year, clients made little use of
finance properties in Western Europe,
financed by the Bank in Germany and
their contractual right to repay their
with 52% used for residential proper-
abroad had to be adjusted to match
loans prematurely.
ties (Residential MBS) and 48% for
market circumstances, because of the
commercially-used properties (Com-
loan-to-value covenants arranged by
The regional portfolio structure remai-
mercial MBS). The total of 24 tranches
the Bank this only led to restructuring
ned unchanged compared to the prior
from 17 MBS issues are spread
agreements in a few isolated cases,
year. The share of west German real
amongst
countries:
resulting in improved conditions for the
estate including Berlin in the financing
mixed EU 21%, United Kingdom 18%,
Bank owing to higher margins, partial
portfolio lay at 39% (40%) and the
Spain and Italy each at 17%, Ireland
loan repayments or provision of addi-
share of east German real estate at
7%, Portugal, Greece and France each
tional collateral. At no time in the
2% (2%). Finance extended to other
6% and Germany at 2%. 83% of the
reporting period did breaches of cove-
countries in the EU accounted for
portfolio is ECB-eligible. New MBS
nants lead to defaults on loans.
29% (28%) of the portfolio, with the
tranches were not acquired in the
rest of the world (USA, Canada,
reporting period.
the
following
servative benchmarks, the need to
Switzerland) making up the remaining
30% (30%).
Even when applying exceedingly con-
The credit ratings of four of the
recognise loan loss provisions on exi-
24 MBS tranches were written down in
sting property financing remained
The composition of the loan book by
the reporting period as the rating
manageable. Net risk provision in the
property use has also remained con-
agencies put a lower assessment on
reporting period came to € 6.7 m
stant. The share of residential pro-
the future development of the values of
(€ 11.9 m). This includes additions of
perty remained at 21% (21%) with
the underlying real estate and the
€ 5.2 m (net) to loan loss provisions for
commercial property still accounting
potential for renting it out later.
two property finance packages and
for 79% (79%). In the commercial pro-
61% (80%) of the portfolio was rated
write-downs on interest receivables of
perty segment, office properties still
AAA as at 31 December 2009 and
€ 1.5 m. The risk provision in the pro-
play a dominant role accounting for
14% (16%) at AA. A further 14% (4%)
perty
53% (53%), followed by wholesale and
was rated at investment grade and
€ 22.6 m (€ 22.5 m) as of balance sheet
retail properties at 15% (15%) and
11% (0%) at BB or B. In some cases the
date, or 1.2% (1.2%) of the entire pro-
operator properties (hotels, retirement
downgrading led to a significant rise in
perty finance portfolio.
homes) accounting for 11% (11%) of
the amount of the capital commitment
the portfolio. The average size of the
required by the financial supervisory
loans at the end of the year came to €
authorities. As in the prior period,
12.2 m per borrower, representing a
there is no indication of any need to
slight fall on the prior year (€ 13.4 m).
write-down the MBS portfolio. The
The portfolio of property lending inclu-
repayments profile of the MBS portfo-
des MBS of € 327 m (€ 360 m). The
lio shows that prospectively 78% of the
portfolio will be paid back by 2014 as
scheduled.
financing
business
totalled
Capital market business scaled back
at state and sub-state level. In the sub-
by €2.4 bn as planned
stitute cover and non-eligible portfolios ratings generally fell as a result of
The capital markets business segment
problems at individual banks. In spite
of Düsseldorfer Hypothekenbank con-
of this, the total portfolio still enjoys an
sists of the “public-sector lending port-
excellent rating profile: 25% (30%) of
folio (ordinary coverage)”, the “substi-
the portfolio is rated AAA, 33% (29%)
tute cover” business and business “not
AA, 26% (27%) A, 9% (7%) BBB and
eligible for the cover pool”. Correspon-
only 1% (1%) non-investment grade.
ding to the strategic goal of progressi-
6% (6%) of the portfolio is not rated.
vely scaling back the capital markets
These relate primarily to claims on
business and only conducting it as a
German publicly-owned banks which
complementary business line to the
are covered by state guarantees.
Public-sector lendings by borrower groups
(eligible for cover pool)
Public authorities
abroad
36% (32%)
Public authorities
domestic
22% (25%)
property financing business, the total
portfolio of capital market business
After being forced to write off claims
dropped by € 2.4 bn to € 17.7 bn
on banks of a nominal value of € 157 m
(€ 20.1 bn), at face value in each case,
in the prior year due to defaults the
as a result of planned repayments.
Bank did not suffer any further loss
from defaults in its capital markets
The new commitments in the capital
business during the reporting period.
markets business are limited to prolonging loans to municipalities of a
The “public-sector lending business”,
volume of just € 2 m.
the portfolio of which reduced to
Supplementary
cover
17% (14%)
Public-sector credit
institutions domestic
24% (29%)
€ 11,409 m (€ 13,267 m), accounted
After risk premiums rose dramatically
for 64% (66%) of the capital markets
in some cases in the first quarter of
business by the end of the year. This
2009, the total portfolio of a nominal
includes all claims that qualify as ordi-
value of € 17,744 m profited from a
nary cover for public-sector Pfand-
strong recovery in asset swap spreads
briefe under the German Pfandbrief
over the remainder of the year. Apart
Act (Pfandbriefgesetz). The debtors
from a few exceptions, e.g. Greek
are public bodies (states, regional
government bonds, the spreads of
governments, regional bodies) in Ger-
most papers at the end of the year
many (47.8%), member states of the
were generally significantly below
European Union and the EEC (49.6%),
their peaks in February and March.
Switzerland (1.5%), the USA (0.3%),
Nevertheless, the portfolio was affec-
Canada (0.6%) and Japan (0.2%).
Public-sector credit
institutions domestic
1% (0%)
Public-sector lendings by credit quality
(eligible for cover pool)
Share of aggregate portfolio in %
31 Dec 2009
0
31 Dec 2008
10
20
AAA
AA+
AA
ted by a number of ratings being
downgraded. In the public-sector lending segment ratings fell due to the
AA-
A+
wide-scale increase in budget deficits
A
A-
BBB+
BBB
BB+
N.R.
30
40
50
Public-sector loans by credit quality
(eligible as substitute cover)
The “substitute cover” portfolio, which
Significant reduction in the portfolio of
dropped to € 4,718 m (€ 5,479 m) and
derivatives
consists of all securities receivable
31 Dec 2009
0
31 Dec 2008
10
20
30
40
AAA
AA+
AA
AA-
from financial institutes (bank bonds)
As of balance sheet date the Bank held
that are eligible under the rules of the
a portfolio of derivative financial
Pfandbrief Act as substitute cover,
instruments with a nominal volume of
accounts for 27% (27%) of the capital
€ 39.8 bn (prior year € 46.8 bn) com-
market business. 23% of this portfolio
prising interest swaps for a nominal
is attributable to Pfandbriefe and
volume of € 38.8 bn and cross-curren-
other covered bonds from European
cy swaps for a nominal volume of
countries.
€ 1.0 bn. The fall of € 7.0 bn in the
portfolio is primarily due to the sche-
A+
A
A-
BBB
BBB-
BB+
N.R.
Derivative counterparties by rating
31 Dec 2009
0
AA+
duled expiry of commitments and also
contains all securities receivable that
the low volume of new activity due to
are not eligible for ordinary cover or as
the severe restrictions on new lending
substitute cover. This portfolio, which
and issuing business.
accounted for 9% (7%) of the capital
BBB+
AAA
The “non-eligible for cover” portfolio
31 Dec 2008
10
20
30
40
50
market business at the end of the year
The Bank uses derivative financial
rose to € 1,617 m (€ 1,336 m) due to
instruments
the fact that subsequent to the amend-
e as a microhedge to hedge itself
ment of the Pfandbrief Act some of the
against specific interest rate exposu-
papers no longer met the tighter requi-
res (interest swaps) and/or specific
rements to be eligible for cover. The
foreign exchange exposures (cross
portfolio is composed of the following
currency swaps) that are related to
elements: 30.3% non-eligible structu-
specific asset and liability items
red cedulas, 13.3% non-eligible state-
(underlyings). In the process, hedges
sector loans, 14.0% profit participation
are structured in such a way as to con-
rights/hybrid bonds, 8.2% corporates
vert fixed interest euro positions into
and 34.2% other securities of which
variable interest euro positions and
approximately
are
fixed / variable interest positions in
non-eligible bank bonds and one-
foreign currency into variable interest
quarter non-eligible bonds issued by
positions denominated in euro. The
sub-sovereigns.
congruency of such microhedges with
three-quarters
the underlying, which together constiAA
AA-
tute a valuation unit, result in a very
close hedge relationship,
e as macrohedges to control the
A+
Bank’s general exposure to fluctuating
interest rates which arises from the
A
A-
BBB+
BBB-
N.R.
entirety of its interest-bearing items.
Funding and liquidity
As in the prior year, the issue of Pfandbriefe only played a subordinate role
Due to the high quality of the Pfand-
for Düsseldorfer Hypothekenbank due
brief which is recognised both in Ger-
to the marginal volume of new busi-
many and abroad, the risk premiums
ness. Sale of mortgage Pfandbriefe
on the German Pfandbrief market
only came to € 120 m (€ 237 m). No
returned to normal earlier than in
public-sector Pfandbriefe were issued
other covered bond markets. The pro-
in the first six months of the year
gramme initiated by the ECB in July to
owing to the unfavourable conditions
purchase covered bonds for a total
on the market. In the second six
volume of € 60 bn gave this develop-
months of the year the Bank exploited
ment additional impetus. According to
the more favourable issue conditions
the vdp curve for mortgage Pfand-
to place € 250 m (full year 2009:
briefe and the vdp (Association of Ger-
€ 195 m) to refinance its public-sector
man Pfandbrief Banks) curve for
loans.
Investments not eligible for cover pool
by ratings
31 Dec 2009
0
31 Dec 2008
10
AAA
AA+
AA
AA-
A+
A
A-
public-sector Pfandbriefe the issue
spreads for ten-year terms lay 31 bp
An important pillar of the Bank in
and 24 bp respectively above the swap
securing liquidity was once again the
curves at the end of the year 2009,
open market business with the ECB
after these had stood at 64 bp and
which amounted to a total volume of
54 bp at the middle of the year.
€ 5.5 bn (€ 4.5 bn) by the end of the
year. The Bank availed of the offer of
The sale of mortgage Pfandbriefe
facilities with six and twelve month
amounted to € 55 bn by the end of
terms. The repo business with other
November 2009 (the last available
financial institutes, which had shrunk
figure from the Statistics Office of the
to just € 290 m at the middle of the
Bundesbank - German Central Bank),
year, amounted to a nominal € 2.0 bn
representing a fall of 8% on the same
by the end of the year. This develop-
period of the prior year. The sale of
ment reflects the fact that this refinan-
public-sector Pfandbriefe fell in the
cing instrument could be concluded at
same period by 41% to € 50 bn which
more favourable rates in the second
is chiefly attributable to the on-going
six months of the year than the open
consolidation in public-sector lending
market transactions offered by the
by the Pfandbriefe banks.
ECB at the key lending rate of 1%,
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
N.R.
because the Euribor interest rate had
fallen significantly below 1%.
