Bankgesellschaft is focussing on core business - Landesbank Berlin

<strong>Bankgesellschaft</strong> Berlin
Annual Report 2003

<strong>Bankgesellschaft</strong> Berlin Group
At a Glance
Profit and Loss Account
2003 2003 2002 2001 2000 1999
incl. EU 1) excl. EU 1)
Net interest income in t million 1,664 1,664 1,706 1,876 1,642 2,048
Net comm<strong>is</strong>sion income in t million 314 314 342 386 462 420
Net result from financial activities in t million 12 12 – 24 – 106 139 105
Personnel costs in t million 744 744 853 984 973 965
Other admin<strong>is</strong>trative expenditure in t million 543 543 590 696 572 583
Normal depreciation in t million 92 92 103 148 129 136
Admin<strong>is</strong>trative expenditure in t million 1,379 1,379 1,546 1,828 1,674 1,684
Net other operating income and expenditure in t million –65 –42 5 –197 –755 175
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning
R<strong>is</strong>k prov<strong>is</strong>ioning (excluding reserves
in t million 546 569 483 131 –186 1,064
pursuant to section 340f HGB) in t million 351 351 531 763 1,564 368
Consolidated operating result
Changes to reserves pursuant
in t million 195 218 – 48 – 632 –1,750 696
to section 340f HGB in t million –176 –176 –25 2 –366 229
Operating result after r<strong>is</strong>k prov<strong>is</strong>ioning in t million 371 394 – 23 – 634 –1,384 467
Result from financial investments in t million –91 –76 –449 1 15 21
Net other items in t million –606 –304 –144 574 –190 – 49
Earnings before taxes in t million –326 14 – 616 – 59 –1,559 439
Taxes on income 2) in t million –10 –10 83 53 89 282
Earnings after taxes in t million –316 24 – 699 –112 –1,648 157
Balance sheet
Total assets in t million 153,286 174,804 189,163 204,808 193,786
Lending volume in t million 88,972 102,928 117,286 124,009 122,012
R<strong>is</strong>k items (German Banking Act) in t billion 57.4 70.8 89.5 91.3 79.5
Shareholders’ equity
Off-balance-sheet
in t million 3,563 3,889 4,525 2,611 4,366
nominal value in t million 547,770 691,543 888,300 1,009,404 860,770
credit-r<strong>is</strong>k equivalents (German Banking Act)
Key ratios and ratios
in t million 1,163 1,403 1,492 1,912 1,936
Cost-income ratio in % 71.6 76.2 93.3 112.5 61.3
Return on equity in % – 8.3 –14.0 –1.4 –36.6 9.5
Core capital ratio pursuant to German Banking Act in % 6.1 5.6 5.7 3.3 3) 5.7
Overall key ratio pursuant to German Banking Act in % 9.9 9.4 9.4 5.1 3) 10.1
Shares entitled to dividend payment
Share price (closing price on the
Frankfurt Stock Exchange)
Number 999,327,870 999,327,870 999,327,870 218,077,870 218,077,870
high in t 2.59 2.53 15.20 17.75 17.25
low in t 1.20 1.26 2.36 15.10 12.00
Employees
Total number of employees 4) Number 11,260 14,376 16,485 17,192 17,462
of which: in banking
of which: real estate service providers
Number 10,296 13,235 14,792 15,356 15,844
(IBAG, IBG, LPFV) Number 964 1,141 1,693 1,836 1,618
1) Results including or excluding effects of the EU dec<strong>is</strong>ion of February 18, 2004 to approve ass<strong>is</strong>tance for <strong>Bankgesellschaft</strong> Berlin
2) Until 2000: taxes, i.e. including other taxes
3) After the 2001 capital increase, minimum ratios required by superv<strong>is</strong>ory regulations were exceeded again
4) Number of employees as at the balance sheet date December 31

Corporate Profile
• BANKGESELLSCHAFT BERLIN <strong>is</strong> a l<strong>is</strong>ted bank based in the German capital. Since December 2001,
the Bank has been implementing an ongoing process of reorientation and restructuring
with the objective of establ<strong>is</strong>hing the new <strong>Bankgesellschaft</strong> Berlin on the bas<strong>is</strong> of four pillars:
as an innovative, customer-oriented bank with an excellent position in retail banking and
regional corporate banking, with selected activities in capital markets business and real
estate financing throughout Germany geared towards investors and residential construction
companies.
• WITH OUR BRANDS, Berliner Sparkasse, Berliner Bank and Landesbank Berlin, we intend to
further consolidate the quality of our sound market position in business with private
and regional corporate clients. We offer our services using several different brands and
d<strong>is</strong>tribution forms, from the branch, through telephone banking, to the internet. From the
investment and lending business through to consultancy on insurance, home loan and
payment services products, we provide an extensive range of banking products. In the
Asset Management Centres of Berliner Sparkasse and the Advice Centres of Berliner Bank,
we cater for the investment and financing requirements of high net-worth retail banking
clients. In regional corporate banking, we focus on the management of small and mediumsized
companies. We also design comprehensive solutions to meet the financial needs of
our commercial clients.
• WE USE OUR STRENGTHS in selected areas of Capital Markets as a special<strong>is</strong>ed international
market player. A central task in Capital Markets <strong>is</strong> the intensification of the client business
and sales activities. The Bank intends to establ<strong>is</strong>h itself as a renowned, competent provider
of innovative capital market products also for private investors. In International Banking,
we are concentrating on business connections in Central and Eastern Europe. In the Real
Estate Financing business area, we are focusing throughout Germany on the requirements
of private and commercial investors and real estate companies.
• PROXIMITY TO CUSTOMERS <strong>is</strong> a top priority in terms of our activities. Th<strong>is</strong> involves not only
good coverage by our network of branches, but also commitment on the part of our
employees. Their motivation and technical competence are the prerequ<strong>is</strong>ites to customer
sat<strong>is</strong>faction and customer loyalty.

Ratings
Moody’s
Long-term Short-term Financial
Deposit Deposit Strength
Rating Rating Rating
<strong>Bankgesellschaft</strong> Berlin AG A2* P-1 E +
Landesbank Berlin
EMTN-programme
Aa3* P-1 D
BGB Finance (Ireland) plc.
Public Pfandbrief
Aa3 – –
Landesbank Berlin Aaa – –
* Negative outlook
Fitch
Long-term Short-term Individual
Rating Rating Rating
<strong>Bankgesellschaft</strong> Berlin AG A – * F1 D/E
Landesbank Berlin
EMTN programme
AAA F1 + –
BGB Finance (Ireland) plc.
Public Pfandbrief
AAA – – –
Landesbank Berlin AAA – – –
* Outlook: evolving
Standard & Poor’s
Public
Pfandbriefe
Berliner Hypothekenbank AAA
Ratings
Corporate Profile

Contents
4 Management
4 Letter to Shareholders
8 Corporate Governance Structures
10 Report of the Superv<strong>is</strong>ory Board
18 From the Business Areas
18 Segment Reporting and Performance
of the Strategic Business Areas
24 Retail Banking
28 Regional Corporate Banking
32 Capital Markets
34 Real Estate Financing
38 Real Estate Services
41 Corporate Investments
42 Government-Ass<strong>is</strong>tance Programme
45 Other/Consolidation
48 <strong>Bankgesellschaft</strong> Berlin Share
49 Management Report
50 Overview of the 2003 Financial Year
62 Development of Business
82 R<strong>is</strong>k Report
103 Group Outlook
105 Annual Financial Statement for the Group and the AG
106 <strong>Bankgesellschaft</strong> Berlin Group Balance Sheet
110 Profit and Loss Account of the <strong>Bankgesellschaft</strong> Berlin Group
112 Consolidated Equity Capital Statement
114 Segment Reporting of the Group
116 Cash Flow Statement of the <strong>Bankgesellschaft</strong> Berlin Group
118 <strong>Bankgesellschaft</strong> Berlin AG Balance Sheet
122 Profit and Loss Account of <strong>Bankgesellschaft</strong> Berlin AG
124 Notes to the Consolidated and AG Financial Statements 2003
196 Group and AG Audit Certificates
198 Group Banks and Selected Group Participations

2
Proximity to customers
<strong>Bankgesellschaft</strong> <strong>is</strong> increasing its
product and service quality

Our activities are centred around the needs of our customers. In 2003, we therefore began
a sales and quality campaign: more intensive customer support and an improved level
of quality in terms of our consultancy services are the focus of th<strong>is</strong> campaign. In addition,
we are introducing new and innovative products in all strategic business areas. Good
products and high-quality services form the bas<strong>is</strong> of our business success.
3

4
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Management
Letter to Shareholders
Dear Shareholders,
In 2003 and the first few months of 2004, <strong>Bankgesellschaft</strong> Berlin overcame major obstacles to ensure success
in the ongoing implementation of reconstruction and reorientation, begun in 2001. Th<strong>is</strong> positive summary <strong>is</strong>
founded on two developments. Firstly, the <strong>Bankgesellschaft</strong> Berlin Group has returned to profitability in the
operating business. Due to an improvement in the consolidated operating result of a 243 million, a consolidated
operating profit was reported in 2003 for the first time since 1999. Th<strong>is</strong> emphas<strong>is</strong>es that our concept of
a customer-oriented bank with an excellent position in the retail banking and regional corporate banking
business, with strong capital markets business and real estate financing throughout Germany <strong>is</strong> both attractive
and feasible. Secondly, on February 18, 2004, the European Comm<strong>is</strong>sion reached a completely positive
dec<strong>is</strong>ion in favour of <strong>Bankgesellschaft</strong> Berlin in relation to the financial ass<strong>is</strong>tance proceedings, albeit under
certain conditions. Th<strong>is</strong> means that we now have reliable bases for planning for the next few years.
As a result of the conditions of the EU Comm<strong>is</strong>sion, prov<strong>is</strong>ioning and value adjustments in the amount of
a 340 million had to be made. These charges have been incorporated into the consolidated financial statements
for the 2003 financial year. While the consolidated operating result remained virtually unaffected by th<strong>is</strong>,
“Other items, net” was the item most affected. Th<strong>is</strong> subsequently led to a substantial loss in earnings after
tax. Excluding th<strong>is</strong> non-recurring effect, the Group reported positive earnings after tax.
In 2003, <strong>Bankgesellschaft</strong> Berlin took a dec<strong>is</strong>ive step towards sustained stabil<strong>is</strong>ation in the market. The
upward trend recorded in the development of earnings resulted from further cost savings and intensification
of the focus on our ex<strong>is</strong>ting markets. The announcement that we would be concentrating more intensively
on our customers was put into practice. In the second half-year in particular, sales activities were increased
and almost all business areas significantly improved their consolidated operating result compared with
the figure of the previous year. As a result of the strategic merger of business activities, Capital Markets did
not quite maintain the level of the previous year but contributed considerably to the positive consolidated
operating result. In the second half-year in particular, new business in Retail Banking and in Real Estate
Financing was pleasing.

5
LETTER TO SHAREHOLDERS
In addition to the measures for strengthening sales, we continued our progress in terms of r<strong>is</strong>k minim<strong>is</strong>ation
and reduction of costs with the same level of intensity in the year under review.
R<strong>is</strong>k prov<strong>is</strong>ioning was relaxed. Compared with the previous year, the balance of r<strong>is</strong>k prov<strong>is</strong>ioning was
reduced by at least a third to a 351 million.
A main factor in the improvement of operating business <strong>is</strong> still the reduction of admin<strong>is</strong>trative expenditure.
As part of the extensive restructuring in the Group, operating expenditure and personnel costs were reduced
by a total of almost 11% yoy. The cost-income ratio showed further improvement, reaching 71.6% at year-end
2003 (previous year: 76.2%).
An important step towards improved efficiency of the internal processes was the integration of Berliner
Bank into Landesbank Berlin on July 1, 2003. Following the bundling of the two Berliner Bank and Berliner
Sparkasse brands under the umbrella of Landesbank Berlin, the work processes both in the back office div<strong>is</strong>ion
and in the functional units are now organ<strong>is</strong>ed in a more efficient and more transparent way. In accordance
with the EU dec<strong>is</strong>ion, Berliner Bank in its current structure will be retained as a branch of Landesbank
Berlin until its sale, which <strong>is</strong> required by Brussels.
We continued our withdrawal from non-strategic business areas in 2003. In th<strong>is</strong> way, we reduced our business
volume and r<strong>is</strong>k assets, sold a series of participations and improved our equity ratios as a result.
In the year under review, we real<strong>is</strong>ed additional steps towards the withdrawal from International Banking,
from Corporate Banking and Real Estate Financing, as well as Structured Finance.
We sold subsidiary companies Zivnostenská banka a.s., Prague and Allgemeine Privatkundenbank Aktiengesellschaft
(ALLBANK), Hanover, as well as our participation in LHI Leasing GmbH, Munich. <strong>Bankgesellschaft</strong>
(Polska) S.A., Warsaw, and <strong>Bankgesellschaft</strong> (UK), London, have d<strong>is</strong>continued their business activities as
scheduled. The sale of Weberbank <strong>is</strong> still on the agenda.
We successfully continued the restructuring and redimensioning of Real Estate Services. The stock of
so-called inventory real estate was reduced considerably.

6
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Letter to Shareholders
Dear Shareholders,
With the approval of the entire financial ass<strong>is</strong>tance package for <strong>Bankgesellschaft</strong> Berlin, the EU Comm<strong>is</strong>sion
described the restructuring concept of the Group in its entirety as reasonable, feasible and logical. Consequently,
the EU Comm<strong>is</strong>sion <strong>is</strong> convinced that the newly restructured <strong>Bankgesellschaft</strong> will once again be
able to function profitably in the long term.
Based on the reconstruction concept submitted by <strong>Bankgesellschaft</strong> at the end of 2002, the approval covers
the capital increase totalling a 1.75 billion from 2001, the law relating to r<strong>is</strong>k shielding and the neutral<strong>is</strong>ation
or repayment agreement regarding the Wohnungsbaukreditanstalt (WBK) proceedings for the incorporation
of WBK into LBB.
The dec<strong>is</strong>ion by the EU Comm<strong>is</strong>sion deviates significantly from the original reconstruction concept:
the Federal Republic of Germany prom<strong>is</strong>ed the EU Comm<strong>is</strong>sion that the State of Berlin would sell the entire
Group by the end of 2007 as scheduled. However, Berliner Bank must be spun off from Landesbank Berlin
and sold to a separate investor by February 1, 2007 at the latest. In addition, Investitionsbank Berlin (IBB)
<strong>is</strong> to be set up as an independent development bank of the State of Berlin by January 1, 2005 at the latest and
Real Estate Services <strong>is</strong> to be spun off by December 31, 2005.
To summar<strong>is</strong>e for the year under review: the consolidation and cost reduction measures are showing
sustained results and are being rigorously continued. Our progress in terms of the Group restructuring <strong>is</strong>
paying off. In the past financial year, <strong>Bankgesellschaft</strong> Berlin achieved a turnaround in operating income.
The company used the years of reconstruction and restructuring to gather strength for its reorientation
and <strong>is</strong> now on the road to normality. The Bank can now intensify its focus on its work with customers and
can use its resources increasingly for its business areas and business activities.
As a result of the operating progress and with the planning security due to the EU dec<strong>is</strong>ion, we can continue
to leave the recent past of the Group behind us and look forwards. Our utmost priority <strong>is</strong> still to continue
our efforts and maintain the same level of restructuring.

7
LETTER TO SHAREHOLDERS
The positive development of the Group <strong>is</strong> essentially attributable to our employees, who have followed the
course set out, showing great personal commitment in the implementation of the numerous requirements for
the restructuring and reorientation of the Group. The company would not be where it <strong>is</strong> today without their
support.
Th<strong>is</strong> unceasing dedication of the staff to the Group <strong>is</strong> all the more remarkable considering that the restructuring
plan over the past two years called for and continues to call for extensive job cuts. We would also like
to thank our shareholders who are accompanying <strong>Bankgesellschaft</strong> Berlin on th<strong>is</strong> course. <strong>Bankgesellschaft</strong>
Berlin will do everything possible to warrant the confidence you have placed in it over the past two years
and to continue on the path to becoming a profitable bank.
The Board of Management
Hans-Jörg Vetter Serge Demolière Uwe Kruschinski
Norbert Pawlowski Dr. Thomas Veit

8
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Corporate Governance Structures
Board of Management
Hans-Jörg Vetter
Chairman
Serge Demolière
Dr. Johannes Evers
until Nov. 30, 2003
Uwe Kruschinski
since March 10, 2003
Norbert Pawlowski
Hubert Piel
until March 31, 2003
Dr. Thomas Veit
Superv<strong>is</strong>ory Board
Dr. h.c. Klaus G. Adam
Member since Sep. 9, 2003
Chairman since Sep. 26, 2003
Chairman of the Board of Management
at Landesbank Rheinland-Pfalz
– Girozentrale –
Ernst-Otto Sandvoß
Chairman until Sep. 4, 2003
Former Chairman of the Management
Board at DekaBank Deutsche
Girozentrale
Helmut Tesch*
Deputy Chairman
Chairman of the Central Personnel
Committeeand the Personnel Committee
at Landesbank Berlin – Girozentrale –
Dr. h.c. Manfred Bodin
Chairman of the Board of Management at
Norddeutsche Landesbank Girozentrale
Dagmar Brose*
Deputy Chairwoman of the Works Council
at <strong>Bankgesellschaft</strong> Berlin AG
Thomas Dobkowitz
Management Consultant
Dr. Michael Endres
Former member of the
Board of Directors at Deutsche Bank AG
Chairman of the Board of Directors at
Gemeinnützige Hertie-Stiftung
Claudia Fieber*
since Sep. 1, 20033
Member of the Adv<strong>is</strong>ory Council at
the BB/LBB integration group
Hartmut Friedrich*
Deputy Regional Manager at ver.di
Berlin-Brandenburg region
Dr. Thomas Guth
Managing Director at
Gesellschaft für Industriebeteiligungen
Dr. Schmidt AG & Co.
Carmen Hümpel*
until Aug. 31, 2003
Chairwoman of the Central Works Council
at Allgemeine Privatkundenbank AG
Dr. Klaus Murmann
Chairman at Sauer-Danfoss Inc.

Bernd Reinhard*
Chairman of the BB/LBB integration group
Andreas Rohde*
Member of the Works Council at
<strong>Bankgesellschaft</strong> Berlin AG
Dr. Thilo Sarrazin
Finance Senator of the State of Berlin
Hans Chr<strong>is</strong>tian Seidel*
Bank Manager at Landesbank Berlin
– Girozentrale –
Dr. Heinz-Gerd Stein
Former member of the Executive Board
at ThyssenKrupp AG
Peter Strieder
March 27, 2003
Senator for Urban Development
of the State of Berlin (no longer serving)
Joachim Tonndorf*
Head of Department, Financial Services
at ver.di Berlin-Brandenburg region
*Employee representative
Frank Wolf*
Financial Services Secretary at
ver.di Berlin-Brandenburg region
Harald Wolf
since July 8, 2003
Senator for Economic Affairs, Employment
and Women of the State of Berlin
Bernd Wrede
Former Chairman of the Executive Board
at Hapag-Lloyd AG
Bärbel Wulff*
Deputy Chairwoman of the Central
Personnel Committee and the Personnel
Committee at Landesbank Berlin
– Girozentrale –
9
ORGANE DER BANKGESELLSCHAFT BERLIN AG
Committees of
the Superv<strong>is</strong>ory Board
Accounting, Personnel
and Strategy Committee
Dr. h.c. Klaus G. Adam
Member since Sep. 9, 2003
Chairman since Oct. 16, 2003
Ernst-Otto Sandvoß
Chairman until Sep. 4, 2003
Helmut Tesch
Deputy Chairman
Dr. Thilo Sarrazin
Joachim Tonndorf
Credit Committee
Dr. Michael Endres
Chairman
Dr. h.c. Klaus G. Adam
Member since Sep. 26, 2003
Deputy Chairman since Nov. 19, 2003
Ernst-Otto Sandvoß
Deputy Chairman until Sep. 4, 2003
Hans Chr<strong>is</strong>tian Seidel
Dr. Heinz-Gerd Stein
Bärbel Wulff
Directive Committee
Dr. h.c. Klaus G. Adam since Sep. 26, 2003
Ernst-Otto Sandvoß until Sep. 4, 2003
Dr. Thilo Sarrazin
Peter Strieder until March 27, 2003
Harald Wolf since Sep. 4, 2003
Mediation Committee
Dr. h.c. Klaus G. Adam since Sep. 26, 2003
Dagmar Brose
Ernst-Otto Sandvoß until Sep. 4, 2003
Peter Strieder until March 27, 2003
Helmut Tesch
Harald Wolf since Sep. 4, 2003

10
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Report of the Superv<strong>is</strong>ory Board
In the 2003 financial year, the Superv<strong>is</strong>ory Board kept itself well informed on the current situation of the
Bank and on fundamentally important matters relating to the Group at six plenary sessions and a total
of seventeen committee meetings and by means of written and verbal reports by the Board of Management.
The Superv<strong>is</strong>ory Board d<strong>is</strong>cussed the situation of the Bank as well as relevant <strong>is</strong>sues and, if necessary,
gave recommendations. In two urgent cases, resolutions of the Superv<strong>is</strong>ory Board were passed by means
of written circulation processes.
The Superv<strong>is</strong>ory Board reviewed the situation and business developments at <strong>Bankgesellschaft</strong> Berlin AG and
the <strong>Bankgesellschaft</strong> Berlin Group comprehensively and with appropriate urgency and sat<strong>is</strong>fied itself that
business was being managed properly. It was regularly informed by the Board of Management about the
intended business policy and corporate planning, in particular financial, investment and personnel planning.
It then adv<strong>is</strong>ed the Board of Management in th<strong>is</strong> respect and, if necessary, gave recommendations. Furthermore,
individual <strong>is</strong>sues of material importance were d<strong>is</strong>cussed in numerous work consultations between
the Chairman of the Superv<strong>is</strong>ory Board and the Chairman of the Board of Management.
Committees of the Superv<strong>is</strong>ory Board
The Accounting, Personnel and Strategy Committee and the Credit Committee, constituted from members
of the Superv<strong>is</strong>ory Board, held ten and seven meetings in the year under review in order to carry out special
control activities and to generally support the work of the Superv<strong>is</strong>ory Board plenary sessions.
The Accounting, Personnel and Strategy Committee dealt with personnel matters relating to the Board of
Management, prepared the content of individual agenda items for the relevant Superv<strong>is</strong>ory Board meeting,
including the intensive preliminary consultation for and examination of the annual financial statements,
and worked in-depth on strategic <strong>is</strong>sues and specific problem areas.
In its seven meetings, the Credit Committee provided advice relating to fundamental <strong>is</strong>sues of the business
policy from the point of view of rating, market price and liquidity r<strong>is</strong>ks. Loan commitments that, according
to approval rules, require Credit Committee approval were submitted for review to the members of the
Credit Committee in accordance with the internal rules of procedure. Regular advice was also given relating
to the composition of the loan portfolio. In the context of the planned merger of Landesbank Berlin and
<strong>Bankgesellschaft</strong>, the joint Credit Committee meetings of the two banks took place in the 2003 financial year.
The internal rules of procedure of the committee were further developed in the year under review.

11
REPORT OF THE SUPERVISORY BOARD
During the year under review, as in previous years, there was no need to convene meetings of the ex<strong>is</strong>ting
Directive Committee pursuant to section 11 subsection 3 of the agreement concluded between <strong>Bankgesellschaft</strong>
Berlin and Landesbank Berlin on a dormant company and on the establ<strong>is</strong>hment of a unified system of management
or meetings of the Mediation Committee to be legally formed pursuant to section 27 subsection 3 of
he Codetermination Act of 1976.
The Superv<strong>is</strong>ory Board received regular reports on the work of the committees.
Focus of the work of the Superv<strong>is</strong>ory Board
In addition to its intensive involvement in the economic development of the Group, the Superv<strong>is</strong>ory Board
was regularly informed about the progress of the reconstruction efforts of the Group by the Board of Management,
d<strong>is</strong>cussed the <strong>is</strong>sue and adv<strong>is</strong>ed the Board of Management accordingly. Th<strong>is</strong> primarily involved the
continuation of the rigorous implementation of the reconstruction plan, the further reduction of costs and
improvement of the Bank’s earnings situation.
On February 18, 2004, the EU Comm<strong>is</strong>sion approved ass<strong>is</strong>tance for <strong>Bankgesellschaft</strong> Berlin. The approval
encompasses the injection of capital by the State of Berlin in August 2001, the “r<strong>is</strong>k shielding” of the State
of Berlin from December 2001/April 2002 cons<strong>is</strong>ting of various guarantees as well as the “neutral<strong>is</strong>ation
agreement” between the State of Berlin and Landesbank Berlin dated December 2002, which was concluded
in view of any dec<strong>is</strong>ion in favour of restitution taken by the EU Comm<strong>is</strong>sion in the proceedings relating to
the examination of the financial ass<strong>is</strong>tance aspect of the transfer of the former Wohnungsbau-Kreditanstalt
Berlin to Landesbank Berlin.
Both the Superv<strong>is</strong>ory Board and the Accounting, Personnel and Strategy Committee were informed in their
meetings about the current status of the financial ass<strong>is</strong>tance proceedings. The final dec<strong>is</strong>ion by the EU
Comm<strong>is</strong>sion relating to financial ass<strong>is</strong>tance was noted and d<strong>is</strong>cussed intensively by the Superv<strong>is</strong>ory Board.
The plenary session instructed the Board of Management to implement the measures resulting from the
EU dec<strong>is</strong>ion within the stipulated period in constant coordination with the Superv<strong>is</strong>ory Board.
The integration of the retail banking activities of Berliner Bank into Landesbank Berlin was accompanied
with great commitment by the Superv<strong>is</strong>ory Board. The resolution to sell the independent div<strong>is</strong>ion, Berliner
Bank, to Landesbank Berlin was made within an appropriate period, thus enabling the amalgamation of
retail banking business sought by the Board of Management and the Superv<strong>is</strong>ory Board to be fully real<strong>is</strong>ed by
June 30, 2003. As a result of the dec<strong>is</strong>ions from Brussels, it <strong>is</strong> now necessary to spin off Berliner Bank from
the Group and sell it to Landesbank Berlin by 2007 at the latest. Against th<strong>is</strong> background, the Superv<strong>is</strong>ory
Board instructed the Board of Management to demonstrate possible alternatives to the sale and to regularly
inform the committee of the current status.

