A4 für Copyshop GB.indd - Bayerische Landesbank

90 Report on the Bank and the Group
} BayernLB Group
seizes opportunities
in Eastern
Europe
Overview
Economy
After three years of stagnation, 2004 brought moderate economic recovery, with
Germany’s gross domestic product growing by 1.6 percent in real terms. Companies
with a large share of export business in particular were able to benefit from the ebul-
lient rebound of the global economy. Nonetheless, private household consumption
was sluggish due to meagre income growth. This limited the potential of the economic
upswing. The fact that Germany was able to tap into Europe’s economic growth was
purely thanks to strong demand from abroad. Both global and domestic situations do
not point towards an economic revival for Germany in 2005. On the financial markets,
the year was marked by continued – albeit somewhat leisurely – recovery of the equity
markets, a surprising decline in interest rates in the second half, and not least by a
weak dollar.
New business model
The transformation of BayernLB’s business model, begun in 2002 and pursued with vig-
our throughout 2003 and 2004, is already proving successful. The turnaround has been
achieved.
In the year under review, BayernLB’s business model was consistently on – if not ahead
of – schedule. This allowed around 1,000 job cuts in the core Bank (BayernLB excluding
Bayerische Landesbausparkasse (LBS) and Bayerische Landesbodenkreditanstalt (Labo))
to be achieved before schedule. This personnel reduction measure had been approved
in 2003 and was originally planned for wrap-up by 2005 / 2006. BayernLB’s Board of
Management was reduced from nine members in 2003 to seven in 2005.
Optimisation of BayernLB’s foreign entities, begun in 2003, is right on schedule. The
Singapore-based BLB Asia Pacific Ltd., as well as the Singapore, Tokyo and Toronto
branches have been closed. Winding-up of the Labuan branch is also running accord-
ing to plan. The London, Paris, Milan, New York, Hong Kong and Shanghai locations
together form an optimum network of foreign entities, which BayernLB can exploit to
support both its own customers and those of the Bavarian savings banks in their inter-
national business. It can also take advantage of selected business opportunities arising
on these particular financial markets.
As part of its business model, the BayernLB Group is pressing on with its strategy for
Eastern Europe, as well as continuing to expand its retail capability. A major aspect of
this is the support the Bank provides for the savings banks and their customers in the
Central and Eastern European (CEE) markets through high-quality consultation services
and a local network of cooperating partners. This network is currently being expanded.
The Budapest-based Hungarian Foreign Trade Bank (MKB), which enjoys an excellent