20
30
40
Funding structure
%
2009
2008
42%
54%
4%
4%
Securities: ECB lending against (tender)
23%
19%
Securities: Banks' lending against (repo)
8%
8%
Other bank liabilities
4%
5%
Client deposits
8%
10%
Bearer bonds
11%
0%
0%
0%
100%
100%
Subordinate liabilities
Other sources of funding used by the
to a significant improvement of the
Bank were fixed-term deposits and
Bank’s liquidity. Prior to the guarantee
customer deposits, as well as issues of
from SoFFin, the Bank was granted
short-term bonds. In the full year, fun-
support from its shareholders to
ding of a total volume of € 4.5 bn (prior
secure its liquidity.
year € 1.4 bn) was sourced from the
capital markets taking all maturity
In order to additionally strengthen its
bands into account. Of this amount
funding base, the Bank applied again
5.5% (13.8%) took the form of public-
to SoFFin, on 8 April 2009, for
sector Pfandbriefe, 2.7% (16.8%) in
e a grant of additional stabilisation
mortgage Pfandbriefe and 91.8%
funds and
(69.4%) in unsecured funds, including
e a prolongation of the terms to three
bearer bonds of € 2.5 bn that were
years and five years for the stabilisa-
guaranteed by the SoFFin ["Sonder-
tion funds already granted in keeping
fonds Finanzmarktstabilisierung": a
with the terms of its initial application.
federal agency managing the special
To date, no decision has been made on
fund to stabilise the financial markets].
this application.
In 2008 the Bank already applied for
stabilisation funds of € 4.9 bn from the
The public-sector Pfandbriefe of Düs-
SoFFin under Sec. 6 FMStFG ["Finanz-
seldorfer Hypothekenbank continue to
marktstabilisierungsfondsgesetz": law
be rated AAA by both Fitch and Stan-
on the fund to stabilise the financial
dard & Poor´s. On 16 December 2009
markets]. On 12 March 2009 the SoF-
S&P changed its outlook to “negative”
Fin granted guarantees of € 2.5 bn, of
on account of a change in its rating
which € 1.25 bn expires on 12 March
methodology. Pfandbriefe and covered
2010 and the remaining € 1.25 bn on
bonds around the world with a total
11 March 2011. The funds received
volume of € 1.6 trillion were affected
within the framework of these measu-
by this move. The A minus rating from
res – in conjunction with the relaxation
Fitch on the Bank’s unsecured liabili-
on the refinancing markets – have led
ties remained unchanged.
Bankhaus Bauer
Total assets and own funds
Düsseldorfer Hypothekenbank also
Liable capital as defined by Section 10
runs a private banking operation at its
German Banking Act (KWG) amounted
location in Stuttgart under the name of
to € 364 m at the end of the year
Bankhaus Bauer, a traditional bank.
(€ 407 m). Of this amount € 299 m
The range of services provided by the
(€ 333 m) qualifies as core capital and
branch with its 27 employees includes
€ 65 m (€ 74 m) as additional capital.
advising private customers on all
The core capital ratio came to 7.4 %
issues associated with their invest-
(8.6%) whereas the total capital ratio
ments and managing their assets. In
came to 9.0% (10.6%).
Development of core capital
Million €
0
100
2005
200
300
400
500
220
2006
307
2007
340
2008
333
2009
299
addition, loans are extended to private
persons, particularly in the form of
As of 31 December 2009 the Bank’s
property
total assets amounted to € 24.2 bn
financing
and
Lombard
loans.
(€ 24.5 bn). “Claims on banks” have
Development of balance sheet total
Bn €
fallen by approximately € 1.0 bn and
The Board of Managing Directors pas-
“Claims on customers” by € 0.9 bn. By
sed a resolution in the reporting period
contrast, the line item “Bonds and
to divest Bankhaus Bauer as a non-
other fixed interest securities” rose by
strategic operation of immaterial
€ 1.7 bn in a year-on-year comparison.
importance owing to the small volume
This was related to the fact that bearer
of its business. This decision was
bonds of € 2.5 bn held by the Bank
based on the recognition that the busi-
and, as stated above guaranteed by
ness model of a private bank did not fit
SoFFin, were transferred to own funds
the business model of a mortgage bank
and added to the pledged security
that was aligning itself to financing
account of the ECB to bolster the
commercial real estate. There are no
Bank’s solvency. “Liabilities to banks”
obvious synergies between the two
and “Securitised liabilities” changed
units and they are unable to generate
only marginally on the prior year, whe-
business for each other in any sizeable
reas “Liabilities to customers” fell by
scope.
approximately € 0.2 bn.
0
5
10
2005
2006
2007
15
20
25
18.6
25.4
26.7
2008
24.5
2009
24.2
The process to sell the unit was initiated in the spring of 2009 with the identification of suitable investors. This
resulted in considerable interest from
potential buyers. The due diligence
phase was concluded in August. After
intensive negotiations, the contracts
were signed in January 2010. The new
investor has a great deal of expertise
in private banking and will contribute
towards Bankhaus Bauer’s ability to
address the needs of its wealthy private clients even better than in the
past. The transaction should be concluded by the end of July 2010 at the
very latest.
30
e Development of earnings
Net interest income nearly doubles
Development of net interest income
Million €
0
10
20
30
additional
unexpected
expenses were again incurred for the
40
50
42.0
2005
Moreover,
Subsequent to the large loss reported
building in the reporting year, amoun-
for fiscal year 2008 as a result of the
ting to € 3.7 m.
write-offs recorded on securities, the
48.8
2006
Bank managed to return to profit in
the reporting year.
42.2
2007
Administrative expenses burdened by
extraordinary factors
28.9
2008
The main factor in this development
55.3
2009
Development of cost/ income ratio
Administrative expenses to net interest
and commission income in %
0
2005
2006
2007
20
40
60
80
was that net interest income virtually
Personnel expenses fell from € 8.5 m
doubled on the prior year, rising from
to € 6.9 m. The reason for the fall lies
€ 28.9 m to € 55.3 m. The constant fall
in a reduction in employees from 83 to
in interest rates on the money market
78. In addition, personnel expenses in
had a positive impact here. The same
the prior year were burdened by spe-
holds true for the favourable condi-
cial effects related to the reorganisa-
tions at which liquidity was provided
tion of the Bank’s legal structure and
by the ECB within the framework of its
human resources.
open market transactions. Net interest
income does not contain any contribu-
On the other hand, the increase in non-
tion to earnings from the premature
personnel expenses (including depre-
close-out of derivatives.
ciation of property, plant and equipment) to € 19.8 m (€ 13.7 m) can gene-
2008
2009
The
deterioration
in
commission
rally be attributed to
income, which slid from € 1.4 m to
e an adjustment of € 2.6 m to the
€ -14.3 m is due to the commission
allocations required by the Deposit
payments of € 14.8 m due to the SoF-
Protection
Fin for the guarantees provided of
Association of German Banks
€ 2.5 bn. Commission income from len-
e consulting expenses of € 2.1 m
ding and client business amounted to
related to the sales process and the
€ 2.0 m.
conversion to the new IT system of the
Fund
of
the
Federal
Bank,
Net interest and commission income
e a write-down of € 2.4 m on the for-
thus reached € 41.0 (€ 30.3 m), 35%
merly-used office space at Berliner
above that of the prior year.
Allee 43, Düsseldorf, that was sold to
an investor in December.
In an annual comparison, the other
operating
result
improved
from
After
eliminating
these
factors,
€ -7.6 m to € -0.7 m. The provision for
non-personnel expenses amount to
potential losses from pending transac-
€ 12.7 m.
tions of € 6.5 m recorded in the prior
year to cover the predicted cost overruns on the new office building located
at Berliner Allee 41 in Düsseldorf,
which has since been occupied by the
Bank, was written off against the value
of the building in the reporting year.
As a result, administrative expenses
After allocating the share in admini-
totalled € 26.7 m (€ 22.2 m). Admini-
strative expenses and offsetting the
strative costs per employee increased
valuation result, the property finance
by 30% to € 356 k (€ 274 k). However,
segment reports a pre-tax result of
due to the proportionately higher rise
€ -9.0 m (€ -7.9 m) and the capital
in the surplus from net interest and
market segment a pre-tax result of
commission, the cost/income ratio
€ 20.2 m (€ -198.1 m). The pre-tax
improved to finish the period at just
result of the other activities amounts to
65% (73%).
€ -9.6 m (€ -9.2 m).
Development of operating income
Million €
0
10
15
20
30
29.8
2006
2007
25
26.4
2005
0.2
2008 -215.2
2009
Significant improvement in the
5
1.6
Report on affiliated companies
valuation result
According to Section 312 AktG, the
Income statement
Million €
The valuation result, which contains
Board of Managing Directors prepared
both risk provisioning for the lending
a report on relationships with affilia-
business as well as all income and
ted companies for the period under
Net interest income
expenses from the netting option pur-
review, which was audited and issued
Net commission income
suant to Sec. 340 f (3) HGB, amounts
with an auditor's certificate by Ernst &
to € -12 m (€ -215.7 m). In order to
Young GmbH, Wirtschaftsprüfungsge-
Net interest and
commission income
protect against the credit risk in pro-
sellschaft. This report concludes with
Trading result
perty financing, additional loan loss
the following declaration by the Board
Other
operating result
provisions of a net amount of € 6.7 m
of Managing Directors: "Based on the
(€ 11.9 m) were created. The additio-
circumstances of which we were
nal loan loss provisions in the capital
aware at the time, the Company al-
market business amounted to a net
ways received adequate consideration
amount of € 5.3 m (€ 203.7 m).
for all transactions with affiliated com-
Administrative expenses
Gross income
Valuation result
Operating income
panies. No actions were taken or omit-
Extraordinary
Result
In the reporting period the Bank gene-
ted that disadvantaged our company in
Profit before taxes
rated a net profit for the year of
favour of or at the request of affiliated
Taxes
€ 1.6 m (a loss of € -215.3 m). The net
companies.”
Net income for the year
profit for the year will be used in full to
Profit c/fwd from
previous year
settle liabilities to holders of profit participation rights originating from the
Personnel
prior year. The segment result calcula-
Allocation from
Profit-sharing rights
Balance sheet loss
ted by the Bank on the basis of impu-
With an annual average of 78 employ-
ted assumptions from which the ove-
ees, numbers in 2009 are down
rall result is calculated, breaks down
slightly on the prior year (83). The ave-
operations into the segment of “pro-
rage length of service at the Düsseldorf
perty financing”, itself composed of
location reached five years. Eleven
“mortgage loan business” and “MBS”,
staff members have already celebrated
and the segment “capital market busi-
ten years of service. The average
ness”, composed of “public sector len-
length of service at the Stuttgart loca-
ding (ordinary cover)”, “supplemen-
tion is 9.5 years. Two staff members
tary cover" and business that is “non-
in Stuttgart have already served over
eligible for cover”. In addition, there
20 years. Eleven have served over ten
are other activities including the busi-
years.
ness of the Bankhaus Bauer branch.
2009
2008
55.3
28.9
-14.3
1.4
41.0
30.3
0
0
-0.7
-7.6
-26.7
-22.2
13.6
0.5
-12.0
-215.7
1.6
-215.2
0
0
1.6
-215.2
0
-0.1
1.6
-215.3
-191.6
0.1
-1.6
23.6
-191.6
-191.6
With regard to human resources deve-
and compensation system to deter-
lopment, the Bank relies on individu-
mine its compliance with the regula-
ally-tailored internal and external
tory requirements. The conclusion
training measures with a practical
from the risk analysis is that the Bank
focus. The regular assessment inter-
does not need to apply the rulings in
views held between employees and
the special section of the circular on
their superiors provide the basis for
account of its compensation structu-
analysing employee training needs. In
res, its manageable size and the
the year 2009 employees also received
nature of the risks it is exposed to.
training by attending numerous semi-
Consequently the Bank has also opted
nars and professional courses. In addi-
not to set up a compensation commit-
tion, the Bank offers in-house lang-
tee.
uage training.
The Board of Managing Directors
In order to harmonise the demands
would like to express its thanks and
placed on employees by their profes-
recognition to all employees for their
sion and their family situation as best
work over the course of the reporting
possible, the Bank offers employees
year. We were only able to meet the
the opportunity of working from home,
demanding and labour-intensive chal-
in addition to its flexitime and part-
lenges required of the Bank to fulfil its
time solutions. Overall the Bank had
assignment in such a difficult business
ten employees working part-time and
climate due to the enormous commit-
three employees working from home
ment of our staff. Thanks also go to the
at the end of the year.
