Annual Report 2006 - Rheinland Pfalz Bank

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10 LRP 2006 Statement of Financial Condition – Economic Setting Statement of Financial Condition of LRP and the Group Clear Upswing in Economic Activity The year 2006 saw both Germany and the eurozone experience an economic upswing which gained in breadth and depth through the year and benefited virtually all sectors and industries. Stimulation initially came from the global economic environment, leading to clearly improved business sentiment across the eurozone. However, very strong global demand for energy and fuels as well as other commodities, with only limited production resources being available, quickly resulted in a boost to prices, thereby sowing the seeds of a slowdown in the global economy. The ensuing softening in commodities prices benefited domestic demand in Germany; capital spending by companies continued unabated through the year. This in turn stimulated the labour market and supported an appreciable increase in available incomes as well as the first clearly noticeable improvement in private consumption in many years. In this environment the European Central Bank emulated the course pursued by the U.S. Fed and raised its key rates from 2.25 % to 3.5 % in a series of 25 basis point steps between January and December of the year. The careful tightening of monetary policy was initially accompanied by a commensurate rise in capital market rates. When the Fed signaled a break in its tightening cycle at mid-year, a counter movement spilled over from the U.S. capital market to the European bond markets, resulting in a clear flattening of the European yield curve. The general trend in the stock markets was clearly pointed upwards particularly in the second half of the year, with the euro increasingly gaining ground against the U.S. dollar. The charts are not part of the audited Statement of Financial Condition.
Statement of Financial Condition – Net Assets, Financial Position and Results of Operations LRP 2006 11 Financial Year 2006 Successful The LRP Group achieved its best-ever result in the financial year 2006, reporting W 140 million in net income for the year. The operating profit after risk provisions rose by 6.6 %, net income before taxes by 11.6 % and net income for the year by 55.6 %. This statement of financial condition illustrates the Group’s development. The attached tables show the corresponding figures for the development of the Bank’s business volume and earnings. The following companies have been consolidated in the Group’s financial statements: • LRI Landesbank Rheinland-Pfalz International S.A., Luxembourg, • LRI Invest S.A., Munsbach/Luxembourg, • LRP Capital GmbH, Mainz, • Mogon Vermögensverwaltungs GmbH, Mainz, • Lasssarus Handels GmbH, Vienna. Net Income for the Year Clearly Boosted The profitability was characterized by higher net commission income, improved net income from trading activities as well as a clear decline in expenses for risk provisions. In contrast, the Group’s net interest income declined to W 279.4 million (previous year W 302.8 million), reflecting the flat yield curve which affected the entire banking sector, the generally low level of interest rates as well as intensive margin-based competition. Net commission income increased by approximately 15 % to W 91.6 million (previous year W 79.5 million), with securities transactions making the most significant contribution to the increase. Net income from trading activities more than doubled to W 52.2 million; this was mainly due to the overall positive development of results across all product areas, the trade in interest rate products, equity trading and foreign exchange transactions. The Bank also developed its portfolio valuation approach into a risk adjusted mark-tomarket valuation approach during the reporting period. Under this approach, the valuation result prevailing
Page 1 and 2: LRP 2006 THE SUCCESS OF 1,500 RELAT
Page 5 and 6: Contents LRP 2006 1 Contents 2 The
Page 7 and 8: Statement of Financial Condition -
Page 9 and 10: LRP Landesbank Rheinland-Pfalz Our
Page 11 and 12: until18.7. 2005 as of19.7. 2005 82
Page 13: LRP 2006 KEY FIGURES AND RATIOS We
Page 23 and 24: ERIK REISCHL Securities Systems, li
Page 27 and 28: 28,000 Statement of Financial Condi
Page 31 and 32: Report of the Owners’ Meeting LRP
Page 33 and 34: PETER KANIS Organization, finished
Page 35 and 36: Financial Statements LRP 2006 31 Fi
Page 37 and 38: Balance Sheet of the Group LRP 2006
Page 39 and 40: Statement of Income of the Group LR
Page 41 and 42: Balance Sheet of the Bank LRP 2006
Page 43 and 44: Statement of Income of the Bank LRP
Page 45 and 46: Segment Reporting LRP 2006 41 ty ti
Page 47 and 48: Cash Flow Statement LRP 2006 43 Cas
Page 49 and 50: Notes LRP Group LRP 2006 45 Notes t
Page 51 and 52: Notes LRP Group LRP 2006 47 Fixed a
Page 53 and 54: Notes LRP Group LRP 2006 49 Name an
Page 55 and 56: Notes LRP Group LRP 2006 51 (3) Bon
Page 57 and 58: Notes LRP Group LRP 2006 53 (10) De
Page 59 and 60: Notes LRP Group LRP 2006 55 (14) Ce
Page 61 and 62: Notes LRP Group LRP 2006 57 (20) Eq
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Notes LRP Group LRP 2006 61 Derivat
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Notes LRP Group LRP 2006 63 Other f
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Notes LRP Group LRP 2006 65 Supervi
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Notes LRP Group LRP 2006 67 Managin
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Notes LRP Group LRP 2006 69 Mandate
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MICHAEL WARFOLOMEOW Chairman of the
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Bodies LRP 2006 73 Bodies 74 Owners
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Bodies LRP 2006 75 Bank employees i
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SABINE HAY Electronic Banking, one
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LRP’s Commitment to Corporate Cit
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LRP’s Commitment to Corporate Cit
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Member of the LBBW Group LRP Landes
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