PRESIDENT’S REPORT THE SAVINGS BANKS FINANCE GROUP The Savings Banks Finance Group Our business model Our mission Our partners within the GroupThe Joint Liability Scheme Marketable ratin
Trang 1Financial R
Financial Report 2010www.dsgv.de
Trang 2KEY FINANCIALS
of the Savings Banks Finance Group
Selected balance sheet items
for information: total assets (excluding trading derivatives) 2,455.7 2,582.8 −127.1 −4.9
Selected income statement items
1 Monetary fi nancial institutions.
2 Total assets as at the end of December 2010 included derivative fi nancial
instruments held in the trading portfolio (trading derivatives), due to
the fi rst-time application of the German Accounting Modernisation Act
(“ BilMoG”) Trading derivatives of EUR 146.0 billion were carried by
Landesbanken and reported under “Other liabilities”.
3 Provisional data from partly non-audited annual fi nancial statements
prepared in accordance with German GAAP (converted to conform with the
system of the German Bundesbank).
4 Including the balance of gains on the sale of fi nancial investments and
investments held as fi xed assets as well as write-downs/write-ups on
fi nancial investments and investments held as fi xed assets.
5 Calculation is immaterial.
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Trang 3SAVINGS BANKS FINANCE GROUP MARKET SET-UP
As of 31.12.2010
Savings Banks Finance Group
No of companies 610 1 No of branch offi ces 2 20,920 5 Employees 3 363,000 5, 6 Business volume 4 EUR 3,300 bn 5
Income EUR 0.87 bn Employees 1,731
Balance sheet total EUR 1,084 bn
No of branch offi ces (incl self-service) 15,626 Employees 248,137
Additional staff
at directly held Savings Banks subsidiaries 9,239
Employees 70
10 LBS property companies
Property volume EUR 4.6 bn Employees 450
Deutsche Leasing Group
No of contracts 363,000
Cost value EUR 26.8 bn
Employees 1,923
11 Public Primary Insurance Groups
Gross premium income EUR 19.7 bn Employees 30,000
10 Landesbausparkassen (LBS)
(regional building societies)
Balance sheet total EUR 54 bn Employees 9,004
8 Landesbank Groups
LBBW, BayernLB, LBB, HSH Nordbank, Helaba,
NORD/LB (with Bremer Landesbank), SaarLB, WestLB
Balance sheet total EUR 1,546 bn
Employees 48,925
DekaBank Deutsche Girozentrale
Balance sheet total EUR 130 bn Employees 3,683
No hierarchical presentation/no indication of
shareholding/shareholder structure.
1 Including associations and other institutions; numbers rounded.
2 Branches/advice centres
3 Number of staff employed in internal functions/in the mobile
sales force, excluding part-time sales staff; numbers rounded.
4 Business volume, defi ned as: total assets/aggregate holdings/
fund assets/volume of shareholdings; numbers rounded.
5 Including international branches, plus domestic and
international subsidiaries of Landesbank Groups.
6 Including 3,434 employees of associations, related institutions and other institutions
7 Excluding international branches, as well as domestic and
international subsidiaries of Landesbank Groups.
8 Including three companies which form a group
9 Excluding staff numbers included in Landesbanken
consolidated fi gures.
PRESIDENT’S REPORT THE SAVINGS BANKS FINANCE GROUP
The Savings Banks Finance Group Our business model
Our mission Our partners within the GroupThe Joint Liability Scheme Marketable ratings
2010 IN REVIEW MANAGEMENT REPORT
Economic environmentMajor markets and positioning Business development and fi nancial position Staff report
Social involvement reportRisk report
Outlook
2 5
5
6
8
9 1011
12 15
151721
34 363848
CONTENTS
The Savings Banks Finance Group unites around
610 enter prises, collaborating closely in order to pro vide
fi nancial services and support to all sections of society
We apply the profi ts not required to strengthen our reserves to our varied commitment in the regions in which we operate
AGGREGATED FINANCIAL STATEMENTS EXPLANATORY NOTES ON AGGREGATION DEUTSCHER SPARKASSEN- UND GIROVERBAND (DSGV)
SAVINGS BANKS FINANCE GROUP MARKET SET-UP
51 54 55
60
Trang 4With a successful year behind it, the Savings Banks Finance
Group proved in no uncertain terms that it had done more
than successfully weather the fi nancial markets crisis during
2010 In fact, the 429 Savings Banks were able to signifi cantly
increase their operating profi ts – once again posting notable
growth in their capital bases, and reaffi rming the value of
their principles of decentralisation with a business focus on
local regions and the real needs of the local population, even
in diffi cult times
Throughout the most challenging economic crisis in
Ger-many’s post-war period, the Savings Banks held true to their
roots – a sustainable business philosophy oriented towards
the common good Working together with fellow Group
mem-bers, they consistently provided SMEs with suffi cient capital,
thereby playing a pivotal role in Germany’s rapid and
unparal-leled recovery
The Savings Banks did not retreat when the storm raged –
quite the contrary They once again extended signifi cantly
more new loans to companies and the self-employed –
total-ling EUR 64.2 billion – and strengthened regional structures
with uninterrupted funding, to the benefi t and welfare of the
people living there
As such, it comes as no surprise that numerous surveys light the considerable trust that is placed in the Savings Banks, and that their value for economic and social develop-ment is widely – and increasingly – recognised The fi nancial markets crisis made the general public and decision-makers alike aware of the importance of acting according to sound principles, and it also led to a marked realignment in social values The concept of maximising profi ts without taking account of people’s needs, desires and concerns is now seen
high-to have been an expensive error of judgement Cushigh-tomer orientation, social responsibility, security and sustainability are once again in demand These core values have held true for the Savings Banks for more than 200 years
The present and profound resonance of the values by which
we have lived, and the wider acceptance of our business
mod-el, motivate the Savings Banks to steadfastly and effi ciently meet the diverse challenges that our Group currently faces
This applies fi rst and foremost to a new and effi cient
Landes-bank structure The capacity of the LandesLandes-banken must be
reduced to a size that can be fully utilised by stable business segments This should also alleviate the pressure to venture into overly risky business segments due to excess capacity
PRESIDENT’S REPORT
President’s report | Financial Report 2010 Financial Report 2010 | Deutscher Sparkassen- und Giroverband 59
Members of the Board of Managing Directors DekaBank Deutsche Girozentrale
Franz S Waas, PhD
Chairman of the Management Board of DekaBank Deutsche Girozentrale, Berlin and Frankfurt/Main
Bundesverband öffentlicher Banken Deutschlands e V
(Association of German Public Sector Banks)
Dr Gunter Dunkel
Chairman of the Management Board of Norddeutsche Landesbank Girozentrale, Hanover/Braunschweig/Magdeburg
Deutscher Sparkassen- und Giroverband e V
(German Savings Banks Association)
Claus Friedrich Holtmann
Executive President of Ostdeutscher Sparkassenverband, Berlin
Trang 5This process is underway The total assets of the Landesbanken,
as well as their risk-weighted assets and number of
employ-ees, have already been reduced considerably The objective of
the Savings Banks is to decrease the number of their
associ-ated Landesbanken, and ultimately to reduce risk-weighted
assets signifi cantly through mergers
Similarly, the current discussions regarding tighter fi nancial
market regulation, or changes to the banking supervision
regime, are of fundamental importance to the Savings Banks
Finance Group It would be a fatal economic error to hold
the institutions that contributed greatly to quickly
overcom-ing the crisis fi nancially liable – such as the Savovercom-ings Banks –
whilst those who caused the crisis get off lightly and return to
testing the limits of the fi nancial markets
It falls to us to continue actively shaping the Group’s continued viability The changing needs of a digital society demand intelligent answers – from regionally anchored Savings Banks
in particular Without relinquishing the benefi ts offered by local decision-making, we will take advantage of the synergy potential afforded by a stronger network to further unleash the combined strength of the Savings Banks Finance Group in the interest of our customers