Work's Council for their trusting and
constructive co-operation.
At the beginning of 2010 the Bank
established its first graduate trainee
programme for the development of
Subsequent events
two of its junior staff. The programme
is aimed at training junior specialist
There were no events subsequent to
staff in a targeted fashion and is
the close of the fiscal year that were of
addressed at university graduates and
material importance.
graduates from bank training academies.
Within the framework of implementing the MaRisk, as issued on
14 August 2009, and the rules it contains on the design of compensation
systems, and the supplementary circular issued by the BaFin on 21 December 2009, the Bank reviewed its salary
e Risk Report
Aims of the risk management /
The spread-based credit risk model
System of limits
applied by the Bank throughout fiscal
Organisation of risk management
year 2009 often overvalues the actual
The full Board of Managing Directors
The primary task of risk management
credit risk, as risks are quantified
holds responsibility for the manage-
is to secure the long-term ability of the
using historical changes in spreads
ment of risks. It is supported in this
Bank to tolerate risks. The term risk
which are largely influenced by mar-
task by the Bank’s assets/liabilities
tolerance describes the ability to bear
ket factors, such as liquidity and mar-
committee (APA) and, if needed, by the
the risks the Bank enters into if they
ket sentiment, and not just credit-rela-
internal lending committee (IKA).
actually occur. This results in a need
ted factors. For this reason, the Super-
for the Bank to identify its potential
visory Board approved last year
The design and structure of processes
risk coverage. If the risk coverage is
already the decision to cancel the over-
is given great importance within risk
constantly higher than the quantified
night and stop-loss limits and the
management. The Bank has clearly
risks, the Bank is able to bear its risks
limits for the total loss potential for
defined the duties, authorities and
for the long-term.
lending risks based on this credit risk
responsibilities of its staff. The design
model.
of workflows and processes ensures
The risk coverage of the Bank, and the
that activities which cannot be combi-
point of departure for measuring
If these limits had continued to apply,
ned due to regulatory requirements
limits, is the net present value of liable
the limits would have been exceeded
are performed by separate units of the
capital as defined by Sec. 10 KWG. The
for lending risks and for the total
organisation.
allocation of liable capital to the
upper loss limit in the following cases:
various risk categories was kept con-
e Overnight limit: due to the continu-
stant in 2009: 55% of liable capital is
ing volatility in spreads, this limit
still allocated to credit risk, 30% to
would have been breached for the ent-
Risk categories and types of risk
market risk and 15% to operational
ire reporting period
The Bank has identified its main risk
risks and other risks. The total upper
e Stop loss limit: exceeded from
categories as the market risk, the cre-
loss limit as well as the overnight and
14 January, 2009 to 18 October 2009
dit risk, the liquidity risk and the ope-
stop-loss limits – broken down into
and complied with from 19 October
rational risk. In addition, it has also
individual risk categories – are derived
2009 to 10 December 2009, only to be
identified other fields of risk such as
on this basis. Whereas the overnight
exceeded again from 11 December
strategic risks, reputation risks and
limit corresponds to the risk that the
2009 to 23 December 2009, whereaf-
marketing and income risks. In con-
Bank is willing to assume overnight,
ter it was complied with again from 28
trast to the main risk categories, other
the stop-loss limit puts a floor on the
December 2009 to 31 December 2009.
risks are not managed by means of
actual accumulated loss in value.
e Total loss limit: exceeded from
special systems of limits.
These account for 5% and 12.5% of the
15 January 2009 to 5 October 2009,
allocated capital.
complied with from 6 October 2009 to
31 December 2009.
At the beginning of 2010 the Bank
installed a new credit risk model and a
new system of limits as part of its new
business and risk strategy (see page 40
for more details).
CREDIT RISK
Organisation
Measurement methods
A central requirement on the organi-
The credit risk in public-sector lending
The credit risk is defined as the danger
sation of the lending business is obser-
and the securities business (including
of a default by a counterparty on con-
ving the segregation of marketing and
MBS) is monitored daily by determi-
tractually agreed payments of interest
client-related functions (Origination)
ning any changes in the risk premiums
and principal and the related impair-
from risk analysis and risk manage-
of individual papers on their respective
ment of the underlying asset.
ment tasks (Transaction Manage-
yield curves and is presented in the
ment). The Bank observes this princi-
form of Credit Value at Risk (CVaR)
Property finance and capital market
ple by consistently segregating these
using historical simulations. On the
business is always associated with cre-
two offices along organisational lines.
basis of the last 250 days of trading,
dit risk. The aim of credit risk manage-
Loans are always processed by the Ori-
this indicator shows, at a confidence
ment is to identify these credit risks,
gination
Transaction
level of 99%, the maximum loss that
assess them and control them appro-
Management office is involved in all
could ensue from holding the instru-
priately. In the process, it must be
risk-relevant processes. It does this by
ments for one full day.
ensured that DHB is always able to
making an independent assessment of
bear any risks it assumes. Moreover,
the exposure, special control procedu-
the credit risks must be offset by
res and by a specific responsibility for
appropriate risk-adjusted rewards.
processes. For example, every loan
Strategy
office.
The
Stress tests
approval in property finance requires
In light of the lessons learned from the
The credit risk strategy creates a bin-
a second vote from Transaction
crisis on the financial markets, and to
ding framework for the management
Management before it can be appro-
implement the MaRisk rules, the Bank
of existing and new credit risks that is
ved.
installed a new dual stress test for the
risk of counterparty default. This test
tied to the ability of the Bank to bear
risk. Other aims are to diminish con-
Non-performing loans are processed
analyses the sensitivity of the CVaR in
centrations of risk in the portfolio and
by the Transaction Management office.
terms of unexpected down-gradings in
increase the transparency of risk.
The measurement of credit risk and
ratings of the loan book. It also deter-
the reporting on credit risk for the
mines the potential write-off require-
Bank as a whole are performed by the
ments that would be required due to
risk controlling department. Risk con-
higher rates of default during a crisis.
trolling is also responsible for the day-
Concentrations of counterparties in
to-day monitoring of the development
the capital market and property
of methods used to measure credit
finance business lines are considered
risk.
as particular risk drivers.
A progressive system of multi-variable
more (default defined in accordance
stress scenarios is capable of projec-
with Basel II) that do not, however,
ting both a mild recession and extreme
present a risk for capital requirements
crises on the markets. The ability of
on account of the existing collateral
the Bank to withstand such crisis sce-
provided (i.e. a “technical default”).
narios is measured as part of the cal-
The interest in arrears is written down
culation of its ability to bear risks.
by recording an impairment loss. RC
There is a tailored catalogue of measu-
VI contains all non-performing loans
res to take in critical situations in
(exposures for which a loan loss provi-
order to control the credit risk and
sion is set up) where a collection is not,
increase cover pool.
or no longer expected of an amount
that will cover the claim.
Development of the credit risk
Development of credit risk
Business year 2009, limit utilisation
in %
0
100
Jan
Mar
May
Loans in risk categories IV, V, and VI
are reviewed at regular intervals, at
As of balance sheet date, the CVaR lay
least once a year, to determine any
at € 23.7 m, which is only slightly hig-
need to recognise a loan loss provision.
her than at the end of 2008 (€ 23.0 m),
The need for a risk provision exists if
with it averaging € 23.9 m for the
the repayment of the principal no lon-
period (€ 11.9 m).
ger appears secure after taking
Jul
Sep
account of rents to be collected and the
collateral plus the credit rating of par-
Loan loss provisions for property
ties with joint liability. Regardless of
finance business
this, all interest in arrears that is more
Nov
than 90 days overdue is written off in
The property finance portfolio is clas-
full. Any impairment loss recognised
sified into risk categories on the basis
on the principal of a loan is reviewed
of the measures that need to be taken.
annually and adjusted as needed.
Dec
The early warning system based on
these categories enables the Bank to
As of balance sheet date 95% (96%) of
recognise risks early and systemati-
the entire loan book in property
cally and to react before they become
finance of € 1,796 m (€ 1,928 m) was
acute, by taking counteraction to
classified internally to the “performing
mitigate them.
exposure” class (RC I to III), 2% (0%) to
the “problem exposure” class (RC IV
The Bank separates its property
and V) and 3% (4%) as non-performing
finance business into three classes hol-
(RC VI).
ding a total of six risk categories
(“RC”): The “normal exposure” class
includes RC I “no risk”, RC II “low risk”
and RC III “identifiable risks”. The
“problem exposure” class contains RC
IV “elevated risks” and RC V “acute
risks”. Category V includes all loans
and advances which display arrears of
at least one instalment for 90 days or
200
300
Real Estate by risk class
The additions to the loan loss pro-
Risk provisions for capital market
visions for the lending business
business
amounted to € 7.4 m in the reporting
Normal loans
95% (96%)
Loans with risk
2% (0%)
Non-performing loans
3% (4%)
period (prior year € 11.9 m). This
In the capital market business, the
includes interest receivables of € 1.5 m
Bank also classifies its entire portfolio
(€ 2.1 m) in arrears by more than
of securities into six risk categories
90 days which have already been writ-
(“RC”).
ten down. The sum of loan loss provi-
without any significant risks. RC II:
sions for the property finance business
watch loans and exposures with ade-
amounted to € 22.6 m at the end of the
quate ratings. RC III: watch loans and
year (€ 22.5 m). This constitutes 1.2%
exposures with elevated risks. RC IV:
(1.2%) of the entire loan book for pro-
watch loans and exposures with high
perty finance.
risks. RC V: poorly-performing loans
RC I: loans and exposures
and exposures, RC VI: non-performing
The percentage of exposures in
loans and exposures (the securities in
arrears, expressed as the ratio bet-
this category are written down). The
ween the total sum of interest in arre-
rating of a security and its latest risk
ars (> 30 days) in relation to the total
premium compared to the asset swap
property finance loan book, stood at
spread constitute the basis on which it
0.3% (0.4%). The actual cost of risk,
is allocated to a particular risk cate-
amounting to € 6.7 m (€ 11.9 m), cor-
gory. This method ensures that both
responds to 0.37% (0.62%) of the pro-
the rating (which is based on the
perty finance loan book. Over the last
expertise of the analysts) and market
three years this indicator averaged
information (the asset swap spread)
0.37%.
are appropriately considered in the
risk classification.
In order to measure the risk provision,
securities in risk categories III, IV, and
V are reviewed for the possible need to
recognise a loan loss provision. This
was measured at € 37.7 m. The remaining portfolio was measured using a
valuation technique. The technique
used here is a dynamic valuation technique based on a statistical binomial
model, which resulted in a need to
recognise further loan loss provisions
of € 2.3 m. Due to changes in the port-
folio, loan loss provisions fell in real
Within the framework of its asset/liabi-
terms from € 41.5 m in the prior year
lity management the Bank can enter
to € 40.0 m. Relative to the total loan
into interest risks within the given risk
book for capital market business, loan
limits and consistent with the business
loss provisions amounted to 0.2%
strategy.
Million €
Share in %
2009
2008
2007
60.1
3%
74.4
4%
35.1
2%
(0.2%). In the reporting year the Bank
did not suffer any defaults of any kind
It is not within the scope of the Bank’s
in its public-sector financing or securi-
business activity to assume currency
ties business.
risks. Open currency positions are not
entered into actively on principle.
The special funds of the Bank were vir-
However, they cannot be fully avoided
tually all released to equity without
in the interests of promoting business
affecting income. Since this date, the
efficiency. Existing currency risks are
Bank has not carried any special
measured daily and reported accor-
funds.
dingly.
