A4 für Copyshop GB.indd - Bayerische Landesbank

Strategy / rating
Upon withdrawal of the state guarantee instruments for new liabilities on 18 July 2005,
BayernLB will receive valuations from the rating agencies for unguaranteed and uncov-
ered liabilities for the first time. Both the results of the 2004 financial year and assess-
ment of BayernLB’s business outlook are crucial to the rating agencies’ valuation.
Various indications of the future unguaranteed ratings were published in 2004 by
agencies such as Fitch Ratings (A +), Moody’s (A1 floor rating of the German Savings
Bank Organisation) and Standard & Poor’s (A –). In view of these indications, BayernLB
is confident that it can achieve its target rating of at least A flat or A + from all major
rating agencies, all the more so given its performance in 2004.
As part of the new business model, the consistent implementation of measures aimed
at enhancing sustainable earnings, while taking into account the Bank’s risk and par-
ticipations strategy, remains the single most important element of BayernLB’s target
framework. These measures include:
• targeted exploitation of market opportunities, particularly those aimed at generat-
ing higher commission income, by strengthening customer relationships while con-
tinually adapting the product range
• expansion of retail capability, together with the Bavarian savings banks and through
the Group’s subsidiaries at home and abroad
• stepping up collaboration with the savings banks based on the cooperation agree-
ments signed with the latter; intensifying cooperative market development in the
core market of Bavaria is a key priority here
• enhancing global support for the savings banks in serving and assisting their cus-
tomers in the Eastern European and Asian markets, particularly through the German
Centre in Shanghai
• seizing the opportunities offered by EU enlargement in CEE
• targeted exploitation of market opportunities in selected economic locations around
the world, while taking into account risk, return and costs
In addition, BayernLB will step up core internal projects aimed at optimising manage-
ment and timely implementation of the Basel II and IAS / IFRS requirements.
The progress BayernLB has made in its strategic reorientation is flanked by its new
marketing image, through which the Bank informs both customers and the general
public about its competencies and range of services.
BayernLB anticipates a stabilisation of the operating result in 2005. Factors contribut-
ing to this will include an expected significant improvement of the revaluation result,
as well as normalised risk costs in the Bank’s credit business. Extraordinary charges
such as those experienced in the 2004 financial year are not anticipated, leading
BayernLB to expect a stabilisation of the overall performance.
Report on the Bank and the Group
105
} BayernLB well
prepared for
rating agencies’
valuations of
unguaranteed
and uncovered
liabilities
} BayernLB’s
reorientation
visually reflected
in new marketing
image
} Stabilisation of
operating result
expected