The past few years have borne witness to the fact that the Savings Banks are highly effi cient pillars of economic and social responsibility In 2010, they laid a solid foundation for continued success for 2011 These are excellent reasons
to greet the challenges that confront us with optimism and determination
With kind regards,Berlin, June 2011
Heinrich HaasisPresident of the German Savings Banks Association
Heinrich Haasis, President
of the German Savings Banks Association (DSGV)
Trang 6by the Savings Banks in 2010 EUR 2.5 billion of this was in the form of income tax and around EUR 500 million from funding and sponsorships within the framework of their social commitment This tangible contribution to German society is higher than for any other segment of the German fi nancial services sector It provides concrete support towards improving living conditions in municipalities and regions Moreover, Savings Banks are the largest employer in the German banking sector, and the largest non-government sponsor of culture and sports in Germany We are where life happens – close to the people
WERE RAISED FOR SOCIETY
Trang 7THE SAVINGS BANKS FINANCE GROUP
Joint strength
The business model of the Savings Banks Finance Group once
again demonstrated its solid reliability in 2010 With
approxi-mately 363,000 employees, 610 independent enterprises and
a business volume of roughly EUR 3,300 billion, the Savings
Banks Finance Group is one of the largest fi nancial services
groups in the world
For more than 200 years, the 429 Savings Banks – the heart
of the Group – have been active in the German market and
rooted in small communities As at 31 December 2010, the
Savings Banks had total assets of roughly EUR 1,084 billion
With 15,626 branch offi ces, they are present throughout
Ger-many to provide local service to their 50 million customers
The institutions within the Savings Banks Finance Group work
together with combined strength They act as independent
institutions, but jointly coordinate their range of services This
enables a single Savings Bank to offer lending, investment,
building society and retirement provision services to meet
virtually all the needs of every demographic group, without
having to organise and furnish every aspect of the service
itself This network of different partners makes it possible for
us to offer integrated advisory and fi nancing solutions for
start-ups, cross-border support for export-oriented panies, and assistance in complex municipal development projects Unlocking these synergies is at the heart of the Group’s focus, effi ciency and strength
com-The integrated Group comprises
Savings Banks,
Landesbanken and the DekaBank Group,
Landesbausparkassen (regional building societies),
public primary insurance groups, as well as
leasing and factoring companies, equity capital providers and consultancies
In 2009, the Savings Banks ensured the provision of fi nancing despite the crisis in the fi nancial sector and the real economy, and thus successfully prevented a credit crunch in Germany
In 2010, they worked with their partners to fi nance the nomic recovery, while further expanding their market lead in
eco-fi nancing businesses The Savings Banks and Landesbanken
provided the German economy with aggregate new loans in excess of EUR 64 billion in 2010 – 3.4% more than in 2009
Trang 86 The Savings Banks Finance Group | Financial Report 2010
Regional focus, retail orientation and solidarity are the core
values underpinning the Savings Banks Finance Group’s
business model A business model that has endured for more
than 200 years, not only on the market but also as the very
fi bre that binds our Group It defi nes our structure and how
we see ourselves and also, increasingly, what people have
come to expect from our institutions
Savings Banks are, by nature, decentralised institutions
Decisions are made locally and thus close at hand to our
customers Their local nature makes it possible for quick
deci-sions to be reached in the best interests of their respective
business area; decisions that take into account their
know-ledge of the political, economic and social issues of their
differ ent regions It is a union of customer proximity, effi
-ciency and a high level of expertise
Within the defi ned business area of each Savings Bank, their
specifi c and legally defi ned task is to provide every
demo-graphic group and all businesses with the services of a
uni-versal bank, and to offer them fi nancial planning options The
mission of the Savings Banks also encompasses contributing
to the economy and overall prosperity of their region
Savings Banks compete with other German credit
institu-tions on a daily basis They are also subject to a tremendous
amount of public attention – not only from their 50 million
customers Their business model therefore brings high
requirements with regard to customer orientation and effi
-ciency Both are shaped by a commitment to sustainability:
Savings Banks refi nance themselves predominantly with their customers’ deposits; they must therefore earn their trust on an ongoing basis They succeeded in doing so impressively in 2010: customer deposits increased by EUR 15.6 billion to a total of nearly EUR 768 billion
Savings Banks are members of a community of solidarity,
as are Landesbanken and Landesbausparkassen, namely
the Joint Liability Scheme of the Savings Banks Finance Group The Joint Liability Scheme assures the continued existence of our institutions and ensures that they will always be able to meet their commitments
Their regional roots make Savings Banks effi cient; they afford a keen insight into their customers’ needs and risk situations This local effi ciency also makes it possible to optimally tailor products and react swiftly
Their ties to a specifi c business community means that Savings Banks have a personal stake in its future wel-fare This makes them committed supporters of structural change, cultural and social projects, and underpins their commitment as “the provider of fi nance to German SMEs”
Broad business support geared towards abiding long-term values
Savings Banks are catalysers of “regional economic cycles” They transform locally generated customer deposits into loans to fi nance housing construction and corporate invest-ments within their business area The returns generated are ultimately put towards enhancing their capital base, and public welfare-oriented projects As one of Germany’s largest
taxpayers, the Savings Banks and Landesbanken also make an
important contribution to municipal budgets Savings Banks’ funds remain in their regions, securing the foundation of their business
OUR BUSINESS MODEL
Regional focus, retail orientation and solidarity
Trang 9Importantly, Savings Banks can be found everywhere in
Ger-many – not merely in strong economic regions, but
nation-wide They function according to the principle that what is
good for the region is good for the Savings Bank This is why
it is in Savings Banks’ own best interests to aim their business
activities towards the common good, as their mission
state-ment makes clear
The steadily rising esteem that the Savings Banks have
enjoyed in the wake of the fi nancial crisis testifi es to how
strongly they are anchored in the minds of the German
pub-lic According to a recent survey,1 Savings Banks are seen as
especially trustworthy partners compared with other
bank-ing service providers.2 Whilst the reputation of private banks
suffered greatly as a result of the fi nancial crisis, Savings Banks were held in signifi cantly higher regard in 2010; 68% of the German public believe that the Savings Banks are “important” or “very important” for the stability and future viability of the German economy.3
In order to remain reliable, long-term partners, Savings Banks are profi t-oriented institutions Their objective is to gener-ate stable returns with a moderate risk profi le Savings Banks believe in profi tability, dependability and reliability They offer customer proximity and secure customer confi dence The results of the 2010 business year attest to the success of the unwavering pursuit of this strategy
1 Source: Forsa survey commissioned by stern magazine, January 2011.
2 With a score of 49%, they enjoy signifi cantly higher approval than private
banks with 26%.