Percentage of exposures in arrears
Percentage of exposures in arrears in %
Net loan loss provisions
Million €
Cost of risk (bp)
The conscious acceptance of option
MARKET RISK
risks is also an activity that does not
Strategy
belong in the market risk strategy of
the Bank. However, where assets/liabi-
The market risk strategy describes the
lity transactions entered into by the
measures taken to control and mit-
Bank involve option risks (e.g. termi-
igate the market risk the Bank is expo-
nation rights), suitable hedges are
sed to at the level of portfolios and
taken out.
individual exposures, taking account
of its business strategy and risk tole-
The Bank is not involved in transac-
rance.
tions that are dependent on the development of shares and commodity pri-
The market risk is defined as the dan-
ces. Nor will it participate in such
ger that the current or future assets or
transactions in future.
earnings of the Bank deteriorate
because of changes in
e interest (interest risk)
e foreign exchange (currency risk)
e option sensitivity, e.g. volatility
(option risk)
e share prices (share market risk) or
e commodity
prices
(commodity
price risk)
2009
2008
2007
0.3
0.4
0.4
6.7
37
11.9
62
2.4
13
0
Jan
Mar
25
50
75
ded on any one day determined over
Organisation
Development of interest rate risk
Business year 2009, limit utilisation
in %
an observation period of 250 days of
100
Fundamental to the way in which the
trading. The VaR forecast is then com-
Bank handles its trading business as
pared daily with the actual losses in
defined by MaRisk is the principle of
value that are incurred (back-testing).
segregating functions, in particular
If these model parameters are brea-
those of concluding a trade (Treasury)
ched significantly, they are adjusted in
on the one hand and the settlement of
the course of a process to review the
the trade and risk assessment (Trans-
model.
action Management – Money and Capital Markets) on the other. The Bank
May
observes this principle by clearly
Stress tests
segregating both of these functions
along organisational lines.
In addition, sensitivity analyses are
carried out daily and hypothetical and
Jul
Sep
Nov
Dec
The Treasury department is responsi-
historical stress tests are carried out
ble for concluding trades. The hand-
monthly. The latter tests quantify the
ling and controlling of closed deals is
impact of extreme market fluctuations
performed
Transaction
on the net assets and earnings of the
Management – Money and Capital
Bank. The Bank scales its stress tests
Markets department, which is a unit
in accordance with the recommenda-
that is organisationally segregated
tions of the Federal Supervisory
from the Treasury and not subject to
Authority. In this way the Bank has
its instructions. At the level of the Bank
implemented the requirements of cir-
as a whole, the measurement, monito-
cular 07/2007 issued by the BaFin on
ring and reporting of the risks entered
“Interest risks in the investment
into is performed by the risk control-
book”. The impact of a parallel shift in
ling department. On-going monitoring
the interest curve by +130 bp/ -190 bp
and development of the measuring
is calculated daily by the Bank to its
instruments is also performed by the
net present value. In the course of
risk controlling department.
implementing MaRisk in the version
by
the
issued on 14 August 2009 an additional historical scenario has been deve-
Measurement methods
loped that was applied in the current
fiscal year.
In order to measure and control its
market risk, the Bank calculates the
value at risk (VaR) using a variance/
covariance approach for all its onbalance sheet and off-balance sheet
interest risks on a daily basis. VaR
shows the loss which, with a confidence level of 99%, will not be excee-
A short-term liquidity forecast is pre-
Development of market risk
Organisation
The Bank held its market risk at a low
A central requirement placed on the
rent liquidity status and the liquidity
level in the reporting year. The given
organisation of liquidity management
planning from the Treasury depart-
VaR limit was not breached at any
is observing the strict segregation bet-
ment for a planning horizon of at least
time. As at the reporting date the VaR
ween liquidity management and liqui-
three months. In addition, at the end of
reached € 2.0 m (€ 2.3 m). As an
dity monitoring. The Bank will do
each month a long-term liquidity pro-
annual average it stood at € 3.1 m
justice to this requirement by ensuring
jection is prepared for at least three
(€ 2.2 m). This corresponds to an ave-
strict organisational segregation. The
full calendar years.
rage utilisation of the VaR limit of
treasury department is responsible for
56%. The highest daily VaR measured
controlling the liquidity of the Bank.
Moreover, the Bank manages its liqui-
in fiscal year 2009 came to € 4.6 m
Likewise, another task of the treasury
dity on the basis of the Liquidity Regu-
(€ 3.6 m).
department is the regular review of
lation (LiqV). On this basis, liquidity is
pared each day that contains the cur-
the relevant sources of refinancing
considered secured when the weighted
The actual change in value of interest-
with regard to their availability, taking
average balance of cash available in a
bearing items did not exceed the fore-
account of the corresponding refinan-
thirty-day period covers the payment
cast VaR on any day. The simulation of
cing costs. The money market/capital
obligations that could be called in this
interest shocks in accordance with the
market transactions department is
same period. To date, no standard has
BaFin circular 07/2007 did not result
responsible for monitoring liquidity
established itself in the banking sector
in any outliers. The 20% limit was not
and preparing the documents needed
for quantifying the liquidity risk. For
exceeded at any time. In fact, the
for the steering function, as well as
this reason, the liquidity risk will not
annual average burden calculated
checking their plausibility. The tasks
be considered in the risk tolerance
under the interest shock scenarios was
include the daily variance analysis of
concept of the Bank, as is permitted by
just 32% of this limit.
the liquidity status of the Bank and the
MaRisk, until further notice.
day-to-day monitoring and reporting
of the liquidity position of the Bank as
LIQUIDITY RISK
a whole.
Stress tests
Strategy
The stress tests, which are tailored to
The primary goal of the Bank’s liqui-
Measurement methods
dity risk strategy is to maintain the sol-
the various interests of the Bank and
based on various premises, are con-
vency of the Bank at all times. In addi-
The Bank possesses a comprehensive
ducted on the short and long-term
tion, the Bank must ensure that the
set of tools for analysing and steering
liquidity projections. They describe the
liquidity ratio as defined by Sec. 2 LiqV
the liquidity of the Bank (liquidity
impact of extreme market conditions
[Liquiditätsverordnung: German liqui-
structure analysis). This secures the
on the liquidity position of the Bank.
dity regulation] is observed at all
early recognition of possible liquidity
times. A further yet subordinate goal is
bottlenecks to ensure that suitable and
minimising the costs of procuring
targeted countermeasures can be initi-
liquidity.
ated.
To measure operational risks the Bank
Development of liquidity
Organisation
In the first quarter of the reporting
The quality of business processes will
year the Bank was dependent on the
be optimised by determining those
support of its shareholders to secure
processes exposed to risk, so as to
This involves comparing the operatio-
its solvency in the wake of the drama-
identify operational risks. In addition,
nal risks that have occurred with the
tic tightening of cash available on the
the employees will be trained by the
allocated limit. Special measures are
money markets and capital markets.
OpRisk manager in how to identify and
defined in the risk manual in the event
The funds received from SoFFin pur-
handle risks. To realise these goals a
that the utilisation of a limit becomes
suant to Sec. 6 FMStFG (a guarantee of
risk officer has been appointed by each
critical or that a limit is breached.
€ 2.5 bn) within the framework of the
department who is responsible for
government's stability program led to
recording operational risks and moni-
The Bank has established a separate
a significant improvement in the liqui-
toring the measures implemented to
process for risks associated with the
dity of the Bank.
counter them.
outsourcing of activities and proces-
applies the basic indicator approach
pursuant to Secs. 270 et seq. SolvV.
ses, which constitute a special form of
The liquidity ratio reported pursuant
to the LiqV lay between 1.1 and 1.7
operational risk.
Measurement methods
from February onwards and therefore
In the reporting year the focus of pro-
above the limit of 1.0 required by the
The most important instruments to
ject work was on replacing the legal IT
Federal Financial Supervisory Autho-
mitigate operational risks are the self-
system “KEA” with the “PARIS”
rity. In January of the reporting year,
assessment and the loss database.
system. An external firm of consul-
however, this limit was not met.
tants accompanied both the wording of
In the framework of the self-assess-
the contract and the implementation of
ment, structured interviews are held
the system. With “PARIS” the Bank
OPERATIONAL RISK
with the heads of department of the
now possesses a modern legal IT
Strategy
Bank to identify potential operational
system that is fit for the future and tai-
risks for the risk categories set by the
lored to the special requirements of a
Operational risk is defined as the risk
Federal Financial Supervisory Autho-
Pfandbrief bank.
of loss resulting from inadequate or
rity
failed internal processes, human and
systems, external events). Weaknesses
system error or from external events.
and areas exposed to risks are filtered
It includes legal risks and risks from
out from the findings. Operational
outsourcing activities and processes.
risks are then prevented from happe-
In addition to standard stress test sce-
ning, or the loss incurred is minimised
narios, such as a fire in the bank buil-
by applying corresponding measures.
ding or the outbreak of a pandemic,
The Bank pursues the goal of avoiding
(internal
processes,
people,
or mitigating its operational risks. This
Stress tests
other stress scenarios are also elabo-
involves efforts to continuously im-
All losses incurred are recorded in
rated. The expected impact is quanti-
prove the risk management process
detail in a loss database and analysed.
fied by estimating the size of the loss in
and develop it in accordance with the
This provides the foundation for iden-
the various scenarios. The stress tests
changing basic conditions.
tifying and analysing the causes for the
are conducted annually subsequent to
loss from which appropriate measures
the self-assessment.
can be derived and implemented.
Moreover, the capture of historic data
is also used to present measures that
have already been implemented and
measure their effectiveness.
On the basis of its long-term audit
INTERNAL CONTROLS AND RISK
plan, the internal audit monitors and
MANAGEMENT SYSTEM WITH
assesses all the operations and busi-
REGARD TO THE ACCOUNTING
not exceed the given limit at any time.
ness processes of the Bank, including
PROCESS
At the end of the year the limit was uti-
e The functionality, effectiveness,
Strategy
lised by 11%.
economic efficiency and appropriate-
Development of the operational risk
The operational risk of the Bank did
ness of the internal control systems,
With its internal controls and risk
the reporting, the information systems
management system for the accoun-
and the accounting
ting processes the Bank pursues
e Compliance with the applicable
accounting-related controlling goals
laws, supervisory requirements and
and other controlling goals. The
ment of the internal monitoring
regulations
accounting-related controlling goals
system. Responsibility for the esta-
e Compliance with the operating
are used by the Bank to steer the com-
blishment and functionality of the
requirements (rules of procedure,
pliance and reliability of the internal
internal audit department lies with the
organisational instructions)
and external accounting. In this
entire Board of Managing Directors.
e Compliance of all operating and
regard, focus is placed on the comple-
This responsibility cannot be delega-
business processes and the preventive
teness and accuracy of the documenta-
ted. The internal audit reports to the
measures taken to protect the Bank’s
tion, the prompt recording of transac-
senior member of the Board of Mana-
assets.
tions, reconciliations between the IT
Internal audit
The internal audit is an essential ele-
ging Directors. At his instruction it
systems and compliance with accoun-
performs independent and objective
The management is informed of any
ting requirements. Other controlling
audits as well as rendering consulting
significant findings. Once a year the
goals involve ensuring the implemen-
services for significant projects of the
internal audit submits a comprehen-
tation
Bank. The internal audit is organised
sive report on all its major findings,
taking account of the necessary appro-
independently. To enable it to perform
which includes the latest position
vals and compliance with business
its duties, the internal audit has a full
regarding the implementation of mea-
strategy, the economic efficiency of
and unlimited right to obtain informa-
sures. Serious findings are also repor-
business activities as well as compli-
tion at any time.
ted immediately to the Chairman of the
ance of the accounting with the appli-
Supervisory Board.
cable laws.
of
management
decisions,
The audit activities of the internal
audit extend, as a matter of principle
The internal audit was involved in all
and on the basis of a risk-orientated
significant projects in fiscal year 2009.