12
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Report of the Superv<strong>is</strong>ory Board
In the context of the regulations agreed with the State of Berlin relating to the shielding of the <strong>Bankgesellschaft</strong>
Berlin Group from the material r<strong>is</strong>ks from Real Estate Services by the State of Berlin, the parties
agreed on an ordinance regulating responsibility and procedure (ZuVO) in 2003, which specifies the details
of the approval conditions and approval procedure regulated in the detailed agreement and creates legal
security for various procedural <strong>is</strong>sues. The Superv<strong>is</strong>ory Board closely monitored the process and approved
the conclusion of the ZuVO to supplement the detailed agreement.
In the context of the restructuring, the Board of Management was instructed by the Superv<strong>is</strong>ory Board to
present to the committee the planning and objectives of the individual business areas in the Group. In
connection with th<strong>is</strong>, the Superv<strong>is</strong>ory Board was informed in full of the development of the Retail Banking
and Regional Corporate Banking business areas, as well as the reduction of portfolios in Capital Markets.
At the same time, the Superv<strong>is</strong>ory Board was also informed about the progress of the reorientation of the
Real Estate Services activities with regard to the status of the structural changes to the individual Real Estate
Services companies and their prospects.
As in previous years, the Superv<strong>is</strong>ory Board regularly dealt with the development of Investitionsbank Berlin
(IBB). In particular, the committee was kept informed about the current status of the planned spin-off of
IBB from Landesbank Berlin.
Furthermore, with regard to significant legal d<strong>is</strong>putes, for which it <strong>is</strong> responsible in accordance with the
law or internal rules of procedure, the Superv<strong>is</strong>ory Board d<strong>is</strong>cussed the current status of the individual
proceedings with the aid of the expert opinions prepared by the law firm it had appointed, made appropriate
resolutions and <strong>is</strong>sued further audit assignments based on the results.
The Superv<strong>is</strong>ory Board was also kept fully informed about the economic situation of Group companies and
d<strong>is</strong>cussed th<strong>is</strong> <strong>is</strong>sue.
Aside from the segment reporting in the Group, the Board of Management also presented the current r<strong>is</strong>k
situation, the r<strong>is</strong>k strategy, the early warning systems and r<strong>is</strong>k controlling to the Superv<strong>is</strong>ory Board in the
2003 financial year. Furthermore, the Board of Management regularly informed the Superv<strong>is</strong>ory Board about
the r<strong>is</strong>k prov<strong>is</strong>ioning requirement and the resulting measures. An important reporting point for the Superv<strong>is</strong>ory
Board was the liquidity situation and the refinancing situation of the Bank and its subsidiaries.
The Superv<strong>is</strong>ory Board was kept informed by the Board of Management about the current project status of
the IAS introduction planned for the 2005 financial year.

13
REPORT OF THE SUPERVISORY BOARD
In the reporting period, further advancements were made towards the structured reduction of the Monita l<strong>is</strong>ts
in close cooperation between the Bank and the auditor. The Monita l<strong>is</strong>t processing status <strong>is</strong> communicated
in several Superv<strong>is</strong>ory Board meetings.
Moreover, in a separate meeting, the sale of the participation in Allgemeine Privatkundenbank AG (ALLBANK)
was agreed to after an extensive audit and thus a further participation not considered to be a future core
business was sold. At the end of 2003, the Superv<strong>is</strong>ory Board agreed to the sale of the 25% participation of
<strong>Bankgesellschaft</strong> Berlin AG in LHI Leasing GmbH.
Corporate Governance
With regard to the corporate governance of the company, the Board of Management and the Superv<strong>is</strong>ory
Board compiled a report for 2003, which explains the declaration of conformity and the corporate governance
understanding of the Bank.
In accordance with section 5.6 of the new version of the German Corporate Governance Code (DCGK) dated
May 21, 2003, the Superv<strong>is</strong>ory Board <strong>is</strong> to regularly monitor the efficiency of its work; an appropriate audit
procedure was introduced at the end of the year.
Audit and approval of the 2003 annual financial statements
PwC Deutsche Rev<strong>is</strong>ion Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt/Main, Berlin branch,
audited the annual financial statements for the 2003 financial year drawn up by the Board of Management,
including the management report, as well as the consolidated financial statements, including the Group
management report, taking into consideration the focus of the audit agreed with the Superv<strong>is</strong>ory Board. The
financial statements were awarded with an unqualified audit certificate. The annual financial statements,
the management report and the audit report for the AG and the Group as well as the consolidated financial
statements and the Group management report were then submitted to the Superv<strong>is</strong>ory Board for examination.
The Chairman of the Superv<strong>is</strong>ory Board was kept regularly informed by the auditor about the status of
the audit.
In the 2004 financial year, the auditors took part in the meetings of the Credit Committee and Accounting,
Personnel and Strategy Committee, in which documentation relating to the annual financial statements
and the results of the audit were examined and d<strong>is</strong>cussed in detail, and the accounting meeting of the Superv<strong>is</strong>ory
Board. In th<strong>is</strong> process, the auditors reported on the main results of their audit and answered questions
from the members of these committees. The effects of the EU dec<strong>is</strong>ion of February 18, 2004 in particular
were intensively examined and d<strong>is</strong>cussed.

14
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Report of the Superv<strong>is</strong>ory Board
The Superv<strong>is</strong>ory Board ra<strong>is</strong>ed no objections following the final results of its examination, and approved the
annual financial statements of the AG and the Group as at December 31, 2003 in its meeting on May 16, 2004.
The annual financial statements are thus approved pursuant to section 172 subsection 1 clause 1 of the
German Stock Corporation Act.
The Superv<strong>is</strong>ory Board examined the Board of Management’s report on relations with affiliated companies
for the 2003 financial year. Neither th<strong>is</strong> examination nor the audit performed by the auditors gave r<strong>is</strong>e to
any objections.
The auditors’ report on th<strong>is</strong> contains the following audit opinions: “Based on an audit and assessment
performed in accordance with professional standards, we hereby confirm that
1. the facts stated in the report are correct
2. the Company’s contribution to the legal transactions l<strong>is</strong>ted in the report was not unreasonably high
3. there are no circumstances regarding the measures l<strong>is</strong>ted in the report that would suggest
an essentially different assessment from that made by the Board of Management.”
The Superv<strong>is</strong>ory Board does not ra<strong>is</strong>e any objections to the statement made by the Board of Management
at the end of the report on relations with affiliated companies for the 2003 financial year.
Personnel
The following personnel-related changes occurred in the composition of the Board of Management and
the Superv<strong>is</strong>ory Board:
As already mentioned in the 2002 Superv<strong>is</strong>ory Board report, Mr Uwe Kruschinski was appointed as an
ordinary member of the Bank’s Board of Management with effect from March 10, 2003; he <strong>is</strong> responsible
for lending (market outcome area) in the Group.
Mr Hubert Piel resigned from the Group at h<strong>is</strong> own request and on mutually amicable terms with effect
from March 31, 2003.
During the course of the integration of Berliner Bank into Landesbank Berlin, Dr. Johannes Evers resigned
from h<strong>is</strong> position on the Board of Management at <strong>Bankgesellschaft</strong> Berlin AG on November 30, 2003.
Dr. Evers remains a member of the Board of Management at Landesbank Berlin.
In addition, the Superv<strong>is</strong>ory Board reached a joint agreement with Mr Norbert Pawlowski that h<strong>is</strong> appointment
<strong>is</strong> to end on June 30, 2004 in accordance with h<strong>is</strong> contract.

15
REPORT OF THE SUPERVISORY BOARD
Mr Harald Wolf, Senator for Economic Affairs, Employment and Women, was appointed to the Bank’s
Superv<strong>is</strong>ory Board on July 8, 2003 by the State of Berlin in accordance with section 8 of the statute of <strong>Bankgesellschaft</strong>
in place of Mr Peter Striederfn, Senator for Urban Development of the State of Berlin (no
longer serving), who had left the Board on March 27, 2003.
Following the expiry of the mandate of Ms Carmen Hümpel as a result of the sale of ALLBANK on August 31,
2003, Ms Claudia Fieber was promoted to the Superv<strong>is</strong>ory Board of <strong>Bankgesellschaft</strong> as the elected substitute
member of the employee representatives on September 1, 2003.
At the end of the Superv<strong>is</strong>ory Board meeting on September 4, 2003, Mr Ernst-Otto Sandvoß resigned from
h<strong>is</strong> post as Chairman of the Superv<strong>is</strong>ory Board. Mr Sandvoß had been a member of the Superv<strong>is</strong>ory Board
at the Bank since July 2001 and had chaired the committee since February 14, 2002 with a high level of
personal commitment in a particularly difficult time for the Bank. The Superv<strong>is</strong>ory Board would therefore
like to extend its sincere thanks for th<strong>is</strong> dedication. The members of the Committee w<strong>is</strong>h him all the best
for the future both personally and professionally.
Dr. h. c. Klaus G. Adam was appointed to the Bank’s Superv<strong>is</strong>ory Board by means of a judicial process.
Dr. h. c. Adam began h<strong>is</strong> term of office on September 9, 2003. The Superv<strong>is</strong>ory Board elected Dr. h. c. Adam
as Chairman of the Superv<strong>is</strong>ory Board on September 26, 2003.
The Superv<strong>is</strong>ory Board would like to thank the members of the Board of Management and the Superv<strong>is</strong>ory
Board who have left for the support they have shown the Bank in th<strong>is</strong> extraordinarily difficult time, for the
expert<strong>is</strong>e they have contributed and for their cons<strong>is</strong>tently balanced and constructive cooperation on the
various committees.
The Superv<strong>is</strong>ory Board would also like to thank the members of the Board of Management and all employees
of the Group for the high level of commitment they have shown over the past year and for their personal
contributions they have made in the interest of successful restructuring of the Group and securing the Bank’s
continued ex<strong>is</strong>tence.
Berlin, May 2004
The Superv<strong>is</strong>ory Board
Dr. h.c. Klaus G. Adam
Chairman

16
Efficiency
<strong>Bankgesellschaft</strong> <strong>is</strong>
reducing its complexity

Since the start of the reconstruction in 2001, we have radically simplified and streamlined
the Group structure. Th<strong>is</strong> enables us to improve process control, save costs and increase
capacity for customer management. The Group as a whole <strong>is</strong> now more transparent and more
efficient. We have almost halved the number of div<strong>is</strong>ions in <strong>Bankgesellschaft</strong> Berlin and
Landesbank Berlin.
17

18
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
From the Business Areas
Segment Reporting and Performance
of the Strategic Business Areas
Noticeable reconstruction successes character<strong>is</strong>ed
the development of the business areas of the <strong>Bankgesellschaft</strong>
Berlin Group in 2003.
The transfer of Retail Banking managed under
the brand Berliner Bank to Landesbank Berlin and
the further harmon<strong>is</strong>ation of guidelines and processes
ensure the uniform management of the strategic
business areas and other segments. The heads of the
business areas are directly responsible for the Group
companies and market segments assigned to them.
Segment reporting remains unchanged from the
previous year in terms of the breakdown and methods.
We report on the following segments:
Strategic business areas
• Retail Banking
• Regional Corporate Banking
• Capital Markets
• Real Estate Financing
Other segments
• Real Estate Services
• Corporate Investments
• Government-Ass<strong>is</strong>tance Programme
• Other/Consolidation
The strategic business areas and segments are
managed applying the following performance ratios:
• Operating result after r<strong>is</strong>k prov<strong>is</strong>ioning
• Earnings before taxes
• Return on equity
• Cost-income ratio
Business areas improve on earnings
Despite the strategic reduction of the consolidated
balance sheet total by around a 22 billion and the
consolidated r<strong>is</strong>k items by around a 13 billion,
almost all business areas showed an improvement
in earnings in the year under review. The negative
impact on earnings resulting from the d<strong>is</strong>continuation
of activities that no longer conform to the
strategy, in particular capital markets business, but
also in the participations portfolio, was minim<strong>is</strong>ed.
A stable gross income, progressively decreasing
admin<strong>is</strong>trative expenditure and further reduced r<strong>is</strong>k
costs contributed to the turnaround.

Retail Banking business area
19
SEGMENT REPORTING AND PERFORMANCE OF THE STRATEGIC BUSINESS AREAS
The Retail Banking business area largely completed
the restructuring of its sales network. Following
the transfer of Berliner Bank to Landesbank Berlin
during the year, th<strong>is</strong> business within the Group <strong>is</strong>
now managed exclusively from Landesbank Berlin.
Berliner Sparkasse and Berliner Bank continue to
operate as separate entities in the market. Despite the
still noticeable restraint of customers in the securities
business, net comm<strong>is</strong>sion income increased by
a 7 million. Th<strong>is</strong> development only offset the margin
and volume-related reduction in net interest income
to a certain extent. The number of full-time jobs
was again cut by 464; admin<strong>is</strong>trative expenditure fell
by a 86 million overall. As r<strong>is</strong>k prov<strong>is</strong>ioning in the
lending business was lower, the business area was
able to post positive earnings before taxes of a 75 million
after two years of losses (in th<strong>is</strong> structure). Return
on equity was 27.4% and the cost-income ratio rose
by 7.5 percentage points to 82.4%.
Regional Corporate Banking business area
The Regional Corporate Banking business area will
also only be run from Landesbank Berlin after the
transfer of Berliner Bank. The market presence in
th<strong>is</strong> case <strong>is</strong> similar to that of Retail Banking, with the
multi-brand strategy. The efficiency benefit ar<strong>is</strong>ing
from th<strong>is</strong> merger will be v<strong>is</strong>ible in the lending
div<strong>is</strong>ions in particular. As a result of the d<strong>is</strong>continuation
of business that no longer conforms to the
strategy (financing of the public sector and nationwide
activities), segment assets fell by around
a 7.7 billion to a 9.3 billion. Despite these measures,
gross income increased slightly. With reduced admin<strong>is</strong>trative
expenditure and lower r<strong>is</strong>k costs, and due
to non-recurring effects from a participation sale,
earnings before taxes rose to a 70 million in 2003,
after almost breaking even in the previous year. The
return on equity was 21.0% and the cost-income
ratio decreased by 10.7 percentage points to 58.6%.
Capital Markets business area
The greatest impact of the strategic reorientation of
the Group can be seen in the Capital Markets business
area. Segment assets were reduced by a 11 billion,
r<strong>is</strong>k items by some a 7 billion and segment liabilities
by a 40 billion. The long-term refinancing activities
(<strong>is</strong>sue business) of the bank as a whole are no longer
allocated to capital markets business at Landesbank
Berlin but to interest management. Net interest
income decreased by a 142 million for th<strong>is</strong> reason in
particular. Furthermore, some a 29 million of the

20
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Segment Reporting and Performance
of the Strategic Business Areas
decrease related to the scaled-back business in
Corporate Banking and Structured Finance. Despite
the reallocations mentioned, earnings before taxes
of a 163 million were generated. The return on equity
was 11.2% (previous year: 14.2%) and the cost-income
ratio was 46.6%.
Real Estate Financing business area
The Real Estate Financing business area was character<strong>is</strong>ed
by the development of sales activities in the
year under review. At a 813 million, the volume of new
business was initially pleasing but was not sufficient
to compensate for the reduction in the portfolio
due to scheduled and unscheduled repayments. The
extension rate was pleasingly around 90%, clearly
more than scheduled. Noticeably reduced r<strong>is</strong>k prov<strong>is</strong>ioning
contributed in particular to the considerable
improvement in earnings. In terms of earnings before
taxes, the loss of the previous year was reduced from
a 119 million to a 56 million. The return on equity
was negative. The cost-income ratio was 38.5%
(previous year: 35.1%).
Real Estate Services segment
The Real Estate Services segment did not acquire any
new business in the year under review in line with
the strategy. The restructuring and redimensioning
were continued and the number of full-time jobs
was cut by a further 155 to 902. The cooperation with
the State of Berlin in the context of r<strong>is</strong>k shielding
provided by the State was the focus of activities. The
pre-tax loss was reduced to a 2 million (previous
year: a 62 million). The return on equity was negative.
Corporate Investments segment
As at year-end 2003, the Corporate Investments
segment only compr<strong>is</strong>ed Weberbank Privatbankiers
KGaA and <strong>Bankgesellschaft</strong> Berlin (Polska) S.A.,
which, for the most part, no longer carries out operating
business. Zivnostenská banka a.s. (no longer
included in the 2003 consolidated and segment result)
and Allgemeine Privatkundenbank AG ALLBANK
(included in the consolidated and segment result
until August 2003) were sold in the year under
review. Th<strong>is</strong> essentially explains the decline in the
segment volu-me and personnel capacity. Earnings
before taxes amounted to a 43 million (previous year:
a 22 million). The improvement in earnings was
almost completely due to ALLBANK. The return on
equity was 21.2%.

Government-Ass<strong>is</strong>tance Programme segment
The Government-Ass<strong>is</strong>tance Programme of Investitionsbank
Berlin reported earnings before taxes of
21
SEGMENT REPORTING AND PERFORMANCE OF THE STRATEGIC BUSINESS AREAS
a 12 million. The return on equity was 3.2% and the
cost-income ratio was 56.6%. In order to strengthen
the core capital ratio of the prospective independent
bank, the reserve as per section 340f of the German
Commercial Code amounting to a 176 million was
written back and a 202 million was allocated to the
reserve as per section 340g of the German Commercial
Code (funds for general bank r<strong>is</strong>ks). Investitionsbank
Berlin, which <strong>is</strong> reported in th<strong>is</strong> segment, made
considerable preparations in the year under review
to enable the transition of the bank to autonomy
as a development bank of the State of Berlin to take
place by January 1, 2005 at the latest. For th<strong>is</strong> reason,
independent functional units in particular were
again establ<strong>is</strong>hed.

22
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Segment reporting
Pro rata earnings of the strategic business areas in the Group
iin t million Retail Banking Regional Capital Markets Real Estate
Corporate Banking Financing
2003 2002 2003 2002 2003 2002 2003 2002
Net interest income 466 501 183 176 406 548 278 281
Net comm<strong>is</strong>sion income 231 224 38 36 7 20 –3 9
Profit from financial transactions 4 –24
Balance of other income/expenditure 9 6 34 26 –10 –8
Total income 697 734 227 212 451 570 265 282
Personnel costs 207 231 65 79 73 83 49 55
Other admin<strong>is</strong>trative expenditure 359 421 67 67 127 138 51 42
Normal depreciation 8 8 1 1 10 2 2 2
Admin. expenditure 574 660 133 147 210 223 102 99
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning 123 74 94 65 241 347 163 183
R<strong>is</strong>k prov<strong>is</strong>ioning in lending business 46 93 18 52 91 97 208 289
Earnings from liquidity reserve securities –14 16
Change to the reserve acc. to § 340f of HGB
R<strong>is</strong>k prov<strong>is</strong>ioning 46 93 18 52 77 113 208 289
Operating result after r<strong>is</strong>k prov<strong>is</strong>ioning 77 –19 76 13 164 234 –45 –106
Result from financial investments –5 3 –6 –3 3
Balance of other items –2 –9 –6 –1 –14 –13
Earnings before taxes 75 –24 70 1 163 231 –56 –119
Segment assets 5,853 6,058 9,293 16,974 51,488 62,017 26,077 28,820
Segment liabilities 14,082 14,630 4,279 3,854 51,453 91,933 1,242 1,846
R<strong>is</strong>k items 4,638 5,365 5,751 6,420 20,937 27,705 13,259 12,925
Balance sheet shareholders’ equity (average) 274 266 334 347 1,455 1,622 731 685
Employee capacity (reporting date) 3,516 3,980 944 1,131 508 609 667 652
Return on equity 27.4% –9.0% 21.0% 0.3% 11.2% 14.2% –7.7% –17.4%
Cost-income ratio 82.4% 89.9% 58.6% 69.3% 46.6% 39.1% 38.5% 35.1%
1) IBAG, IBG and LPFV: Other admin<strong>is</strong>trative expenditure and normal depreciation are shown
in the items other expenditure or in the balance of other operating income/expenditure
2) December 31, 2002 including Zivnostenská banka

23
SEGMENT REPORTING AND PERFORMANCE OF THE STRATEGIC BUSINESS AREAS
Real Estate Corporate Government- Other/ GROUP Effects of GROUP
Services 1) Investments 2) Ass<strong>is</strong>tance Consolidation Excl. effects EU dec<strong>is</strong>ion
Programme of EU dec<strong>is</strong>ion
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
19 –14 151 220 157 160 4 –166 1,664 1,706 1,664 1,706
16 29 26 27 –1 –3 314 342 314 342
2 7 6 –7 12 –24 12 –24
34 19 19 6 –10 –115 –47 –42 5 –23 –65 5
53 5 188 262 173 187 –106 – 223 1,948 2,029 –23 1,925 2,029
63 62 57 91 55 53 175 199 744 853 744 853
44 81 28 34 –133 – 193 543 590 543 590
6 16 15 16 50 58 92 103 92 103
63 62 107 188 98 103 92 64 1,379 1,546 1,379 1,546
–10 –57 81 74 75 84 –198 – 287 569 483 –23 546 483
22 41 9 39 15 6 409 617 409 617
9 2 –2 –4 –51 –100 –58 –86 –58 –86
1 1 –176 –26 –1 –176 –25 –176 –25
32 44 –169 9 –37 –94 175 506 175 506
–10 –57 49 30 244 75 –161 – 193 394 –23 –23 371 –23
–3 –1 –2 –1 –19 –66 –58 – 367 –76 – 449 –15 –91 – 449
11 –4 –4 –7 – 213 –8 –72 – 106 – 304 –144 – 302 –606 –144
–2 –62 43 22 12 1 – 291 – 666 14 – 616 – 340 –326 – 616
2,326 2,219 4,534 9,550 19,197 19,513 34,518 29,653 153,286 174,804 153,286 174,804
2,326 2,219 4,534 9,550 19,197 19,513 56,173 31,259 153,286 174,804 153,286 174,804
2,405 5,639 4,127 4,392 6,326 8,378 57,443 70,824 57,443 70,824
158 462 203 286 372 414 379 331 3,907 4,413 3,907 4,413
902 1,057 312 1,932 747 751 2,536 2,863 10,132 12,975 10,132 12,975
–1.3% –13.4% 21.2% 7.7% 3.2% 0.2% 0.3% –14.0% – 8.4% –14.0%
56.9% 71.8% 56.6% 55.1% 70.8% 76.2% 71.6% 76.2%

24
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Retail Banking
With Landesbank Berlin and its brands Berliner Sparkasse and Berliner Bank, <strong>Bankgesellschaft</strong>
Berlin <strong>is</strong> the regional market leader in business relating to financial services for private clients.
Via the Retail Banking Centres, we offer comprehensive solutions to meet our customers’ financial
needs, including product offers relating to pensions, asset management, consumer and real estate
financing as well as payment transactions and liquidity management. In addition to a wide range
of services for our universal clients, the Berliner Bank Retail Banking Advice Centre and the Berliner
Sparkasse Asset Management Centre focus on the particular demands of high net-worth clients.
In Private Banking, our high net-worth clients are supported individually and as a group.
The retail banking activities of Berliner Bank were
transferred to Landesbank Berlin during 2003 in
order to real<strong>is</strong>e additional synergy. Throughout the
entire year, we continued the cost reduction measures
that were begun. At the same time, the business
area focussed increasingly on strengthening its
earnings power.
Volume of deposits slightly reduced
The volume of deposits by private clients decreased
slightly yoy. The decline in savings and term deposits
<strong>is</strong> offset by a volume increase in higher-interest
demand deposits. In th<strong>is</strong> div<strong>is</strong>ion, customer demand
continues to show strong growth due to the low
interest rate level.
Overall, the volume of deposits developed in line
with the Berlin market, where a decline in private
household savings has been recorded for the past
two years.
Securities business
developed as scheduled
The securities business developed as scheduled. In
the past year, a pleasing improvement in the average
order volume was recorded. For the first time since
2000, initial signs of confidence returning were
apparent in the positive stock market development.
Nevertheless, innovative fund concepts (Kasko fund)
and structured products (SOFIA-system) continued
to make a dec<strong>is</strong>ive contribution to the securities
business. These products, which are specially tailored
to customer requirements in uncertain stock market
phases, enjoyed a high level of demand. The “E.I.
Capital-Welt-Kasko 100 PlusZins”, for example, was
sold out in June last year, even before the end of
the subscription.
At the end of 2003, portfolio management
for private clients, including unit shares, contained
a volume of securities totalling approximately
a 7.8 billion.

RETAIL BANKING LOANS
in t million 31.12.2003 31.12.2002
Overnight and term money 107 225
Overdraft facilities 952 657
Near-money market loans 183 180
Real estate loans 3,396 3,664
Other loans (e.g. consumer loans) 1,126 1,240
Total loans and advances to customers 5,764 5,966
RETAIL BANKING DEPOSITS
in t million 31.12.2003 31.12.2002
Demand deposits 5,641 5,526
Overnight deposits 52 68
Term deposits 704 997
Savings deposits 7,638 7,983
Savings certificates and similar products 44 56
Total customer deposits 14,079 14,630
Slight decline in the lending business
due to d<strong>is</strong>continuations
Loans and advances to clients, including the acqu<strong>is</strong>ition
of a loan portfolio of ALLBANK, fell slightly in
2003. Consumer loans showed a pleasing increase
of 2.7%, which <strong>is</strong>, however, overshadowed overall by
the phasing out of nationwide, non-strategic transactions.
Private real estate financing business decreased
slightly once again in 2003 and remained clearly
below budget. The expansion of real estate financing
remains one of the objectives in business with private
clients. For th<strong>is</strong> purpose, consultancy competencies
relating to private financing of building projects were
combined in three Real Estate Centres at Berliner
Sparkasse in the second half of 2003.
.
Group remains one of the largest
credit card <strong>is</strong>suers
The <strong>Bankgesellschaft</strong> Berlin Group had a stock of
1.3 million <strong>is</strong>sued credit cards in the reporting period.
We are therefore one of the largest credit card
<strong>is</strong>suers in Germany.
The credit card reward scheme in cooperation
with webmiles GmbH in Munich <strong>is</strong> still extremely
popular. The number of participants has increased to
over 300,000. The reward scheme linked the highestactivity
cardholders in particular to the Group.
25
RETAIL BANKING

26
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Retail Banking
Insurance brokerage showed
extremely positive development
The insurance policies business of our co-operation
partner, Gothaer Versicherungen, was one of the sales
focuses in 2003. It performed very positively and
better than planned. Annuity insurance again represented
the lion’s share of business.
The percentage share of unit-linked insurance
products decreased further due to the stock market
development of the past year in new business and
only just reaches around 8% of total earnings.
Stationary sales in the greater
Berlin area further streamlined
Following the transfer of the retail banking activities
of Berliner Bank to Landesbank Berlin, business
with private clients <strong>is</strong> managed under the separate
brands of Berliner Bank and Berliner Sparkasse.
The concentration on the Berlin region was further
strengthened with the sale of ALLBANK in the
autumn of 2003.
The planned cost reduction measures in sales
were successfully implemented. The streamlining of
the sales network was completed in 2003 with the
merger of four further locations, as well as the
extensive installation of self-service cash machines
in the Retail Banking Centres. Cash transactions via
the cash machines were processed smoothly, thus
completely fulfilling our expectations within a short
period. The client base again decreased slightly
due to the reconstruction.
The new customer service programme provides
consultants in the sales offices with up-to-date consultancy
support for asset structuring and pension
planning.
Electronic sales channels extended
The number of internet users at Berliner Bank and
Berliner Sparkasse rose by 20% to some 435,000 in
the 2003 financial year. At the same time, the number
of v<strong>is</strong>itors to the websites also increased by 20%.
Thanks to technical improvements, the access times
on our websites were accelerated considerably.
The service for our clients was extended in 2003
to include a more efficient stock price information
system, online conclusion of building society savings
contracts and foreign currency ordering, as well
as additional calculation modules and sample statements.
Solutions, in particular for home banking,
can be ordered from the comfort of home via our
new internet shop.