3 Source: Forsa survey commissioned by DSGV, June 2010.
Our sustainable business model
The Savings Banks Finance Group
Public legal structure Municipal trusteeship Public service obligation Regional principle
Trang 10The widespread attention currently devoted to the
redis-covered importance of conducting business according to
“sustainability” and “values” affi rms our strategic orientation
Both principles are at the very heart of our success and are
part of the Savings Banks Finance Group’s long tradition
The root of the Savings Bank philosophy lies in the desire
to put fi nancial planning and independence within reach of
people without large incomes, whilst providing them with
secure interest rates on their deposits The Savings Bank
philosophy focuses on people and their needs In an age
where globalisation and extreme fl uctuations on the money
and capital markets are shaking people’s sense of security,
many of these old, yet still salient ideas are undergoing a
renaissance The Savings Bank philosophy has proved over
the last two centuries that it not only carries with it the power
of social cohesion, but that it also adds economic value
Once formed by citizens and founded as “banks of the
com-mon man”, Savings Banks have always been more than mere
credit institutions In many communities, they have remained
important institutions in public life to this day Back in the
19th century, the Savings Banks helped to cushion the
industrial revolution socially and improve living standards signifi cantly for the individual and for society as a whole Products such as the bank book made it possible to make the saver’s “small money” grow
Providing affordable, nationwide fi nancial services and ing the needs of SMEs is and remains our core duty Respon-sible lending and growing deposits are central elements of this Savings Banks are also committed to training the next generation of the workforce They offer skilled jobs, even in regions where they are hard to come by
meet-Economic success is essential for the companies within the Savings Banks Finance Group, also in terms of achieving their greater goal: to preserve the future prospects of coming gen-erations First and foremost, this includes concentrating on a sound and sustainable business model Our clear objective is
to foster growth and prosperity in society in an economically, ecologically and socially viable way One consequence that
is already visible can be seen in our increased range of tainable and “green” products that add ecological and social value, in both execution and design
sus-OUR MISSION
Sustainability from the very start
The Savings Banks Finance Group | Financial Report 2010
Trang 11Landesbausparkassen – number one in home loan savings
The total assets of the ten Landesbausparkassen amount to
approximately EUR 54.3 billion Together, these regional
build-ing societies account for 816 branches and employ around
9,000 in-house employees and fi eld staff As the market leader
in their segment in Germany, the Landesbausparkassen hold
a market share of 39.5% in terms of the number of new home
loan and savings contracts, and of 34.3% in terms of portfolio
(total savings)
DekaBank
DekaBank is the central asset manager of the Savings Banks
Finance Group The bank is active in the business segments
of Capital Markets Asset Management, Real Estate Asset
Man-agement and Corporates & Markets With an aggregate fund
volume of approx EUR 181 billion – according to the
Bun-desverband Investment und Asset Management e.V (“BVI”),
the German investment management association, including
ETFlab Investment GmbH – DekaBank is one of the major
Ger-man fi nancial institutions It offers a wide range of investment
funds for private and institutional investors alike DekaBank is
a market leader in open-ended real estate funds, and in
struc-tured investment products (such as funds of funds or
fund-linked asset management)
Deutsche Leasing – one of Europe’s biggest leasing
companies
Deutsche Leasing Group reported total assets of approximately
EUR 15 billion for its annual year 2009/10 1 with a workforce of
some 2,000 employees With product and real estate leasing
business of EUR 7.8 billion, Deutsche Leasing is Europe’s third-largest leasing company As the German pioneer in the leasing business and Germany’s number one leasing company, Deutsche Leasing Group can look back on almost 50 years of experience in the fi eld of fi nancial services and investment
Public insurers – market leaders in their region
The eleven public primary insurance groups increased their gross premium income by almost 11% in 2010 to EUR 19.7 billion 2 Thereby the group has consolidated its rank
as Germany’s second-largest insurance group The regional savings banks and giro associations are the main owners of nearly all public insurance companies
Other fi nancial services providers
The range of fi nancial service providers within the Savings Banks Finance Group is supplemented by numerous partner
companies and establishments These include seven
Landes-bank investment companies, three factoring companies, ten
real estate companies owned by the Landesbausparkassen,
75 equity investment companies and other fi nancial services companies, as well as eight management/local government consultancy fi rms
Through all of its institutions and partners, the Savings Banks Finance Group can meet all of the fi nancial requirements of its private and corporate customers in Germany
OUR PARTNERS WITHIN THE GROUP
Strong specialist entities forming part of the Group
1 As of 30 September 2010.
Provisional gross premium income.
Trang 12The portfolios of institutions within the Savings Banks
Finance Group are secured by the Group’s Joint Liability
Scheme, which guarantees all customer deposits held at
member institutions In 2010, these included 429 Savings
Banks, eight Landesbank Groups, the DekaBank, the ten
Landesbausparkassen and S Broker.
The Joint Liability Scheme encompasses thirteen
guaran-tee funds: eleven regional Savings Bank guaranguaran-tee funds,
the guarantee fund of the Landesbanken and Girozentralen
and the guarantee fund of the Landesbausparkassen Each
guarantee fund is interlinked with the others Should a fund
lack suffi cient resources to cover its particular institution, it is
supplemented by other guarantee funds
This Joint Liability Scheme has proved its worth for more
than thirty years and provides customers of the Savings
Banks Finance Group with the utmost fi nancial security
Since the scheme’s inception in 1973,
not a single customer of any Savings Bank, Landesbank or
Landesbausparkasse has lost any deposits or savings;
no compensation has ever had to be paid to depositors,
and no member institution has failed to honour its fi cial obligations Nor has there been a single insolvency.Banking supervisors and the fi nancial markets recognise the assurance of the Joint Liability Scheme Three international credit rating agencies – Moody’s Investors Service, Fitch Rat-ings and DBRS – expressly cite the scheme in justifying their very good assessments of the Savings Banks Finance Group’s creditworthiness and ratings
nan-Further information on the Joint Liability Scheme can be found in the risk report on pages 45–47
THE JOINT LIABILITY SCHEME
The Savings Banks Finance Group’s guarantee scheme
The Savings Banks Finance Group | Financial Report 2010
Trang 13The Savings Banks Finance Group has a total of three
inde-pendent marketable ratings – issued by Moody’s Investors
Service, Fitch Ratings and DBRS For both long-term and
short-term liabilities, all three agencies awarded comparable
ratings in 2010
By issuing a corporate family rating of Aa2 for long-term
li-abilities, Moody’s once again endorsed the high credit
qual-ity of the Savings Banks Finance Group in 2010 The rating
relates to the creditworthiness of the Group as a whole As in
the previous year, for 2010 Moody’s has assigned the Savings
Banks Finance Group a Bank Financial Strength Rating (BFSR)
of C+
The Canadian agency DBRS once again gave the members
of the Joint Liability Scheme a so-called fl oor rating for the
Group The rating of A (high) for long-term liabilities and the
R-1 rating (middle) for short-term liabilities were confi rmed
The fl oor rating refl ects the minimum credit quality of the
members of the Joint Liability Scheme
We are delighted that the internationally well-regarded agency
Fitch Ratings has for the fi rst time also assessed the minimum
credit quality of the Savings Banks with a fl oor rating of A+ for
long-term liabilities and F1+ for short-term liabilities
Key aspects that factored into all three agencies’ positive
ratings included
the sound business model,
the high creditworthiness – particularly of the Savings
Banks,
the cooperation and solidarity within the Savings Banks
Finance Group,
the effi cient business performance and
the Savings Banks’ risk management and the diversifi
ca-tion of their risk posica-tions
This view remains unchanged in 2011, with an Aa2 rating from Moody’s and an A+ from Fitch.1
Fitch and DBRS ratings may also be awarded on an ual basis to Group members The vast majority of Savings Banks took advantage of this option in 2010, putting them
individ-in a strong position for refi nancindivid-ing activities and servicindivid-ing internationally active corporate clients, since both functions increasingly require internationally recognised credit ratings This applies in particular to issuing guarantees for corporate customers The ratings facilitate the assessment of the creditworthiness or transactions (such as guarantees or letters
of credit) of Savings Banks and Landesbanken for institutional
partners such as insurance companies or pension funds, as well as on the interbank market
In short, the consistently very good capital market ratings constitute a great success for the Savings Banks Finance Group They attest to the high performance of its members
as well as the high credit quality of the Savings Banks Finance Group on an international level
Moody’s Group Rating
Trang 14submis-12 2010 in review Financial Report 2010
IN REVIEW
The review of a diffi cult 2009 dominated the picture at the start of
the year Discussions about a credit crunch have not yet abated in
Germany Nonetheless, the Savings Banks have signifi cantly expanded their corporate lending business and continue to show undiminished commitment to small and medium-sized companies
With regard to social commitment, the fi rst quarter marked the fi rst high
for the Savings Banks Finance Group: as Germany’s Olympic partner,
the Savings Banks Finance Group accompanies the German athletes to
the Winter Olympics in Vancouver Every second German participant is
enrolled at one of the 40 elite sports schools that are supported by the
Savings Banks Finance Group
The 2010 Diagnose Mittelstand (SME-Check-up), a comprehensive report
on the position of SMEs published every year by the German Savings Banks Association, determined that 35% of German companies are not affected
by the crisis A further 45% indicate that although they are affected, they are in a position to deal with the consequences on the basis of their own strengths and abilities The International Monetary Fund (IMF) believes that the German economy is growing cautiously and is forecasting growth
of 1.5% for 2010
The full extent of the Greek crisis becomes evident in April – yields on Greek
sovereign bonds climb to over 10% on some maturities The EU states, together with the IMF, put together a EUR 750 billion bailout package: such a volume has never been seen before The European Central Bank buys government bonds from eurozone countries for the fi rst time in order to stabilise the bond markets
In June, the euro falls to its annual low of EUR/USD 1.19 At the same time, new
rules and regulations for the banking markets are being worked on intensively
Financial markets react strongly to these developments Despite this turbulence, the German economy recovers – gross domestic product (GDP) has been rising sharply, by 2.2%
The Savings Banks also set the tone for stability In the Stuttgarter Erklärung
(“Stuttgart Declaration”), presented at the 2010 German Savings Banks’ Day,
the Group warns about the threat of over-sized banks and refers to its based business model that generates stable returns with manageable risks
retail-Rating agency Moody’s affi rms the Aa2 rating for the Savings Banks Finance Group, while DBRS confi rms the fl oor rating of A (high).