Organisation
verification approach, to all of the
Bank’s activities and processes.
The financial accounting, financial
planning, loan accounting, assets
After concluding its audit procedures,
accounting, as well as regulatory
the internal audit promptly prepares a
reporting departments are central
written audit report which includes a
functions that are not allocated to any
presentation of the subject and the fin-
administrative area and belong to the
dings of the audit. Moreover, the fin-
accounting department.
dings are analysed and a catalogue of
measures is presented whose implementation is then monitored.
In order to meet the strategies descri-
Risk management of cover funds
bed above, integrated controls of busi-
rements of the rating agencies for
nominal and present value excess
ness processes have been installed
Sec. 27 (1) PfandBG [“Pfandbriefge-
cover of Pfandbriefe. The development
that are separated into error preven-
setz”: German Pfandbrief Act] requires
of the present value excess cover of
tive and error identification measures.
that a risk management system is
Pfandbriefe and the major measures
Preventive measures primarily involve
installed for the Pfandbrief business
taken to manage the cover funds is
observing the segregation of functions,
which contains suitable instruments
reported on monthly in the asset/liabi-
restricting access, setting standard
and rules for steering, monitoring, and
lity management committee.
procedures, and checking plausibility.
controlling risks in the Pfandbrief
Measures aimed at identifying errors
business. The Bank has installed a risk
The Bank complied with expanded
include controls of completeness and
management system in accordance
liquidity requirements on cover, impo-
accuracy based on the principle of
with Sec. 27 PfandBG. The reporting
sed by the amendment to the Pfand-
dual control. When implementing
duties and transparency duties pursu-
brief Act in 2009 to include the "180
measures to comply with new laws and
ant to Sec. 28 PfandBG are met by the
days liquidity” ruling, at all times
regulations, support is obtained from
preparation of a monthly report on the
during the year.
external experts. With regard to any
risks pertaining to cover funds.
new product processes, proof must
obtained prior to any product launch,
The German Pfandbrief Act requires
that the new product is appropriately
that cover funds are covered at all
represented in the accounting system.
times by funds whose present value
exceeds the exposure by at least 2%.
implemented a new business and risk
The internal audit regularly conducts
The Bank monitors compliance with
strategy on 15 January 2010 with the
controls of the accounting that are
this legal requirement on a daily basis.
approval of the Supervisory Board.
independent of the processes. The
The net present value of the cover
Based on this new business and risk
accounting of the Bank is also revie-
funds, taking account of the regulatory
strategy, and the new risk manual, the
wed by the external auditor of the
stress tests described above, are used
risk management system and system
financial statements at year end, as
to calculate the surplus in cover requi-
of limits were completely revised and
well as during the review of the inte-
red by Sec. 4 (1) PfandBG. In this way
in some parts totally redesigned in
rim financial statements for the first
the required surplus is ensured even in
order to meet the MaRisk require-
six months of the year. In the course of
the event of extreme interest and
ments issued on 14 August 2009 and
the rating of the Bank by the Gesell-
foreign exchange fluctuations (Sec. 4
remedy the deficiencies of the old risk
schaft für Bankbeurteilung (GBB)
PfandBarwertV [“Pfandbrief-Barwert-
management system.
there is also a review of the accoun-
verordnung”: Regulation on ensuring
ting. The Bank has installed a risk
adequate cover of Pfandbriefe]). The
The most important changes compa-
management system for its accounting
Bank applies a dynamic method for its
red to the former risk management
processes that contains the measures
stress testing. As an annual average,
system are:
needed to identify and measure the
the net present surplus in cover for
significant risks and corresponding
public-sector Pfandbriefe after stress
risk-mitigating measures to ensure
testing amounted to 6.4% and for
that the financial statements comply
mortgage Pfandbriefe 17.7%. The
with requirements.
huge overlap in cover compared to the
excess cover required by law can be
attributed to the more stringent requi-
New business and risk strategy
e All credit risks will be measured
Risk position of the Düsseldorfer
and managed using uniform methods
Hypothekenbank
Net present value overcollateralisation
Public-sector Pfandbriefe 2009
in %
in future. In addition to credit risks
0
from the property finance business
In the reporting year, the Düsseldorfer
and the capital market business this
Hypothekenbank
extends to the credit risks from the
developments to its risk management
money market business (including
and its risk controlling system. In
repurchase transactions with banks)
future, too, the methods used to mea-
Apr
and from derivatives.
sure risks and steer risk processes will
May
e Credit risks will be measured using
be continually improved. Risks that
Jun
the default-based Credit-Value-at-Risk
were significant for assessing the ove-
Jul
approach based on the Gordy model.
rall risk exposure of the Bank in fiscal
This model supplies an estimate of the
year 2009 have been presented in the
expected loss and the unexpected loss
preceding sections of this report. Other
for the loan book.
significant risks were not discernible
Oct
e The concept used to assess the risk
in the reporting year. The Bank has
Nov
tolerance of the Bank was extended to
made appropriate provision for all
Dez
include an income statement-based
discernible risks.
made
significant
2
4
6
8
10
Jan
Feb
Mar
Aug
Sep
analysis, in addition to the present-
annual average: ----
value orientated assessment of the
ability of the Bank to bear risk from a
going concern perspective.
Net present value overcollateralisation
Mortgage-Pfandbriefe 2009
in %
0
The system of limits was revised to
match the changes in methods and its
10
20
Jan
Feb
conceptual basis extended. The main
goals of the new architecture of the
Mrz
system of limits are to secure the abili-
Apr
ty of the Bank to bear the risks it
May
enters into and to limit risk concentra-
Jun
tions. The CVaRnew calculated using
Jul
the new credit risk model for all credit
Aug
risks of the Bank (likelihood 99%,
default period of one year) amounted
Sep
to € 126.0 m as at 31 December 2009.
Oct
With a CVaR-Limitneu of € 190.3 m
Nov
the result was a 66.2% utilisation of
Dec
the limit.
annual average: ----
30
e Outlook
The dominant issue on the capital
In the meantime, the EU commission
In the meantime, there are many signs
markets in the first weeks of the new
has formulated clear requirements for
that the economies in the euro area
year was the budget crisis in Greece,
the consolidation of Greek state finan-
are continuing on the course of reco-
one of the countries in the euro area.
ces. On this basis the Greek budget
very that began in the past year. The
In December 2009 Fitch was the first
deficit must be scaled back to 8.7% of
Economic Sentiment Index that is
rating agency to lower its rating of
GDP in the current year and to 2.8% of
widely recognised as an early indicator
Greece from A+ to BBB+ after the
GDP by 2012. The commission will
of economic development in the euro
Greek government announced that the
monitor progress by means of strict
area rose in January for the tenth time
budget deficit in the country would
monthly monitoring. As long as there
in succession to 95.7 points (after rea-
reach 12.7% of GDP, almost double the
appears to be no serious intention on
ching a low of 70.6 points in March
amount previously forecast. The ensu-
the part of the Greek government to
2009). The German IFO economic
ing widening in the credit default swap
install savings measures, it must be
index stood at 95.8 points compared to
premiums (CDS premiums) accelera-
expected that spreads will remain
its low of 82.2 points in March 2009. In
ted in January as a result of Greek fun-
volatile. On the other hand, fears that
December 2009 the ECB economists
ding requirements of approximately €
a departure of Greece from the Euro-
raised their GDP forecast for the euro
54 bn. At the beginning of February,
pean monetary union or even a default
area from 0.2% to 0.8%. They expect
CDS premiums for five-year Greek
by Greece could destabilise the inter-
growth of 1.2% in 2011. Growth will be
government bonds, that had stood at
national capital markets and the inter-
encouraged by rising inventories and a
283 bp at the beginning of the year,
national banking system appear to be
recovery in exports, whereas there is a
reached 428 bp, only to fall once the
over-exaggerated. In order to avoid
perceived risk that unemployment will
EU indicated that it was prepared to
such extreme scenarios, external assi-
continue to increase as economic sti-
provide a rescue package. Portugal,
stance would most likely be provided
mulus packages come to an end. In
which is also wrestling with a large
from Brussels or the IMF with strin-
contrast to recent years, German GDP
budget deficit, was drawn into this
gent requirements for Greek fiscal
growth is expected to lie above the
development (with its premium rising
policy attached. Consequently, given
average for the euro area.
from 92 bp at the end of the year to
its hold-to-maturity strategy, the Bank
244 bp at the beginning of February).
is not expecting any defaults on inte-
Positive stimulus for growth is also
rest payments or capital in its Greek or
likely to continue to come from the len-
The exposure of Düsseldorfer Hypo-
Portuguese exposures in the foreseea-
ding rate policy of the ECB. With the
thekenbank in these two countries
ble future.
inflation rate forecast to be near one
amounted to a nominal amount of
percent, it is not expected that the key
€ 854 m as of 31 January 2010, of
rate will be raised before the fourth
which € 422 m relates to Greece
quarter of the current year. The ECB
(€ 375 m in sovereigns, € 2 m in sub-
has unequivocally stated that the spe-
sovereigns and € 45 m in banks) and
cial measures to secure the liquidity of
€ 432 m to Portugal (€ 155 m sover-
the banking system that were put into
eigns, € 145 m in sub-sovereigns,
place to confront the crisis will be pha-
€ 38 in covered bonds, € 89 m in bank
sed out step-by-step. In December
bonds and € 5 m in corporate bonds).
2009 a refinancing offer with a oneyear term was offered for the last time.
Six-month terms are also likely to
come to an end from April 2010. The
As usual the new year started with a
In light of this general economic envi-
president of the German Central Bank,
lot of new issues on the bond market,
ronment, the Düsseldorfer Hypothe-
Mr. Weber, has not excluded a return
the market for liquid covered bonds
kenbank has refrained from entering
to the bulk tender process with full
being particularly outstanding. The
into any new business in either the
allocation by the middle of the year
volume of issues in January came to €
property finance sector or the capital
with a normal interest tender. Such a
29.5 bn, the second highest in its ent-
market business.
step would mean that overnight rates
ire history. With just two jumbo bonds,
in the interbank market, which have
German issuers were particularly
In its mid-term planning, which
lately hovered around 0.3%, would
under-represented. For the rest of
extends to the end of 2013, the Bank
return to near the key rate and that
year it is also expected that new bond
assumes there will be a sustained rise
other money market rates would rise
issues from German issuers of Pfand-
in the number of approvals for new
again. The Bank will consider the
briefe will continue to be moderate.
business in the sector of property
resulting scenario for money market
The estimated volume of Pfandbriefe
financing. The accumulated volume of
refinancing in its funding policy.
expected to mature in 2010 is compa-
new business in the coming four years
ratively low, at just € 175 bn. In addi-
is expected to total almost € 11 bn with
On the capital markets, German
tion, it can be expected that public-
the accumulated net interest income
government bonds profited from their
sector cover business from issuers of
amounting to € 287 m. An essential
safe haven status at the beginning of
Pfandbriefe will decline again this
component of the planning is that the
the year. The yield on ten-year govern-
year. In this context, the number of
Bank receives a substantial equity
ment bonds fell to 3.10% at the begin-
issues from the Bank, which are
injection.
ning of February, with ten-year inte-
anyway small in number, is unlikely to
rest swaps slipping to 3.33% (two-year
suffer any restrictions.
