A4 für Copyshop GB.indd - Bayerische Landesbank

Financial Institutions & Sovereigns
BayernLB’s Financial Institutions and Sovereigns Business Area manages business rela-
tions worldwide with banks, insurance companies and other institutional customers,
as well as government and non-Bavarian municipal customers. This low-risk customer
group accounts for approximately half of BayernLB’s total portfolio. The lending busi-
ness handled by this business area achieves a comparatively good return on capital
employed because low risk assets are required. These customers are also key partners
in our syndication, securities, refinancing and transaction businesses.
Earnings from new business were again increased in spite of unfavourable develop-
ment of the market. Given the considerable pressure on interest margins, this was only
possible thanks to improved net commission income, strengthened cross-selling of
services and strong growth in the volume of new credit business.
Interbank business / loan syndication
Internationally syndicated loans reached new record volumes in the year under review.
High liquidity in the credit markets stimulated investment. This market environment
meant that margins and credit commissions came under considerable pressure. For
competitive reasons, the banks were also more prepared than previously to meet their
customers’ requests with regard to extended durations due to the low interest rate
level.
Against this backdrop, the Bank succeeded in maintaining the position held in previous
years in the syndication markets. Net commission income improved slightly due to
increased total volume. The number of lead management positions rose by more than
a third to 44 mandates.
Central and Eastern European borrowers were a key regional focus. Following EU
accession in May, some government and bank customers in this region were able to
exploit the relaxed regulatory equity requirements in order to procure new loans with
improved terms. Once again, financial service providers constituted the main sector
focus in both number and volume for the Bank’s syndication business. The well-known
trade magazine “EUROWeek” awarded BayernLB one of the two first places in the cate-
gory “Best arranger for loans for financial institutions” for the third time.
Moreover, more lead management positions for corporate financing were gained
thanks to the joint market development (centre of competence) of BayernLB’s syndica-
tion units in Munich and London.
In 2004, the Bank further extended its network of correspondent banks. The main
focus was on public-sector banking groups and foreign savings bank organisations.
In particular, the cooperation agreement that the Bank has held with the Swiss can-
tonal banks for over a decade continues to be revitalised in several product sectors.
Following termination of its equity participation, the Bank nonetheless continued its
collaboration with the Austrian Bank für Arbeit und Wirtschaft (BAWAG) with a cooper-
ation agreement. A further cooperation agreement was made with the Spanish savings
BayernLB – our company
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} Syndication
business focuses
on financial
institutions