Trang 15It is a “Summer of Innovation” in the Savings Banks Finance Group
The Savings Banks offer the fi rst mobile fi nancial portal, so that
customers have their fi nances under control at all times and anywhere
Various apps for smartphones, such as a free “S-budget planner” for
the iPhone, are offered during the year
The third quarter starts with the results of the fi rst EU-wide bank stress test All members of the Savings Banks Finance Group pass this
test The Group’s high level of creditworthiness is affi rmed in July by
the rating agency Fitch, which rates the Savings Banks Finance Group
for the fi rst time (A+) A new fund is created in Germany alongside the draft of the Banking Restructuring Act, which should reduce the costs
of future state bailouts
The G20 convene in Seoul and agree on the framework for Basel III, where
the focus is on higher capital backing requirements The members of the Savings Banks Finance Group are well prepared for this However, the DSGV sounds a warning about unwanted disincentives under the new rules and regulations, which could particularly burden stable retail banks
The Savings Banks Finance Group ends 2010 with two awards for its
sustained commitment It receives the “GreenIT Best Practice Award
2010” Additionally, “Planspiel Börse”, the Savings Banks’ stock market simula tion game, has been acknowledged by the German UNESCO Commission as a project for the UN decade campaign on “Learning Sustainability” From an economic perspective, the trend at the end of
2010 for the German economy and the Savings Banks Finance Group is heading in the same direction: upwards
In the US, the Federal Reserve Bank (Fed) tries to stimulate the
still-weak domestic economy by means of a USD 600 billion quantitative easing programme Together with the major divergences in the
eurozone and speculation about the future dollar pegging of the yuan, this leads to intense debate about a “currency war” Infl ation fears in Germany are fanned by the high volume of liquidity provided
by the central banks
Trang 16OF NEW LOANS
were extended by Savings Banks to enterprises and self-employed
per-sons during 2010 The market share held by the Landesbanken alone in
this segment has exceeded the market share of private banks for years This economic performance is our contribution to the success of the German economy – today, tomorrow and beyond
Trang 17MANAGEMENT REPORT
Economic environment
Macro-economic situation
The German economy grew by 3.6% in 2010, posting the
strongest increase in twenty years A good portion of this
remarkable fi gure should be interpreted as a rebound from
the recession at the end of 2008 and the beginning of 2009
However, it is still very positive that recovery has set in so
quickly and so robustly
Germany’s swift economic recovery was spurred by the
mo-mentum of the global economy, spearheaded by the
impor-tant developing countries Global industrial production in 2010
grew by 5% overall, and global trade volumes were up by
12.4% – more than offsetting the 2009 downturn
According-ly, the German export sector in particular was able to profi t –
with an upward trend that began to take hold in summer
2009 Businesses also began to re-stock their inventories; at
the height of the crisis, many companies had allowed their
stocks to dwindle In summer 2010, positive development
ac-celerated and spread to reach more of the domestic economy
Private consumption, which had been stagnating for years,
began to rise slightly at this point
The upturn in investment, however, was considerably stronger
from the outset of 2010 For the full-year 2010, there was a
10.9% year-on-year increase (adjusted for infl ation) in
equip-ment and facilities investequip-ment, for example This, too, was a
distinct countermovement to the declines of previous
reces-sion years There was also greater occareces-sion for maintaining
and expanding capacity: this type of expansion investment
started to grow towards the end of 2010 Although internal fi
-nancing continued to play a signifi cant role, rising investment
activity in Germany generated increased credit demands
Developments in the employment market were especially
positive in 2010 The jobless rate declined from its 2009 level
of 8.1% to 7.7% in 2010 The number of employed
individ-uals increased by more than 200,000, with the number of
employees making social security contributions rising even
more strongly At nearly 40.5 million, 2010 marked an all-time high in the number of people employed in Germany The vol-ume of work based on hours showed even greater growth than the increase in headcount would imply Short-time work,
a widespread instrument that offered greater fl exibility in the last recession, was largely done away with and regular work-ing hours were resumed
Developments on the money and capital markets
Throughout the course of 2010, the key interest rates of the European Central Bank (ECB) remained at the low level of 1% set during the recession and fi nancial crisis The special instruments implemented during the crisis to stabilise the
fi nancial markets were, however, allowed to expire by the ECB The twelve-month tenders, introduced in three rounds during
2009, were no longer offered after their expiry in 2010 The covered bonds purchase programme, for example, was also terminated Yet a number of other stabilisation measures, such as full-allocation tenders, continued This ensured that there continued to be ample liquidity available, although it also increased certain fi nancial sectors’ dependency on the ECB in peripheral eurozone countries
Furthermore, the ECB made a series of government bond purchases from EU member states whose credit quality was increasingly coming under scrutiny on the markets Greece’s budgetary problems, which by the end of 2009 had become impossible to overlook, continued to escalate The support measures required by Irish banks weakened Ireland’s solvency Ultimately Portugal reported both a budget and trade defi cit, which was exacerbated by the negative economic develop-ments within the EU In spring 2010, EU member countries put together a rescue package for Greece The European Financial Stability Facility (EFSF) was then incepted to address other crises potentially arising through 2013 However, dra-matically widening risk premiums in the eurozone have not yet been contained
Trang 1816 Management report | Financial Report 2010
German government bonds were initially able to benefi t
from the shift from high-risk to low-risk investments Yields
on bonds outstanding in August hovered at record lows of
1.8% However, concerns about the budgetary burdens of
other EU member nations impacting on Germany caused
yields to rise again Yields on outstanding exchange- listed
federal secur ities climbed to roughly 2.5% by year-end
2010, approximately 0.6 percentage points over yields at
the beginning of the year
1 2011 forecast for global industrial production taken from the International
Monetary Fund’s World Economic Outlook of April 2011
2 2011 forecasts for Germany from the Spring Forecast of the Economic
Research Institutes, 7 April 2011.