Outlook
Measures to further strengthen earnings power are
the focus for 2004. To th<strong>is</strong> end, internal management
and incentive systems are being reviewed and
adapted to the requirements of modern service sales.
The last part of the ongoing programme of
measures still has to be implemented to further reduce
costs. Th<strong>is</strong> will involve, among other things, organ<strong>is</strong>ing
sales in retail banking more efficiently with
streamlined operating processes and intelligent
consultancy support.
February 2004 was the start of the new online
banking, now combining banking and brokerage
together. The advantage for clients <strong>is</strong> that all
relevant account information <strong>is</strong> d<strong>is</strong>played clearly
in the form of a financial statement.
27
RETAIL BANKING

28
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Regional Corporate Banking
Even in the difficult 2003 financial year, <strong>Bankgesellschaft</strong> Berlin maintained its market position in
Regional Corporate Banking. Landesbank Berlin/Berliner Sparkasse and Berliner Bank still manage
some 80,000 clients in Regional Corporate Banking in Berlin-Brandenburg. Further cost cuts were
made within the framework of the reconstruction. Measures to increase quality and optim<strong>is</strong>e
processes were also introduced. These measures took effect in the 2003 financial year and enabled
Regional Corporate Banking to substantially improve its earnings situation yoy.
Focus on the regional market
In the 2003 financial year too, Regional Corporate
Banking continued to focus on the core market of
Berlin-Brandenburg with the further d<strong>is</strong>continuation
of the sub-portfolios from the nationwide business.
In addition, consultancy-intensive special transactions
and sub-portfolios that are not in line with
the strategy, as well as the nationwide public-sector
business, were reduced. Public-sector business
eligible for cover funds was also transferred to the
Capital Markets business area. These measures led
to a planned reduction in r<strong>is</strong>k assets of around 8%
in Regional Corporate Banking and to the considerable
overall decrease in the assets volume. In the
same period, our client base decreased slightly
yoy. Th<strong>is</strong> <strong>is</strong> primarily attributable to the scheduled
reduction in adverse client relationships.
Regional Corporate Banking in the core region of
Berlin-Brandenburg continued to focus on managing
commercial clients as well as small and medium
sized regional corporate clients. The Landesbank
Berlin/Berliner Sparkasse and Berliner Bank range
on offer matches th<strong>is</strong> client group’s demand profile
for financing and investment products. At the same
time, we are bundling our capacity for large regional
corporate clients in specific management units
according to brands. With the transfer of Berliner
Bank, all brands now share the legal status of Landesbank
Berlin since July 1, 2003. As Berliner Bank
retained close ties with its clients, the transfer was
carried out with very few client losses. Th<strong>is</strong> transfer
enabled us to combine additional functions in the
back office.

The Competence Centres merged last year in
Regional Corporate Banking (International Banking,
Leasing & Factoring, Start-Ups and Business Succession
as well as Electronic Banking) showed a pleasing
performance in 2003. They provide the brands with
special<strong>is</strong>t knowledge and support capacity.
R<strong>is</strong>k costs reduced
REGIONAL CORPORATE BANKING LOANS
The still weak economic development in the core
market of <strong>Bankgesellschaft</strong> led to a further increase
in insolvencies in 2003. As in previous years, particular
demands were placed on r<strong>is</strong>k management
and lending in Regional Corporate Banking. As a
29
REGIONAL CORPORATE BANKING
in t million 31.12.2003 31.12.2002
Overnight and term money 327 922
Overdraft facilities 492 577
Near-money market loans 0 0
Real estate loans 1,696 1,721
Other loans 6,333 12,666
Total loans and advances to customers 8,848 15,896
Loans and advances to banks over 1 year 48 748
Total 8,896 16,644
REGIONAL CORPORATE BANKING DEPOSITS
in t million 31.12.2003 31.12.2002
Demand deposits 2,370 1,914
Overnight deposits 91 141
Term deposits 456 650
Savings deposits 334 180
Savings certificates and similar products 1 1
Total customer deposits 3,252 2,906
Amounts due to banks over 1 year 642 948
Total 3,894 3,854
result of the reduction in the lendings portfolio, r<strong>is</strong>k
costs in Regional Corporate Banking at <strong>Bankgesellschaft</strong>
Berlin were lowered. The reconstruction
measures introduced in previous years are taking
effect.
In the lending business too, work was carried
out on improved processes to optim<strong>is</strong>e the r<strong>is</strong>k policy
and the series of r<strong>is</strong>k policy measures. We have readjusted
and streamlined the standard loan processes.
Th<strong>is</strong> also leads to an improvement in the quality
of services for clients, for example, with regard to
reduced lead times in the loan allocation process.

30
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Regional Corporate Banking
Positive development of interest
and comm<strong>is</strong>sion income due to
optim<strong>is</strong>ed market dealings
In the 2003 financial year, following the cost reductions
achieved in previous years, measures to
increase income were implemented, which subsequently
boosted interest and comm<strong>is</strong>sion income.
The acqu<strong>is</strong>ition of additional deposits increased
the interest income. On the assets side, the future
bas<strong>is</strong> of interest income was strengthened by r<strong>is</strong>kadjusted
pricing in the lending business. Th<strong>is</strong> policy
will be continued over the next few years.
In the comm<strong>is</strong>sion business, the new expenditure-oriented
price model introduced in December
of the previous year for corporate current accounts
resulted in particular in a consolidation of the payment
transaction income.
To improve the management of sales activities,
we are continuing to use the Customer Relationship
Management (CRM) system implemented in Regional
Corporate Banking, which we made available to
the employees in the Competence Centres in 2003.
CRM <strong>is</strong> a client support system for the efficient
organ<strong>is</strong>ation of client relationships as a management
tool and as a tool for sales support. In future, we
will also be using th<strong>is</strong> system in a modified form
in the commercial client business. The tools for sales
management in Regional Corporate Banking were
further developed in 2003 and incorporated into
relevant regulatory processes.
In 2003, Regional Corporate Banking was successful
in intensifying and strengthening client
relationships. As a result, ex<strong>is</strong>ting market potential
in the core region was better util<strong>is</strong>ed and the income
base was gradually improved. In connection with
th<strong>is</strong>, we are placing particular value on the expansion
of the comm<strong>is</strong>sion business.
Further restructuring
measures implemented
As in previous years, we implemented further measures
to reduce costs in the 2003 financial year too.
These measures related primarily to process reductions
and streamlining, as well as the consolidation
of locations in the commercial client business. Now
the measures to reduce costs in the Regional Corporate
Banking business area have begun to take
effect and the cost situation has been substantially
improved, we are placing the focus of the restructuring
in the 2003 financial year increasingly on
measures to increase earnings. We will continually
monitor the effects of the cost reduction measures
to enable any necessary adjustment to be made at
an early stage.

The participations portfolio allocated to the
Regional Corporate Banking business area was further
reduced through the sale of participations, in line
with the strategic orientation. Furthermore, additional
measures were taken to limit the r<strong>is</strong>ks from the
participations portfolio for the business area.
Outlook
For 2004, the aim <strong>is</strong> to push ahead with the implementation
of multi-channel supply in Regional
Corporate Banking. In addition to stationary sales,
client relationship managers and the internet range
of Landesbank Berlin/Berliner Sparkasse and
Berliner Bank brands, we will also be exploring the
potential of a call centre for regional corporate
clients.
In the context of our medium-term planning,
we intend to implement additional measures to
increase earnings, in order to achieve sustained
consolidation of the income base of Regional Corporate
Banking. The current lending policy <strong>is</strong> to be
continued unchanged. We also intend to further
develop the sales management system in the direction
of a value-oriented management approach.
31
REGIONAL CORPORATE BANKING

32
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Capital Markets
The Capital Markets business area achieved a good result in the last financial year, with a pre-tax
profit of a 163 million, thus contributing substantially to the Group. The strategic refocusing on the
client business <strong>is</strong> already reflected in the considerable increase in the earnings contributions of
these div<strong>is</strong>ions. The restructuring measures continued as scheduled in Capital Markets in the 2003
financial year. Th<strong>is</strong> was linked to further staff cuts and the optim<strong>is</strong>ation of structures and processes,
in particular in foreign branches.
The rapid reduction of portfolios in the Corporate
Banking and Structured Finance div<strong>is</strong>ions <strong>is</strong> evident
in the decline in the loan volumes. The significant
decrease in deposits results largely from the reallocation
of portfolios previously posted in Capital Markets
to Interest Rate Management at LBB.
Debt Finance div<strong>is</strong>ion restructured
The activities of the Debt Finance div<strong>is</strong>ion were
restructured and moved to other div<strong>is</strong>ions of the business
area as a result of the reorientation of Capital
Markets. Debt Finance will no longer be managed as
a separate div<strong>is</strong>ion.
Successful proprietary trading activities
in Berlin and London
Proprietary Trading successfully put into practice
its cross-product, limited-r<strong>is</strong>k trading strategies and
therefore, as in previous years, achieved a good
result. The activities relating to the interest rate, newly
integrated into Proprietary Trading, contributed to
an even greater extent to th<strong>is</strong> result; Proprietary
Trading at the London location provided a considerable
contribution to the overall success.
Equities d<strong>is</strong>tingu<strong>is</strong>hing itself as a trading
partner and product supplier
The Equities div<strong>is</strong>ion has continued to establ<strong>is</strong>h itself
as a successful provider of trading facilities and
product solutions. The target group for the structured
products was still the retail banking client base
of the Group. In co-operation with the Retail Banking
business area, good sales results were achieved with
in-house products. Furthermore, sales to third-party
institutes, to which Equities offered its structuring
exper-t<strong>is</strong>e, were intensified. In conjunction with
the sales and research services offered, the div<strong>is</strong>ion
maintained the good results of the previous year.
International Business focus
The International Business div<strong>is</strong>ion focussed its
activities on Central and Eastern Europe in line with
the reconstruction plan for the Group. Th<strong>is</strong> meant
a decline in business activities, which could not yet
be offset by intensifying business relations in the
target regions. However, a good overall result was
achieved.

From the d<strong>is</strong>solution of the Debt Finance div<strong>is</strong>ion,
the International Business div<strong>is</strong>ion assumed the
syndication activities, which are, however, not set
to be expanded.
Expansion of functions in
the Treasury div<strong>is</strong>ion
CAPITAL MARKETS LOANS
In addition to short and long-term funding activities,
the Treasury div<strong>is</strong>ion also assumed other important
functions for providing liquidity for the Group
with the d<strong>is</strong>solution of the Debt Finance div<strong>is</strong>ion.
The High Grade Investments and Asset Backed
Transactions fields of activity were integrated and
provide an important earnings contribution.
The div<strong>is</strong>ion achieved a good result in all of
the fields of activity described.
Successful new start in the Interest
Rate/Lending Products div<strong>is</strong>ion
The Interest Rate/Lending Products div<strong>is</strong>ion was
completely re-establ<strong>is</strong>hed in the context of the
restructuring of Capital Markets, with a strong focus
on client trading and sales activities. The focus of
business activities in the year under review was to
restore client links and to establ<strong>is</strong>h the div<strong>is</strong>ion
as an important market player and product solution
supplier. Moreover, the portfolios were further
optim<strong>is</strong>ed with regard to the lowering of equity
requirements.
With the d<strong>is</strong>solution of Debt Finance, the previous
Credit Derivatives activities were integrated
into the value-added chain of Interest Rate/Lending
Products. The success of these and other integration
measures was reflected in the good performance
of all fields of activity in the 2003 financial year.
Corporate Banking and Structured
Finance scaled back still further
The portfolio totalling a 5.1 billion at the end of
2002 was almost halved to a reporting date volume
of a 2.8 billion and the r<strong>is</strong>k assets fell by 55%. The
targets were clearly exceeded. Th<strong>is</strong> positive development
<strong>is</strong> further confirmed by the substantially
lower level of r<strong>is</strong>k prov<strong>is</strong>ioning.
Outlook
The restructuring of the Capital Markets business
area has already proven successful in the first full
financial year. The further expansion of the client
business and the intensive util<strong>is</strong>ation of the available
capacity of the Group will be dec<strong>is</strong>ive for 2004 in
order to consolidate the positive development.
33
CAPITAL MARKETS
in t million 31.12.2003 31.12.2002
Total loans and advances to customers 5,990 7,489
Loans to banks over 1 year 4,321 7,210
Total 10,311 14,699
CAPITAL MARKETS DEPOSITS
in t million 31.12.2003 31.12.2002
Total customer deposits 5,304 11,722
Amounts due to banks over 1 year 2,971 9,879
Total 8,275 21,601

34
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Real Estate Financing
In the year under review, the Real Estate Financing business area successfully implemented
the restructuring in the most important div<strong>is</strong>ions. Following the organ<strong>is</strong>ational and strategic
reorientation, the focus for 2003 was on re-establ<strong>is</strong>hing sales and market activities.
Pleasing momentum in new
loan commitments
The new start in the market with a different sales
strategy was largely successful. Th<strong>is</strong> shows new
business with a volume of a 813 million concluded in
2003. Although th<strong>is</strong> result does not meet the targets,
th<strong>is</strong> development <strong>is</strong> sat<strong>is</strong>factory for the Real Estate
Financing business area in view of the extended
absence from the market and the still difficult market
environment. Furthermore, the stricter r<strong>is</strong>k and
profitability criteria are to be taken into account. New
business <strong>is</strong> oriented towards a clearly defined target
portfolio with a weighting that <strong>is</strong> character<strong>is</strong>ed by
the financing of properties in Berlin and the West
German conurbations. It <strong>is</strong> centred on business with
private and commercial investors, real estate companies
as well as property developers.
Adjustment of the real estate portfolio
The real estate portfolio was further consolidated
as scheduled in the year under review. Business not
in line with the strategy was d<strong>is</strong>continued where
possible. The strained economic environment
allowed new r<strong>is</strong>ks to ar<strong>is</strong>e for a few individual commitments
in the portfolio, meaning that adequate
prov<strong>is</strong>ioning was required in the period under
review. However, overall, r<strong>is</strong>k prov<strong>is</strong>ioning was
again scaled back yoy.
Decline in the portfolio volume
lowers operating result
Due to the decline in volume as a result of the portfolio
adjustment and scheduled repayments, the
development of income was inevitably negatively
impacted. The reduced net interest income could not
be completely compensated by new business, which
only gained momentum in the second half-year after
an initial start-up phase. The decrease in admin<strong>is</strong>trative
expenditure has now almost reached its limit.
The internal operating processes have been optim<strong>is</strong>ed
and are proving successful in practice. Our activities
continue to be oriented towards the recovery of new
business and the consolidation of earnings power.

Outlook
REAL ESTATE FINANCING LOANS
The forecasts for the economic development in 2004
indicate a slight general upturn. However, th<strong>is</strong> does
not yet mean the all-clear for the real estate market.
The structural adjustments have not yet been completed.
To date, cyclical influences have generated
little impetus that could lead to a sustained improvement
in the market situation.
Our confidence for the 2004 financial year <strong>is</strong>
based on the momentum of new business in the second
half of 2003 and the sustainability of th<strong>is</strong> development.
The acceptance and response of clients <strong>is</strong>
positive. 2003 showed that, despite the difficult situation,
the market provides some attractive business
opportunities. We have structured our concept
35
REAL ESTATE FINANCING
in t million 31.12.2003 31.12.2002
Overnight and term money 2,755 2,609
Overdraft facilities 258 642
Near-money market loans
Real estate loans 20,643 22,197
Other loans (esp. public-sector loans) 2,355 3,332
Total loans and advances to customers 26,011 28,780
Loans and advances to banks over 1 year 15 10
Total 26,026 28,790
REAL ESTATE FINANCING DEPOSITS
in t million 31.12.2003 31.12.2002
Demand deposits 524 790
Overnight deposits 42 53
Term deposits 554 979
Savings deposits 0 2
Savings certificates and similar products 0 0
Total customer deposits 1,120 1,824
Amounts due to banks over 1 year 25 0
Total 1,145 1,824
accordingly. We intend to achieve a further significant
improvement in the operating result in the next few
years primarily by increasing our earnings power
while reducing r<strong>is</strong>k costs. Furthermore, the focus <strong>is</strong>
on the continual optim<strong>is</strong>ation of the portfolio. Against
th<strong>is</strong> background, our business motto <strong>is</strong>: pers<strong>is</strong>tent
concentration in new business on quality, profitability
and the expansion of nationwide business in the
West German conurbations. At the same time, we
aim to prudently secure a strong position at our
Berlin location.

36
Focus
<strong>Bankgesellschaft</strong> <strong>is</strong>
<strong>focussing</strong> on core business

<strong>Bankgesellschaft</strong> Berlin <strong>is</strong> a modern bank for the Berlin-Brandenburg region. In 2003, we
maintained our focus on core competencies. In th<strong>is</strong> way, we successfully sold a considerable
number of participations, reduced the business volume and restructured real estate services
business. As a result of combining Berliner Bank and Berliner Sparkasse under the umbrella
of Landesbank Berlin, our retail activities within the Group are now bundled together. Th<strong>is</strong>
enables uniform processes, cost savings and better sales results.
37

38
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Real Estate Services
IBAG Immobilien und Beteiligungen
Aktiengesellschaft
In 2003, the sub-group IBAG primarily compr<strong>is</strong>ed
the following core companies: IBAG Holding, Bavaria
Objekt- und Baubetreuung GmbH, IBV Immobilien
Beteiligungs- und Vertriebsgesellschaft der IBAG
Gruppe mbH, ARWOBAU Apartment- und Wohnungsbaugesellschaft
mbH, IBI Real Estate Immobilien
und Beteiligungen International GmbH, Universal
AG and DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft
mbH.
Fund business reorgan<strong>is</strong>ed
The “closed-end real estate funds” business area <strong>is</strong>
represented within the IBAG Group by IBV Immobilien
Beteiligungs- und Vertriebsgesellschaft der
IBAG Gruppe mbH. In the 2003 financial year, no new
closed-end real estate funds were initiated. The core
business of IBV <strong>is</strong> therefore centred on the management
and admin<strong>is</strong>tration of the initiated closed-end
real estate funds previously under the management
of IBG as the parent company. In order to real<strong>is</strong>e
th<strong>is</strong> task, in line with targets, oriented towards a solution
and in the context of the position of IBV as the
managing limited partner, the company underwent
extensive restructuring in 2003. In addition to the
concentration of the company exclusively on the
Nuremberg office, within the company, a fund-related
team organ<strong>is</strong>ation was real<strong>is</strong>ed, which <strong>is</strong> exclusively
responsible for the functions of fund management,
controlling and accounting. Furthermore, customeroriented
subscriber management was establ<strong>is</strong>hed
for all funds.
After appra<strong>is</strong>al and analys<strong>is</strong> of all closed-end
real estate funds managed directly by IBV, specific
commercial options, with regard to earnings and r<strong>is</strong>k
aspects in particular, were developed in conjunction
with LPFV.
In addition, for the 2001 and 2002 financial years,
a current account statement was prepared for the
first time since 2000 for all funds in which IBV carries
out the management function. These measures
involved the closure of the “planning and sale of real
estate funds” business area, previously based in
Wiesbaden, on September 30, 2003.
Util<strong>is</strong>ation of non fund-linked
real estate assets
In the business area “non fund-linked real estate
assets”, property sales with an overall volume of
some a 730 million were real<strong>is</strong>ed in the year under
review despite the difficult market conditions.
Commercial real estate (e.g. project developments,
land ready for building and/or complete commercial
properties) account for around a 670 million of th<strong>is</strong>
total (previous year: a 337 million). The Residential
Real Estate segment achieved a sat<strong>is</strong>factory result
with 454 units (previous year: 503 units) and a
sales volume of some a 57 million (previous year:
a 82 million).
The non fund-linked real estate portfolio of the
IBAG Group was substantially reduced by a 2.4 billion
from around a 3.4 billion originally to now almost
a 1 billion since the start of the restructuring measures
in autumn 2001. The r<strong>is</strong>k minim<strong>is</strong>ation involved
was also achieved in particular as a result of the

almost full implementation of the strategically planned
withdrawal in international business from investments
in the UK, the Netherlands and the USA.
Cost reduction in facility management
ARWOBAU <strong>is</strong> responsible for facility management
within the IBAG Group and for the major fund companies.
In the year under review, extensive measures
for the restructuring were successfully continued
here too in a separate sub-project with the objective
of achieving sustained cost reduction and increasing
efficiency.
Higher level of market acceptance
for municipal real estate services
DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft
mbH provides nationwide and specific
municipal real estate services with a high level
of market acceptance, with no r<strong>is</strong>k investments of
its own. The restructuring of DSK had already been
extensively implemented in the previous year.
Business policy and strategic dec<strong>is</strong>ions
The IBAG Group performs its functions in the context
of the basic agreement concluded in December 2001
relating to shielding the <strong>Bankgesellschaft</strong> Berlin AG
Group from material r<strong>is</strong>ks from Real Estate Services,
and the detailed agreement defined in relation thereto
on April 16, 2002. These agreements were concluded
between the State of Berlin as well as Bankgesell-
39
REAL ESTATE SERVICES
schaft Berlin, IBAG Immobilien und Beteiligungen
AG, Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong>
Berlin GmbH (IBG) and LPFV. The particular
structure of the detailed agreement covers
r<strong>is</strong>k management, which <strong>is</strong> implemented at a Real
Estate Services level (IBAG, IBG and LPFV) and at
Group level, not only of Group r<strong>is</strong>ks, but also the r<strong>is</strong>ks
assumed by the State of Berlin. The Group manages
the r<strong>is</strong>ks assumed by the State and provides a r<strong>is</strong>k
management and controlling system.
The process of strategic reorientation and
restructuring commenced in 2001 also had a major
impact on 2003. Across the companies, by the end
of the year under review, the majority of the original
33 Group locations, with the exception of the main
offices in Berlin and Nuremberg, were closed.
Personnel and operating costs were permanently
reduced by around a 88 million as a result. All
participations that are not part of the core business
were or are to be liquidated or sold.
In the 2003 financial year, a total of 230 employees
(previous year: 564) left the IBAG Group as
a result of redundancies/severance agreements or
resignations. The number of employees was reduced
as at December 31, 2003 to 971 employees (December
31, 2000: 1,945).
IBG d<strong>is</strong>posing of its participations
IBG progressed as scheduled with its continued
expansion of management and controlling structures
in 2003. As in previous years, it does not manage

40
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Real Estate Services
any new business. The business of IBG and its subsidiaries
<strong>is</strong> to be maintained as necessary. Participations
of IBG are to be sold in the medium term, as
scheduled.
Since IBG does not manage any new business,
it did not generate any significant income to offset its
expenses from performance of its contractual obligations
relating to its ex<strong>is</strong>ting fund business. The
resultant loss was offset at the end of 2002 by the IBG
shareholders by means of a capital measure totalling
a 30 million for the period up to the end of 2003.
LPFV reorgan<strong>is</strong>ed as a contract and
asset management company
LPFV Finanzbeteiligungs- und Verwaltungs GmbH
<strong>is</strong> a wholly-owned subsidiary of <strong>Bankgesellschaft</strong>
Berlin AG. Its original function was the assumption
of internal obligations and r<strong>is</strong>ks of IBG that remained
at IBG in the course of the reorgan<strong>is</strong>ation of the
real estate services business of the Group at the end
of 2000.
To meet the requirements ar<strong>is</strong>ing from the
detailed agreement relating to LPFV and the other
companies in the <strong>Bankgesellschaft</strong> Berlin Group,
LPFV was reorgan<strong>is</strong>ed into a contract and asset
management company. The central objective of the
reoriented LPFV <strong>is</strong> to minim<strong>is</strong>e losses from the
util<strong>is</strong>ation of guarantees. In addition to the area of
responsibility of the accepted obligations, contract
management, in particular the value-maintenance
guarantees segment, was further expanded.
The systematic planning and management of all
guarantees for the individual funds on the bas<strong>is</strong> of
usable and cons<strong>is</strong>tent information was an important
objective for 2003. In th<strong>is</strong> context, taking the fund
LBB 5 as an example, an IT pilot project was initiated
and successfully concluded in summer 2002. The
“integrated r<strong>is</strong>k controlling” system was extended
to all funds during the year under review. Th<strong>is</strong> measure
was supplemented by a project to ensure and
improve the settlement ability with regard to material
aspects, in particular the data quality throughout
the companies. Aside from LPFV, th<strong>is</strong> also included
ARWOBAU, IBV, Bavaria and IBG. The audit of rental
guarantee statements of the funds for 2002 was
carried out in the fourth quarter of 2003 based on
the project results. Around 400 individual property
statements were audited for the relevant funds.
Outlook
On February 18, 2004, the European Comm<strong>is</strong>sion
approved ass<strong>is</strong>tance for <strong>Bankgesellschaft</strong> Berlin.
The approval from the Comm<strong>is</strong>sion <strong>is</strong> tied in with
the commitment by the Federal government to
ensure that a number of measures are implemented.
As a result, Real Estate Services in particular must
be sold or wound up by December 31, 2005 in accordance
with a commitment to the EU Comm<strong>is</strong>sion.
On th<strong>is</strong> date, any ex<strong>is</strong>ting participations in Real
Estate Services companies are then to be transferred
to the State of Berlin in line with market conditions.
A corresponding plan for the spin-off <strong>is</strong> to be drawn up
by the Bank. New real estate funds or other capital
investment products are no longer developed or sold.

