Annual Report 2006 - Rheinland Pfalz Bank

40 LRP Landesbank Rheinland-Pfalz – Group –
Segment Reporting
The purpose of segment reporting is to provide information
that makes it possible to characterize the profit
and risk situation of individual business and geographic
segments. The relevant disaggregated performance
and portfolio figures used for this purpose are taken
from internal profit center accounting, external accounting
and LRP’s reporting system. The segments
are identified on the basis of the Group’s internal organizational
structure (mainly relating to customer and
product groups), taking the respective individual opportunity
and risk profiles into account.
In the column “Other/Consolidation” the interlocking
relationships of the Group are eliminated, and this column
presents a reconciliation of internal financial control
data to external reporting data.
Segmentation by business segments
(primary reporting format)
For the first time, the information shown at segment
level has been determined according to the internal
accounting methods; the previous year’s figures have
been adjusted accordingly.
LRP Group’s primary report is geared to the reporting
structure of LBBW Group and has been divided into the
following four segments plus the column “Other/Consolidation”:
• Retail Clients
The Retail Clients segment comprises all activities
with regard to Private Banking clients and the promotional
lending business.
• Corporate Finance
The Corporate Finance segment includes business
transactions with corporate customers, real estate
companies and municipal loan transactions with the
public sector. Besides traditional corporate banking
this also includes specialized product areas, such as
leasing and factoring.
• Financial Markets
Besides classic trading operations, the Financial
Market segment also includes all business activities
with credit institutions and insurance companies. In
addition, this segment includes refinancing and
capital market investments in connection with credit
risk controlling.
• Corporate Items
The Corporate Items segment comprises all business
activities not transferred to business units.
These include equity investments not assigned to
the operating segments, the investment of own
funds as well as strategic positions.
1 millions
Net interest income
Net commission income
Net income from trading activities
General administrative expenses
Other operating expenses/income
Risk provisions/adjustments
Segment result
Assets
Liabilities
Risk positions
Allocated capital
%
Profitability of allocated capital
Cost-Income Ratio
Secondary reporting covers the geographic segments
“Germany” and “Europe (excl. Germany)”. The units of
the Group were assigned to these segments using the
country-of-incorporation principle.
As a rule, the results determined by internal methods
of control are allocated to those segments in which they
arise. Net interest income is calculated using the current-interest-rate
method. Net interest income also
includes investment income from equity. Besides personnel
and material expenses, the general administrative
expenses of a segment also include expenses to be
assigned on the basis of intra-Group cost allocation (full
costing approach). Risk provisions in the business segments
are in line with commercial law valuations and
are allocated to the segments in which they arise. Equi-