Change in the averagecost of living in %
Economic growth –
review and outlook 2008–2011
6.9 7.7
+2.6
+0.4
+2.4 +1.1 +1.0
+2.8 +3.6
−4.7
+3.0
+4.4 +5.0
−0.5
6 4 2 0
8 10
−2
−4
−6
6 4 2 0
8 10
−2
−4
−6
6 4 2 0
8 10
fi nances than the eurozone
The equity market refl ected improved corporate results in the wake of more robust general economic recovery The DAX rose from just under 6,000 over the course of 2010 to close with nearly 7,000 points
Trang 19Major markets and positioning
General overview
The combined business volume of the member
institu-tions of the Savings Banks Finance Group* amounted to
EUR 2,398.7 billion as at the 2010 year-end With a total
German market volume of EUR 7,185.5 billion, this equates
to a market share of 33.4% Consequently, the Savings Banks
Finance Group has reduced its market share compared with
the previous year by 1.2 percentage points This is due to
the sharp decline of EUR 140.4 billion (–9.6%) in the volume
of business at the Landesbanken to EUR 1,317.5 billion,
refl ecting the implementation of strategic re-dimensioning
measures in the balance sheets The commercial banks follow
with a market share of 31.0% (with the big banks accounting
for 18.0%, and regional/other commercial banks/foreign bank
branch networks for 13.0%) The cooperative sector accounts
for 13.1% of total market volume and “other banks” for 22.5%
(including special-purpose banks with 12.5% and mortgage
banks with 10.0%)
During the 2010 fi nancial year, credit business with German
customers was defi ned by a slight decline in corporate
lend-ing and deposits taken from companies on the one hand, as
well as increases in private housing construction loans,
con-sumer credit and deposits taken from private individuals on
the other
In relation to customer lending, the Savings Banks Finance
Group further increased its market share in the area of
cor-porate loans during the 2010 fi nancial year The Group also
maintained its strong market position with regard to private
housing construction loans It once again shed market share
in the consumer credit business In the fi ercely competitive
private customer deposit-taking business, the Savings Banks
Finance Group once again had to incur a slight loss in market
share in 2010 in the face of strong pressure from its
com-petitors However, measured in terms of market share in this
business segment, it remains signifi cantly ahead of the other
banking groups In relation to deposits from domestic
enter-prises, the Savings Banks Finance Group lost market share
here, too
Customer lending business
The total market volume of corporate loans in the 2010 fi cial year fell by EUR 10.6 billion or 0.8% to EUR 1,305.7 billion With portfolio growth of EUR 1.5 billion (+0.3%), the Savings Banks Finance Group once again bucked the trend and record-
nan-ed further growth The volume of corporate loans extendnan-ed totalled EUR 550.2 billion at year-end 2010 This equates to a market share of 42.2%, with the Savings Banks accounting for
24.3% and the Landesbanken for 17.9% The Savings Banks
Finance Group has therefore further expanded and pinned the strong position it has built up with domestic busi-nesses and the self-employed, making it the most important
under-fi nancial partner for small and medium-sized enterprises in the German lending industry Providing a reliable supply of credit and dependable service and advice to the SME sector has always been one of the core elements of the commercial strategy pursued by the Savings Banks Finance Group.Having endured three years of slightly weaker portfolio de-velopment, fi nancing of private housing construction post-
ed a strong recovery again in the year under review The total market volume of private housing construction loans rose by EUR 5.1 billion (0.7%) in 2010 to EUR 697.1 billion
18.0%
Big banks
13.0%
Regional banks/other credit banks/branches
22.5%
Special-purpose banks
As of 31.12.2010
1 Excluding derivative fi nancial instruments held in the trading portfolio.
Market shares by business volume
Total market volume: EUR 7,185.5 billion 1
* In this chapter, “Savings Banks Finance Group” relates to Savings Banks
and Landesbanken
Trang 2018 Management report | Financial Report 2010
The Savings Banks Finance Group posted above-average
port-folio growth here of +1.5% This increased their loan port port-folio
by EUR 3.7 billion to EUR 257.2 billion The Savings Banks
accounted for EUR 232.6 billion thereof, which equates to a
market share of 33.4% They were followed by the
second-strongest banking group, namely the cooperative banking
sector, with a market share of 23.8% Together, the Savings
Banks and Landesbanken account for a market share of 36.9%.
The consumer credit portfolio (overall market) performed
favourably in 2010 and slightly exceeded last year’s level The
market volume increased by EUR 2.0 billion or by 0.9%, to
EUR 228.6 billion as at 31 December 2010 The members of
the Savings Banks Finance Group recorded another slight fall
in their portfolio during the year under review The reduction
of EUR 0.8 billion or 1.1% resulted in a slight fall again in
market share With a portfolio volume of EUR 68.0 billion and
a market share of 29.8%, the Savings Banks Finance Group
lies in se cond place, behind the group of regional and other
commercial banks (market share: 36.1%) This banking group
is comprised almost entirely of specialised fi nanciers For the
fi rst time since the end of the 90s, it recorded a fall in folio volume in consumer credit business and therefore a loss
port-of market share in 2010 The cooperative sector was the only banking group to have reported portfolio growth in the area of consumer credit during 2009 and the year under review This had the effect of raising its market share to 22.2%
17.0%
Special-purpose
banks
As of 31.12.2010
* Loans to enterprises and self-employed persons
(including commercial housing loans).