Corporate Investments
The Group’s banking participations, which are no
longer allocated to the core business of Bank in line
with the reconstruction plan and have therefore
been prospectively put up for sale, are reported in
the Corporate Investments segment.
Zivnostenská banka a.s., Prague was sold in
2002. The transfer of ownership to the new owners,
the Italian company UniCredito Italiano, took place
at the beginning of 2003. Earnings contributions
from the current business of th<strong>is</strong> bank were no
longer generated for the Group in the year under
review.
Following its sale to GE Bank, Allgemeine Privatkundenbank
AG (ALLBANK) withdrew from the scope
of consolidated companies on September 1, 2003.
The earnings of ALLBANK up to August 2003 are included
in the 2003 consolidated and segment result.
As at year-end 2003, the segment only compr<strong>is</strong>ed
Weberbank Privatbankiers KGaA and the largely
de-operational<strong>is</strong>ed <strong>Bankgesellschaft</strong> Berlin (Polska)
S.A. Warsaw. Further steps for divestment were
prepared.
Earnings before taxes amounted to a 48 million
(previous year: a 22 million). The improvement in
earnings was almost completely due to ALLBANK.
41
REAL ESTATE SERVICES / CORPORATE INVESTMENTS

42
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Government-Ass<strong>is</strong>tance Programme
Investitionsbank Berlin (IBB) <strong>is</strong> the State of Berlin's central bank for development. The bas<strong>is</strong> for
its operations <strong>is</strong> the Act by the State of Berlin on the Establ<strong>is</strong>hment of Investitionsbank Berlin
of November 25, 1992. The function of IBB <strong>is</strong> to support the development of the economy and the
housing market through development programmes and by providing expert advice in relation to
investment plans. In ass<strong>is</strong>tance to trade and industry, it <strong>is</strong> primarily geared towards start-ups as
well as small and medium-sized companies. The objective of the monetary ass<strong>is</strong>tance <strong>is</strong> to stabil<strong>is</strong>e
the development of companies and to support their establ<strong>is</strong>hment on the market. In addition,
the prov<strong>is</strong>ion of ass<strong>is</strong>tance by IBB <strong>is</strong> oriented in particular towards the areas of expert<strong>is</strong>e of the
State of Berlin, such as IT, communication technology, life science and transportation.
IBB fulfils its tasks at the instigation of the State of
Berlin. It <strong>is</strong> an organ<strong>is</strong>ationally and economically
independent, commercially unreg<strong>is</strong>tered bank subject
to public law, which <strong>is</strong> run as a non-profit department
of Landesbank Berlin. IBB’s assets are managed
separately from the Bank’s other assets as a special
fund. IBB’s activity <strong>is</strong> not geared towards generating
a profit.
IBB VOLUME OF GOVERNMENT ASSISTANCE
Subsidies Loans Participation
(new approvals) (new approvals)
in t million 31.12.2003 31.12.2002 31.12.2003 31.12.2002 31.12.2003 31.12.2002
Ass<strong>is</strong>tance to trade & industry 124.8 120.3 8.7 16.9 7.8 9.0
Real estate ass<strong>is</strong>tance 23.8 1) 39.5 1) 24.9 2) 107.5 2) – –
Total 148.6 159.8 33.6 124.4 7.8 9.0
1) Excluding ongoing ass<strong>is</strong>tance, including hardship allowance
2) Excluding ongoing ass<strong>is</strong>tance and pass-through loans
The development result of the year under review
was strongly impacted in the real estate div<strong>is</strong>ion by
the decline in ass<strong>is</strong>tance for housing associations. Th<strong>is</strong>
<strong>is</strong> compounded by the d<strong>is</strong>continuation of ongoing
ass<strong>is</strong>tance, which <strong>is</strong> not included in the table shown
above. In ass<strong>is</strong>tance to trade and industry, above all
the decrease in new business in relation to liquidity
ass<strong>is</strong>tance and the d<strong>is</strong>continuation of programmes
led to a reduction in new approvals for loans. In contrast,
subsidy volumes increased slightly.
in t million 31.12.2003 31.12.2002
Balance sheet total 19,196.9 19,513.5
Of which loans to clients 14,857.2 15,105.4
Net income for the year 12.0 0.8

The Assembly of Guarantors of Landesbank
Berlin <strong>is</strong> to decide on the use of the net income for
2003 following an amendment of the statute in
December 2003. In previous years, the net income
of Investitionsbank Berlin was allocated to the
special-purpose reserve. Th<strong>is</strong> special-purpose reserve,
which largely remains tied to IBB’s ass<strong>is</strong>tance policy
objectives, will be fully taken into account for the
purpose of determining the regulatory equity ratios
of Landesbank Berlin and the <strong>Bankgesellschaft</strong>
Berlin Group. IBB’s volume of business <strong>is</strong> recorded
in the corresponding statements of Landesbank
Berlin and the <strong>Bankgesellschaft</strong> Berlin Group as
a component of the aggregate totals.
Scope of responsibilities of
Investitionsbank Berlin
GOVERNMENT-ASSISTANCE PROGRAMMES LOANS
The State of Berlin’s most important programmes to
provide ass<strong>is</strong>tance to trade and industry and real
estate are combined under the umbrella of Investitionsbank
Berlin. IBB provides ass<strong>is</strong>tance in the form
of loans at favourable interest rates, non-repayable
subsidies, guarantees, participations and free-ofcharge
consultations. In co-ordination with the State
of Berlin, IBB launches its own development programmes
and <strong>is</strong> directly and indirectly involved in
solving structural policy <strong>is</strong>sues.
43
GOVERNMENT-ASSISTANCE PROGRAMME
in t million 31.12.2003 31.12.2002
Real estate loans 11,487 12,146
Other loans (e.g. consumer loans) 3,168 2,959
Total loans and advances to customers 14,655 15,105
Loans to banks over 1 year 2,475 3,467
Total 17,130 18,572
GOVERNMENT-ASSISTANCE PROGRAMMES DEPOSITS
in t million 31.12.2003 31.12.2002
Overnight deposits 309 188
Term deposits 11,136 9,537
Total customer deposits 11,445 9,725
Amounts due to banks over 1 year 3,627 7,079
Total 15,072 16,804
Focus of ass<strong>is</strong>tance to trade and industry
on small to medium-sized companies in Berlin
With its ass<strong>is</strong>tance to trade and industry programmes,
Investitionsbank Berlin supports the economic and
structural change in Berlin. It provides ass<strong>is</strong>tance
in particular to innovative and technology-oriented
companies in the sectors of the future, such as IT,
communication technology and biotechnology. The
programmes also ass<strong>is</strong>t start-ups to real<strong>is</strong>e their
business ideas right through to the establ<strong>is</strong>hment
of the new company on the market.
In the context of a pilot project with the Techn<strong>is</strong>che
Universität Berlin (TU Berlin), Investitionsbank
Berlin offered a tuition fee loan programme for the
first time in the year under review
to ass<strong>is</strong>t students with the financing of study costs
for postgraduate courses that are subject to fees.
The reorientation of the bank will, in future,
denote a greater focus in ass<strong>is</strong>tance to trade and industry
on the prov<strong>is</strong>ion of monetary ass<strong>is</strong>tance to
the areas of expert<strong>is</strong>e of Berlin and small to mediumsized
companies based in Berlin.

44
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Government-Ass<strong>is</strong>tance Programme
Real estate ass<strong>is</strong>tance scaled back still further
The volume in the real estate ass<strong>is</strong>tance div<strong>is</strong>ion was
scaled back still further due to the shortage of budget
funds and low market demand. In the year under
review, IBB financed other measures for the formation
of housing ownership from Berlin’s housing portfolio,
the foundation of housing associations, the modern<strong>is</strong>ation
and maintenance of residential space and the
improvement of the residential environment. The
problematic general economic situation on the Berlin
real estate market <strong>is</strong> continuing to necessitate intensive
consultation to support owners in maintaining
the economic efficiency of their properties.
In real estate ass<strong>is</strong>tance, the future focus will
be on efficient processing of ex<strong>is</strong>ting development
programmes.
Structure bank participations promote
plans in the interest of the State
In addition to the implementation of development
programmes, it <strong>is</strong> also IBB’s responsibility to structure
or finance important plans in the interest of the
State through strategic participations.
2003 saw the merger of Wirtschaftsförderung
Berlin GmbH and BAO BERLIN International GmbH.
The new company bundles the strengths relating to
the establ<strong>is</strong>hment of new companies in Berlin and
the international<strong>is</strong>ation of the Berlin economy under
the name Wirtschaftsförderung Berlin International
GmbH (WFBI). IBB holds 37.5% of the nominal
capital of the new company.
Furthermore, Filmboard Berlin-Brandenburg
GmbH assumed the responsibilities of Medienbüro
Berlin-Brandenburg on January 1, 2004 and now
operates as Medienboard Berlin-Brandenburg
GmbH. Shareholders in Medienboard are Investitionsbank
Berlin and Investitionsbank Brandenburg
each holding 50%. Medienboard <strong>is</strong> to function in
future as a central contact point for the media sector
in Berlin and Brandenburg.
The direct share of IBB in ipal Gesellschaft für
Patentverwertung Berlin GmbH was reduced on
December 31, 2003 from 52.5% to 49.5%; 3% was
transferred to <strong>Bankgesellschaft</strong> Berlin.
Outlook
The core function of IBB as a development bank <strong>is</strong>
the fast and effective implementation of the economic
policy objectives of the State. The intention <strong>is</strong> to spin
off IBB from Landesbank by January 1, 2005 at the
latest as a bank subject to public law with liability
assumed and refinancing guarantees, however without
guarantor’s liability. The creation of legal bases
for the spin-off of IBB <strong>is</strong> on the verge of being completed.
Th<strong>is</strong> includes in particular the adoption of the
IBB law, which determines the future responsibilities
and structures of IBB. The operational implementation
of the spin-off activities <strong>is</strong> expected to be
concluded by the end of the second quarter of 2004,
i.e. IBB will have set up all relevant functions for
the operation of the banking business.
In parallel to the spin-off from Landesbank
Berlin, IBB <strong>is</strong> to carry out a restructuring project for
the reorientation of the bank. Once the fundamental
strategic orientation has been co-ordinated with
the State, the current detailed planning <strong>is</strong> to centre
primarily on adjusting and focusing the range of
development programmes. In addition, the processing
procedures for increasing efficiency are to be
simplified and optim<strong>is</strong>ed.

Other/Consolidation
Earnings contributions that are not to be allocated to
the client-oriented business areas are posted in the
Other/Consolidation segment. Group consolidation <strong>is</strong>
also carried out.
On the income side, own shares did not have any
significant impact on income in the year under review
(previous year: negative impact in the amount of
a 16 million in the profit from financial transactions).
Admin<strong>is</strong>trative expenditure includes the expenditure
of the central staff unit and control div<strong>is</strong>ions as well
as that of all service companies available as service
providers. Their services are primarily charged
to the other segments, where they are included in
Other admin<strong>is</strong>trative expenditure.
The service companies are IT service provider
BB-Data and system development company BG-SYS
oHG, as well as BankenService GmbH and Bauprojektund
Facilitymanagement GmbH (BFM). BB-Data was
no longer operational in 2003 and BG-SYS oHG was
transferred to <strong>Bankgesellschaft</strong> Berlin AG in the
middle of 2003 by means of a transfer of operations.
BFM <strong>is</strong> to conclude its operating activities in 2004;
some of the functions are to be moved back to the
Bank or outsourced to an external service provider.
45
GOVERNMENT-ASSISTANCE PROGRAMME / SONSTIGES/KONSOLIDIERUNG
The number of full-time jobs in the Corporate
Centres was cut still further by 327 to 2,536 in the year
under review. Around 700 of these are in the central
staff areas and 1,300 are in Transaction Banking
(Organ<strong>is</strong>ation, IT, Bankenservice, BFM). Some 500
personnel capacities will continue to be reported
separately as a result of legal protection of working
mothers, parental leave, etc.
Other admin<strong>is</strong>trative expenditure of the Corporate
Centres was also decreased to a significant extent
and the focus was again on office space costs.
After r<strong>is</strong>k prov<strong>is</strong>ioning, the operating result of
the Other/Consolidation segment <strong>is</strong> up a 36 million
on the previous year, at a –157 million.
In earnings from financial investments of
a –44 million (previous year: a –367 million), the
write-downs (in particular on EURO STOXX-50 unit
shares) and profits from participations (in particular
the sale of Zivnostenská banka a.s.) were largely
netted. The Group’s reorgan<strong>is</strong>ation and reconstruction
measures again necessitated an allocation to
the restructuring prov<strong>is</strong>ions, which are reflected in
other items, net, in addition to the current restructuring
costs.

46
Profitability
<strong>Bankgesellschaft</strong> <strong>is</strong> setting itself high income targets

The measures for repositioning <strong>Bankgesellschaft</strong> are taking effect – the reconstruction <strong>is</strong>
successful and <strong>is</strong> beginning to pay off. Based on the foundations laid in 2002, the Group <strong>is</strong> now
centred on four pillars: we consider ourselves to be a customer-oriented bank with an excellent
position in retail banking and regional corporate banking, with selected activities in capital
markets business, as well as real estate financing geared towards investors. Th<strong>is</strong> path has
already proven successful. Our room for manoeuvre has been extended. In 2003, we achieved
a turnaround in operating income within the Group.
47

48
MANAGEMENT GESCHÄFTSFELDER AKTIE LAGEBERICHT JAHRESABSCHLUSS
<strong>Bankgesellschaft</strong> Berlin Share
In 2003, the <strong>Bankgesellschaft</strong> Berlin share price
did not participate in the upward trend of the stock
market evident in the second half-year.
Sales have since been revived, indicating increased
interest in the <strong>Bankgesellschaft</strong> share. However,
temporary price r<strong>is</strong>es were not sustainable. After
a volatile development in the middle of the year, the
share became detached from the sector trend and
was quoted at the end of 2003 at a year-end price of
a 2.01, almost at the level of the start of the year.
<strong>Bankgesellschaft</strong> Berlin compared with DAX and CDAX Banks
(closing price December 31, 2002 = 100 %)
in %
180
160
140
120
100
80
60
40
The share of <strong>Bankgesellschaft</strong> Berlin AG <strong>is</strong> l<strong>is</strong>ted
on all German stock exchanges and belongs to the
General Standard index in accordance with the segmentation
of the stock market introduced by
Deutsche Börse on January 1, 2003.
The earnings situation of the 2003 financial year
still does not allow for the payment of dividends.
The resumption of dividend payments can only be
considered at a later date.
31.12.02 18.02.03 08.04.03 27.05.03 15.07.03 02.09.03 21.10.03 09.12.03 27.01.04 16.03.04 06.05.04
<strong>Bankgesellschaft</strong> Berlin
DAX
CDAX Banks

Management Report
50 Overview of the 2003 Financial Year
50 General economic situation
51 General development
52 Restructuring and reorientation in banking
54 Restructuring and spin-off of Investitionsbank Berlin (IBB)
55 Restructuring and reorientation of Real Estate Services
57 Detailed agreement with the State of Berlin
(r<strong>is</strong>k shielding of Real Estate Services)
59 EU financial ass<strong>is</strong>tance proceedings relating to restructuring
ass<strong>is</strong>tance for the benefit of <strong>Bankgesellschaft</strong> Berlin and
the transfer of the former Wohnungsbaukreditanstalt Berlin
(WBK) to Landesbank Berlin – Girozentrale –
62 Development of Business
62 Consolidated result for the 2003 financial year
69 Result of <strong>Bankgesellschaft</strong> Berlin AG for the 2003 financial year
73 Effects of consolidation
75 Development of volume of the Group
78 Development of volume of <strong>Bankgesellschaft</strong> Berlin AG
79 Final statement on the controlled company report pursuant
to section 312 of the German Stock Corporation Act
79 Corporate Governance
81 Implementation of IAS accounting in the Group
82 R<strong>is</strong>k Report
82 Overall system for planning, managing and monitoring r<strong>is</strong>ks
83 R<strong>is</strong>ks of counterparty default
87 Liquidity r<strong>is</strong>ks
87 Market r<strong>is</strong>ks
90 Operational r<strong>is</strong>ks
96 Other r<strong>is</strong>ks
103 Group Outlook
49
SHARE / MANAGEMENT REPORT

50
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Management Report
Overview of the 2003 Financial Year
General economic situation
Hopes of an overall recovery of economic activity
in Germany were dashed once more in 2003. In
the first half of the year, economic output even fell
slightly and employment continued to decline. On
the one hand, th<strong>is</strong> was caused by the unfavourable
general foreign trade conditions. On the other,
however, domestic demand also remained unexpectedly
weak.
Uncertainty with regard to the conflict in Iraq
and the ongoing revaluation of the euro compared
with the currencies of important trading partners
since spring 2002 considerably dampened foreign
demand for German export products in the first few
months of the year. There was only a noticeable
recovery in exports after the third quarter thanks to
the improvement in the international environment
after the spring of 2003. However, even by the end
of the year, the positive foreign trade impetus in the
second half of the year had hardly any impact on
private consumption or the investment activities of
companies.
Against the background of the continuing uncertainty
regarding the future of the social security
systems and possible changes to the tax system, the
propensity to invest by private households remained
high. In view of declining employment figures, d<strong>is</strong>posable
income also only increased slightly, thereby
also preventing stronger growth in consumption
expenditure. The decline in investment in equipment
continued in the past year, albeit with considerably
less momentum. After the mid-year point, however,
the first signs of an improvement could be seen
here. Important indicators, such as the ifo business
climate index, revealed a noticeable change of mood
amongst companies in the second half of the year
at least.
In th<strong>is</strong> still unfavourable environment, the economy
in Berlin has not yet been able to break free
from the recessive phase that it has now been experiencing
since 1996 – with the exception of 2000.
Thus, gross domestic product for Berlin once more
fell by 1.3% in 2003. Thanks to th<strong>is</strong> result, Berlin fell
significantly short of the national German average
of –0.1%. Consequently, Berlin <strong>is</strong> now second from
the bottom compared with the other Federal states.
In addition, the latest economic indicators from
the Stat<strong>is</strong>tical Office of Berlin still do not indicate a
far-reaching improvement in Berlin’s economic
situation. In view of the uncertain outlook for the
future, private households are placing even less
emphas<strong>is</strong> on consumption. The propensity of companies
to invest also remains muted. The situation
with public finances in Berlin <strong>is</strong> an additional factor.
Nevertheless, there <strong>is</strong> growing confidence that things
will start to look up again for the Berlin economy
over the coming months. Important indicators, such
as the IHK business climate indicator for Berlin,
point upwards. The majority of companies are therefore
expecting better economic development over
the next few months.

The increasing economic optim<strong>is</strong>m in Germany
as a whole also underpins a gradual recovery of economic
activity in Berlin. The sales perspectives of
Berlin companies could improve as a result and
propensity to invest could increase somewhat. All in
all, we are expecting moderate growth of 1.0% in
the gross domestic product in Berlin for 2004, which
will therefore once more fall short of the national
average. It <strong>is</strong> important to consider that the forecast
value will benefit from the fact there are fewer bank
holidays in the current year than there were in 2003.
Without th<strong>is</strong> effect, estimated growth in Berlin would
be just 0.5%. However, economic growth at th<strong>is</strong> level
would still be far from sufficient to reduce the high
level of unemployment in Berlin on a sustained
bas<strong>is</strong>.
General development
The continuation of the strategic reorientation of the
Bank, adopted in November 2001, towards becoming
a strong regional bank in the greater Berlin area
with capital markets and real estate financing throughout
Germany was also the main focus of the business
policy in the 2003 financial year. Business activities
of the Group outside of th<strong>is</strong> objective were further
reduced. Th<strong>is</strong> also includes the Group separating
itself from major subsidiary companies and participations.
Another important component of the restructuring
concept, adopted in 2001, was the transfer of
the Berliner Bank branch of <strong>Bankgesellschaft</strong> Berlin
AG to Landesbank Berlin.
51
OVERVIEW OF THE 2003 FINANCIAL YEAR
The restructuring of Real Estate Services was
resolutely continued.
In parallel to the continuation of the Group
restructuring, the pending financial ass<strong>is</strong>tance proceedings
of the European Comm<strong>is</strong>sion (EU Comm<strong>is</strong>sion)
relating to the approval of financial ass<strong>is</strong>tance
offered by the State of Berlin to <strong>Bankgesellschaft</strong>
Berlin was supported. A positive dec<strong>is</strong>ion was reached
on February 18, 2004 regarding the application.
Both the consolidated operating result and the
consolidated result of ordinary business activities
(earnings after taxes, excluding effects from the EU
dec<strong>is</strong>ion) show that the <strong>Bankgesellschaft</strong> Berlin Group
also made considerable progress in the second year
of the restructuring even though the economic
situation in Berlin in particular remained strained
and the banking environment was generally difficult.
Income from ordinary business activities
remained almost stable despite the reduction in the
balance sheet volume in line with the strategy. The
admin<strong>is</strong>trative expenditure was reduced once again,
th<strong>is</strong> year by 10.8% (previous year: –15.4%), as a
result of rigorously implemented cost management.
R<strong>is</strong>k prov<strong>is</strong>ioning in the lending business was
a 409 million, significantly below the figure for the
previous year (a –208 million or –33.7%).
In the operating result of the Group (operating
result after r<strong>is</strong>k prov<strong>is</strong>ioning – without changes to
the reserve according to section 340f of the German
Commercial Code), a positive value <strong>is</strong> reported for
the first time in 2003 after three years with negative
results (a 218 million after a –48 million in the
previous year).

52
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Overview of the 2003 Financial Year
Primarily due to the reduction in expenditure for
financial investments, for losses assumed and for
restructuring, it was possible to achieve profitability
again in the consolidated result of ordinary business
activities (earnings after taxes, excluding effects
from the EU dec<strong>is</strong>ion) (a 24 million after a –699 million
in the previous year).
The approval given in February 2004 by the EU
Comm<strong>is</strong>sion relating to the financial ass<strong>is</strong>tance
granted by the State of Berlin <strong>is</strong> the main milestone
on the path to restructuring to secure the ex<strong>is</strong>tence
of <strong>Bankgesellschaft</strong>. The prov<strong>is</strong>ioning for the implementation
of the EU dec<strong>is</strong>ion amounting to a 317
million and valuations amounting to a 23 million
took the imposed conditions into account. Consolidated
earnings after taxes reported in line with
commercial law were therefore a –316 million.
Restructuring and reorientation in banking
In the context of the EU financial ass<strong>is</strong>tance proceedings,
the EU Comm<strong>is</strong>sion last year appointed
an appra<strong>is</strong>er to examine the conclusiveness and
success prospects of <strong>Bankgesellschaft</strong>’s restructuring
concept. In h<strong>is</strong> report, the auditor concluded that
the restructuring concept <strong>is</strong> both feasible and has,
so far, been successfully implemented.
The principle behind the concept <strong>is</strong> to establ<strong>is</strong>h
the Group on the bas<strong>is</strong> of four pillars: As a customeroriented
bank with an excellent position in the retail
banking and regional corporate banking business,
with capital markets and real estate financing
throughout Germany geared towards investors and
residential construction companies.
The principle behind the restructuring plan
submitted to Brussels <strong>is</strong> to streamline activities, capacity
and organ<strong>is</strong>ational structures for future business
operations and emphatically increase efficiency.
Business activities in Real Estate Services and
Corporate and International Banking are to be
d<strong>is</strong>continued.
Significantly lower r<strong>is</strong>k assets, a substantially
improved r<strong>is</strong>k profile and the sustained reduction of
admin<strong>is</strong>trative costs are expected to safeguard the
Group’s operating earnings power in the long term.
In Capital Markets, the Group aims above all
to reduce the amount of equity tied up by redimensioning
the business and thus lowering r<strong>is</strong>k assets.
The concentration <strong>is</strong> on profitable business areas.
Focused proprietary trading and customer
trading/sales are the future core business areas of
the Capital Markets div<strong>is</strong>ion. The portfolios in Corporate
Banking and Structured Finance are to be
phased out. In international business, opportunities
for business are identified in the growing Central
and Eastern European markets.

Other important cornerstones of th<strong>is</strong> reconstruction
concept for the Group are:
• Increasing the operating result from 2001 to 2006
by a total of a 1 billion
• Reduction of over 8,500 positions in the Group
from the start of the restructuring from the end
of 2001 to the end of 2006
• Lowering admin<strong>is</strong>trative expenditure in the
Group by approximately a 740 million by the end
of 2006
• Scaling back r<strong>is</strong>k items from a 90 billion in 2001
to a 50 billion in 2006
• Substantially adjusting the participation portfolio
The current business plan needs to be adjusted
and reworked due to the conditions imposed by the
EU Comm<strong>is</strong>sion. As a separate <strong>is</strong>sue, the aim <strong>is</strong> to
achieve the reconstruction objectives from the EU
plan from June 2003 submitted to Brussels.
Personnel costs in the Group were further reduced
against the previous year and amount to
a 744 million. Within the scope of reconstruction, a
further 1,200 positions were cut in the year under
review.
The operating costs (including normal depreciation)
in the Group were also further reduced in 2003
against the previous year and amount to a 635 million.
R<strong>is</strong>k items were also reduced as scheduled to
approximately a 58 billion.
53
OVERVIEW OF THE 2003 FINANCIAL YEAR
The reconstruction concept was again rigorously
implemented in 2003.
In Retail Banking, measures to further tighten
the sales network and various process and structural
optim<strong>is</strong>ations were implemented, in particular in
DirektBankService.
The extensive installation of self-service cash
machines resulted in a stronger sales network in
conjunction with the continued optim<strong>is</strong>ation of the
service process.
Regional Corporate Banking successfully
restructured the regional branches in the State of
Brandenburg by focusing on the Potsdam branch.
In Berlin, the branches and sales processes were
concentrated on the commercial client centres of
Berliner Sparkasse. The merger of the Regional
Corporate Banking and Public Sector business areas
was completed.
The new strategic reorientation was further
implemented in Capital Markets. The development
of an integrated sales strategy across the product
areas and the associated reorgan<strong>is</strong>ation of responsibilities
and processes between the trading div<strong>is</strong>ions
were carried out. The measures for the scheduled
ceding of div<strong>is</strong>ions and activities that are not in line
with the corporate strategy were successfully continued.
The reduction of r<strong>is</strong>k assets in the Corporate
Banking and Structured Finance div<strong>is</strong>ions <strong>is</strong> to be
continued unchanged.

