A4 für Copyshop GB.indd - Bayerische Landesbank

Report by the Board of Administration, accounts of BayernLB and the BayernLB Group and notes to the accounts
New strategy for BayernLB
As mentioned above, a key focus of our work was the consistent implementation of
the Bank’s new strategy and concomitant consolidation or improvement of July 2004’s
nominal shadow rating in the A category.
Measures initiated by the Bank were extensively conferred upon with the Board of
Administration. Furthermore, the Board of Management provided information on the
status of implementation of the new strategy on an ongoing basis.
Numerous aspects of the new business model were elaborated and refined. Key exam-
ples of this were the streamlining of the foreign entities network, further intensifica-
tion and optimisation of the market development being carried out by the Bank in con-
junction with the Bavarian savings banks, and BayernLB’s concomitant development as
network bank of the association. The Eastern European strategy was also re-examined
and revised.
The Board of Administration devoted considerable effort to continuing the enhance-
ment of the earnings and cost situation. Thus, for example, the Bank was able to termi-
nate personnel reduction plans before schedule.
We also worked intensively on optimising both the credit and participations portfolios.
Presentations explaining the most important of the Bank’s strategic participations gave
the Board of Administration a more in-depth insight into the participations portfolio.
Further reduction of concentration risks was the principal objective in terms of rea-
ligning the credit portfolio.
Different measures aimed at reinforcing the Bank’s capital base represented another
key focus. This could be achieved by converting dated capital contributions of silent
partners subject to call into undated ones without accompanying calling rights.
Another option would be preparing the way for a capital increase.
Statutory and supervisory requirements
We continued to address the statutory and supervisory requirements incumbent on
the Bank on a regular basis. Thus, regarding the implementation of the Minimum
Requirements for the Credit Business of Credit Institutions (MAK), the Board of
Management provided us with comprehensive information in good time on the credit
risk strategy adopted, its implementation and further development, as well as on the
introduction, realisation and updating of the standardised, bank-wide credit policy.
EU proceedings regarding state aid
In addition, the Board of Administration was involved with the EU proceedings insti-
gated against BayernLB on charges of illegal state aid, in conjunction with the recovery
of special-purpose assets belonging to the Free State of Bavaria. In October 2004, an
agreement was reached in respect of the level of interest to be levied on the special-
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