Market shares in loans to enterprises *
Total market volume: EUR 1,305.7 billion
13.3%
Big banks
16.3%
Regional banks/other credit banks/branches
9.7%
Special-purpose banks
As of 31.12.2010
Market shares in housing loans to households
Total market volume: EUR 697.1 billion
7.5%
Big banks
36.1%
Regional banks/other credit banks/branches
4.4%
Special-purpose banks
As of 31.12.2010
Market shares in consumer credits
Total market volume: EUR 228.6 billion
Trang 21Deposits from private individuals
Last year, the market volume of deposits from private persons
(excluding term deposits for a period of more than two years)
increased by 3.8% to EUR 1,522.3 billion as at year-end 2010
With absolute growth of EUR 55.2 billion, the previous year’s
growth of EUR 43.9 billion was clearly exceeded However, the
very high growth levels recorded in 2007 (EUR 71.9 billion)
and 2008 (EUR 89.6 billion) could not be matched Further
huge shifts were observed within the individual investment
categories: growth in current account balances and savings
deposits, and lower volumes in fi xed-term deposits and
sav-ings bonds However, these shifts were not as pronounced as
in the previous year, as a consequence of the sharp decline in
interest rates on the term deposit market, which reduced
pri-vate term deposit volumes by almost half, while the pripri-vate
current account balances posted growth of almost one-third
The Savings Banks recorded an increase of EUR 17.8 billion
or 3.0% in deposits from private individuals during the year under review Although this meant that they clearly exceeded the result achieved in the previous year (+1.9%), during 2010 the Savings Banks once again participated disproportionately
in the overall increase in market volume, and lost additional market share – albeit to a lesser extent than in previous years With a portfolio volume of EUR 611.0 billion as at 31 Decem-ber 2011, and a market share of 40.1% of the deposit-taking business with private customers, the Savings Banks Finance Group remains ahead of the cooperative banking sector banks that are also heavily involved in retail business: their portfolio volume amounts to EUR 409.6 billion, which rep-resents a market share of 26.9% The group of regional and other commercial banks (portfolio volume: EUR 278.1 billion,
market share: 18.3%) is in third place Together with the
Lan-desbanken, for which private deposit-taking business is only
of minor importance, the Savings Banks hold a market share
of 42.7%
Deposits from domestic enterprises
Deposits from domestic enterprises totalled lion at year-end 2010 After private deposits, this is the second- largest segment in the entire deposit-taking business of the German banking sector During the 2010 fi nancial year, deposits from domestic enterprises recorded a slight decline
EUR 1,121.3 bil-of 1.0%, after some sharp increases in previous years (for example more than 11% in both 2007 and 2008) This was
due to the performance of the Landesbanken, where deposits
from domestic enterprises fell by a total of EUR 22.0 billion
or 7.5% to EUR 271.5 billion during the year under review
As of 31.12.2010
Market shares in deposits from households
Total market volume: EUR 1,522.3 billion
Trang 2220 Management report | Financial Report 2010
This decline is attributable solely to the sharp reduction in
the term deposits of insurance companies that resulted from
the implementation of strategic measures taken to reduce
the volume of total assets, and the Landesbanken’s resulting
lower refi nancing requirements Despite the sharp decline
in portfolio volume and market share (–1.7%) last year, at
24.2%, the Landesbanken still commanded the highest
mar-ket share of deposits from domestic enterprises Together
with the Savings Banks, the Landesbanken hold a combined
market share of 34.9% in this deposit-taking segment
Savings Banks strengthen international business support
The German economy has staged a solid recovery from the global economic crisis The recovery has been driven by German exports, which were up by more than 14% year on year, and are expected to exceed the one trillion euro mark in 2011
Meanwhile, German small to medium-sized enterprises – the
Mittelstand – or “SMEs” – account for around a quarter of this
success in international trade As the most important pro vider
of fi nance to German SMEs, Savings Banks have pursued a comprehensive approach in advising their business custom-ers for many years – an approach that takes into account the customers’ manifold cross-border business relationships Recognising the increasingly international profi le of German SMEs, Savings Banks continued to enhance their advisory capacity to this sector during 2010: for instance, by bundling advisory services across multiple Savings Banks, in so-called
“Centres of Competence for International Business” In this way, Savings Banks combine their extensive advisory skills with regional responsibility
During 2010, additional Savings Banks have embarked upon this development Almost one quarter of German Savings Banks are now working with such Centres of Competence, leveraging these skills for their corporate customers who conduct business abroad
20.2%
Special-purpose
banks
As of 31.12.2010
Market shares in deposits from domestic enterprises
Total market volume: EUR 1,121.3 billion
Trang 23Business development and fi nancial position
Performance of the member institutions of the
Joint Liability Scheme – an aggregated view
The Savings Banks Finance Group saw a marked improvement
in results for the 2010 fi nancial year Two aspects in particular
were signifi cant for the Group’s fi nancial perform ance: on the
one hand, write-downs were considerably lower compared
with the previous year, whilst on the other hand, the burdens
on earnings from net extraordinary income/expenses as well
as from the investment business were signifi cantly reduced
This was largely attributable to the fi nancial performance of
the Landesbanken However, the Group could only increase
operating profi t slightly, even though the Savings Banks
managed to improve upon what was already a good fi gure
the previous year
The Savings Banks Finance Group concluded its operative
business in 2010 with an operating result of EUR 17.0 billion
(excluding revaluation results) This represents an
improve-ment of 1.5% over the previous year (EUR 16.8 billion) Net
commission income rose by 5.9% to EUR 7.4 billion, while at
EUR 34.8 billion, net interest income was marginally lower
than the fi gure for the previous year Net earnings from
fi nancial transactions contracted to EUR 0.5 billion Admin
is-trative expenses were reduced by 3.4% to EUR 26.0 billion
Within this fi gure, EUR 11.0 billion of material expenses
represented a practically unchanged fi gure, while personnel
expenses fell by 5.6% to EUR 15.0 billion The only relief
provided in this context was the reclassifi cation of interest
cost for pension provisions into net interest income, pursuant
to the fi rst-time application of the German Accounting
Moder nisation Act (“BilMoG”)
The cost-income ratio for the entire Savings Banks Finance
Group improved to 61.7% during the 2010 fi nancial year
(previous year: 64.1%) This was largely attributable to the
rise in net commission income and to the decline in
adminis-trative expenses
After the two previous years, which were largely defi ned by the fi nancial markets crisis, the Savings Banks Finance Group saw a marked relief in revaluation results in the 2010 fi nan-cial year Net write-downs were reduced from EUR 10.6 billion
in 2009 to EUR 6.2 billion This is primarily attributable to the sharp economic recovery in the previous year and the resulting opportunity in 2010 to reverse loan loss provisions from previous years The “extraordinary result” 1 that was largely determined in the previous year by non-recurring
effects within the Landesbanken burdened the Savings Banks
Finance Group’s total income by only EUR 2.2 billion in the
2010 fi nancial year – down from EUR 6.5 billion in 2009 Overall, the member institutions of the Savings Banks Finance Group achieved net income before taxes of EUR 8.7 billion in
2010 This is in sharp contrast with the previous year, which the Savings Banks Finance Group concluded with a negative result before taxes (EUR –0.3 billion) After taxes, the Savings Banks Finance Group recorded net profi t of EUR 6.0 billion in the 2010 fi nancial year, compared with a loss of EUR 2.9 bil-lion the year before
In the 2010 fi nancial year, aggregated total assets for the
Savings Banks Finance Group (Savings Banks, Landesbanken 2
and Landesbausparkassen) fell once again Total assets
de-clined by 4.9% (2009: –3.8%) to EUR 2,455.7 billion.3 ever – as in the previous year – this renewed decline was not the result of weak growth but was a consequence of strategic realignment/redimensioning measures implemented at the
How-Landesbanken They continued to consistently reduce the
volume of their interbank business, their securities treasury portfolio and, owing to the drop in refi nancing requirements, their securitised liabilities (in the latter case, signifi cantly)
1 Balance of other and extraordinary income and expenses (according to the German Bundesbank).
2 Landesbanken with no foreign branches, no domestic and foreign group companies and without Landesbausparkassen.
3 Not taking into account the trading portfolio derivatives that were dated for the fi rst time as at the balance sheet date of 31 December 2010.
Trang 24consoli-22 Management report | Financial Report 2010
Selected balance sheet and income statement items
of the Savings Banks Finance Group
Selected balance sheet items
for information: total assets (excluding trading derivatives) 2,455.7 2,582.8 −127.1 −4.9
Selected income statement items
1 Monetary fi nancial institutions.
2 Total assets as at the end of December included derivative fi nancial
instru-ments held in the trading portfolio (trading derivatives), due to the fi
rst-time application of the German Accounting Modernisation Act (“BilMoG”)
Trading derivatives of EUR 146.0 billion were carried by Landesbanken,
and reported under “Other liabilities”.
3 Provisional data from partly non-audited annual fi nancial statements prepared in accordance with German GAAP (converted to conform with the system of the German Bundesbank).
4 Including the balance of gains on the sale of fi nancial investments and investments held as fi xed assets as well as write-downs/write-ups on
fi nancial investments and investments held as fi xed assets.