54
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Overview of the 2003 Financial Year
The Real Estate Financing business area further
reduced its r<strong>is</strong>k items in the period under review
and decreased the number of jobs.
The restructuring of the Lending Real Estate
and R<strong>is</strong>k Management Real Estate div<strong>is</strong>ions was
carried out.
While new business as a whole remained below
expectations, significantly more extensions were
carried out than planned. Following the optim<strong>is</strong>ation
and implementation of a large number of measures
to rearrange internal processes and structures, the
focus <strong>is</strong> now on the further strengthening of sales
activities. Th<strong>is</strong> became evident in the second half of
2003 as a result of increasing market acceptance.
In the Corporate Centres, approximately
140 jobs were cut in 2003 by means of relinqu<strong>is</strong>hment
of services of the business areas, structural
changes and reduction of the product portfolio.
As a result of bundling the retail business of the
Berliner Bank and Berliner Sparkasse brands under
the umbrella of Landesbank Berlin, an important
milestone in the reconstruction of the Group was
reached on July 1, 2003. Th<strong>is</strong> step was taken on the
bas<strong>is</strong> of the sales agreement dated June 24, 2003.
The independent div<strong>is</strong>ion of the business, Berliner
Bank, previously run as a subsidiary of <strong>Bankgesellschaft</strong>
Berlin AG, was sold to Landesbank Berlin
– Girozentrale –. Under the umbrella of LBB, the two
Berliner Bank and Berliner Sparkasse brands are
now run as separate entities. As a result of the EU
dec<strong>is</strong>ion, the profitable Berliner Bank unit must be
spun off from the Group by February 1, 2007 at the
latest and sold to a separate investor.
Divestment possibilities for the Group’s
participations were also rigorously examined and
implemented in 2003. For example, <strong>Bankgesellschaft</strong>
d<strong>is</strong>posed of the stake in ALLBANK. The sale of
Zivnostenská banka a.s., Prague, which was contractually
agreed in 2002, was concluded in the year
under review with the transfer of the shares to the
new owner. Shares in LHI Leasing GmbH were also
sold. These divestments contribute to the reduction
of the <strong>Bankgesellschaft</strong> Group’s complexity. The
sale of Weberbank <strong>is</strong> going ahead.
Restructuring and spin-off
of Investitionsbank Berlin (IBB)
The intention <strong>is</strong> to spin off IBB by January 1, 2005 at
the latest as a bank subject to public law with liability
assumed and refinancing guarantees, however without
guarantor’s liability. Following the assurance of
the Federal Government, the <strong>Bankgesellschaft</strong> Group
must separate the IBB special-purpose reserve from
Landesbank Berlin by January 1, 2005 at the latest,
whereby LBB will continue to have access to the
share of the special-purpose reserve that <strong>is</strong> necessary
for a core capital ratio of 6.0% in the <strong>Bankgesellschaft</strong>
Group as at January 1, 2004 (after the spin-off of
IBB), but not exceeding a 1.1 billion. Interest on the
funds remaining at LBB will be calculated in line

with market conditions. Prec<strong>is</strong>e details on the volume
and amount of the interest have not yet been determined.
The scope of the state liability guarantees
allows the henceforth independent IBB to continue
its work as the development bank for the State of
Berlin within the framework of the understanding
relating to the continuation of the state liability
guarantees for liability assumed and guarantor’s
liability agreed between the Federal Republic of
Germany and the EU Comm<strong>is</strong>sion on March 1, 2002.
The creation of legal bases for the spin-off of
IBB <strong>is</strong> on the verge of being completed. In particular,
th<strong>is</strong> includes the approval of the IBB leg<strong>is</strong>lation
planned for spring 2004 by the Senate and the Berlin
House of Representatives, which regulates the future
duties and structures of IBB.
The operational implementation of the spin-off
activities <strong>is</strong> expected to be concluded by the end of
the second quarter 2004. Associated tasks include the
creation of an in-house reporting system, fulfilment
of regulatory requirements and the continuing creation
of functions that are currently still performed
by the <strong>Bankgesellschaft</strong> Group.
At the start of September 2003, the IBB Committee
decided to initiate a restructuring project to optim<strong>is</strong>e
the bank at the same time as spinning off IBB from
the <strong>Bankgesellschaft</strong> Berlin Group.
The bas<strong>is</strong> of the restructuring <strong>is</strong> the reorientation
of IBB drawn up and agreed with the State of Berlin.
The core elements of th<strong>is</strong> business orientation in
55
OVERVIEW OF THE 2003 FINANCIAL YEAR
ass<strong>is</strong>tance to trade and industry are a focus on the
prov<strong>is</strong>ion of monetary ass<strong>is</strong>tance for Berlin’s areas of
expert<strong>is</strong>e and small and medium-sized companies
in Berlin. In contrast, the emphas<strong>is</strong> in real estate
ass<strong>is</strong>tance <strong>is</strong> on more efficient processing of ex<strong>is</strong>ting
development programmes. Within IBB’s development
funding contract, the aim <strong>is</strong> for cons<strong>is</strong>tent orientation
to business principles in terms of services rendered.
A more detailed restructuring concept <strong>is</strong> currently
being drawn up and implemented. Th<strong>is</strong> concept concentrates
on both adjusting and focusing the range of
development programmes as well as simplifying and
optim<strong>is</strong>ing the processing procedures to improve
efficiency when providing services.
Restructuring and reorientation
of Real Estate Services
The restructuring and reconstruction of Real Estate
Services, started in the autumn of 2001, remained
focus of activities in the 2003 financial year. Th<strong>is</strong>
included the implementation of the agreement concluded
with the State of Berlin relating to shielding
from the material r<strong>is</strong>ks ar<strong>is</strong>ing from Real Estate
Services business (see chapter Detailed agreement
with the State of Berlin).

56
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Overview of the 2003 Financial Year
The “closed-end real estate funds” business area <strong>is</strong>
represented within the IBAG Group by IBV Immobilien
Beteiligungs- und Vertriebsgesellschaft der IBAG
Gruppe mbH. The company underwent extensive
restructuring in 2003. In addition to the concentration
of IBV exclusively on the Nuremberg office, within
the company, a fund-related team organ<strong>is</strong>ation
was real<strong>is</strong>ed, which <strong>is</strong> exclusively responsible for
the functions of fund management, controlling and
accounting. Furthermore, customer-oriented subscriber
management was establ<strong>is</strong>hed for all funds.
Since no new closed-end real estate funds were
initiated in the 2003 financial year, as in the previous
year, the “planning and sale of real estate funds”
business area, previously based in Wiesbaden, was
d<strong>is</strong>continued and concluded on September 30, 2003.
Across the companies, by the end of the 2003
reporting year, the majority of the original 33 Group
locations, with the exception of the main offices in
Berlin and Nuremberg, were closed as part of the
restructuring and the personnel and operating costs
were permanently reduced by around a 88 million.
All participations that are not part of the core business
were or are to be liquidated or sold.
In the 2003 financial year, a total of 230 employees
(previous year: 564) left the IBAG Group as
a result of redundancies/severance agreements or
resignations. The number of employees was reduced
as at December 31, 2003 to 971 employees (December
31, 2000: 1,945). Compared with December 31,
2000, a total of 974 employees were lost; th<strong>is</strong> equates
to almost 60% of the original workforce at (old) IBG.
At the focus of the activities of the current
financial year <strong>is</strong> the rigorous continuation of the
restructuring and consolidation process, including
all measures to cut costs and minim<strong>is</strong>e losses.
The approval from the Comm<strong>is</strong>sion <strong>is</strong> tied in
with the commitment by the Federal government to
ensure that a number of measures are implemented.
As a result, Real Estate Services in particular must
be sold or wound up by December 31, 2005 in accordance
with a commitment to the EU Comm<strong>is</strong>sion. On
th<strong>is</strong> date, any ex<strong>is</strong>ting participations in Real Estate
Services companies are then to be transferred to the
State of Berlin in line with market conditions. A
corresponding plan for the spin-off <strong>is</strong> to be drawn up
by the Bank. New real estate funds or other capital
investment products are no longer developed or sold.
Accordingly, based on the scenarios and resulting
medium-term planning, all necessary valuation
measures were taken and adequate prov<strong>is</strong>ioning was
made in the IBAG 2003 annual financial statements.

The measures started in 2002 for the restructuring
of LPFV in terms of organ<strong>is</strong>ational set-up and
ongoing implementation, as well as the establ<strong>is</strong>hing
of auditing and clearing procedures for the various
guarantees to both the exempted Group companies
and the State of Berlin, was almost completed in 2003.
As early as 2002, to meet the requirements ar<strong>is</strong>ing
from the detailed agreement, LPFV was reorgan<strong>is</strong>ed
into a contract and asset management company.
Firstly, it acts as a central settlement office of the
<strong>Bankgesellschaft</strong> Berlin Group in relation to the State
of Berlin. Secondly, it performs real estate r<strong>is</strong>k and
fund r<strong>is</strong>k management tasks for closed-end real
estate funds carrying guarantees. During the course
of the deoperational<strong>is</strong>ation of IBG, LPFV assumed
important responsibilities of IBG in the context of an
agency agreement.
IBG achieved the scheduled progress in deoperational<strong>is</strong>ation
as well as further expansion of management
and controlling structures in 2003. Against the
background of the orientation of IBG towards a pure
controlling company, a project was initiated in the
year under review for the planning and implementation
of suitable process and the real<strong>is</strong>ation of clear
structures and responsibilities. Th<strong>is</strong> project ensures
and documents the mapping of the agreements in
accounting and in the planning process at IBG. The
project <strong>is</strong> to be concluded in the first quarter of 2004.
57
OVERVIEW OF THE 2003 FINANCIAL YEAR
Detailed agreement with the State of Berlin
(r<strong>is</strong>k shielding of Real Estate Services)
The detailed agreement dated April 16, 2002
between <strong>Bankgesellschaft</strong> Berlin AG and its subsidiaries
Landesbank Berlin – Girozentrale –,
Berlin Hannoversche Hypothekenbank AG, IBAG
Immobilien und Beteiligungen AG, Immobilienund
Baumanagement der <strong>Bankgesellschaft</strong> Berlin
GmbH, LPFV Finanzbeteiligungs- und Verwaltungs
GmbH with the State of Berlin shields the Group
from the substantial r<strong>is</strong>ks in Real Estate Services
that had ar<strong>is</strong>en by December 31, 2001. Th<strong>is</strong> does not
include r<strong>is</strong>ks from subsequent new business and
from the launch of real estate funds after December
31, 2000.
In accordance with the detailed agreement, the
loan guarantee covers loans and loan commitments
to IBAG Immobilien und Beteiligungen AG Group,
Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong>
Berlin GmbH Group companies named in
the detailed agreement as well as certain property
and fund companies, which <strong>Bankgesellschaft</strong> Berlin
AG, Landesbank Berlin – Girozentrale – or Berlin
Hannoversche Hypothekenbank AG have originated
or guaranteed.

58
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Overview of the 2003 Financial Year
Furthermore, the key balance sheet assets of
the IBAG Immobilien und Beteiligungen AG Group
and the Immobilien- und Baumanagement der
<strong>Bankgesellschaft</strong> Berlin GmbH Group companies are
consolidated, as well as certain prov<strong>is</strong>ions and exemption
from contingent liabilities and contingencies.
Claims from the guarantee specified in the detailed
agreement only ar<strong>is</strong>e in the event of d<strong>is</strong>posal or liquidation
of guaranteed balance sheet assets or final
real<strong>is</strong>ation of a r<strong>is</strong>k covered by the exemption up
to final settlement to be performed by December 31,
2031 at the latest. Losses real<strong>is</strong>ed here are to be
reimbursed by the State of Berlin and gains are to be
transferred to the same. Book values in IBAG Immobilien
und Beteiligungen AG participations in which
th<strong>is</strong> company manages its new business are excluded
from th<strong>is</strong> guarantee.
The State of Berlin has also exempted <strong>Bankgesellschaft</strong>
Berlin AG’s subsidiary special<strong>is</strong>ing in the
management of the fund guarantees, LPFV Finanzbeteiligungs-
und Verwaltungs GmbH, from its liability
r<strong>is</strong>ks should the portion of the loss to be borne
exceed a 100 million. Th<strong>is</strong> portion of the loss to be
borne was util<strong>is</strong>ed in full by LPFV Finanzbeteili-
gungs- und Verwaltungs GmbH in the 2003 financial
year. With the exception of certain individual funds,
the result <strong>is</strong> that the Group <strong>is</strong> shielded against substantial
liability r<strong>is</strong>ks from the fund guarantees
<strong>is</strong>sued. Furthermore, the State of Berlin has largely
exempted <strong>Bankgesellschaft</strong> Berlin AG from enforcement
from the letters of comfort that ex<strong>is</strong>ted for
Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong>
Berlin GmbH, Immobilien Beteiligungs- und
Vertriebsgesellschaft der <strong>Bankgesellschaft</strong> Berlin
mbH and Bavaria Objekt- und Baubetreuung GmbH
until December 31, 1998. The State of Berlin has
been granted examination rights in accordance with
the Federal Law on Budgetary Principles (HGrG)
at the Group companies involved and additional
information and management rights. Thus, certain
measures are only covered by the guarantee or
exemption if the State of Berlin has approved the
measures in question in advance.
For the obligations of the Group companies resulting
from the detailed agreement, joint and several
liability has been specified to cover <strong>Bankgesellschaft</strong>
Berlin too. Liability was d<strong>is</strong>tributed internally by
means of an agreement dated August 2002 and th<strong>is</strong>
provides for liability equal<strong>is</strong>ation in accordance
with the regulations defined in more detail therein.
These regulations are largely oriented towards the
investments in the company with which liability
originated.

Up to and including 2011 at least, the State of
Berlin will receive a guarantee comm<strong>is</strong>sion amounting
to a 15 million p.a. from <strong>Bankgesellschaft</strong> Berlin
for assuming the various guarantees. Th<strong>is</strong> comm<strong>is</strong>sion
<strong>is</strong> broken down within the Group on the bas<strong>is</strong> of
the agreement dated August 2002, providing for a
partial reimbursement of costs by Landesbank Berlin
– Girozentrale – and Berlin Hannoversche Hypothekenbank
AG. Th<strong>is</strong> reimbursement <strong>is</strong> based on
volume ratios of the three sub-bank loans protected
by the loan guarantee. In addition, the State of Berlin
has received a debtor warrant, which carries with it
certain conditions, the costs of which are to be borne
by <strong>Bankgesellschaft</strong> Berlin AG alone as the principal
beneficiary of the detailed agreement.
Supplementing the detailed agreement, the
parties to the agreement conducted final negotiations
on an ordinance regulating responsibility and
procedure as scheduled. The ordinance regulating
responsibility and procedure, which requires the
approval of the Berlin House of Representatives and
the BGB Annual General Meeting, controls the
approval and procedural <strong>is</strong>sues in detail and in th<strong>is</strong>
respect replaces the corresponding regulations of the
detailed agreement. However, the ordinance regulating
responsibility and procedure should not give
r<strong>is</strong>e to any changes to the material scope of the r<strong>is</strong>k
shielding.
59
OVERVIEW OF THE 2003 FINANCIAL YEAR
EU financial ass<strong>is</strong>tance proceedings relating
to restructuring ass<strong>is</strong>tance for the benefit
of <strong>Bankgesellschaft</strong> Berlin and the transfer of
the former Wohnungsbaukreditanstalt Berlin
(WBK) to Landesbank Berlin – Girozentrale –
On February 18, 2004, the EU Comm<strong>is</strong>sion approved
ass<strong>is</strong>tance for <strong>Bankgesellschaft</strong> Berlin. The approval
encompasses the injection of capital by the State
of Berlin in August 2001 amounting to a 1.755 billion,
the “r<strong>is</strong>k shielding” of the State of Berlin from December
2001/April 2002 cons<strong>is</strong>ting of various guarantees
with a nominal maximum amount of a 21.6 billion
as well as the “repayment agreement” (term in line
with the dec<strong>is</strong>ion by the EU Comm<strong>is</strong>sion; referred to
as “neutral<strong>is</strong>ation agreement” in the 2002 annual
report) between the State of Berlin and Landesbank
Berlin dated December 2002, which was concluded
in view of any dec<strong>is</strong>ion in favour of restitution taken
by the EU Comm<strong>is</strong>sion in the proceedings relating
to the examination of the financial ass<strong>is</strong>tance aspect
of the transfer of WBK to LBB. The approval by the
EU Comm<strong>is</strong>sion <strong>is</strong> tied in with a number of commitments
from the Federal government and ensures
that the repayment agreement does not result in
the core capital ratio of 6.0% as of January 1, 2004
being exceeded in the <strong>Bankgesellschaft</strong> Berlin Group
(without taking into consideration the spin-off of
Investitionsbank Berlin from Landesbank Berlin to
be carried out by January 1, 2005).

60
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Overview of the 2003 Financial Year
The approval of the injection of capital by the
State of Berlin in line with the capital increase adopted
in the Annual General Meeting of <strong>Bankgesellschaft</strong>
Berlin AG on August 29, 2001 was essential as
the injection of capital was to date only approved as
financial ass<strong>is</strong>tance by the Comm<strong>is</strong>sion for a limited
period. The permanent d<strong>is</strong>position of the injected
capital <strong>is</strong> also now legally approved from a financial
ass<strong>is</strong>tance perspective.
Furthermore, the r<strong>is</strong>k shielding was also approved
in full as expected, i.e. in particular at the amount
of the maximum value of a 21.6 billion.
With the dec<strong>is</strong>ion by the EU Comm<strong>is</strong>sion, approval
has also been given by the Comm<strong>is</strong>sion for the repayment
agreement, which was first approved by the
Berlin House of Representatives on February 20, 2003.
Th<strong>is</strong> agreement was concluded against the following
background:
In a letter dated July 2, 2002, the EU Comm<strong>is</strong>sion
announced its resolution to initiate separate formal
proceedings as a result of the transfer of the former
Wohnungsbaukreditanstalt (now Investitionsbank
Berlin or “IBB”) to Landesbank Berlin – Girozentrale –
(the “LBB/IBB proceedings”). In a letter dated September
9, 2002 in particular, the Federal government
provided the EU Comm<strong>is</strong>sion with additional detailed
information and opposed the view that the measure
in question constituted financial ass<strong>is</strong>tance.
The Board of Management <strong>is</strong> confident that the
EU Comm<strong>is</strong>sion will conclude the LBB/IBB proceedings
with a dec<strong>is</strong>ion to the effect that the measure
involved in the proceedings <strong>is</strong> not connected with
financial ass<strong>is</strong>tance.
It <strong>is</strong> nevertheless still possible that the EU
Comm<strong>is</strong>sion may opt for non-approvable financial
ass<strong>is</strong>tance. In th<strong>is</strong> case, it <strong>is</strong> to be assumed that the
EU Comm<strong>is</strong>sion will decide in favour of restitution,
according to which the ass<strong>is</strong>tance amount plus
interest <strong>is</strong> to be repaid for the period from when the
aid was made available up to its repayment to the
State of Berlin.
A prov<strong>is</strong>ion would need to be set up in the 2003
LBB annual financial statements and the BGB consolidated
financial statements in view of the possible
return of the ass<strong>is</strong>tance ar<strong>is</strong>ing from the LBB/IBB
proceedings, which neither LBB nor the Group would
currently be able to absorb without violating the
bank regulatory requirements; the same was also
applicable for the 2002 annual financial statements.
To avoid th<strong>is</strong> prov<strong>is</strong>ioning, on December 23/27,
2002, the State of Berlin and LBB concluded the
repayment agreement. In accordance with the agreement,
the State of Berlin undertakes to neutral<strong>is</strong>e any
subsequent obligation to repay any WBK ass<strong>is</strong>tance

esulting from the LBB/IBB proceedings in the
context of the granting of a subsidy to be recogn<strong>is</strong>ed
as income. The intention behind the agreement <strong>is</strong>
that any claim by LBB from the repayment agreement
<strong>is</strong> tied in with certain capital ratios being undershot
in the 2002 annual financial statements of LBB
and the BGB Group. The EU Comm<strong>is</strong>sion has adapted
th<strong>is</strong> connection in its dec<strong>is</strong>ion regarding approval
and has decided that the repayment agreement must
also not result in capital ratios of 6.0% at the BGB
Group being undershot as at the reporting date January
1, 2004 (taking the planned spin-off of IBB into
account).
The approval from the EU Comm<strong>is</strong>sion <strong>is</strong> tied in
with the commitment by the Federal government to
ensure that a number of measures are implemented.
One of the measures <strong>is</strong> the d<strong>is</strong>posal of the participation
that the State of Berlin holds in BGB by the end of
2007 at the latest. In addition, the BGB Group has
until the December 31, 2005, with effect on the balance
sheet, to sell or liquidate its Real Estate Services
covered by the r<strong>is</strong>k shielding and to d<strong>is</strong>pose of the
“Berliner Bank” subsidiary of LBB by February 1,
2007 at the latest. Moreover, following the assurance
of the Federal government, the BGB Group must
separate the IBB special-purpose reserve from LBB
by January 1, 2005 at the latest, whereby, in line with
market conditions, LBB will continue to have access
61
OVERVIEW OF THE 2003 FINANCIAL YEAR
to the share of the special-purpose reserve that <strong>is</strong>
necessary for a core capital ratio of 6.0% in the
<strong>Bankgesellschaft</strong> Group as of January 1, 2004 (after
the spin-off of IBB), but not exceeding a 1.1 billion.
Finally, the BGB Group has until the end of 2005 at
the latest to liquid<strong>is</strong>e its participation in BGB Ireland
plc. and implement the restructuring plan. Th<strong>is</strong>
restructuring plan includes the d<strong>is</strong>posal of Weberbank
and the sale or closure of German and foreign
subsidiaries and branches. Finally, the Comm<strong>is</strong>sion
has acknowledged the intention of the Federal government
to sell Berlin Hyp either within the framework
of the privat<strong>is</strong>ation of the BGB Group or separately
by the end of 2007.
<strong>Bankgesellschaft</strong> Berlin <strong>is</strong> prepared to fulfil the
restructuring plan as well as the conditions and
obligation agreements entered into by the Federal
government that the EU Comm<strong>is</strong>sion has imposed
as a prerequ<strong>is</strong>ite for approval of the restructuring
ass<strong>is</strong>tance For <strong>Bankgesellschaft</strong> Berlin, there <strong>is</strong>
no doubt that the State of Berlin and the Federal
government are also willing to participate in these
measures and fulfil the obligations imposed on
them.
The r<strong>is</strong>k report details the r<strong>is</strong>ks associated
still with the EU financial ass<strong>is</strong>tance proceedings.

62
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
Consolidated result for the
2003 financial year
Although the virtually stagnant German economy did
not provide any supportive impetus for the development
of business within the Group, the consolidated
operating result showed that the restructuring of the
Group again progressed successfully in 2003.
Income from the operating result of ordinary
business activities was almost at the level of the previous
year, with a 12.3% reduction of the balance
sheet total. Together with the significant reduction of
a 167 million or 10.8% in admin<strong>is</strong>trative expenditure
achieved in 2003, th<strong>is</strong> <strong>is</strong> dec<strong>is</strong>ive for the considerable
increase in the consolidated operating result from
a –48 million to a 218 million (excluding effects from
the EU dec<strong>is</strong>ion). Amounting to a 340 million, prov<strong>is</strong>ioning
and valuation measures as a result of the
positive EU dec<strong>is</strong>ion relating to the financial ass<strong>is</strong>tance
proceedings had a negative impact.
With an operating result of a 68 million, the fourth
quarter of 2003 reports a result above the average
level of the previous quarters, thereby highlighting
the r<strong>is</strong>ing positive trend. While income and admin<strong>is</strong>trative
expenditure showed largely constant development,
reduction effects resulted in r<strong>is</strong>k prov<strong>is</strong>ioning
in the lending business, still maintaining cautious
balance sheet reporting.
In view of the planned legal independence of
Investitionsbank Berlin (department of Landesbank
Berlin), reserves available as per section 340f
of the German Commercial Code and amounting to
a 176 million were written back. Th<strong>is</strong> write-back
amount and the additional allocation amounting to
a 26 million was used for the allocation of the
reserve as per section 340g of the German Commercial
Code (funds for general bank r<strong>is</strong>ks) and thereby
serves to strengthen the core capital bas<strong>is</strong> of IBB
after the spin-off.
In the 2003 financial year, earnings from financial
investments, in particular from the sale of participations
of a 145 million were achieved, which are
reported mainly in the result from financial investments
and with a 32 million in the valuation earnings
from associated companies. On the bas<strong>is</strong> of the
valuation method, which remained unchanged from
the previous year, securities held in fixed assets
(EURO STOXX-50 unit shares) amounting to a 138
million had to be written down. The book value as
at December 31, 2003 <strong>is</strong> at market value. Writedowns
on financial investments negatively impact
earnings by a 204 million. Current expenditure for
restructuring as well as allocations to the restructuring
prov<strong>is</strong>ions had a negative impact of a 71 million
(previous year: a 100 million) on the consolidated
result, as expected, as extraordinary expenditure.
The consolidated earnings after taxes reported
for the 2003 financial year in line with commercial
law <strong>is</strong> only comparable to a limited degree as a result
of the prov<strong>is</strong>ioning for the implementation of the
dec<strong>is</strong>ion by the European Comm<strong>is</strong>sion. The result of
ordinary business activities of the Group, which does
not include the effects from the EU approval, <strong>is</strong>
therefore compared separately with the result from
the previous year.

