A4 für Copyshop GB.indd - Bayerische Landesbank

30 BayernLB – our company
} BayernLB reinforces
product-related
and advisory competence
in cooperation
with Bavarian
savings banks
Strategy
In 2004, BayernLB consolidated its potential for successful market operation, while
laying the groundwork for the development of new strengths. The Bank is thus well
equipped to deal with the withdrawal of Gewährträgerhaftung (guarantee obligation)
and Anstaltslast (maintenance obligation) for new liabilities, effective as of 19 July 2005.
BayernLB’s business model
BayernLB is a wholesale bank that focuses on core regions and collaborates closely
with the Bavarian savings banks and other partners of the Sparkassen-Finanzgruppe.
Preliminary indications of the Bank’s future rating published in 2004 have confirmed
the wisdom of BayernLB’s strategic decisions. Fitch indicated an A+ rating; Standard &
Poor’s an A–. Moreover, Moody’s published an estimated A1 floor rating for the Ger-
man Savings Bank Organisation.
Banking sector still faces daunting challenges
Withdrawal of the guarantee mechanisms entails changes in the competitive environ-
ment for landesbanks. However, this does not constitute the sole basis for BayernLB’s
decision to transform its business model. Rather, the market and competitive condi-
tions for all banks in Germany have undergone a sea change. Germany’s sluggish
economy inspires only a limited degree of confidence. In addition, regulatory require-
ments (such as Basel II) and new accounting standards (IAS) must be implemented.
The increasing efficiency of information processing systems represents one of the
driving factors behind competitive dynamics throughout the entire banking sector.
Market transparency is increasing, as is our customers’ demand for product-related
and advisory competence. This, in turn, has serious repercussions for the management
and controlling of the institutions. Small organisations with a large variety of customer
groups and products run the risk of excessive costs. Larger organisations with several
customer groups and products, on the other hand, may be jeopardised by excessive
complexity. Against this backdrop, BayernLB, together with the Bavarian savings banks,
can gain competitive advantages by focusing on customer relationships and products,
while optimising the routine processes of the savings banks and generating economies
of scale.