A4 für Copyshop GB.indd - Bayerische Landesbank

Key elements of the Bank’s strategy
BayernLB’s strategy is based on the following pillars, which, in turn, form the founda-
tion for the specific strategies of the individual business areas:
• Clear commitment of the owners to their Bank
• Focus and efficiency
• Network of the Sparkassen-Finanzgruppe Bayern
• Performance of the participations portfolio
The overall strategy of the Bank is constantly revised and adapted to evolving market
and competitive conditions, so that BayernLB is ready to meet new challenges in good
time. In this way, the Bank safeguards its competitiveness and market position in the
long term.
Clear commitment of the owners to their Bank
On 31 December 2004, the Bank reported a core capital ratio of 8.3 percent and a total
equity ratio of 12.5 percent, in accordance with the German Banking Act (KWG). At
Group level, BayernLB thus has excellent capital resources. When valuing the (equity)
capital resources of a bank, rating agencies do not tend to concentrate on those
elements central to the regulatory definition. The quality of a bank’s equity capital is
crucial to the rating agencies’ assessment. In view of the Bank’s target rating of A+,
the Free State of Bavaria and the Association of Bavarian Savings Banks intend to carry
out a capital increase of EUR 640 million in two tranches (2005 and 2006). This clearly
demonstrates the commitment of the owners of BayernLB.
In addition to the Sparkassen-Finanzgruppe’s national cross-guarantee system, there
are plans to set up a regional guarantee fund to reinforce cooperation within the Spar-
kassen-Finanzgruppe in Bavaria. Amounting to EUR 1 billion, this fund will be endowed
by the Bavarian savings banks and by BayernLB in accordance with the respective risk-
weighted assets.
The national cross-guarantee system represents the unequivocal commitment of both
landesbanks and savings banks to the Sparkassen-Finanzgruppe. In 2004, the joint lia-
bility mechanisms were fully revised. In the future, call commitments will be more
strongly oriented toward the risk profile of each individual institute. Furthermore,
agreements have been reached regarding the introduction of early detection and risk
monitoring systems. The Bank will implement these measures in 2005 as planned.
Focus and efficiency
In its business model, BayernLB has focused on particular customer groups. The Bank’s
activities are primarily centred on its core markets of Bavaria and bordering regions.
In 2004, the planned optimisation of the network of foreign entities was concluded.
BayernLB will continue to serve its customers in selected economic and financial
centres around the world (London, Paris, Milan, New York, Hong Kong and Shanghai).
In autumn 2004, BayernLB resolved a new strategy for Eastern Europe. Opportunities
BayernLB – our company
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} Capital increase
planned for 2005
and 2006