The long-lasting process to sell the
to 1.56%). The market expects interest
Bank to a suitable investor should be
rates to rise moderately on the capital
Following the typical pattern of beha-
concluded in the second half of 2010.
markets over the course of the year.
viour,
The investors involved show undimi-
The forward rates at the end of 2010
Europe will have a delayed impact on
for
interest
the property market. However, the
swaps came to 3.73% (2.24%) as of
trend towards stabilisation is likely to
In view of the realignment of the Bank
10 February 2010.
continue, albeit moderately and with
associated with the unfinished sales
regional differences. The fall in rents
process, a reliable forecast of results
will start to slow down across a wide
for the coming year would be subject
front and selected locations will even
to a major degree of uncertainty at
return to slight growth. Factors that
present and is therefore hardly possi-
will dampen recovery will be the
ble.
ten-year
(two-year)
the
economic
recovery
in
nished interest in purchasing.
sustained low level of net absorption
with regard to the volume of new construction that is coming on to the market. Nevertheless, the Bank expects
that there will not be any need to make
provision for depreciation in the property finance business above the level
of the prior year.
ANNUAL ACCOUNTS
Balance Sheet
Profit and Loss Account
Notes
Supervisory Board, Board of Managing Directors
Auditors’ certificate
ANNUAL ACCOUNTS
Balance Sheet
Profit and Loss Account
Notes
Supervisory Board, Board of Managing Directors
Auditors’ certificate
e Balance Sheet as at 31 December 2009
Assets in thousand €
2009
2009
Cash reserve
of which: with Deutsche Bundesbank
collateralised against securities
Bonds
and other fixed income securities
Bonds and notes
of public-sector issuers
of which: eligible as collateral with Deutsche Bundesbank
of other issuers
of which: eligible as collateral with Deutsche Bundesbank
4,345,989
3,256,297
2,094,986
(787,299)
0
(0)
1,469,177
2,140,607
25,278
3,635,062
1,573,376
2,891,021
36,754
1,921
(1,965)
4,622,046
5,048,517
4,206,123
8,802,768
(4,417,297)
13,424,814
9,152,642
7,541,997
(8,074,757)
2,586,153
16,010,967
93,025
(92,075)
14,923
33,413
15,336
15,336
2,584,302
Shares and other
variable-yield securities
Participating interests
of which: in banks
104,846
1,035,891
Own debt instruments
Nominal amount
51,090
(104,534)
2,717,665
1,628,324
Claims on customers
Mortgage loans
Public-sector loans
other claims
of which: collateralised against securities
2008
50,726
Claims on banks
Public-sector loans
other claims
of which: payable on demand
2009
8
(8)
1,008
1,385
Tangible assets
16,888
20,479
Other assets
27,967
30,050
50,736
70,941
42,677
24,169,966
24,465,745
Intangible assets
Deferred items
from issuing and lending business
others
Total Assets
30,804
19,932
Liabilities in thousand €
2009
Liabilities to banks
registered Mortgage Pfandbriefe issued
registered Public-sector Pfandbriefe issued
other liabilities
2009
117,070
316,030
8,328,430
2009
2008
8,761,530
145,584
448,434
8,222,537
257,094
(194,063)
to lenders to secure loans contracted
0
(0)
and registered Public-sector Pfandbriefe
0
(0)
registered Mortgage Pfandbriefe given
Liabilities to customers
registered Mortgage Pfandbriefe issued
registered Public-sector Pfandbriefe issued
savings deposits
with agreed withdrawal notice of three months
with agreed withdrawal notice of more than three months
521,410
4,705,879
10,615
10,548
(13,273)
67
other liabilities
508,280
4,759,001
13,273
(0)
2,119,665
7,357,569
2,308,691
39,431
(592,086)
to lenders to secure loans contracted
0
(0)
and registered Public-sector Pfandbriefe
0
(0)
registered Mortgage Pfandbriefe given
Securitised liabilities
Bonds issued
other bonds
215,960
4,894,598
2,511,558
7,622,116
246,134
7,312,916
35,017
2,210
28,195
6,456
10,554
17,010
8,516
15,816
188
7,379
7,567
2,588
12,493
55,099
53,000
39,376
37,781
Other liabilities
Deferred items
from issuing and lending business
others
Provisions
Tax provisions
others
Subordinated liabilities
of which: due in less than two years
Capital and reserves
subscribed capital
Capital reserve
Revenue reserve
other revenue reserves
distributable profit
Total Liabilities
Contingent liabilities
Liabilities from guarantees and indemnity agreements
Other commitments
irrevocable loan commitments
24,613
(23,616)
251,000
199,229
48,893
-191,633
251,000
199,229
307,489
48,893
-191,633
24,169,966
24,465,745
626
746
9,027
60,486
40|41 Annual accounts
e Profit and Loss Account
from 1 January to 31 December 2009
in thousand €
Interest income
from lending and money market transactions
from fixed-income securities and
debt register claims
2009
2009
2009
1,603,741
510,917
2008
2,622,670
2,114,658
684,055
-2,061,957
52,701
-3,279,480
Income
from shares and other variable-yield securities
from participating interests
2,642
13
2,655
1,675
13
Commission income
2,017
Interest paid
-16,349
Commission paid
Net income from financial transactions
Other operating income
General administrative expenses
Staff expenses
Wages and salaries
compulsory social security contributions and
expenses for pensions and other staff benefits
3,418
-14,332
-2,047
0
0
5,753
347
-5,901
-1,022
of which: pensions
-7,478
-6,923
-1,015
-171
other administrative expenses
(-176)
-16,736
-23,659
-11,197
Depreciation of and value adjustments
to intangible and tangible assets
-3,039
-2,477
Other operating expenses
-6,430
-7,996
Write-downs of and value adjustments
to claims and certain securities as well as
additions to the provision for possible loan losses
to participating interests, shareholdings in
affiliated companies and securities treated as fixed assets
-9,368
-88,426
-2,674
-127,262
1,607
-215,200
0
0
1,607
-215,200
Profit on ordinary activities
Extraordinary expenses
Profit before taxes
Taxes from income and earnings
Other taxes
not included under
“other operating expenses”
Net income/ loss for the year
Loss/ Profit from prior year
Replenishment of/ withdrawal from profit-sharing rights
Balance sheet loss
22
-34
-63
-12
-36
1,595
-215,299
-191,633
100
-1,595
23,566
-191,633
-191,633
e Notes
Accounting and valuation principles
conjunction with a valuation technique
than € 1,000 are collected on a catch-
that reflects the probability of default.
all item and depreciated over five
The financial statements have been
The sum of loan loss provisions deter-
years in accordance with tax legisla-
prepared in accordance with the appli-
mined in this manner amounted to
tion.
cable provisions of HGB [“Handelsge-
€ 39.8 m in the reporting year (prior
setzbuch”: German Commercial Code],
year: € 41.5 m). In addition, impair-
Liabilities are recorded at the amount
AktG [“Aktiengesetz”: German Stock
ment losses of € 8.8 m were recognised
needed to settle the obligation. The dif-
Corporation Act] and PfandG [“Pfand-
on securities that were sold in the
ference between the face value and
briefgesetz”: German Pfandbrief Act]
reporting year. In the fiscal year 2009,
amount paid out is shown under
as well as RechKredV [“Verordnung
256 securities held as a cash reserve
‘deferred items’. Zero-coupon bonds
über die Rechnungslegung von Kredit-
with a nominal volume of € 4,044 m
are measured at issue price plus inte-
instituten": Bank Accounting Direc-
were reclassified as fixed assets. At the
rest on a pro rata temporis basis in
tive].
time of the reclassification the market
accordance with the return on the
value of these securities was € 348 m
issue.
Claims are stated at nominal value in
below their carrying amount without
accordance with Section 340e (2) Ger-
considering the effect of any interest
Provisions have been made for taxes
man Commercial Code (HGB); the dif-
hedges.
and contingent liabilities based on the
ference between the amount paid out
estimated amount needed to settle the
and the nominal amount is shown
The profit participation rights pres-
under ‘deferred items’. All discernible
ented under shares and floating rate
individual risks in lending are taken
securities are allocated to fixed assets
The balance sheet items denominated
into consideration by the formation of
and measured at cost. Loan loss provi-
in foreign currency and hedges are
loss provisions. In addition, there are
sions are recognised in the event of
converted, using the closing rate as
general risk provisions within the
permanent impairment, likewise cal-
published by the ECB, as at balance
meaning of Section 340f (1) HGB and
culated using a valuation technique
sheet date in accordance with Sec.
portfolio-based loan loss provisions
based on default probabilities. The
340h HGB.
calculated at a flat rate.
loan loss provisions determined in this
Bonds recorded under current assets
obligations.
way amounted to € 0.2 m in the repor-
Derivative financial transactions that
ting year.
serve to hedge against interest rate
are stringently valued at the lower of
and exchange rate fluctuations are not
perpetual weighted average cost or
Participation interests are shown at
measured in isolation and are not
lower market value as of balance sheet
cost.
recognised because they are pending
date, after taking interest hedges into
transactions.
account. Bonds classified as fixed
Property, plant and equipment and
assets are valued at cost plus a pro
intangible assets are stated at cost and
When reporting risk provisioning and
rata temporis release of the difference
written off on a straight-line basis over
the result from financial investments,
to their face value. Zero bonds are
their useful lives. In the event of a
use is made of the possibility of cross-
recognised at amortised cost with their
likely permanent loss in value, extra-
compensation in accordance with Sec-
interest income posted to income. The
ordinary write-downs are recorded. In
tion 340f (3) HGB and Section 340c (2)
pro rata temporis release of a pre-
the reporting year, extraordinary
HGB.
mium or debt discount is included in
write-downs of € 7.4 m were required
net interest income. In the event of any
on the completed office building. Of
(Tabelle: Gliederung nach Restlaufzei-
specific indications of a potential
this amount, € 6.5 m was offset by uti-
ten Table: Breakdown by remaining
default, the securities were written
lising a provision for potential losses
time to maturity)
down to the most likely amount expec-
for pending transactions that had been
ted to be received. A loan loss provi-
recognised in the prior year. Low-
Claims on customers with an indefinite
sion is recognised if the impairment is
value assets are depreciated in full in
term amount to € 5.8 m (prior to taking
expected to be permanent on the basis
the year of acquisition. Assets with a
into account any provisioning). There
of an individual risk assessment in
value of at least € 150 but not more
are no other securitised debts.
Breakdown by remaining time to maturity
Million €
payable on
demand
≤ 3 months
> 3 months
≤ 1 year
> 1 year
≤ 5 years
> 5 years
undefined
term
total
1,036
661
323
1,126
1,200
5
219
244
2,071
1,119
257
5,877
2,251
182
195
8,762
39
2,189
642
936
3,541
7,347
Claims
on banks
on customers
4,346
6
3,664 *
Liabilities
on banks
on customers
saving deposits
others
11
11
* Residual claim without loan loss provision
The item ‘Bonds and other fixed-inte-
Marketable securities
rest securities’ includes amounts totalling € 2,194 m that fall due in the year
All bonds and other fixed-interest
following the balance sheet date.
securities totalling € 13,220 m are
negotiable on the stock exchange. Of
Amounts contained in the sub-item
this amount, € 12,885 m is listed on the
‘Bonds issued’ that fall due in the year
stock exchange.
following the balance sheet date total
€ 3,051 m.
The profit participation rights of
€ 14 m reported under shares and flo-
Claims on banks of € 48 m relate to
ating rate securities are negotiable
companies in which a participating
and are listed on the stock exchange,
interest is held. Liabilities to banks
whereas the participating interests of
contain € 3.7 m from companies in
€ 15 m are not negotiable.
which a participating interest is held.
Of the bonds, € 5,328 m is accounted
for by bonds designated as eligible
Cash reserve
cover for Pfandbriefe in circulation.
