annual report - Hypo Real Estate Holding AG

Corporate Centre
Introduction
The Corporate Centre consists of various cost and revenue
items that, due to their special character, do not
fit into any particular business segment or can be seen
as supporting the entire organization as a whole rather
than individual segments.
For example, support related costs cover Group
functions like group accounting and reporting, opera -
tions, corporate communications, internal audit and
compliance among others. Items of special character
include charitable donations and sponsorships, such
as DEPFA’s ongoing relationship as corporate sponsor
to the Irish charity Concern. The segment also includes
residual property assets which have been a non-core
activity since DEPFA decided to focus exclusively on
public finance in 2002.
Corporate Centre
Results*
The negative net interest income results from interest
expenditure relating to subordinated debt (lower Tier II
and profit participation certificates) which is charged in
its entirety to the Corporate Centre. Non-interest
revenues showed a positive result, mainly due to
interest on tax refunds.
The significant increase in operating expenses was due
to exceptional merger related costs of €88 million and
€23 million of a loss on disposal of DEPFA Deutsche
Pfandbriefbank AG and also, to a lesser extent, higher
direct costs. Included in the prior year are exceptional
impacts relating to tax refunds and related interests
from discontinued operations, consisting of €34 million
under operating income and €41 million under
operating expenses.
€ m 2007 2006 Change Change %
Net interest income -30 -31 1 -3%
Non interest revenues 6 40 -34 -85%
Total operating income -24 9 -33 -367%
Operating expenses -209 -120 -89 74%
Profit before taxation -233 -111 -122 110%
Key Balance sheet items**
Financing volume (on-balance sheet) 416 4,590 -4,174 -91%
Financing volume (off-balance sheet) 0 0 0
Total commitments 416 4,590 -4,174 -91%
* For reconciliation of the results to the published in come statement, see page 62.
** For comparability with the financial statements, 2007 volumes include HPFB and exclude DEPFA Deutsche Pfandbriefbank
AG.
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