CONSOLIDATED RESULT OF ORDINARY BUSINESS ACTIVITIES
(excluding expenses resulting from the dec<strong>is</strong>ion by the EU)
63
DEVELOPMENT OF BUSINESS
in t million 2003 2002 Change
Net interest income 1,664 1,706 –42
Net comm<strong>is</strong>sion income 314 342 –28
Net result from financial activities 12 –24 36
Admin<strong>is</strong>trative expenditure 1,379 1,546 –167
Personnel costs 744 853 –109
Other admin<strong>is</strong>trative expenditure 543 590 –47
Normal depreciation 92 103 –11
Net other operating income and expenditure –42 5 –47
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning 569 483 86
R<strong>is</strong>k prov<strong>is</strong>ioning
(excluding reserves pursuant to section 340f HGB) 351 531 –180
Operating result 218 –48 266
Reserves pursuant to section 340f HGB –176 –25 –151
Operating result 394 –23 417
Result from financial investments –76 – 449 373
Net other items – 304 –144 –160
Earnings before taxes 14 – 616 630
Taxes on income 1) –10 83 –93
Earnings after taxes 24 – 699 723
1) On the bas<strong>is</strong> of the overall result in line with commercial law
Prov<strong>is</strong>ioning was set up and valuations were carried out for the following for the
implementation of the dec<strong>is</strong>ion by the European Comm<strong>is</strong>sion relating to the approval
of the financial ass<strong>is</strong>tance:
in t million 2003
D<strong>is</strong>posal of Real Estate Services, which <strong>is</strong> subject to the detailed agreement 122
Sale of the Berliner Bank branch 177
Liquidation of BG (Ireland) plc 18
Value correction of the 25% profit-sharing rights of LBB 23
Total 340
These effects negatively impact the following P&L items:
in t million 2003
Net other operating income and expenditure 23
Result from financial investments 15
Other items, ne (extraordinary expenditure) 302
Total 340

64
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
TOTAL CONSOLIDATED RESULT IN LINE WITH COMMERCIAL LAW
(ordinary business activities and EU dec<strong>is</strong>ion)
in t million 2003 2002 Change
Net interest income 1,664 1,706 –42
Net comm<strong>is</strong>sion income 314 342 –28
Net result from financial activities 12 –24 36
Admin<strong>is</strong>trative expenditure 1,379 1,546 –167
Personnel costs 744 853 –109
Other admin<strong>is</strong>trative expenditure 543 590 –47
Normal depreciation 92 103 –11
Net other operating income and expenditure –65 5 –70
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning 546 483 63
R<strong>is</strong>k prov<strong>is</strong>ioning (excl. reserves pursuant to section 340f HGB) 351 531 –180
Operating result 195 –48 243
Reserves pursuant to section 340f HGB –176 –25 –151
Operating result 371 –23 394
Result from financial investments –91 – 449 358
Net other items – 606 –144 –462
Earnings before taxes – 326 – 616 290
Taxes on income –10 83 –93
Earnings after taxes – 316 – 699 383
Net interest income
The decline in net interest income of a 42 million
to a 1,664 million <strong>is</strong> primarily due to the strategic
reduction of the balance sheet volume. Margin
increases had a compensating impact. While interest
expenses amounted to a 5,001 million, 21.1% below
the figure of the previous year, interest income fell
slightly by 18.4% to a 6,419 million, with almost
constant income from strategic interest management
Net Interest Income excluding
current income from shares
and participations in € million
1,273
2000
1,589 1,532
1,418
2001 2002 2003
measures. The current income, included in the net
interest income, from participations and affiliated
companies, profit pooling and associated companies
rose by a 79 million to a 92 million. The main influencing
factor here was proceeds from the sale of
associated companies.
The development of net interest income (excluding
current income from equity and income from
participations) <strong>is</strong> shown in the above chart.

Structure of net
com<strong>is</strong>sion income in %
40 34 29 31
27 32 38
44
16
10
7
15
12
7
12
13
8
8
11
6
2000 2001 2002 2003
Overall, in terms of net interest income, the
interest rate spread was 1.03% (previous year: 0.96%).
Excluding the measures relating to strategic interest
management, it amounted to 0.93% (previous year:
0.86%).
Net comm<strong>is</strong>sion income
At a 314 million, net comm<strong>is</strong>sion income was
Securities and <strong>is</strong>sue business
Payment services/account management
Lending business
Card business
Other services
a 28 million or 8.2% below the figure for the previous
year of a 342 million.
With an increased share of the comm<strong>is</strong>sion
from payment services/account management, the
development of the structure of the net comm<strong>is</strong>sion
income showed progress in the restructuring into
a strong regional bank with significant retail
business.
At a 139 million, comm<strong>is</strong>sion from payment
services/account management represents a considerable
income component of the net comm<strong>is</strong>sion income.
At a 96 million, the securities and <strong>is</strong>sue business
was slightly below the level of the previous year due
to restrained customer activities as a result of the
economic situation.
As a result of the continuation of the planned
concentration of Retail Banking and Regional Corporate
Banking on the greater Berlin area and due to
selective new business in the lending area, linked to
strict criteria, net comm<strong>is</strong>sion income was lower, at
a 25 million, than in the previous year (a 41 million).
The decline results primarily from guarantee comm<strong>is</strong>sion.
Comm<strong>is</strong>sion from card business and other
services was down on the previous year, at a 36 million
and a 18 million respectively.
Net result from financial activities
The net result from financial activities reached
65
DEVELOPMENT OF BUSINESS
a 12 million (previous year: a –24 million). In contrast
to the previous year, th<strong>is</strong> item was only impacted to
a limited extent by the valuation of the portfolio of
own shares in the 2003 financial year (a +0.3 million;
previous year: a –15.9 million). The open market
value reserves in the trading div<strong>is</strong>ion decreased
slightly.
Admin<strong>is</strong>trative expenditure
Admin<strong>is</strong>trative expenditure
in € million
1,674
2000
1,828
1,546
2001 2002 2003
Admin<strong>is</strong>trative expenditure at the Group fell by
1,379
a 167 million or 10.8% to a 1,379 million (previous
year: a 1,546 million). With regard to cost savings
real<strong>is</strong>ed, personnel costs accounted for a 109 million,
and other admin<strong>is</strong>trative expenditure, including
normal depreciation, accounted for a 58 million. As a
result of the restructuring of the Group and stringent
cost management, admin<strong>is</strong>trative expenditure
has again reached the level of the 1995 financial year.
Personnel costs (see page 67) totalled a 744 million,
after a 853 million in the previous year. A
dec<strong>is</strong>ive factor in th<strong>is</strong> was the shedding of 3,116 jobs
(–21.7%) in the financial year, in line with restructuring.
Of these jobs, 1,743 employees left the Group
as a result of the sale of Zivnostenská banka and
ALLBANK.
Other admin<strong>is</strong>trative expenditure (see page 67)
decreased by a 47 million or 8.0% to a 543 million.
As a result of the reduction of employees and
the d<strong>is</strong>posal of offices, the Group’s office space costs
decreased considerably by a 23 million or 17.7%.

66
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
Expenditure of the banking group (excluding Real
Estate Services) for consultations, audits and contributions
from current business activities amounted
to a 54 million, significantly below the level of the
previous year (a 65 million). Th<strong>is</strong> <strong>is</strong> due in part to
projects that were concluded. Considerable work on
the Basel II and IAS/IFRS projects was continued.
Both the cost management instigated at the start
of the restructuring process and the staff cuts led to
a fall of a 7 million or 38.9% in personnel-related
operating costs in particular.
Normal depreciation amounting to a 92 million
(previous year: a 103 million) resulted from depreciation
on bank buildings, IT hardware and office furn<strong>is</strong>hings
and fixtures. The 10.7% reduction in depreciation
expenditure results from the diverse restructuring
measures in the Group.
Net other operating income and expenditure
At a –42 million, net other operating income and
expenditure from ordinary business activities
(excluding effects from the EU dec<strong>is</strong>ion) was down
on the value of the previous financial year (a 5 million).
A dec<strong>is</strong>ive factor <strong>is</strong> a write-down amounting
to a 57 million on the 25% profit-sharing rights
of LBB reported on the balance sheet as other assets.
Th<strong>is</strong> was carried out on the bas<strong>is</strong> of the previous
applied valuation procedure. In view of the intended
simplification of the Group structure in connection
with the privat<strong>is</strong>ation stipulated by the EU Comm<strong>is</strong>sion,
a write-down was also carried out in the
amount of a 23 million.
Adjusted for these value corrections, the net
other operating income and expenditure totalled
a 15 million, a 10 million up on the previous year’s
value (a 5 million). The adjusted net other operating
income and expenditure cons<strong>is</strong>ts of the net other
operating income and expenditure (a 25 million,
previous year: a 7 million) and other taxes (a 10 million,
previous year: a 2 million).
Net other operating income and expenditure
compr<strong>is</strong>es the corresponding profits from the banks
belonging to the Group. The main business activities
of the service companies were integrated into
banks or transferred to Group third parties by means
of outsourcing. In addition, expenditure (except for
personnel costs) and income from the Real Estate
Services operating business of the Group (IBAG, IBG
and LPFV) are posted here.

Personnal costs
in € million
973
2000
984
R<strong>is</strong>k prov<strong>is</strong>ioning
853
744
2001 2002 2003
For r<strong>is</strong>k prov<strong>is</strong>ioning in the lending business, a net
total of a 409 million (previous year: a 617 million)
was transferred, of which a 140 million at BGB,
a 85 million at LBB (including IBB) and a 147 million
at Berlin Hyp.
Net earnings from securities in the liquidity
reserve, which amounted to a 58 million (previous
year: a 86 million), were realized predominantly
at Landesbank Berlin and Berlin Hyp.
RISK PROVISIONING GROUP
67
DEVELOPMENT OF BUSINESS
In view of the planned legal independence of
Investitionsbank Berlin, reserves available pursuant
to section 340f of the German Commercial Code
(a 176 million) were written back. Th<strong>is</strong> write-back
amount and the additional allocation amounting to
a 26 million was used for the allocation of the reserve
pursuant to section 340g of the German Commercial
Code. Th<strong>is</strong> serves to strengthen the core capital
bas<strong>is</strong> of IBB after the spin-off.
R<strong>is</strong>k prov<strong>is</strong>ioning breaks down as follows:
in t million 2003 2002
R<strong>is</strong>k prov<strong>is</strong>ioning in the lending business
Value adjustments debited from the P&L account 723 1,001
Direct depreciation 45 32
Value adjustments credited to the P&L account 340 409
Receipts related to written-off receivables 19 7
Net prov<strong>is</strong>ioning costs 409 617
Result from securities in the liquidity reserve
Other admin<strong>is</strong>trative expenditure
including scheduled depreciation
in € million
701
2000
844
693 635
2001 2002 2003
R<strong>is</strong>k Prov<strong>is</strong>ioning in the lending
business in € million
1,537
2001 2002 2003
Income components 160 209
Cost components 102 123
Net earnings from securities 58 86
Total before changes to reserve as per section 340f HGB 351 531
Change to the reserve as per section 340f HGB –176 –25
Total 175 506
2000
738
617
409

68
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
Result from financial investments
Consolidated results from financial investments
totalled a –91 million (previous year: a –449 million).
On the bas<strong>is</strong> of the valuation method, which
remained unchanged from the previous year, securities
held in fixed assets (EURO STOXX-50 unit
shares) amounting to a 138 million (previous year:
a 399 million) had to be written down. The average
unit price over the past twelve months formed the
bas<strong>is</strong> for determining the carrying value on the valuation
date, whereby the current market price represented
the lower limit. At year-end 2003, the unit
shares were valued at market price.
The shares in the Berlin Capital Fund held by
<strong>Bankgesellschaft</strong> Berlin AG and LBB as well as the
participations portfolio accounted for the significant
value adjustments and prov<strong>is</strong>ioning. Income from the
sale of shares in Zivnostenská banka, which were
reduced in the Group as a result of profits reinvested
during the period of Group affiliation, compensated
for th<strong>is</strong> expenditure.
With regard to the implementation of the dec<strong>is</strong>ion
by the EU Comm<strong>is</strong>sion, the amount posted in
line with commercial law for results from financial
investments includes a 15 million for de-consolida-
tion effects from the d<strong>is</strong>posal of Real Estate Services.
Net other items
Th<strong>is</strong> summary item mainly includes expenditure
from losses assumed and the items extraordinary
expenditure and extraordinary income.
At a 29 million, assumed losses were down on
the previous year (a 39 million) and mainly result
from the property companies belonging to the Group.
Extraordinary income and expenditure were
crucially determined by the restructuring of the
Group and the associated reorientation in the areas
of personnel, operating expenditure and prem<strong>is</strong>es
management.
Of the restructuring prov<strong>is</strong>ions posted as at
December 31, 2002, a 95 million was used or deployed
for specific purposes. In the reporting year, a 75 mil-
lion was allocated and a 18 million was written back.
Current expenditure from the restructuring accounted
for a 26 million.
With regard to the implementation of the dec<strong>is</strong>ion
by the EU Comm<strong>is</strong>sion, the amount posted in line
with commercial law for the extraordinary expenditure
included prov<strong>is</strong>ioning expenditure amounting
to a 302 million. The planned d<strong>is</strong>posal of Real Estate
Services in accordance with the detailed agreement,
the sale of the Berliner Bank branch and the liquidation
of the <strong>Bankgesellschaft</strong> Berlin (Ireland) plc
subsidiary are taken into account here.

Taxes on income
As a result of the capital<strong>is</strong>ation of deferred tax assets
in the 2003 financial year, the item income tax
expenditure shows a positive income effect overall.
The initial total of deferred taxes, which were to
be calculated on the bas<strong>is</strong> of German Accounting
Standard DRS 10 to be applied for the first time in the
year under review, has been posted as at January 1,
2003 to the consolidated financial statements with an
amount of a 151 million, with a neutral effect on
earnings. Income from taxes on income in the Group
was a 10 million (previous year: a 83 million expenditure),
which includes income from posted deferred
taxes amounting to a 39 million.
Result of <strong>Bankgesellschaft</strong> Berlin AG
for the 2003 financial year
In the following values for the 2003 financial year,
the profit and loss account of Berliner Bank up to the
date of sale July 1, 2003 – i.e. for the first half-year –
<strong>is</strong> reported in the original items of the profit and loss
account of <strong>Bankgesellschaft</strong> Berlin AG. The result
of Berliner Bank for th<strong>is</strong> period (a –2 million) was
reimbursed by Landesbank Berlin as stipulated by
the contract. The reimbursement amount <strong>is</strong> reported
in net other operating income and expenditure. In
order to illustrate the effects from the sale of Berliner
Bank for the past reporting year, the 2003 income
statement was also shown pro forma in the following
69
DEVELOPMENT OF BUSINESS
table, including the Berliner Bank for the entire year.
Th<strong>is</strong> breakdown was also carried out for the information
in the balance sheet, profit and loss account
forms and in the notes. Other compar<strong>is</strong>ons relate
exclusively to the effective changes between both
financial years. If necessary in individual cases,
reference <strong>is</strong> also made to the relevant influence on
the sale of Berliner Bank. A detailed explanation
relating to the transfer and the determination of the
statement of earnings for the independent div<strong>is</strong>ion,
Berliner Bank, <strong>is</strong> provided in the notes.
The individual financial statements of <strong>Bankgesellschaft</strong>
Berlin AG for the 2003 financial year show
a slightly improved result compared with the previous
year. However, the operating result (operating
result after r<strong>is</strong>k prov<strong>is</strong>ioning – excluding reserves as
per section 340f of the German Commercial Code)
<strong>is</strong> below that of the previous year, which <strong>is</strong> due primarily
to reduced participation earnings. While the
result for the previous year was impacted by special
expenditure in the result from financial investments,
losses assumed for subsidiary companies and by
restructuring expenditure, 2003 <strong>is</strong> character<strong>is</strong>ed by
the considerable negative impact resulting from the
EU dec<strong>is</strong>ion from February 18, 2004. Th<strong>is</strong> impact
<strong>is</strong> reflected not only in the net other items but also in
the net interest income and the net other operating
income and expenditure.

70
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
RESULT OF ORDINARY BUSINESS ACTIVITIES OF BANKGESELLSCHAFT BERLIN AG
(excluding expenditure resulting from the dec<strong>is</strong>ion by the EU)
in t million 2003 2003 1) 2002 Change
Net interest income 553 607 727 –174
Net comm<strong>is</strong>sion income 56 105 122 –66
Net result from financial activities 5 5 –29 34
Admin<strong>is</strong>trative expenditure 554 642 674 –120
Personnel costs 200 229 281 –81
Other admin<strong>is</strong>trative expenditure 276 334 382 –106
Normal depreciation 78 79 11 67
Net other operating income and expenditure 105 106 95 10
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning 165 181 241 –76
R<strong>is</strong>k prov<strong>is</strong>ioning
(excl. reserves as per section 340f HGB) 136 150 251 –115
Operating result 29 31 –10 39
Reserves as per section 340f HGB 0 0 0 0
Operating result 29 31 –10 39
Result from financial investments –144 –144 –538 394
Net other items –31 –33 –137 106
Earnings before taxes –146 –146 –685 539
Taxes on income 2) 1 1 11 –10
Earnings after taxes –147 –147 –696 549
1) Including Berliner Bank for the 2003 year as a whole
2) On the bas<strong>is</strong> of the overall result in line with commercial law
Prov<strong>is</strong>ioning was set up and valuations were carried out for the implementation of the
dec<strong>is</strong>ion by the European Comm<strong>is</strong>sion:
in t million 2003
D<strong>is</strong>posal of Real Estate Services, which <strong>is</strong> subject to the detailed agreement
(netted against positive effects) 42
Sale of the Berliner Bank branch 155
Valuation of BG (Ireland) plc due to liquidation 6
Value correction of the 25% profit-sharing rights of LBB 23
Effects on profit and loss pooling from subsidiaries due to the negative impact on earnings 172
Total 398

These effects negatively impact the following P&L items:
TOTAL RESULT IN LINE WITH COMMERCIAL LAW OF BANKGESELLSCHAFT BERLIN AG
(ordinary business activities and EU dec<strong>is</strong>ion)
71
DEVELOPMENT OF BUSINESS
in t million 2003
Net interest income 83
Net other operating income and expenditure 23
Result from financial investments 6
Net other items (including losses assumed) 286
Total 398
in t million 2003 2003 1) 2002 Change
Net interest income 470 524 727 –257
Net comm<strong>is</strong>sion income 56 105 122 –66
Net result from financial activities 5 5 -29 34
Admin<strong>is</strong>trative expenditure 554 642 674 –120
Personnel costs 200 229 281 –81
Other admin<strong>is</strong>trative expenditure 276 334 382 –106
Normal depreciation 78 79 11 67
Net other operating income and expenditure 82 83 95 –13
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning 59 75 241 –182
R<strong>is</strong>k prov<strong>is</strong>ioning
(excl. reserves as per section 340f HGB) 136 150 251 –115
Operating result –77 –75 –10 –67
Reserves as per section 340f HGB 0 0 0 0
Operating result –77 –75 –10 –67
Result from financial investments –150 –150 –538 388
Net other items – 317 – 319 –137 –180
Earnings before taxes – 544 – 544 –685 141
Taxes on income 1 1 11 –10
Earnings after taxes – 545 – 545 –696 151
1) Including Berliner Bank for the 2003 year as a whole

72
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
Net interest income decreased significantly by
a 257 million or 35.4%. Th<strong>is</strong> was mainly because of
the lower income from participations and the om<strong>is</strong>sion
of the net interest income of Berliner Bank in
the second half-year. The share of income generated
in the financial year from measures relating to
strategic interest management was slightly reduced.
At a 56 million, net comm<strong>is</strong>sion income was
a 66 million or 54.1% below the figure for the previ-
ous year. The om<strong>is</strong>sion of comm<strong>is</strong>sion income of
Berliner Bank in the second half-year had a significant
impact in th<strong>is</strong> regard. Even including the
Berliner Bank branch, a decline of around 14% <strong>is</strong>
recorded.
Admin<strong>is</strong>trative expenditure was reduced
by a 120 million or 17.8% to a 554 million, which <strong>is</strong>
largely due to the spin-off of Berliner Bank. Moreover,
the remaining decrease reflects the successes
of reconstruction measures that have already been
implemented.
The reduction in personnel costs results from
further job cuts and the approx. 8% salary cuts since
May 2002.
The decrease in other admin<strong>is</strong>trative expendi-
ture <strong>is</strong> the result of intensive cost management. Pro-
jects such as KOLIBRI (design for an exposure and
limit management system) were successful completed
and the considerable work on Basel II and IAS was
continued.
The significant increase in normal depreciation
<strong>is</strong> linked with the assumption of the fixed assets of
BB-DATA Gesellschaft für Informations- und Kommunikationssysteme
mbH and the inclusion of BG-SYS
<strong>Bankgesellschaft</strong> Berlin AG & Co. Systementwicklungsgesellschaft
beschränkt haftende oHG. In so far
as fixed assets of other Group companies are util<strong>is</strong>ed,
the bank received corresponding income (a 41 mil-
lion) in the context of the consolidated charges
relating to services, which <strong>is</strong> reported in the net
other operating income and expenditure.
In the net other operating income and expen-
diture, the higher income from the consolidated
charges relating to services, including the normal
depreciation passed on (a 61 million), was more
than compensated by the write-downs on the profitsharing
rights from Landesbank Berlin.
R<strong>is</strong>k prov<strong>is</strong>ioning totalled a 136 million, down
a 115 million or 45.8% on the previous year.
The Result from financial investments of
a –150 million was character<strong>is</strong>ed by write-downs
of a 138 million on funds placed in investment funds
that track the EURO STOXX-50 index (previous
year: a 399 million), write-downs on investment
securities (a 5 million) and necessary prov<strong>is</strong>ioning
for participations and shares in affiliated companies
totalling a 128 million. The latter predominantly
related to consolidated Group companies. The
writedowns of the investment funds are explained
in more detail in the notes under General Valuation
Methods. The write-downs are offset by book profits
from the sale of companies and write-ups of
a 121 million.

RISK PROVISIONING FOR THE AG
Net other items include assumed losses of
a 105 million and extraordinary expenditure of
a 212 million. The assumed losses related largely to
consolidated Group companies. The extraordinary
expenditure takes into account expenditure ar<strong>is</strong>ing
from the EU dec<strong>is</strong>ion on February 18, 2004 amounting
to a 197 million.
The income tax expenditure of the AG totalled
a 1 million. The London branch, where tax-refund
claims for previous years were made, accounted for
a –10 million of th<strong>is</strong>. Conversely in Germany, there
are non-eligible taxes levied at source, corporation
tax (back tax) as a result of the system transition from
the imputation method to the half-income method,
as well as items outside the period under review.
Effects of consolidation
73
DEVELOPMENT OF BUSINESS
in t million 2003 2003 1) 2002
R<strong>is</strong>k prov<strong>is</strong>ioning in the lending business
Value adjustments debited from the P&L account 226 252 336
Direct depreciation 27 34 14
Value adjustments credited to the P&L account 107 123 119
Receipts related to written-off receivables 6 9 2
Net prov<strong>is</strong>ioning costs 140 154 229
Result from securities in the liquidity reserve
Income components 34 34 32
Cost components 30 30 54
Net earnings from securities 4 4 -22
Total before changes to reserve as per section 340f HGB 136 150 251
Change to the reserve as per section 340f HGB 0 0 0
Total 2) 136 150 251
1) Including Berliner Bank for the 2003 year as a whole
2) Excluding ex<strong>is</strong>ting loans
The items of the consolidated profit and loss account
are primarily determined by <strong>Bankgesellschaft</strong> Berlin
AG, LBB, Berlin Hyp and the IBAG sub-group. LBB
and Berlin Hyp each showed a balanced result for
the 2003 financial year.
In the context of consolidation, participation earnings
recovered in the same period had to be eliminated
only to a limited extent for the 2003 financial
year (a 35 million; previous year: a 102 million);
interim earnings were consolidated, netted in the
amount of a 117 million (previous year: a +112 mil-
lion). The eliminations of interim earnings relate
primarily to write-downs on the book values of consolidated
subsidiaries, and to expenditure or income
from the write-back of prov<strong>is</strong>ioning for capital
measures.

74
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
The de-consolidation of Zivnostenská banka on
January 1, 2003 and ALLBANK on September 1, 2003
had a positive effect on earnings amounting to
a 9 million.
Future negative impact from de-consolidation
effects, resulting from the implementation of the
dec<strong>is</strong>ion by the EU Comm<strong>is</strong>sion, were taken into
account in the amount of a 15 million in the setting
up of prov<strong>is</strong>ioning in the Group.
The balance sheet volume relates to <strong>Bankgesellschaft</strong>
Berlin AG, LBB and Berlin Hyp. In terms of
the combined financial statements, these companies
account for 89.4% (previous year: 88.6%) of the
balance sheet total. The individual breakdown <strong>is</strong>
as follows:
BREAKDOWN OF THE BALANCE SHEET VOLUME
ACROSS THE FOLLOWING COMPANIES
The reduction of volume in line with the restructuring
in <strong>Bankgesellschaft</strong> Berlin and LBB and the
sale of ALLBANK and Zivnostenská banka, as well as
the incorporation of service companies, have a
compensating effect so that the percentage ratio of
the Group companies in the balance sheet volume
of the Group remains virtually unchanged.
Of the a 66.1 billion (previous year: a 51.8 billion)
consolidation volume, a 43.1 billion (previous
year: a 31.2 billion) results from debt consolidation,
a 15.0 billion (previous year: a 15.4 billion) from
securities consolidation and a 8.0 billion (previous
year: a 5.2 billion) from other portfolio consolidation
(including capital consolidation at a 8.0 billion;
previous year: a 4.4 billion).
in % 31.12.2003 31.12.2002
<strong>Bankgesellschaft</strong> Berlin AG 29.0 32.3
Landesbank Berlin
Of which:
42.2 37.3
Investitionsbank Berlin (8.8) (8.6)
Berlin-Hannoversche Hypothekenbank AG 18.2 19.0
<strong>Bankgesellschaft</strong> Berlin International S.A. 2.3 2.3
Weberbank Privatbankiers KGaA 2.1 2.1
93.8 93.0
Other banks 3.0 3.6
Other Group companies 3.2 3.4
100.0 100.0

LENDING VOLUME WITHIN THE GROUP
Development of volume of the Group
The consolidated balance sheet total as at December
31, 2003 fell by a 21.5 billion or 12.3% to
a 153.3 billion compared with the previous year
(a 174.8 billion). A crucial factor in th<strong>is</strong> development
was the restructuring-related decline of
receivables and liabilities due to and from customers
and banks, as well as the subsidiaries no longer
consolidated as at the balance sheet date due to
their sale.
As at the balance sheet date, the nominal
volumes of derivatives business amounted to
a 548.4 billion (previous year: a 691.5 billion).
92.6% of th<strong>is</strong> volume related to interest raterelated
transactions. The largest item here was
interest rate swaps at a 391.3 billion (77.0%
of interest rate-related transactions).
75
DEVELOPMENT OF BUSINESS
31.12.2003 31.12.2002 Change
in t million in t million in t million %
Bills d<strong>is</strong>counted (if not reported under loans and advances) 1 48 –47 –97.9
Loans to banks 1) 11,331 13,376 –2,045 –15.3
Loans and advances to customers 2) Of which:
77,640 89,504 –11,864 –13.3
Mortgage loans from the mortgage bank 15,162 17,798 –2,636 –14.8
Public-sector loans 28,792 25,812 2,980 11.5
Other loans secured by mortgages 14,304 15,658 –1,354 –8.6
Other amounts due from customers 19,382 30,236 –10,854 –35.9
Lending volume 88,972 102,928 –13,956 –13.6
1) Loans and advances to banks with a maturity of over 1 year
2) Excluding reverse repos and receivables from securities lending transactions
In line with Principle I of the German Banking
Act (r<strong>is</strong>k of counterparty default), derivatives business,
with a nominal volume of a 548.4 billion,
corresponds to a weighted credit r<strong>is</strong>k equivalent of
a 1.2 billion (previous year: a 1.4 billion).
The lending volume in the Group fell by a 13.9
billion to a 89.0 billion (previous year: a 102.9 billion).
Loans and advances to banks accounted for a
2.0 billion of th<strong>is</strong> decrease and amounts due from
customers accounted for a 11.9 billion.

