A4 für Copyshop GB.indd - Bayerische Landesbank

54 BayernLB – our company
} LBS Bayern
celebrates its 75 th
anniversary
} Investor confidence
dented by
deterioration of
housing policy
LBS Bayern and Landesbodenkreditanstalt
LBS Bayern
In the year of its 75 th anniversary, LBS Bayerische Landesbausparkasse, the Bank’s Home
Loan Division, achieved the third best volume of new business in its history. With
223,406 contracts totalling EUR 5.65 billion, the sales result was actually significantly
below that of the peak year 2003 (by 27.2 percent in terms of contract amounts). This
result was considerably influenced by the long-running debate over the abolition of
building-saving premiums and the home ownership subsidy. However, it significantly
exceeded the long-term average, amounting to EUR 4.5 billion achieved between 1993
and 2002, by more than EUR 1 billion.
Broad swathes of the population see building saving primarily as a secure and flexible
investment and financing instrument. The building saving trend thus tends to be sta-
ble. Building saving products offer clear advantages, including the fact that building
saving loans are unaffected by fluctuations in the capital market, the benefit of a
guaranteed interest rate over the entire duration, the freedom the saver enjoys during
the savings phase, and the possibility of unscheduled repayment during the term of
the loan. Such products are particularly attractive in the context of the current market
environment. Building saving has a more positive image than other forms of financial
investment. Today, security is the most crucial investment criterion. In the 2004 invest-
ment barometer conducted by Emnid for the German Savings Bank Association (DSGV),
97 percent of German citizens assert that security is either “very important” or “impor-
tant” for their investment decisions. Moreover, building saving is a tried and trusted
way of preparing for and backing up retirement provisions with property. Building
saving fees earmarked for financing accounted for 75 percent of LBS’s new business.
Since 1948, LBS Bayern has taken on around 4.5 million building saving contracts with
a total volume of more than EUR 60 billion. These contracts have helped to finance
some 1.5 million homes predominantly detached and semidetached. From monetary
reform in 1948 to the present day, 7.4 million building saving contracts have been
arranged, representing a total volume of EUR 120 billion. Some 1.5 million savers
currently hold more than two million building saving contracts with LBS: Given this
customer base, in addition to new business, LBS is market leader in Bavaria as “the
savings banks’ building and loan association”.
Slump in housing construction
In line with the overall market trend, LBS’s financing business is at a relatively low level.
There was no respite from the slump in housing construction, as continuing economic
stagnation and high unemployment levels curbed the propensity to invest. The gradual
deterioration of housing policy in general, as well as the never-ending debate over the
curtailing or abolition of the home ownership subsidy meant that the tax situation for
house construction became more and more unpredictable. This leads to a climate of