Bonds of € 13,220 m and shares and
The ‘Cash reserve’ item includes depo-
floating rate securities of € 14 m are
sits at central banks totalling € 50.7 m
not measured using the strict lower of
and cash in hand totalling € 364 k.
cost or market principle as at the
balance sheet date. This includes
bonds with a book value of € 6,049 m
and profit participation rights with a
book value of € 795 k. Due to price
fluctuations on the capital markets the
market values of these instruments as
of balance sheet date was € 382 m less
for bonds (excluding interest hedges
the book value of bonds amounts to
€ 8,525 m and the potential loss to
€ 686 m) and € 88 k less for the profit
Development of fixed assets
Million €
Bonds and
notes
Participating Shareholdings
interests
in affiliated
companies
Intangible
assets
Tangible
assets
total
4
24
10,216
8
4,008
Cost of acquisition/ manufacture
carried forward on 1 January 2009
10,173
0
Additions in 2009
3,982
18
Disposals in 2009
-668
-4
Accumulated depreciation
-267
Book value as at 31 December 2009
13,220
Depreciation charge in 2009
participation rights. They are counter-
14
15
15
-8
-4
-676
-3
-11
-281
1
17
13,267
-1
-8
-17
Other assets and liabilities
balanced to some extent by liabilities
and derivatives measured at market
Other assets contain a property of
prices.
€ 26 m which was acquired within the
framework of a rescue acquisition and
Low-value assets of up to € 150 are
tax receivables of € 0.9 m.
reported as ‘additions’ in the year and
are expensed in full. These items are
Other liabilities generally consist of
included in the disposals of the fiscal
payment obligations originating from
year. Assets with a value of at least
daily operations which had not fallen
€ 150 but not more than € 1,000 are
due by balance sheet date and tax lia-
collected on a catch-all item and
bilities.
depreciated over five years. Property,
plant and equipment of € 15.8 m relates to the land and buildings used for
Deferred items from issuing
the Bank’s own operations. Moreover,
and lending business
property, plant and equipment also
includes office and operating equip-
The assets-side deferred items contain
ment of € 1.1 m.
prepaid expenses which include a discount of € 11 m offered on a bond
issue, premiums on claims totalling
Participating interests
€ 17 m and upfront premiums of
€ 19 m. The liabilities-side deferred
As in the prior year, the participating
income contains an issue premium of
interest in Bauer Aktiengesellschaft
€ 0.6 m on bonds and discounts in
zur Entwicklung des europäischen
respect of claims of € 6 m.
Kommunal- und Hypothekarkredits,
Glarus, Switzerland, amounts to 29%.
According to the company, book equity
totalled € 41 m as at balance sheet
date after currency conversion. A preliminary profit for the year of € 2.9 m
was reported by the company.
Million €
Interest rate
Issue date
Maturity
20
4.22
25.02.2005
25.02.2015
7
4.68
28.01.2005
28.01.2015
8
4.69
28.01.2005
28.01.2015
After allocating losses to holders of
No subordinated liabilities were issued
profits participation rights, the balance
in the reporting period. Consequently,
comprises profit participation rights of
the balance of the item has remained
€ 21 m, profit participation certificates
unchanged,
subject to restricted transfer of € 3 m,
papers of € 20 m and bonds of € 33 m.
and registered profit participation cer-
In contrast to the prior year, the pro
tificates of € 15 m. Of the profit partici-
rata share in interest due of € 2.1 m is
pation rights, an amount of € 13 m is
no longer presented under the other
recognised as liable capital until the
liabilities but also under “subordinated
beginning of July 2010 and € 2 m until
liabilities”. In the event of the insol-
the beginning of July 2011.
vency or liquidation of the Bank, sub-
consisting
of
bearer
ordinated liabi-lities may not be settled
Due to the terms of the issue, the accu-
until the claims of all more senior cre-
mulated losses for 2008 led to a reduc-
ditors have been satisfied. Premature
tion of profit participation capital. If
repayment is precluded. These borro-
profits remain in future years after
wings qualify as liable capital under
allocating losses, the profit participa-
the criteria in Section 10 (5a) KWG
tion capital must be replenished to its
[“Kreditwesengesetz”: German Ban-
original nominal amount before the
king Act]. The interest and debt dis-
profit for the year can be used for any
count expenses on all subordinated lia-
other purposes. For this reason no inte-
bilities totalled € 2.2 m.
rest expenses were incurred on the
profit participation rights in the year
The following subordinated loans each
2009. The net profit of € 1.6 m genera-
account for more than 10% of the total
ted in the fiscal year 2009 was used to
balance (s.T.).
replenish profit participation capital,
with the replenishment being in proportion to the face value of each profit
Subscribed capital and
participation right in relation to the
revenue reserves
total face value of all profit participation rights.
The accumulated losses brought forward from the prior year of € 192 m
were carried forward to new account.
As at the balance sheet date, subscribed capital totalled € 251 m. It compri-
ses 251,000,000 no par value registe-
The
annual
average
number
of
red shares of € 1 each. The reserves of
employees for the year, excluding
€ 248 m comprise the capital reserve of
members of the Board of Managing
€ 199 m and other revenue reserves of
Directors, was 78 employees, including
€ 49 m.
six part-time employees (converted to
full-time basis).
Contingent liabilities and other
commitments
Auditing and consulting fees
The liabilities on guarantees and war-
Administrative
ranties largely comprise guarantee
€ 350 k for the auditor of the current
loans of € 0.6 m which are secured by
fiscal year's financial statements,
senior mortgages. As at the balance
€ 60 k for auditing the financial state-
sheet date irrevocable loan commit-
ments of the prior fiscal year plus
ments totalled € 9.0 m. Of this total,
€ 183 k for other audit services.
expenses
include
€ 4.1 m relates to loans, € 2.1 to mortgage loans, and € 2.8 m to current
account lending. In some cases the
Other operating result
Bank receives commission for the guarantee loans. Loan commitments avai-
Other operating income of € 5.8 million
led of within current accounting len-
contains rental income (€ 4 m), releases
ding are remunerated by interest on
of accrued expenses (€ 1.2 m) and the
the resulting overdrafts.
proceeds from the sale of a property in
the reporting period of € 0.4 m. Other
operating expenses of € 6.4 m relate to
Assets assigned as collateral
the costs of a provision created for
impending losses (€ 3.6 m), the opera-
As at the balance sheet date, securities
ting costs for own property (€ 2.3 m) a
totalling € 1,978 m were assigned wit-
provision for private customer business
hin the framework of repurchase
(€ 0.3 m) and a balancing item for
agreements (non-recourse repurchase
foreign currency conversion (€ 0.2 m).
agreements). The book value of bonds
transferred as security for open market loans and other loans totalled
Taxes on income
€ 7,256 m.
Taxes on income originate from the
result of ordinary business activities.
Personnel expenses, emoluments and
employees
Appropriation of profits and losses
Personnel expenses totalled € 6.9 m in
the reporting year. This includes total
The accumulated losses of € 192 m will
emoluments for the Board of Managing
be carried forward to new account
Directors which came to € 842 k.
The emoluments for the members of
the Supervisory Board (€ 219 k) are
included under other administrative
expenses.
Public-sector Pfandbriefe: Nominal overcollateralisation
Million €
2009
2008
Claims on banks (public-sector loans)
2,123
2,952
Claims on customers (public-sector loans)
2,088
2,812
Claims on customers (mortgage loans)
1
Bonds and other fixed-income securities
5,328
5,949
Ordinary cover
9,540
11,713
926
1,132
Substitute cover
Total cover
10,466
12,845
Public-sector Pfandbriefe requiring cover
-9,691
-12.226
775
619
Overcollateralisation
Public-sector Pfandbriefe: Net present value (npv) overcollateralisation
Million €
npv
Risk-adjusted npv
2009
2008
2009
2008
Cover assets
10,741
13,264
10,091
12,270
-9,997
-12,564
-9,388
-11,654
744
700
703
616
Public-sector Pfandbriefe: Principal maturities by years
Million €
till 1 year
Total cover
2009
2008
2009
2008
806
2,567
1,815
2,470
till 2 years
1,170
837
1,745
1,910
till 3 years
703
1,038
325
1,788
till 4 years
1,124
710
1,100
372
till 5 years
1,047
1,044
410
1,140
till 10 years
3,748
4,801
1,963
2,012
> 10 years
1,868
1,848
2,333
2,534
total
10,466
12,845
9,691
12,226
Public-sector Pfandbriefe: Public-sector loans by country and borrower
Million €
Central government
2009
2008
134
138
Belgium
Bulgaria
Regional authorities
2009
2008
20
20
2,271
3.072
Local authorities
2009
2008
France
Greece
295
290
25
25
127
107
15
15
34
41
3,097
4,468
34
40
175
50
2
2
13
13
40
78
Ireland
Iceland
Italy
240
295
Japan
Canada
Latvia
Lithuanian
51
66
143
25
25
53
15
5
150
2008
33
Denmark
Germany
others
2009
18
20
73
Luxembourg
7
8
Netherlands
27
14
Norway
10
10
1,435
1,563
95
110
Austria
125
125
Poland
115
101
Portugal
155
105
Romania
81
101
Switzerland
15
77
15
74
Slovenia
Slovakia
105
512
Czech Republic
152
152
Hungary
157
25
USA
581
114
134
18
20
80
32
25
35
38
45
United Kingdom
98
139
105
Spain
Cyprus
95
50
98
There are no payments in arrears in the case of claims serving as cover for public-sector Pfandbriefe.
50
25
69
136
Mortgage Pfandbriefe: Principal maturities by years
Million €
Total cover
2009
2008
2009
2008
till 1 year
547
467
137
85
till 2 years
37
43
152
137
till 3 years
87
24
93
152
till 4 years
122
136
61
82
till 5 years
51
70
26
41
till 10 years
94
183
203
240
> 10 years
75
54
167
139
1,013
977
839
876
2009
2008
total
Mortgage Pfandbriefe: Mortgage loans by loan size
Million €
< 0.3 Mio €
1
> 0.3 Mio € ≤ 5.0 Mio €
133
88
> 5.0 Mio €
794
816
928
904
Mortgage Pfandbriefe: Property loans by use of property and country
Million €
Germany
2009
2008
Appartments
58
57
Multi-family dwellings
19
50
Offices
279
283
Retail
144
158
others
44
44
France
2009
2008
Netherlands
Switzerland United Kingdom
2009
2009
2008
2008
2009
2008
USA
total
2009
2008
2009
2008
53
27
58
57
72
77
145
112
563
541
27
7
171
165
64
64
residential
commercial
21
21
20
20
49
49
31
32
There are no payments in arrears in the case of claims serving as cover for mortgage Pfandbriefe.
38
44
Mortgage Pfandbriefe: Nominal overcollateralisation
Million €
2009
2008
Claims on customers (mortgage loans)
928
904
85
73
Substitute cover
Total cover
Mortgage Pfandbriefe requiring cover
1,013
977
-839
-876
174
101
Mortgage Pfandbriefe: Net present value (npv) overcollateralisation
Million €
Cover assets
NPV
Risk-adjusted NPV
2009
2008
2009
2008
1,069
1,031
1,045
1,020
-868
-895
-923
-973
201
136
122
47
Foreclosures, seized properties
Repayments of mortgage loans
and interest in arrears
In the fiscal year, mortgage loans totalAs at the balance sheet date, no fore-
ling € 81 m were repaid. Of this total,
closure proceedings were pending for
€ 60 m was due to scheduled amortisa-
mortgages serving as cover. In the
tion and € 19 m to other repayments on
reporting year foreclosure proceedings
commercial pro-perties. An amount of
were applied for with regard to one
€ 2 m was amortised on residential
cover mortgage. The court hearing is
properties.
expected in the first quarter of 2010.
No properties were seized in the year
to prevent losses on mortgages serving
Foreign currency positions
as cover.
Total assets denominated in foreign
The interest in arrears of € 1.6 m,
currencies amounted to € 1,387 m as at
arising between 1 October 2008 and
balance sheet date. Liabilities denomi-
30 September 2009, was written off in
nated in foreign currencies amounted
full as a bad debt. They relate to two
to € 150 m. Foreign currency positions
commercial properties.
were secured against exchange rate
fluctuations by corresponding hedges.