76
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
Assets
Loans and advances to banks fell by a 2.7 billion or
8.7% to a 28.1 billion (previous year: a 30.8 billion).
The decline in loans and advances due on demand
was largely offset by longer-term loans and
advances.
Loans and advances to customers fell by
a 11.9 billion or 13.3% to a 77.7 billion. Th<strong>is</strong> development
<strong>is</strong> primarily due to the reduction in terms of
over five years, in particular for long-term mortgage
loans from the mortgage bank. a 2.4 billion relates to
the divestment of ALLBANK and Zivnostenská banka.
R<strong>is</strong>k prov<strong>is</strong>ioning in the lending business
amounted to a 5,312 million (previous year:
a 5,535 million). In terms of the total lending volume,
th<strong>is</strong> results in an increase in the ratio from 5.1% to
5.6%, due to the reduction of the lending volume.
CONSOLIDATED ASSETS
Debt securities and other fixed-interest
securities totalled a 32.9 billion. The a 6.6 billion
fall against the previous year <strong>is</strong> primarily due to
loans and bonds relating to other <strong>is</strong>suers.
The increase in the item shares and other non
fixed-income securities of a 0.6 billion or 16.5% to
a 3.9 billion results from an increase in the trading
portfolio.
The reduction in other assets results in part
from the decline in asset items from the portfolios of
the trading portfolio and from the value corrections
of the profit-sharing right of LBB.
31.12.2003 31.12.2002 Change
in t million in t million in t million %
Cash reserve 1,301 1,392 –91 –6.5
Loans and advances to banks 28,121 30,798 –2,677 –8.7
Loans and advances to customers 77,708 89,579 –11,871 –13.3
Debt securities 32,974 39,595 –6,621 –16.7
Shares
Participations, shares in associated
3,923 3,367 556 16.5
and affiliated companies 603 788 –185 –23.5
Assets held in trust 181 220 –39 –17.7
Tangible assets 491 580 –89 –15.3
Other assets 7,984 8,485 –501 –5.9
Total assets 153,286 174,804 –21,518 –12.3

Liabilities
CONSOLIDATED LIABILITIES
Deposits by banks fell by a 7.9 billion or 13.3% to
a 51.5 billion, of which a 7.5 billion relates to liabilities
due on demand.
Customer savings declined by a 8.9 billion or
15.6% to a 48.2 billion, due in part to the divestment
of ALLBANK and Zivnostenská banka as well as the
volume reductions of the other Group banks.
The decline in securit<strong>is</strong>ed liabilities <strong>is</strong> largely
due to the maturities of debt securities <strong>is</strong>sued at
Berlin Hyp and <strong>Bankgesellschaft</strong> Berlin AG.
Prov<strong>is</strong>ions were slightly above the level of the
previous year (a 2.5 billion, after a 2.3 billion in the
previous year); th<strong>is</strong> includes a 317 million reported
for the implementation of the dec<strong>is</strong>ion by the EU
77
DEVELOPMENT OF BUSINESS
31.12.2003 31.12.2002 Change
in t million in t million in t million %
Deposits by banks 51,459 59,349 –7,890 –13.3
Customer savings
Of which:
48,175 57,091 –8,916 –15.6
Savings deposits including building society deposits 8,025 9,224 –1,199 –13.0
Other liabilities due on demand 11,206 13,009 –1,803 –13.9
Other liabilities with spec. maturities 28,945 34,858 –5,913 –17.0
Securit<strong>is</strong>ed liabilities
Of which:
40,006 44,168 –4,162 –9.4
Mortgage bonds and public Pfandbriefe 31,047 36,158 –5,111 –14.1
Other debt securities 8,823 7,748 1,075 13.9
Other securit<strong>is</strong>ed liabilities 136 262 –126 –48.1
Liabilities held in trust 181 220 –39 –17.7
Prov<strong>is</strong>ions 2,539 2,303 236 10.2
Subordinated capital 2,752 2,863 –111 –3.9
Shareholders’ equity
Of which:
3,563 3,889 –326 –8.4
Subscribed capital 2,555 2,555 0 0.0
Reserves 1) 1,008 1,334 –326 –24.4
Othe liabilities 4,611 4,921 –310 –6.3
Total liabilities 153,286 174,804 –21,518 –12.3
1) Including unappropriated profit/loss of s –2,654 million (previous year: s –2,222 million)
and adjustments for minority interests of s 57 million (previous year: s 70 million).
Comm<strong>is</strong>sion. In the remaining types of prov<strong>is</strong>ioning,
the allocations are compensated by write-backs and
util<strong>is</strong>ation. The prov<strong>is</strong>ions posted in the 2001 annual
financial statements for the portion of loss to be
borne by LPFV of a 100 million were fully util<strong>is</strong>ed
in the 2003 financial year.
As a result of the net loss for the year of
a 316 million in particular, Group equity declined.
Effects that increase shareholders’ equity resulting
from the accounting rules to be applied for the first
time in the financial year are offset by negative
effects of Group accounting (in particular the consolidation
of securities and reporting of profitsharing
rights). Group equity amounts to a 3.6 billion
(previous year: a 3.9 billion).

78
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
Capital ratios
As at December 31, 2003, the total bank regulatory
capital resources of the Group pursuant to the German
Banking Act amounted to a 5.7 billion. In relation to
the r<strong>is</strong>k items amounting to a 57.4 billion, th<strong>is</strong> results
in an overall key ratio pursuant to the German
Banking Act Principle I of 9.9% and a core capital
ratio of 6.1%. The overall key ratio for the AG was
10.5% and the core capital ratio was 7.2% (after
approval of the annual financial statements).
Development of volume
of <strong>Bankgesellschaft</strong> Berlin AG
In the reporting year, the balance sheet total of
<strong>Bankgesellschaft</strong> Berlin AG declined from a 73.2 billion
to a 63.6 billion (13.0%). The sale of Berliner
Bank contributed a 3.6 billion here.
AG ASSETS
Even excluding the sale of Berliner Bank, a
fall of a 6.0 billion (–8.2%) <strong>is</strong> recorded. As scheduled,
loans and advances to customers decreased by
a 3.6 billion and debt securities by a 3.3 billion,
whereas loans and advances to banks rose as at the
reporting date by a 1.7 billion. On the refinancing
side, securit<strong>is</strong>ed liabilities fell by a 1.8 billion as
a result of maturities, subordinated liabilities fell by
a 0.6 billion and customer savings decreased by
a 2.0 billion.
a 1.0 billion (previous year: a 2.1 billion) <strong>is</strong>
to be held as a r<strong>is</strong>k prov<strong>is</strong>ion. In terms of the total
lending volume, th<strong>is</strong> results in a ratio of 3.9%
(previous year: 6.7%).
31.12.2003 31.12.2003 1) 31.12.2002 Change
in t million in t million in t million in t million %
Cash reserve 95 364 614 –519 –84.5
Loans and advances to banks 21,241 20,492 18,748 2,493 13.3
Loans and advances to customers 6,986 10,917 14,565 –7,579 –52.0
Debt securities 25,210 25,210 28,519 –3,309 –11.6
Shares 2,408 2,408 1,971 437 22.2
Participations 76 76 110 –34 –30.9
Shares in affiliated companies 2,071 2,071 2,645 –574 –21.7
Tangible assets 102 113 108 –6 –5.6
Other assets 5,460 5,558 5,912 –452 –7.6
Total assets 63,649 67,209 73,192 –9,543 –13.0
1) Including Berliner Bank for the 2003 year as a whole

AG LIABILITIES
Final statement on the controlled company
report pursuant to section 312 of the German
Stock Corporation Act
Pursuant to section 312 of the German Stock Corporation
Act, the Board of Management of <strong>Bankgesellschaft</strong>
Berlin AG has submitted a report on business
relations with affiliated companies for the 2003
financial year. The declaration at the end of th<strong>is</strong>
report <strong>is</strong> as follows:
The Board of Management of <strong>Bankgesellschaft</strong>
Berlin AG hereby declares that the <strong>Bankgesellschaft</strong>
Berlin AG Group companies received appropriate
consideration for all legal transactions and other
measures with the State of Berlin and companies affiliated
thereto in accordance with the circumstances
known at the time of legal transactions or measures
and that these companies were not d<strong>is</strong>advantaged
by the measures taken.
Corporate Governance
79
DEVELOPMENT OF BUSINESS
31.12.2003 31.12.2003 1) 31.12.2002 Change
Mio.t Mio.t Mio.t Mio.t %
Deposits by banks 49,061 47,011 48,009 1,052 2.2
Customer savings 2,801 8,225 10,264 –7,463 –72.7
Securit<strong>is</strong>ed liabilities 4,052 4,052 5,804 –1,752 –30.2
Prov<strong>is</strong>ions 1,224 1,301 1,022 202 19.8
Subordinated capital 1,853 1,853 2,465 –612 –24.8
Shareholders’ equity
Of which:
2,178 2,178 2,723 –545 –20.0
Subscribed capital 2,555 2,555 2,555 0 0.0
Reserves 2) – 377 – 377 168 –545 –324.4
Other liabilities 2,480 2,589 2,905 –425 –14.6
Total liabilities 63,649 67,209 73,192 –9,543 –13.0
1) Including Berliner Bank for the 2003 year as a whole
2) Including unappropriated profit/loss of s 2,582 million (previous year: s 2,038 million)
In the second year of radical changes experienced by
the bank due to restructuring, corporate governance
<strong>is</strong> still an important topic. The Board of Management
and the Superv<strong>is</strong>ory Board are aware of the importance
of reliable and efficient rules for managing and
monitoring the company and its subsidiaries.
In the ongoing restructuring process in particular,
compliance with the corporate governance guidelines
<strong>is</strong> an important factor for building up confidence
among the general public as well as employee identification
with their company.
<strong>Bankgesellschaft</strong> Berlin <strong>is</strong> therefore committed
to the principles of sound, responsible, efficient
corporate management based on sustained valueadded,
with the exception of the deviations from the
recommendations of the Code of the Government
Comm<strong>is</strong>sion, which are l<strong>is</strong>ted in the declaration
of conformity.

80
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Development of Business
The om<strong>is</strong>sion of the illustration of remuneration
systems of the Board of Management and an individual<strong>is</strong>ed
breakdown of the salaries of the Board of
Management and Superv<strong>is</strong>ory Board <strong>is</strong> mentioned for
the first time in the declaration of conformity.
The company <strong>is</strong> obliged to take into consideration
the interests of all and to weigh up the public’s
demand for a transparent illustration of the corporate
structures against the w<strong>is</strong>hes of the committee
members to safeguard their personal rights. In th<strong>is</strong>
case, we believe that the insight that the public
would have gained from th<strong>is</strong> information does not
justify a detailed d<strong>is</strong>closure.
The Group companies largely adhere to the
recommendations of the Corporate Governance Code.
Berlin-Hannoversche Hypothekenbank AG explains
th<strong>is</strong> in its own declaration of conformity. Corporate
governance <strong>is</strong> observed at the other Group companies,
in so far as it <strong>is</strong> applicable and <strong>is</strong> important for the
implementation of an intra-Group model.
The wording of the declaration of conformity of
the Board of Management and Superv<strong>is</strong>ory Board,
submitted on December 15, 2003 pursuant to section
161 of the German Stock Corporation Act, <strong>is</strong> as follows:
§1 <strong>Bankgesellschaft</strong> Berlin AG complied/complies
with the conduct recommendations of the
Government Comm<strong>is</strong>sion on the German Corporate
Governance Code for the development of
internationally and nationally recogn<strong>is</strong>ed
standards of sound and responsible corporate
governance with the exceptions l<strong>is</strong>ted under
section 2.
§2 <strong>Bankgesellschaft</strong> Berlin AG deviates from the
following recommendations of the Code:
(a) In deviation from the conduct recommendations,
the consolidated financial statements
and the interim reports have not been/are
not prepared in line with international
accounting standards, but in line with the
regulations of the German Commercial
Code. Furthermore, the regulations of the
German Accounting Standards (DRS) have
been/are adhered to (7.1.1. of the German
Corporate Governance Code).
(b) The requirement to make the consolidated
financial statements publicly accessible
within 90 days of the end of the financial
year could not/cannot be fulfilled at present
by the Group due to its complexity and
upheaval. (7.1.2 of the German Corporate
Governance Code)

(c) The system of compensation of the Board
of Management has not been/<strong>is</strong> not made
public. (4.2.3 of the German Corporate
Governance Code)
(d) The compensation of the members of the
Board of Management <strong>is</strong> reported as an
overall total in the notes of the consolidated
financial statements. There are no plans
to provided individual<strong>is</strong>ed information.
(4.2.4 of the German Corporate Governance
Code)
(e) The compensation of the members of the
Superv<strong>is</strong>ory Board <strong>is</strong> reported as an overall
total in the notes of the consolidated financial
statements. There are no plans to
provided individual<strong>is</strong>ed information. (5.4.5
of the German Corporate Governance Code)
Implementation of IAS accounting
in the Group
After conducting a preliminary study in 2002, the
“IAS introduction” project was begun in November
2002 at <strong>Bankgesellschaft</strong> Berlin with the aim of
enabling the <strong>Bankgesellschaft</strong> Group to prepare the
consolidated financial statements prescribed by law
in accordance with IAS/IFRS (hereinafter: IAS) for
the first time by December 31, 2005. The measures
taken in the Group are carried out in several projects
at the various companies of the Group.
81
DEVELOPMENT OF BUSINESS
The central project covers the companies <strong>Bankgesellschaft</strong>
Berlin AG and LBB (including Berliner
Bank and Berliner Sparkasse) at the Berlin and
Luxembourg locations, as well as <strong>Bankgesellschaft</strong>
Berlin International S.A. Luxembourg. The conversion
<strong>is</strong> to take place using a new software solution
from which the necessary IAS-compliant individual
financial statement data for these companies are
to be prepared. Furthermore, the central project
works out the necessary special<strong>is</strong>ed stipulations for
ensuring uniform Group-wide accounting in accordance
with IAS for the other projects in the Group.
The conversion of Group accounting to IAS
requires extensive measures in the projects to
introduce the new software solution or to adapt
ex<strong>is</strong>ting software to set up the technical infrastructure
and implement the necessary interfaces to
the ex<strong>is</strong>ting IT landscape. These measures are supplemented
by extensive work on the preparation
and implementation of necessary process adjustments
in the Group as a whole.
The introduction of IAS will have a lasting influence
on the annual financial statements, as well as
the business and balance sheet policy of the Group.
Th<strong>is</strong> results in particular from IAS regulation 39
(on-balance sheet entry of all derivatives, handling
of internal transactions, hedge accounting), but also
from an extended scope of consolidation in accordance
with IAS, the effects from the revaluation of
the prov<strong>is</strong>ioning for pensions and the deferred taxes.

82
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
R<strong>is</strong>k Report
Overall system for planning, managing
and monitoring r<strong>is</strong>ks
In the year under review, other new rating procedures
were introduced as scheduled. R<strong>is</strong>k-oriented portfolio
management in the lending area was expanded.
The ongoing development of the methods for other
types of r<strong>is</strong>k as well led to a corresponding adjustment
to reporting. The Group’s written regulations
were stated in more prec<strong>is</strong>e terms with the approval
of a detailed credit r<strong>is</strong>k strategy.
The approval of <strong>Bankgesellschaft</strong> Berlin’s
financial ass<strong>is</strong>tance proceedings by the European
Comm<strong>is</strong>sion on February 18, 2004 was material
for the Group’s r<strong>is</strong>k situation. The bank now has
planning security. The ass<strong>is</strong>tance was approved on
the bas<strong>is</strong> of the reconstruction plan submitted to
the European Comm<strong>is</strong>sion.
Principles for r<strong>is</strong>k management and controlling
Controlled assumption of r<strong>is</strong>ks in the context of
a r<strong>is</strong>k strategy <strong>is</strong> a fundamental part of banking. The
r<strong>is</strong>k strategy of the Group <strong>is</strong> defined by two essential
components specified by the Board of Management:
• defined strategies specify in which core business
areas r<strong>is</strong>ks are to be assumed
• uniform Group r<strong>is</strong>k policy principles ensure
that the r<strong>is</strong>ks assumed can be monitored at
all times and consequently the material assets
of the company cannot be jeopard<strong>is</strong>ed
Organ<strong>is</strong>ation of r<strong>is</strong>k management and controlling
The functional separation of r<strong>is</strong>k monitoring units
from r<strong>is</strong>k-taking business areas has been in place
within the <strong>Bankgesellschaft</strong> Berlin Group for several
years now. The task of identifying, assessing, monitoring
and managing r<strong>is</strong>ks has been transferred to
various central div<strong>is</strong>ions of the Bank, which are
attached to the Board department. The department
includes the loan office, r<strong>is</strong>k controlling, controlling
and compliance div<strong>is</strong>ions.
Overall r<strong>is</strong>k management <strong>is</strong> carried out by the
R<strong>is</strong>k Review Committee. Every month, the committee
meets with the full Board of Management to d<strong>is</strong>cuss
the r<strong>is</strong>k situation.
The Internal Audit department monitors adherence
to the criteria and the procedures for r<strong>is</strong>k
management through internal audits.
Within the Group, we still differentiate between the
following r<strong>is</strong>k classifications in terms of content:
• R<strong>is</strong>ks of counterparty default
– Credit r<strong>is</strong>ks
– Counterparty r<strong>is</strong>ks
– Country r<strong>is</strong>ks
– Participation r<strong>is</strong>ks
• Liquidity r<strong>is</strong>ks
• Market r<strong>is</strong>ks

• Operational r<strong>is</strong>ks
– System r<strong>is</strong>ks
– Personnel r<strong>is</strong>ks
– Legal r<strong>is</strong>ks
• Other r<strong>is</strong>ks
– Business policy and strategic dec<strong>is</strong>ions
– R<strong>is</strong>ks from Real Estate Services and
from the detailed agreement
– R<strong>is</strong>ks from the government-ass<strong>is</strong>tance
programmet
R<strong>is</strong>ks of counterparty default
The r<strong>is</strong>k of counterparty default <strong>is</strong> defined as the r<strong>is</strong>k
connected with a loss or foregone profit as a result
of default by a business partner. It <strong>is</strong> then divided into
the aforementioned r<strong>is</strong>k classifications. The settlement
r<strong>is</strong>k, i.e. the r<strong>is</strong>k that no counter performance
<strong>is</strong> rendered on the payment date, <strong>is</strong> defined as a
subtype of the counterparty r<strong>is</strong>k. Issuer r<strong>is</strong>ks are considered
part of the credit r<strong>is</strong>k.
Credit r<strong>is</strong>ks
In terms of managing credit r<strong>is</strong>ks, the overriding
objective <strong>is</strong> to assess, monitor and selectively reduce
the r<strong>is</strong>k potential of the Group. For th<strong>is</strong>, it <strong>is</strong> necessary
to
• recogn<strong>is</strong>e, weigh up and limit the r<strong>is</strong>ks
of new business
• identify and assess the r<strong>is</strong>ks of the
ex<strong>is</strong>ting portfolio
• diversify the structure of the loan portfolio and
thus reduce the r<strong>is</strong>k potential as a whole
R<strong>is</strong>k management projects
In the year under review, the Group successfully
completed or further optim<strong>is</strong>ed the r<strong>is</strong>k management
projects that were started in 1999.
The IT bas<strong>is</strong> for extensive credit r<strong>is</strong>k management
and controlling in the Group was created within
the framework of a project. One measure was the
creation of a loan reg<strong>is</strong>ter database, in which r<strong>is</strong>krelated
data for all products (from traditional loans
through to capital market derivatives) were recorded
and consolidated from all sub-banks and all clients.
In addition, a limit management system was implemented
with which portfolios can be limited and
thereby controlled.
On the bas<strong>is</strong> of the data from these systems,
the credit r<strong>is</strong>k report was continuously developed. In
particular, the chronological development of the
portfolios <strong>is</strong> illustrated.
Thanks to the loan reg<strong>is</strong>ter database, shortcomings
in the data quality in the lending business
have become more transparent. The systematic and
targeted improvement of the data quality was intensified
in the year under review.
For limit management and r<strong>is</strong>k-oriented portfolio
management, the software product RICOS was
implemented at the end of 2002. In the year under
review, the system was optim<strong>is</strong>ed in a stabil<strong>is</strong>ation
and expansion phase.
83
RISK REPORT

84
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
R<strong>is</strong>k Report
The credit r<strong>is</strong>k committee was establ<strong>is</strong>hed in
the year under review for operational management
and limiting of the portfolios. The Committee submits
recommendations to the Board of Management
relating to the level and allocation of the limits. In
particular, economic influences, the Group r<strong>is</strong>k
strategy and the actual development of the loan portfolios
are taken into account.
Since the fourth quarter 2003, the portfolios
throughout the Group have not only been limited and
managed by country but also by sector as well as
rating category and maturity.
In addition, the redevelopment of the rating
methods was concluded. The corporate banking rating
developed with the German Savings Bank Association
(DSGV) has been in use since October 1, 2002.
The DSGV real estate rating and most of the modules
developed in the Landesbank rating project for wholesale
banking were gradually deployed at <strong>Bankgesellschaft</strong>
in 2003. The objective <strong>is</strong> that the new rating
methods meet the legal requirements of the 2nd Basel
Accord (Basel II) and are recogn<strong>is</strong>ed by the regulatory
authorities as “internal rating”.
As the new rating system has greater selectivity
and can better d<strong>is</strong>tingu<strong>is</strong>h between good and bad
r<strong>is</strong>ks with the stat<strong>is</strong>tical process it employs, the loan
portfolios can be managed in a more targeted way.
Thanks to the project findings to date (loan
reg<strong>is</strong>ter database and implementation of modern
rating procedures), the important prerequ<strong>is</strong>ites
for the application of the stat<strong>is</strong>tical r<strong>is</strong>k calculations
(credit value-at-r<strong>is</strong>k) have been created at portfolio
level. Establ<strong>is</strong>hing th<strong>is</strong> r<strong>is</strong>k assessment process
and integrating the findings from these calculations
into the process of managing the bank as a whole
will be important tasks in 2004.
Loan processes in the context of the minimum
requirements for lending
The principle behind the minimum requirements for
lending (MaK) <strong>is</strong> that the Bank <strong>is</strong> able to d<strong>is</strong>tingu<strong>is</strong>h
between r<strong>is</strong>k-related and less r<strong>is</strong>k-related business as
defined by MaK in terms of its processes. To th<strong>is</strong> end,
<strong>Bankgesellschaft</strong> has defined that r<strong>is</strong>k-related business
<strong>is</strong> business in excess of a 50,000 for a borrower
unit.
The central criteria of the minimum requirements
for lending have already been implemented.
For example, th<strong>is</strong> relates to the demarcation of responsibilities
in the lending process between market
and back-office and the organ<strong>is</strong>ational structure
demarcation of these div<strong>is</strong>ions up to Board of
Management level. Problematic loan commitments
are also managed and processed by r<strong>is</strong>k management
div<strong>is</strong>ions or appropriate special<strong>is</strong>ts.
Furthermore, the minimum requirements for
lending require two positive, mutually independent
dec<strong>is</strong>ions for exerc<strong>is</strong>ing loan approval powers. Th<strong>is</strong>
independent loan commitment approval <strong>is</strong> ensured
by involving the market and back office div<strong>is</strong>ions in
the lending dec<strong>is</strong>ion.