5 Calculation is immaterial.
Trang 25In the customer lending business, the Savings Banks
Finance Group reported growth again within the scope of a
signifi cantly better environment in 2010, following a
mar-ginal decline the year before Claims due from non-banks
increased by 1.2% to EUR 1,214.3 billion The customer
de-posits business also posted slight growth Liabilities owed
to non-banks were up 0.4% to EUR 1,164.7 billion
The Savings Banks Finance Group’s equity declined slightly
by 3.5%, to EUR 122.2 billion This decline is solely
attribut-able to developments at the Landesbanken, and is
primarily explained by the processing of losses from the 2009 fi
-nancial year incurred by some Landesbanken during the
year under review Nonetheless, the Savings Banks Finance
Group’s capitalisation remains comfortable This meant that
the Savings Banks Finance Group was able to continue to
make a key contribution, providing (in particular) German
SMEs with credit, as it had done in the previous year
Business development of the Savings Banks
The 429 Savings Banks in Germany saw sound business development in the 2010 fi nancial year Despite the further reduction of interbank business, their total assets rose by EUR 11.0 billion or 1.0% to EUR 1,084 billion At 429 (previ-ous year: 431), the number of Savings Banks continues to fall slightly as smaller units are successfully consolidated.Customer lending increased by 2.8%; loans to enterprises and self-employed persons, as in the previous year, were the main drivers of growth (+3.3%) New business expanded, too: at EUR 64.2 billion, loans granted to enterprises and self- employed persons rose by 3.4% compared to 2009.With regard to customer deposits, the Savings Banks were able to signifi cantly exceed the weaker previous year’s growth
of EUR 9.6 billion and achieve an increase of EUR 15.6 billion (+2.1%) There were further shifts between the individual investment categories, albeit signifi cantly less than in 2009 Term deposits (–10.0%) and own bond issues (–12.2%) continued to decline, while growth was reported for savings deposits (+4.3%) and current account balances (+6.6%)
in %
Business performance of Savings Banks
Trang 2624 Management report | Financial Report 2010
Selected income statement items of Savings Banks
1 Provisional data from partly non-audited annual fi nancial statements
prepared in accordance with German GAAP (converted to conform with
the system of the German Bundesbank).
2 Including the balance of gains on the sale of fi nancial investments and
in-vestments held as fi xed assets as well as write-downs/write-ups on
fi nancial investments and investments held as fi xed assets.
3 Calculation is immaterial.
The customer securities trading segment did not recover in
2010, despite the economic upswing At EUR 102.5 billion,
turnover was down by 7.1% on the previous year’s fi gure,
although investors had already demonstrated their strong
concern over the fi nancial market crisis in 2009 with a clear
fall in the number of securities traded
Since net sales of securities within the customer securities trading segment amounted to EUR –1.0 billion, the creation of
fi nancial assets in the year under review was mainly fuelled by infl ows from the deposit-taking business In 2010, the Savings Banks’ customers, including attributable life insurance and building society business, invested (directly and indir ectly)
an amount of EUR 17.8 billion at their Savings Banks This is
an improvement of 4.0% year on year; however the creation
of fi nancial assets is still below the levels achieved in previous years
Trang 27Profi tability
Traditionally, the Savings Banks’ level of profi tability has
been dependent primarily upon the development of net
interest income generated from the loan and deposit- taking
business with households and medium-sized enterprises
Despite tough competition in these segments, the Savings
Banks were able to increase net interest income in the 2010
fi nancial year by 2.3% to EUR 23.1 billion (previous year:
EUR 22.6 billion)
In addition, the Savings Banks were able to raise net
commis-sion income by 7.4% to EUR 6.3 billion, up from EUR 5.9
bil-lion in the previous year This good result is mainly
attribut-able to improved commission income generated from Group
business (notably, life insurance and building society business)
Commission income from payment transactions and the
securities business only increased slightly compared with
the previous year
The Savings Banks reported signifi cant relief in 2010 as far
as risk provisioning for loan losses (valuation result) is
con-cerned Net charges from the valuation of assets declined by
EUR 0.5 billion to EUR 4.0 billion (previous year:
EUR 4.5 bil-lion) This is primarily due to the fact that provisions were
released in the 2010 fi nancial year which had been formed in
previous years due to the uncertainty surrounding economic
development
However, reduced net charges from the valuation of assets
were not the main driver for the overall performance in 2010:
that role was taken by development of the operational
busi-ness The operating result (after revaluation results) increased
by almost 40% to EUR 7.1 billion (previous year: EUR 5.1
bil-lion) and net income for the year before taxes by approximately
40% to EUR 6.6 billion (previous year: EUR 4.7 billion), primarily
due to the considerable increase of operating surpluses
Administrative expenses declined by 3.0% in the 2010 fi cial year to EUR 18.5 billion (previous year: EUR 19.1 billion) Operating expenses only declined by 0.2% to EUR 7.2 billion, while personnel costs dropped by 4.6% to EUR 11.4 billion Some relief came from the reclassifi cation of expenses to net interest income, made as part of the application of the new provisions of the German Accounting Law Modernisation Act (“BilMoG”) However, the agreed salary increases could not
nan-be fully compensated by personnel consolidation measures
At the end of the reporting year, the Savings Banks employed 248,137 people (previous year: 249,577), making them the largest employer in the German banking sector As in previ-ous years, jobs were again shifted out of the back-offi ce areas into sales or service functions during 2010
In 2010, the Savings Banks’ cost-income ratio improved siderably to 63.1% (previous year: 67.2%) due to the rise in income generated from operative business and, at the same time, reduced administrative expenses
con-Net income after taxes for the year was EUR 4.1 billion in 2010 and thus as much as EUR 1.6 billion (or 66.4%) up on the pre-vious year’s fi gure of EUR 2.5 billion Pre-tax return on equity rose to 11.5% compared with 8.5%, despite the fact that equity was further increased (from EUR 55.6 billion on aver-age in 2009 to EUR 57.6 billion on average in 2010)
Trang 2826 Management report | Financial Report 2010
Lending business
Along with the improved overall economic situation in
Germany, developments in the Savings Banks’ lending
business were very positive
The total customer lending business grew by EUR 17.7
bil-lion in 2010, so that the loan portfolio increased by 2.8% to
EUR 660.4 billion (previous year: +1.8%) This is the second-
highest portfolio growth fi gure in the last ten years New
business also developed very well In the past fi nancial
year, loan commitments reached EUR 121.4 billion, a fi gure which is up 6.1% from the very good previous year’s fi gure (EUR 114.5 billion)
The increase of EUR 10.2 billion (or 3.3%) to EUR 317.0 billion
in corporate lending was also signifi cant Growth was even more pronounced in commercial residential construction at a rate of +4.7%, compared to a rate of +2.8% for “pure” corpor-ate loans
Loan commitments / loan payouts
Loan commitments / loan payouts
Loan commitments / loan payouts
* Figures may contain rounding differences.
