Landeskreditbank Baden-Württemberg - L-Bank

Bank’s own notes
This item consists of securities that are eligible for listing on a stock exchange that we issued in a public
offering and later repurchased. Securities issued that are not eligible for listing on a stock exchange and that we
repurchased are deducted from Item 3 a) on the liabilities side of the Balance Sheet.
Shares and other non-interest-bearing securities
This item includes shares that are not contained in Items 6 or 7. It also includes profit participation rights
(Genussscheine) that are bearer or negotiable instruments and that are eligible for listing on a stock exchange,
and all other non-interest-bearing securities that are listed on a stock exchange. This item principally contains
investment shares that are part of our fixed assets portfolio. See “—Summary of Material Differences between
Generally Accepted German and United States Accounting Principles.”
Equity investments in non-affiliated companies; equity investments in affiliated companies
An “equity investment” (Beteiligung), as defined in Section 271(1) of the German Commercial Code
(Handelsgesetzbuch), is a direct or indirect equity interest in another company that we intend to hold on a longterm
basis in order to establish a permanent relationship that contributes to our business. Equity interests of 20%
or more are subject to a rebuttable presumption that they are Beteiligungen.
“Non-affiliated companies” are companies that do not fulfill the definition of “affiliated companies.”
“Affiliated companies” (verbundene Unternehmen) within the meaning of Section 271(2) of the German
Commercial Code are companies (i) that are wholly or more than 50%-owned, or otherwise controlled, by us, (ii)
our interest in which is characterized as an equity investment (Beteiligung) and (iii) which must be fully
consolidated with us in accordance with Section 290 of the German Commercial Code. Thus, our investments in
all affiliated companies are Beteiligungen.
A Beteiligung can be an investment (i) in an affiliated company or (ii) in a company that is not an affiliated
company if the conditions of Section 271(1) of the equity investment in the German Commercial Code are met.
Item 6 refers to equity investments in companies that are not affiliated companies, whereas Item 7 refers to
equity investments in affiliated companies.
A credit institution (Kreditinstitut) is defined in Section 1(1), the German Banking Act (Kreditwesengesetz –
“KWG”) which enumerates certain activities as banking activities and provides that any enterprise engaging in
one or more of such banking activities commercially or on a scale that requires a commercially organized
business operation requires a license pursuant to Section 32(1), sentence 1, KWG.
A financial services institution (Finanzdienstleistungsinstitut) is defined in Section 1(1a), KWG which
enumerates certain activities as financial service activities and provides that any enterprise other than a credit
institution engaging in one or more of such financial service activities commercially or on a scale that requires a
commercially organized business operation requires a license pursuant to section 32(1), sentence 1, KWG.
Companies in which a company owns at least 20 % of the capital must be listed pursuant to Section 285 No.
11 of the German Commercial Code in the Notes to Financial Statements. Such Notes indicate which of the
companies listed pursuant to Section 285 No. 11 of the German Commercial Code are affiliated companies.
Fiduciary assets; fiduciary liabilities
The major portions of “fiduciary assets” and “fiduciary liabilities” consist of fiduciary loans, which are
loans made by us in our name but on behalf of other entities with funds entirely supplied by, and for a purpose
and on terms specified by, such other entities. Our liability in connection with fiduciary loans is limited to our
duties as trustee of the other entities’ funds, and we bear no credit risks with respect to fiduciary loans. See “—
General—Introduction,” and “—Business—Loan Portfolio Risks.” An equal amount appears under fiduciary
loans on both the assets and the liabilities side of our Balance Sheet.
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