Financial derivates by remaining time to maturity
Million €
Interest rate swaps
Cross-/ currency swaps
Nominal amount
< 1 year
1 – 5 years
> 5 years
total
Market value
5,845
14,410
18,529
38,784
-503
617
66
289
972
-24
6,462
14,476
18,818
39,756
-527
Outsourced areas
In the view of the Bank, the most significant process that has been outsour-
The Bank has outsourced significant
ced is the data-processing of the
functions in an effort to cut its costs.
accounts department. In the fiscal year,
Outsourcing that is relevant from an IT
this led to cash outflows of € 1.5 m. The
perspective relates to the transfer of
Bank expects future cash outflows to
data-processing functions in the ac-
be similar.
counts department and the provision of
interfaces pursuant to Sec. 24c KWG
(automatic search of account informa-
Derivative financial instruments
tion) to an external partner working
under contract. Furthermore, mone-
As at the balance sheet date, the follo-
tary transactions, credit card proces-
wing interest and currency-driven for-
sing, salary accounting, management
ward transactions were still outstan-
of securities and custodian business of
ding: interest rate swaps, interest
the Stuttgart branch and the archiving
rate/currency swaps, short swaption
of documents subject to mandatory
positions, note loans with put and call
archiving requirements, have all been
options, Pfandbriefe with call option,
outsourced to third parties. What is
rate capping agreements. All derivati-
common to all outsourcing is that none
ves serve the purpose of hedging
of these services could be performed by
against interest rates and exchange
the Bank at such a low cost. The asso-
rate fluctuations.
ciated costs can be reliably calculated,
no own human resources need to be
allocated to these tasks, and the Bank
can profit from the experience and
expertise of the contractual partners.
Apart from the usual disadvantages
attached to outsourcing, the Bank does
not perceive any special risks that
could arise from outsourcing these
functions.
Results from use of financial derivatives
Million €
from Micro hedging
from Macro hedging
2009
2008
2007
2009
2008
2007
Earnings
414.8
406.3
432.7
915.2
1,785.0
1,570.1
Current
414.8
406.3
407.1
850.8
1,725.6
1,457.8
25.6
64.4
59.4
112.3
Costs
-410.6
-392.3
-409.9
-961.6
-1,840.3
-1,627.5
Current
-403.2
-392.3
-390.0
-895.8
-1,779.8
-1,554.8
-19.9
-65.8
-60.5
-72.7
22.8
-46.4
-55.3
-57.4
Market values compensation
Market values compensation
-7.4
4.2
14.0
The negative market values of the deri-
The member of the Board of Managing
vative financial instruments were set
Directors, Dr. Dirk Hoffmann held a
off against the corresponding positive
position on the Advisory Board of
market values of the hedged items.
Bauer Aktiengesellschaft zur Entwikklung des europäischen Kommunal-
The fair value compensation of deriva-
und Hypothekarkredits, Glarus, Swit-
tives relates to close-outs. In the repor-
zerland. Moreover, he is the President
ting year swaps with a face value of
of the Advisory Board of Banque Bauer
€ 2,284 m were liquidated. Within the
(Suisse) SA, Geneva, Switzerland.
framework of macro hedges against
interest exposures, contracts with posi-
As at balance sheet date, there were no
tive market values of € 64.4 m and
loans to members of the Supervisory
negative market values of € 73.2 m
Board.
were liquidated with the results being
posted to net interest income.
The Bank engages in principal brokering services (Section 1 (1) No. 4 KWG)
and custody business (Section 1 (1) No.
Other reporting obligations
5 KWG) for third parties.
Resba Beteiligungsgesellschaft mbH
(the deposit protection agency of the
Transactions with related parties
Association of German Banks) informed the Bank that it had acquired
Interest of € 2.3 m was paid to related
more than 25% of the shares of the
firms and persons in the reporting year
Company.
for funding, which took the form of
overnight deposits. In addition, a provision of € 0.9 m was established to cover
the expected assumption of costs related to services.
Statement of operations by segment
Million €
Property financing
Public-sector lending
Other activities
total
2009
2008
2009
2008
2009
2008
2009
2008
4.0
11.4
51.6
18.3
-0.3
-0.8
55.3
28.9
Results by segment
Net interest income
Trading result
0.6
1.2
-16.2
-1.6
1.3
1.8
-14.3
1.4
Administrative expenses*
-6.9
-8.6
-9.9
-11.0
-10.6
-10.2
-27.4
-29.8
Valuation result
-6.7
-11.9
-5.3
-203.8
-12.0
-215.7
Taxes
2.4
-9.0
-5.5
59.4
20.2
-61.9
-138.7
-9.6
-71.1
-0.1
1.6
-215.3
Ratios
Risk assets
Cost/ income ratio
Return on equity
63
103
122
245
122
151
307
499
150%
68%
28%
66%
1.060%
1.020%
65%
73%
-14.2%
-5.3%
16.5%
-56.6%
-7.9%
-47.1%
0.5%
-43.1%
* incl. other operating result
Cash flows are allocated to operating
Segment reporting
activities in line with the composition of
In terms of the method applied, the
the operating result. The cash flow
segment reporting is based on the
from investing activities is mostly due
income statement and allocates all
to payments made in connection with
expenses and income to the individual
the acquisition of financial assets. The
segments according to the costs incur-
cash flow from financing activities pre-
red. The result per segment comprises
sents the cash flows from transactions
net interest income, net commission
with equity investors.
income, the net result from financial
transactions, administrative expenses,
Cash and cash equivalents comprise
the valuation result, extraordinary
the cash reserve, which is made up of
items and taxes. The valuation result
cash in hand and deposits at central
consists of risk provisioning and the
banks.
result from financial investments (see
the management report for further
As a rule, the informative value of a
explanations).
bank’s cash flow statement is low and
is therefore not used for liquidity or
financial planning, or as a control
instrument.
Cash flow statement
The cash flow statement is broken
down into cash flows from operating
activities, investing activities and
financing activities. It is prepared in
line with German Accounting Standard
GAS 2 (DRS 2), supplemented by the
bank-specific
German
Accounting
Standard GAS 2-10 (DRS 2-10).
Statement of Changes in Financial Position
Million €
2009
2009
2009
2008
Cash flow from operating activities
Net income/ loss for the year
1.6
-215.3
20.7
147.4
Provisions
3.1
11.9
Income that does not affect cash flow
1.0
69.5
Items contained in the net income for the year that do not affect cash flow
Write-downs on and value adjustments to claims,
financial investments and tangible assets
Income from disposal of financial investments and tangible assets
other adjustments
4.7
-40.3
0.5
-9.2
-27.8
Change in claims and liabilities
Claims on banks
Claims on customers
Bonds and notes
other assets
Liabilities to banks
Liabilities to customers
Securitised liabilities
other liabilities from continuing operations
Interest and dividends received
Interest paid
Income taxes paid
1,005.3
494.1
866.0
776.4
-2,415.9
164.1
65.2
41.8
-21.9
714.2
-231.7
-66.1
28.0
-2,826.5
-44.8
-15.6
2,532.0
3,319.0
-2,471.2
-3,261.4
0
-689.0
-698.2
-0.6
Cash flow from investing activities
Changes in funds from financial investments
648.3
Investments in tangible assets
-3.6
other investments
-0.2
602.3
-5.1
644.5
-0.8
Cash flow from financing activities
Cash inflow from issue of equity capital
0
Changes in funds from other capital
0
150.0
0
-30.9
Cash flow. total
-53.7
41.1
Cash at the beginning of the period
104.8
63.7
51.1
104.8
Cash at the end of the periode
e Supervisory Board, Board of Managing Directors
Supervisory Board
Board of Managing Directors
Dr. Thomas A. Lange
Dr. Dirk Hoffmann
Chairman
Senior member
Senior member of the Board of
Berlin
National-Bank AG, Meerbusch
Friedrich Munsberg
Schorndorf
Dr. Peter Gassmann
Deputy Chairman
from 27 March 2009
Managing Director of
Booz & Company GmbH, Köln
Dr. Andreas Früh
Deputy Chairman
to 27 March 2009
Divisional Board of Management
of the UniCredit Bank AG, München
Dr. Kai Franzmeyer
to 27 March 2009
Hypo Real Estate Holding AG,
Bad Homburg
Paul Hagen
from 27. March 2009
HSBC Trinkaus & Burkhardt AG,
Düsseldorf
Christian Sewing
Director Deutsche Bank AG,
London (Großbritannien)
Dr. Eberhard Weber
Auditor, Oberhausen
Düsseldorf, 22 February 2010
Düsseldorfer Hypothekenbank Aktiengesellschaft
Dr. Dirk Hoffmann
Friedrich Munsberg
e Audit opinion
We have issued the following opinion
dence supporting the disclosures in the
on
books and records, the annual finan-
the
financial
statements
and
management report:
cial statements and the management
“We have audited the annual financial
report are examined primarily on a test
statements, comprising the balance
basis within the framework of the
sheet, the income statement and the
audit. The audit includes assessing the
notes to the financial statements, toget-
accounting principles used and signifi-
her with the bookkeeping system, and
cant estimates made by management,
the management report of Model Com-
as well as evaluating the overall pre-
pany, Location, for the fiscal year from
sentation of the annual financial state-
1 January 2009 to 31 December 2009.
ments and management report. We
The maintenance of the books and
believe that our audit provides a reaso-
records and the preparation of the
nable basis for our opinion.
annual
financial
statements
and
management report in accordance
Our audit has not led to any reserva-
with German commercial law are the
tions.
responsibility
of
the
Company’s
management. Our responsibility is to
In our opinion, based on the findings of
express an opinion on the annual
our audit, the annual financial state-
financial statements, together with the
ments comply with the legal require-
bookkeeping system, and the manage-
ments and give a true and fair view of
ment report based on our audit.
the net assets, financial position and
results of operations of the Company in
We conducted our audit of the annual
accordance with principles of proper
financial statements in accordance
accounting. The management report is
with Sec. 317 HGB and German gene-
consistent with the annual financial
rally accepted standards for the audit
statements and as a whole provides a
of financial statements promulgated by
suitable view of the Company’s position
the Institut der Wirtschaftsprüfer
and suitably presents the opportunities
(IDW). Those standards require that
and risks relating to future develop-
we plan and perform the audit such
ment.”
that misstatements materially affecting
the presentation of the net assets,
financial position and results of opera-
Ernst & Young GmbH
tions in the annual financial statements
Wirtschaftsprüfungsgesellschaft
in accordance with principles of proper
accounting and in the management
report are detected with reasonable
assurance. Knowledge of the business
Müller-Tronnier
activities and the economic and legal
German Public Auditors
environment of the Company and
expectations as to possible misstatements are taken into account in the
determination of audit procedures. The
effectiveness of the accounting-related
internal control system and the evi-
Lösken
e Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting
principles for annual financial reporting, this Annual Report gives a true and fair
view of the net assets, financial and earnings position of the Bank, and provides a
fair review of the development and performance of the business and the position
of the Bank, together with a description of the principal opportunities and risks
associated with the expected development of the Bank.
Dr. Dirk Hoffmann
Friedrich Munsberg
The binding language and version
of this annual report is German, or
rather the German version.
Berliner Allee 41, 40212 Düsseldorf
Fon +49 (0)211.86720.0, Fax +49 (0)211.86720.209
[email protected], www.duesshyp.de
HRB Düsseldorf Nr. 35004

2009ANNUAL REPORT

Transcription

Similar documents

Nachtrag C - Zertifikate Commerzbank

Nr. 173

- MünchenerHyp

90 Years Aareal Bank Group – Trusted since 1923