1 Including loans for housing construction.
2 For households and enterprises.
3 Short-term, medium-term and long-term loans.
Lending by Savings Banks to customers *
Trang 29The Savings Banks managed to exceed the high level of new
business achieved in the previous year The volume of loans
granted amounted to EUR 64.2 billion, up 3.4% compared to
2009 New business development benefi ted especially from a
strong third and fourth quarter At 83.7%, medium- and
long-term maturities accounted for the bulk of loan commitments,
i.e loans attributable to investment activities
For the fi rst time since 2006, the Savings Banks were able to
record growth in the highly competitive retail lending
busi-ness In 2010, the loan portfolio rose by EUR 3.7 billion or
1.3%, to reach EUR 290.6 billion In terms of new business,
loan commitments amounted to EUR 48.8 billion, up 9.2% on
the previous year Compared with the years 2007 to 2009, the
situation within the retail banking segment has clearly
im-proved for the Savings Banks The growth driver was the
pri-vate housing loan business, while consumer credits declined
slightly
The volume of private housing loans strongly increased by
EUR 5.3 billion (+2.3%), representing the largest rise within
the past fi ve years At EUR 34.9 billion – an increase of 13.8%
year on year – new business also posted the best fi gure of
the last fi ve years in view of a buoyant demand for
residen-tial fl ats and homes This development is primarily
attrib-utable to low prices and low interest rates, as well as to the
government assistance granted as part of the Riester home loan and savings scheme (Riester Bausparen)
In contrast, the volume of the consumer credit portfolio saw another decline (by EUR 1.5 billion or 2.5%), which is a similar rate to the previous year (decline of 2.8%) The volume of in-stalment loans rose by EUR 1.0 billion, while non-instalment loans fell by EUR 2.5 billion New business volume was be-low the previous year’s level, with commitments of consumer credits declining by 0.9% to EUR 13.9 billion over the previ-ous year
Customer securities trading
The Savings Banks reported weak total revenues of EUR 102.5 billion in customer securities trading in 2010, down 7.1% compared to the previous year Net sales – defi ned as the difference between purchases and sales – was negative in the reporting year and amounted to EUR –1.0 billion (previous year: EUR 4.6 billion)
Fixed-income securities sales declined sharply (down 20.4%), while the sales volume of equities managed to recover due to the price increases on stock exchanges (up 21.5%) Invest-ment funds were traded in a roughly similar volume as in the previous year and declined a mere 1.4%
* Figures may contain rounding differences.
1 Net sales = balance of customer buying and selling.
Calculation is immaterial.
Customer securities trading by Savings Banks *
Trang 3028 Management report | Financial Report 2010
Net sales were positive for both fi xed-income securities
(EUR 1.3 billion) and equities (EUR 0.7 billion) so the
nega-tive net sales balance is attributable to the decrease of
in-vestment funds alone (down EUR 3.0 billion) The negative
development was evident above all in fi xed income funds
(EUR –4.7 billion) and money market funds (EUR –2.3
bil-lion), while net sales were clearly positive for balanced
funds (EUR +3.8 billion) and open-ended real estate funds
(EUR +1.6 billion)
Refi nancing
The customer deposit business in 2010 was better than
in 2009 Across all deposit categories, liabilities from
customer business increased by EUR 15.6 billion (+2.1%)
to EUR 767.8 billion, which is a signifi cant improvement
over the previous year (+1.3%)
As in 2009, investors transferred their funds for interest rate reasons, albeit with signifi cantly reduced momentum Current account balances (+6.6%, previous year: +31.1%) and savings deposits (+4.3%, previous year: +8.2%) continued to grow, while term deposits (–10.0%, previous year: –46.6%) and own issues (–12.2%, previous year: –26.8%) declined further
An analysis of individual customer groups shows an increase
in the volume deposited by enterprises, which raised their deposits once again in 2010 by EUR 4.7 billion (+4.0%); this growth rate, however, is below that achieved in the previous year (+11.2%) Retail customers made additional deposits
in the amount of EUR 11.6 billion (+2.0%), compared with a slight decline of 0.1% in the previous year
Thus, as in the previous years, the Savings Banks are acterised by a comfortable refi nancing situation The entire customer lending business was able to be refi nanced through customer deposits
* Figures may contain rounding differences.
Customer deposits in Savings Banks *
Trang 31Creation of fi nancial assets
As a result of negative net sales within the customer
secur-ities trading segment, the creation of fi nancial assets at the
Savings Banks in 2010 was mainly driven by deposit-taking
business Taking into account the home loan and savings
busi-ness as well as the attributable life insurance busibusi-ness,
cus-tomers invested directly and indirectly approx EUR 17.8 billion
at their Savings Banks This is a below-average fi gure in the
longer-term comparison, although it represents an increase of
4.0% compared to the previous year
Taking into account building society and life insurance
busi-ness, retail customers saved additional funds of approx
EUR 13.1 billion This has led to a signifi cant improvement in
the creation of fi nancial assets, which had recovered
consid-erably thanks to the direct Savings Banks business, and which
has now more than doubled since the very weak year 2009
* Figures may contain rounding differences.
1 Deposits business, customer securities trading, savings contracts for
housing loans and life assurance policies for which Savings Banks act as
at 31 December 2010, which represented a further ment over the previous year’s fi gure of 14.8% This means that the Savings Banks’ equity ratio signifi cantly exceeds the minimum ratio of 8% prescribed by the German Banking Act (KWG), thus providing adequate scope for further qualifi ed growth
* Figures may contain rounding differences.
1 Dotation capital and retained earnings (including fund for general
banking risks).
Equity capital of Savings Banks *
Trang 3230 Management report | Financial Report 2010
Business development of the Landesbanken
In the 2010 fi nancial year, the business development of the
Landesbanken was mainly characterised by a sharp reduction
in total assets This refl ects the implementation of the
stra-tegic measures introduced during the fi nancial market crisis
for the purposes of realigning and re-dimensioning their
business
Overall, the ten institutions1 recorded a fall of
EUR 140.4 bil-lion (9.6%) in their aggregated total assets in 2010, to
EUR 1,317.5 billion This meant that the fall in on-balance
sheet transactions, which had already shrunk by 1.5% in
2009, continued during the past fi nancial year at an even
faster pace Beside the development in business, which was
characterised by a continuing decline in claims due from
banks and, at the same time, a drop in liabilities owed to
banks, key to the ongoing fall in total assets was a dramatic
decrease in the balance of own investments in securities and
in securitised liabilities Business done by the Landesbanken
with non-banks was also down in 2010
Lending business
On the assets side of interbank business, the Landesbanken
recorded a drop in loans to banks of 12.8% to
EUR 435.7 bil-lion, following on from a reduction of 14.9% during the
previ-ous year Loans to foreign banks fell the most strongly (2010:
–17.5%, previous year: –16.3%) Landesbank loans to
do-mestic banks (excluding Savings Banks) were cut by 14.1%
(previous year: –15.9%) In contrast, loans extended by the
Landesbanken to Savings Banks in the past year increased
slightly by 4.8% compared with an 8.0% fall in 2009
In 2010, the volume of customer lending was characterised
by continued, overall weak momentum In terms of loans to
non-banks, the Landesbanken recorded a marginal decline
(0.6%) in their portfolio to EUR 528.4 billion (previous year: –3.3%)
The main reason for the smaller portfolio of customer loans was the development in relation to loans to domestic en-terprises, which fell by 3.5% (previous year: –1.8%) Loans
to private individuals in Germany also declined (including non-profi t organisations), by 2.7%, as did loans to foreign
non-banks (–2.5%) In contrast, the Landesbanken
record-ed strong growth in loans to domestic public authorities
in 2010, with the volume climbing 11.1% (previous year: +1.6%) This strong portfolio growth was infl uenced by the establishment of the liquidation institutions of WestLB (Erste Abwicklungsanstalt – “EAA”) and of Hypo Real Estate Group,
as these liquidation institutions belong to the public sector
Securities trading
In 2010, the Landesbanken signifi cantly reduced own
invest-ments in securities (by 12.2%), down to EUR 283.4 billion This cutting-back process was accompanied by considerable portfolio shifts While investments in bank bonds and corpor-ate bonds were strongly reduced by 17.7% and 21.0%, respectively, the portfolio of investments in bonds and debt securities issued by domestic public authorities was increased signifi cantly (+ 57.0%) This massive growth is attributable to securities issued by the German federal states,
the volume of which held by the Landesbanken rose by 70%
in the past fi nancial year However, this increase is based primarily on the classifi cation of the EAA as a public-sector institution
1 For the purposes of this chapter this includes the nine Landesbanken,
combined from an organisational perspective into eight groups of
companies, as well as DekaBank.