A4 für Copyshop GB.indd - Bayerische Landesbank

96 Report on the Bank and the Group
} Return to satisfactory
operating
result after difficult
years
} Improved return
on equity
Key banking regulatory figures in accordance with the German Banking Act (KWG)*
EUR billion
BayernLB Group
31.12.2004 31.12.2003
Risk positions as per Principle I 127.7 137.2
Own funds
– of which core capital
Own funds ratio (at Group level) 12.5 % 11.3 %
Core capital ratio 8.3 % 7.8 %
* Based on the approved accounts
Earnings position
Following three difficult years – measured in terms of operating profit – marked by the
realignment of the credit and participations portfolios, the BayernLB Group once again
succeeded in achieving a satisfactory performance in 2004. This was due not least to
the Bank’s fundamental transformation of its business model.
Factors contributing to this encouraging performance included dramatically decreased
risk expenditure in credit business and, given the reduction of risk assets, consistently
high revenues and low administrative expenses. As part of the Group’s strategic reori-
entation, the participations portfolio was realigned and essential value adjustments
16.0
9.4
carried out. Net income for the year was affected by an extraordinary expense of
EUR 320 million. This amount represented a payment to the Free State of Bavaria upon
conclusion of the EU state aid proceedings regarding housing construction funds.
In 2004, return on equity was further enhanced both in the Group and at BayernLB.
The Group’s return on equity was 9.5 percent (up from 4.9 percent in the previous
year), while BayernLB’s was 8.0 percent (compared to 4.5 percent).
15.5
9.6