Total
A
B
C
D
E
F
no rating available
no compulsory rating
Value assessments are created by a central
appra<strong>is</strong>al office to ensure uniform standards within
the Group and the regulatory div<strong>is</strong>ion of functions
between loan processing and value estimation when
assessing the value of real estate. The appra<strong>is</strong>al
office <strong>is</strong> attached to Berlin-Hannoverschen Hypothekenbank
AG and also carries out its operations for
<strong>Bankgesellschaft</strong> Berlin AG and Landesbank Berlin.
The detailed credit r<strong>is</strong>k strategy explicitly
required by the minimum requirements for lending
was approved by the Board of Management in the
year under review and the reporting was adapted to
meet the requirements.
R<strong>is</strong>k prov<strong>is</strong>ioning
Structure of the Group’s loan portfolio
Figures in € billion
Borrowings 1) according to r<strong>is</strong>k category 2)
5.01
5.83
3.77
0.96
16.41
11.09
24.06
75.90
1) Borrowings: “external limits” extended
to the customer.
2) The r<strong>is</strong>k category <strong>is</strong> determined from the
credit rating class, taking into consideration
first-class collateral.
143.00
Troubled loan commitments essentially fall within
the processing competence and area of responsibility
of the r<strong>is</strong>k management div<strong>is</strong>ions, except in the
banks, insurance companies, countries and structured
financing segments. Transfer to the r<strong>is</strong>k management
div<strong>is</strong>ions <strong>is</strong> carried out in line with specified
criteria.
In the year under review, the authority to create,
change and write back individual value adjustments
was reregulated. Th<strong>is</strong> <strong>is</strong> now essentially the responsibility
of the r<strong>is</strong>k management div<strong>is</strong>ions; above
defined amount limits, it <strong>is</strong> necessary to obtain the
approval of individual members of the Board of
Management or the full Board of Management.
Dec<strong>is</strong>ions on these cases are then taken throughout
the year. A regularly generated report provided to
the Board of Management on a monthly bas<strong>is</strong> gives
details on both cases where a dec<strong>is</strong>ion has already
been taken and the expected development in future.
The level of the individual value adjustment
proposals <strong>is</strong> based on the expert estimate of the r<strong>is</strong>k
management div<strong>is</strong>ions. The maximum level of
an individual value adjustment <strong>is</strong> calculated as the
unsecured portion of the loan commitment.
Counterparty r<strong>is</strong>ks
Total
Berlin
Former West German states
Former East German states
Outside Germany
Other
Loan util<strong>is</strong>ation by region 1)
Figures in € billion
8.46
1.07
28.11
38.49
51.55
1) Sorted by country code and
borrower’s address.
<strong>Bankgesellschaft</strong> predominantly trades with counterparties
with good and very good ratings.
The Bank attaches a great deal of importance
to adhering to the highest possible documentation
standards. Th<strong>is</strong> regularly includes an agreement
relating to close-out netting, which makes it possible
for the Bank to offset receivables and liabilities in
the event of the counterparty’s credit standing deteriorating,
and always in the case of the counterparty
becoming insolvent.
Using the new RICOS system architecture
(see Credit r<strong>is</strong>ks chapter), counterparty r<strong>is</strong>ks in the
trading business have been monitored since the
beginning of 2003.
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Country r<strong>is</strong>ks
Managing the country r<strong>is</strong>k
Adv<strong>is</strong>ing the Board of Management on the management
of the country r<strong>is</strong>k (transfer r<strong>is</strong>k) <strong>is</strong> a responsibility
of the newly formed credit r<strong>is</strong>k committee. The
main task of th<strong>is</strong> committee <strong>is</strong> to draw up proposals
for setting the appropriate limits.
In the year under review, r<strong>is</strong>k assessment of
the countries was converted to a procedure that was
developed in the state clearing bank rating project
(see page 83). As in all other rating procedures, the
countries are divided into 18 rating categories
depending on the expected default frequency. Classification
<strong>is</strong> determined in a formal process by the
staff unit Macroeconomics. The evaluation <strong>is</strong> based
on key macroeconomic ratios and qualitative factors.
To limit the transfer r<strong>is</strong>k, the Bank sets country
limits at Group and bank level. To calculate the util<strong>is</strong>ation
of a country limit, the first-class collateral
(including cash collateral from developing countries,
Hermes guarantees) <strong>is</strong> deducted from the util<strong>is</strong>ation
in each country. Th<strong>is</strong> generates the net util<strong>is</strong>ation per
country. The chart on page 87 shows an overview of
the util<strong>is</strong>ation of country limits as at the end of 2003.
Here, to improve clarity, the 18 rating categories are
allocated to 6 r<strong>is</strong>k groups (RG), whereby r<strong>is</strong>k groups
5 and 6 have no allocations. The results show that
transactions are especially concluded with group 1,
i.e. with countries with no r<strong>is</strong>k.
Participation r<strong>is</strong>ks
The Corporate Development div<strong>is</strong>ion monitors
overall Group-wide shareholdings as part of the admin<strong>is</strong>tration
and contract management. The tasks of
participation r<strong>is</strong>k controlling are carried out and
developed by the R<strong>is</strong>k Controlling div<strong>is</strong>ion. A number
of measures have been adopted for the purpose of
early identification and monitoring of r<strong>is</strong>ks. The comprehensive
evaluation of the r<strong>is</strong>ks using the implemented
rating procedure was one of the measures
continued in the year under review. A process was
designed to quantify participation r<strong>is</strong>ks taking the
rating results into account, and th<strong>is</strong> process has been
used since the first quarter of 2004. In th<strong>is</strong> way, it
was possible to improve consideration of the participation
r<strong>is</strong>k when calculating r<strong>is</strong>k viability.
The Group participations are allocated to the
business areas. The management in charge of the
respective segment <strong>is</strong> also responsible for determining
and sustaining the operational and strategic
objectives for its participations as a condition from
which lasting operational planning and management
<strong>is</strong> derived and laid down.
The participations are part of the r<strong>is</strong>k strategy
of the business area to which they are allocated.
For management purposes, certain participations
are managed centrally instead of by the strategic
business areas. These are primarily participations
that provide central services for the Group.

The complexity and scope of the ex<strong>is</strong>ting participations
portfolio <strong>is</strong> to be further reduced in line with
the strategy. In the year under review, Allgemeine
Privatkundenbank AG (ALLBANK), as well as LHI
Leasing GmbH & Co. Immobilien KG, was sold and
other participations were scaled back. Weberbank
Privatbankiers KGaA <strong>is</strong> scheduled to be sold and
<strong>Bankgesellschaft</strong> Berlin (Polska) S.A. liquidated.
The major investment holdings are l<strong>is</strong>ted as an
appendix to the Notes. The r<strong>is</strong>ks from the participations
of the Real Estate Services business are
considered as other r<strong>is</strong>ks and represented in the
relevant section.
Liquidity r<strong>is</strong>ks
Section 11 of the German Banking Act states that banks
must invest their funds in such a way that sufficient
liquidity can be guaranteed at all times. In normal
cases, the Federal Financial Superv<strong>is</strong>ory Authority
assesses whether a bank’s liquidity <strong>is</strong> sufficient pursuant
to Principle II. The Treasury business area <strong>is</strong>
responsible for ensuring that <strong>Bankgesellschaft</strong> Berlin
AG and Landesbank Berlin adhere to Principle II.
Th<strong>is</strong> <strong>is</strong> managed on the bas<strong>is</strong> of accurate daily cash
flow forecasts as well as daily alternative scenario
calculations. Where applicable, it includes Principle
II approved measures before the key ratios are not
met.
PRINCIPLE II KEY RATIOS FOR DECEMBER 31, 2003
Bank Key liquidity ratio
<strong>Bankgesellschaft</strong> Berlin AG 1.29
Landesbank Berlin 1.49
Berlin-Hannoversche Hypothekenbank AG 1.13
Weberbank Privatbankiers KGaA 1.26
For recording and managing r<strong>is</strong>k aspects that Principle
II does not cover or covers in too general terms,
an extended liquidity analys<strong>is</strong> <strong>is</strong> generated. Th<strong>is</strong>
principally includes:
• the consolidated depiction of the Group overall
• the determination of the concentration r<strong>is</strong>k for
the refinancing sources
• a scenario-related stress test with assumptions
on outflows of short-term deposits and drawing
on agreed credit lines
• the classification of the securities portfolio
according to real<strong>is</strong>eability
Since the end of 2003/the start of 2004, it has once
more been possible to access the segment of long-term
unsecured capital market financing. With the updating
of the EMTN programme (European Medium
Term Note), it <strong>is</strong> expected that th<strong>is</strong> development will
continue in the international markets.
Market r<strong>is</strong>ks
Not Rated
RG 4 Countries with increased r<strong>is</strong>k
RG 3 Countries with manageable r<strong>is</strong>k
RG 2 Countries with low r<strong>is</strong>k
RG 1 Countries with no r<strong>is</strong>k
Country r<strong>is</strong>ks – util<strong>is</strong>ation
Figures in € billion
0.0
0.3
0.1
The Group <strong>is</strong> exposed to market r<strong>is</strong>ks in the form of
interest changes, currency, share price and other
price r<strong>is</strong>ks in the various business areas of Capital
Markets (trading portfolio) and in Asset/Liability
Management (banking book).
Trading portfolio and banking book activities
Trading-portfolio activities are part of the strategic
business area Capital Markets. They are an integral
part of the written individual strategies of the respective
business areas in Capital Markets. The
strategies define the framework for each business
1.2
RG = r<strong>is</strong>k group
R<strong>is</strong>k group 1 covers rating categories 1– 3
R<strong>is</strong>k group 2 covers rating categories 4– 7
R<strong>is</strong>k group 3 covers rating categories 8– 12
R<strong>is</strong>k group 4 covers rating categories 13– 15
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area’s tasks in terms of the type and extent of transactions
entered into, the instruments approved for
that purpose and the r<strong>is</strong>k level considered acceptable
from the point of view of the bank as a whole. For
both the trading portfolio and banking book activities,
the strategic framework <strong>is</strong> transformed into firm
annual targets through the annual planning (capitalat-r<strong>is</strong>k
(CAR) limits) and approved by the Board of
Management on the bas<strong>is</strong> of a viability concept.
Managing market r<strong>is</strong>ks
In the case of trading-portfolio activities, r<strong>is</strong>k management
<strong>is</strong> carried out by the front office div<strong>is</strong>ions on
the bas<strong>is</strong> of CAR limits/util<strong>is</strong>ation and the profit and
loss (P&L) analyses per business area and per desk
or trader. Th<strong>is</strong> <strong>is</strong> supplemented by daily and yearto-date
stop-loss limits and other procedures that
are tailored to the respective type of transaction and
vary depending on the business area involved (e.g.
scenario matrix limits, shift sensitivities limits,
bas<strong>is</strong> point value limits, duration limits, vega limits).
The Board of Management member responsible
for R<strong>is</strong>k Controlling and Capital Markets <strong>is</strong> informed
of the results of the daily CAR and the profit and
loss analyses.
In the case of the banking books, r<strong>is</strong>k and income
monitoring <strong>is</strong> also carried out every day. Economic
income effects (changes in net asset value) are
analysed, which enables control based on net present
value and maturity criteria. Furthermore, analyses
are carried out with regard to current income, especially
net interest income; these also form the bas<strong>is</strong>
for the management of the profit and loss account.
At least every 14 days, the Central Management
Committee of the Board of Management d<strong>is</strong>cusses
and decides on business policy re-evaluation and, if
appropriate, a re-adjustment of the interest change
and price r<strong>is</strong>k incurred.
Monitoring market r<strong>is</strong>ks
The R<strong>is</strong>k Controlling div<strong>is</strong>ion <strong>is</strong> independently
responsible for the r<strong>is</strong>k monitoring in trading portfolio
and banking book activities in accordance with
the minimum requirements for trading (MaH). At
present, market r<strong>is</strong>ks that must be backed with
equity are still determined according to the standard
procedures set out in the German Banking Act and
reported to the superv<strong>is</strong>ory authorities. The Bank’s
aim <strong>is</strong> to achieve regulatory recognition of the internal
procedures for market r<strong>is</strong>k monitoring.
The internal monitoring of market r<strong>is</strong>ks <strong>is</strong> based
on the capital-at-r<strong>is</strong>k concept. These analyses incorporate
a system of limits to restrict r<strong>is</strong>k and loss and
related procedural rules. Through the introduction
of prior warning levels on 80% limit util<strong>is</strong>ation,
monitoring processes are triggered and the Board of
Management <strong>is</strong> provided with additional information
from R<strong>is</strong>k Controlling or the relevant business area
giving r<strong>is</strong>e to the warning.

CAPITAL-AT-RISK LIMITS AND UTILISATION IN 2003
in t million Capital-at-R<strong>is</strong>k
Unit Ø Min. Max. Limit
Trading portfolio activities 19.8 11.2 41.2 117.2
Proprietary trading 11.5 4.9 37.6 40.0
Equities 1.6 0.5 3.2 7.0
Treasury 5.6 2.0 10.1 25.0
Interest rate and lending products 6.6 3.3 10.4 25.0
Banking book activities 137.6 63.5 290.5 636.6
Group 1) 150.1 76.8 308.6 753.8
BY RISK CATEGORIES
in t million Capital-at-R<strong>is</strong>k
Unit Ø Min. Max.
Interest change r<strong>is</strong>k 152.4 38.7 307.2
Currency r<strong>is</strong>k 6.4 1.2 28.2
Share price r<strong>is</strong>k 49.1 1.9 116.5
Group 1) 150.1 76.8 308.6
1) As a result of the correlations, the Group values are not derived directly as a total from the individual activities
Furthermore, the New Product Committee
meets regularly and as required to assess r<strong>is</strong>ks and
organ<strong>is</strong>ational effects from new forms of business,
and to monitor the necessary steps through to their
launch. Final approval for a new product comes from
the Board of Management, based on a proposal in
conjunction with the New Product Committee. Comparable
procedures apply to the initiation of activities
in new markets.
R<strong>is</strong>k assessment methods in the case of market r<strong>is</strong>ks
In terms of methodology, the procedures applied
for r<strong>is</strong>k assessment (CAR exposure) are based on an
analytical Delta-Gamma approach including volatility
r<strong>is</strong>ks on the bas<strong>is</strong> of a 10-day holding period and
a 99% confidence level. Spread r<strong>is</strong>ks of the interestbearing
operations are assessed explicitly, taking
into account government, Pfand and swap curves.
Integrative reporting of option r<strong>is</strong>ks <strong>is</strong> carried out in
the form of gamma and vega r<strong>is</strong>ks. The conservative
scenario matrix method <strong>is</strong> used for complex and
highly structured portfolios.
Share price r<strong>is</strong>ks are split into a general price
r<strong>is</strong>k and a special price r<strong>is</strong>k. Th<strong>is</strong> <strong>is</strong> done with the
help of a single index model. Option r<strong>is</strong>ks in the
shares area are conservatively added to the r<strong>is</strong>k as
add-ons.
Correlations of the approx. 1,100 r<strong>is</strong>k factors are
taken into account in full for each business area and
for the report on the Bank as a whole. In addition
to the regulations mentioned, the r<strong>is</strong>k content of the
positions <strong>is</strong> examined on a monthly bas<strong>is</strong> in a large
number of different scenarios (h<strong>is</strong>torical, fixed and
exposure-related scenarios) by means of stress tests.
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Furthermore, the forecasting quality of the
models <strong>is</strong> determined by means of clean back-testing.
Since 2002, during back-test checks in all div<strong>is</strong>ions,
results have been achieved that confirm the high
forecasting quality.
One of the methods employed to analyse the net
interest income <strong>is</strong> Monte Carlo simulations.
With ARMADA (architecture for a new r<strong>is</strong>k
management data processing system), the Bank has
a high-value system for assessing market r<strong>is</strong>ks. The
methods record all transactions subject to the minimum
requirements for trading. With the updating of
the r<strong>is</strong>k and result calculation in 15-minute cycles,
the ARMADA system clearly exceeds the minimum
requirements and also enables effective monitoring
of trading activities during the course of the day.
Reporting market r<strong>is</strong>ks
The Group has introduced a comprehensive and
detailed r<strong>is</strong>k reporting system for market r<strong>is</strong>ks:
• intraday monitoring of the r<strong>is</strong>ks and income of
the trading div<strong>is</strong>ions (every 15 minutes)
• a daily report pursuant to the minimum requirements
for trading to the responsible Board of
Management members
• fortnightly asset/liability report for d<strong>is</strong>cussion
by the Central Management Committee
• a monthly report pursuant to the minimum requirements
for trading to the Group Board of Manage-
ment, with back-testing and stress testing
The r<strong>is</strong>k monitoring procedures employed
at <strong>Bankgesellschaft</strong> proved successful in all market
situations in the past year. R<strong>is</strong>ks are recogn<strong>is</strong>ed
quickly, reported and managed by the dec<strong>is</strong>ionmakers.
The CAR-oriented calculations as well as
the dec<strong>is</strong>ion-making processes based on them
are being further refined continuously on the bas<strong>is</strong>
of practical experience and corresponding projects.
Operational r<strong>is</strong>ks
According to the publications by the Basel Committee
on Banking Superv<strong>is</strong>ion, operational r<strong>is</strong>ks within the
Group are defined as the r<strong>is</strong>k of losses incurred as
a result of the inappropriateness or the failure of
internal procedures, human error and system faults
or external events. Th<strong>is</strong> definition includes legal
r<strong>is</strong>ks but excludes strategic r<strong>is</strong>ks and reputation r<strong>is</strong>ks.
In line with the r<strong>is</strong>k strategy of the <strong>Bankgesellschaft</strong>
Berlin Group, r<strong>is</strong>k management <strong>is</strong> the responsibility
of the company div<strong>is</strong>ions within the framework
of their responsibility for earnings. Th<strong>is</strong> decentral<strong>is</strong>ed
responsibility for control covers the minim<strong>is</strong>ation
of operational r<strong>is</strong>ks by the initiation and implementation
of countermeasures in the form of appropriate
internal procedures. Central<strong>is</strong>ed responsibility for
control <strong>is</strong> assumed by the R<strong>is</strong>k Controlling div<strong>is</strong>ion,
which <strong>is</strong> also responsible for the introduction and
determination of the r<strong>is</strong>k management process,
cross-business area regulations and strategies, qualitative
and quantitative methods of assessment and
for data reg<strong>is</strong>tration. In addition, the R<strong>is</strong>k Controlling
div<strong>is</strong>ion <strong>is</strong> involved in designing insurance models
relating to r<strong>is</strong>k transfer.

Since 2002, a Committee for Operational R<strong>is</strong>ks
(OpR<strong>is</strong>k Committee) has been establ<strong>is</strong>hed to support
the organ<strong>is</strong>ational set-up and ongoing implementation
of uniform r<strong>is</strong>k management and an early warning
system for operational r<strong>is</strong>ks. As a result of the inclusion
of the relevant central core competency div<strong>is</strong>ions,
(e.g. Personnel, Organ<strong>is</strong>ation, Information Technology
and Law) on the one hand and the business areas
on the other, the uniform functional capability of the
r<strong>is</strong>k management system <strong>is</strong> ensured in the div<strong>is</strong>ions
and the sub-companies. The OpR<strong>is</strong>k Committee assumes
these tasks for the Group, but at the same time,
also for the individual banks <strong>Bankgesellschaft</strong> Berlin
AG, Landesbank Berlin and Berlin-Hannoversche
Hypothekenbank AG.
An important element of r<strong>is</strong>k identification <strong>is</strong>
the r<strong>is</strong>k inventory (OpR<strong>is</strong>k Inventory), whereby all
business areas and the sub-companies of the scope of
consolidation in line with commercial law assess
their r<strong>is</strong>k situation themselves using uniform questions.
Quantitative aspects are recorded with the
objective of a monetary evaluation of r<strong>is</strong>k potential
in the structure of the Basel event categories. In
addition, the Bank analyses qualitative key r<strong>is</strong>k ratios
that provide information about the future development
of the operational r<strong>is</strong>ks and indicate potential
critical r<strong>is</strong>k situations.
The measures implemented in the Bank to
reduce the organ<strong>is</strong>ational and technical complexity
have resulted in considerably lower r<strong>is</strong>k potential
with the monetary assessment in the quantitative
OpR<strong>is</strong>k Inventory.
To assess the operational r<strong>is</strong>ks, the technical
platform for the systematic accumulation of loss
events was improved in the year under review. An
intranet-based loss event database developed in
cooperation with the Federal Association of Public
Banks <strong>is</strong> used to optim<strong>is</strong>e data collection and admin<strong>is</strong>tration.
Th<strong>is</strong> application supports the decentral
recording of loss events and therefore provides the
internal database for the Advanced Measurement
Approach (AMA) in accordance with Basel.
Another focus of activities was the steady further
development of the management reporting system.
In addition to the quantitatively assessed r<strong>is</strong>k potential,
management reporting also provides qualitative
parameters relating to the r<strong>is</strong>k situation as early
warning indicators in the form of a “traffic light
status”. Moreover, the contents of important events
in the reporting period are shown in a summar<strong>is</strong>ed
format and the situation as a whole explained. Th<strong>is</strong>
depiction <strong>is</strong> based on a comprehensive configuration
of detailed data with quantitative and qualitative
contents (for example, loss events, legal r<strong>is</strong>ks, IT
r<strong>is</strong>ks, emergency planning).
The r<strong>is</strong>k viability concept was successfully
further developed in the field of operational r<strong>is</strong>ks by
taking the findings from the OpR<strong>is</strong>k Inventory into
account.
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The focus of the current year will be in particular
the further development of r<strong>is</strong>k-oriented analys<strong>is</strong>
and assessment of IT systems and processes. Furthermore,
the optim<strong>is</strong>ation of r<strong>is</strong>k indicators will be
given high priority status and will l<strong>is</strong>t OpR<strong>is</strong>k limits
in greater detail. In addition, by supplementing the
internal loss event accumulation to include external
loss data, the available database will be expanded.
System r<strong>is</strong>ks
The achievement of set reconstruction targets and
the fulfilment of legal requirements are of the utmost
priority at <strong>Bankgesellschaft</strong> Berlin. Within the framework
of the reconstruction concept, the implementation
of the measures adopted from the Group-wide
IT strategy was reworked and continued in 2003,
thus taking into account the need for a homogenous
and stable system environment.
With regard to operating, maintenance and future
development, the standard<strong>is</strong>ation and thus reduction
of the system and application environments will
implicitly secure th<strong>is</strong>. For th<strong>is</strong>, the extensive project
activities begun in 2002 for Group-wide IT system
consolidation (server and application systems) were
largely concluded. 2003 saw the start of projects that
were aimed at achieving the consolidation of the
front office procedures in Capital Markets in 2004/2005
and updating and reducing the complexity of the
Capital Markets infrastructure.
In addition to th<strong>is</strong>, Group-wide configuration
management was introduced in 2003. Th<strong>is</strong> measure
takes into account the diverse modification requirements
with regard to complex system environments,
as well as maintaining the high operating and
security standards.
Within the framework of the strategic investment
portfolio of FinanzIT, projects are underway to
standard<strong>is</strong>e and improve the quality of the application
landscape. Above all, th<strong>is</strong> relates to the standard<strong>is</strong>ation
of the loan systems, financial accounting and
the development of a process for loan processing
across the value-added chain in line with the DSGV
model.
Personnel r<strong>is</strong>ks
On the bas<strong>is</strong> of the “Framework Agreement for
real<strong>is</strong>ing personnel management alignment measures
within the Group of <strong>Bankgesellschaft</strong> Berlin AG”
dated December 17, 2001 and the works and service
agreements dated April 10, 2002 for the “reconstruction
agreement”, the process of staff cutbacks and the
reduction of personnel costs continued in the period
under review as scheduled.
The sustained reduction in personnel costs
continued in 2003 and was therefore also an important
element in the contribution to reducing admin<strong>is</strong>trative
expenditure in 2003.
The Bank <strong>is</strong> taking various measures to counter
the danger of a loss in quality and knowledge associated
with the reduction in employees. Th<strong>is</strong> provides
for the possibility of making external appointments
to a limited extent. Th<strong>is</strong> option was util<strong>is</strong>ed to a
moderate extent.

In addition, a qualifying concept relating to
required and priorit<strong>is</strong>ed planning and implementation
of training measures, already approved by the Board
of Management, <strong>is</strong> set to be instigated in 2004.
Legal r<strong>is</strong>ks
Legal r<strong>is</strong>ks are countered by means of observation
of the legal environment, specification of guidelines
and util<strong>is</strong>ation of standard contracts.
Landesbank Berlin (LBB) and Immobilien- und
Baumanagement der <strong>Bankgesellschaft</strong> Berlin
GmbH (old IBG) declarations of exemption from
liability for personally liable partners of individual
limited partnerships
At the start of 2001, as already reported in the last
Annual Reports, the Board of Management of LBB
informed the Superv<strong>is</strong>ory Board that, between 1994
and 1997, two of its members at that time and one
former member of the Board of Management had
given declarations of exemption from liability to
various individuals who had assumed the position
of a personally liable partner in various real estate
funds. According to the declarations, LBB exempts
these individuals from their full liability to third
parties as personally liable partners.
In connection with the LBB declarations of
exemption, various declarations of exemption circulated
by the management of the former IBG at the
time also came to light, which were also made available
to individuals as personally liable partners of
real estate funds. In terms of the outcome, the content
of the declarations of exemption <strong>is</strong>sued by IBG
fundamentally equates to those of LBB.
The exemption of individuals was the subject of a
regulatory audit by the Federal Financial Superv<strong>is</strong>ory
Authority (BAFin). In letters dated February 12, 2002
and August 20, 2002, the Federal Financial Superv<strong>is</strong>ory
Authority (BAFin) announced that it considered
the declarations of exemption that it had seen to be
invalid in terms of civil law. LBB was of the same
opinion. The declarations of exemption therefore do
not have any relevance with regard to commercial
and regulatory law.
Landesbank Berlin (LBB) declaration of exemption
from liability to personally liable partners of
Weberbank Privatbankiers KGaA (Weberbank)
As already reported in the last Annual Reports, in 1994,
LBB had internally agreed a ceiling with the personally
liable partners of Weberbank with regard to
their personal liability. LBB exempted the personally
liable partners from their legal obligation as personally
liable partners of Weberbank above th<strong>is</strong> ceiling.
The Board of Management of LBB informed the
Federal Financial Superv<strong>is</strong>ory Authority of th<strong>is</strong>
immediately after these declarations were announced
in January 2002. In a letter dated June 25, 2002, the
Federal Financial Superv<strong>is</strong>ory Authority stated that
it considered these declarations of exemption to
be loans to associated persons or companies in the
context of the German Banking Law, which had been
<strong>is</strong>sued in violation of the regulatory conditions. The
declarations of exemption were therefore to be
returned by the partners whom they benefited. LBB
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requested the beneficiaries to comply accordingly.
A return has not occurred to date. LBB shares the
opinion of the Federal Financial Superv<strong>is</strong>ory Authority
with regard to the assessment of the declarations
of exemption as loans to associated persons or companies.
Consequently, as a result of violating the
banking regulatory requirements when extending
loans, it views the declarations of exemption as invalid.
These declarations of exemption do not therefore
have to be taken into account in terms of commercial
and regulatory law, as in the previous year.
EU financial ass<strong>is</strong>tance proceedings relating
to restructuring ass<strong>is</strong>tance for <strong>Bankgesellschaft</strong>
Berlin AG and the transfer of the former
Wohnungsbaukreditanstalt Berlin (WBK) to
Landesbank Berlin – Girozentrale –
As described in the Management Report, the European
Comm<strong>is</strong>sion approved the restructuring ass<strong>is</strong>tance
for <strong>Bankgesellschaft</strong> Berlin on February 18, 2004.
The approval encompasses the injection of capital by
the State of Berlin in August 2001 amounting to
a 1.755 billion, the “r<strong>is</strong>k shielding” of the State of
Berlin from December 2001/April 2002 cons<strong>is</strong>ting of
various guarantees with a nominal maximum
amount of a 21.6 billion as well as the “repayment
agreement” (term in line with the dec<strong>is</strong>ion by the
EU Comm<strong>is</strong>sion; referred to as “neutral<strong>is</strong>ation agreement”
in the 2002 annual report) between the State
of Berlin and LBB dated December 2002, which was
concluded in view of any dec<strong>is</strong>ion in favour of restitution
taken by the Comm<strong>is</strong>sion in the proceedings
relating to the examination of the financial ass<strong>is</strong>tance
aspect of the transfer of WBK to LBB. The Comm<strong>is</strong>sion
approved the repayment agreement in the dec<strong>is</strong>ion
dated February 18, 2004 under the condition that,
in addition to the 2002 annual financial statements,
the reporting date January 1, 2004 should also be
material for calculating the core capital ratio. For
<strong>Bankgesellschaft</strong>, there <strong>is</strong> no doubt that the dec<strong>is</strong>ion
by the Comm<strong>is</strong>sion on February 18, 2004 means that
the neutral<strong>is</strong>ation agreement has become valid in
the version that the Berlin House of Representatives
approved on February 20, 2003. Neither <strong>is</strong> there any
doubt that the additionally planned tie-up with the
Group’s core capital ratio as of January 1, 2004, the
positive effects of th<strong>is</strong> ass<strong>is</strong>tance will be restricted
to the required amount. However, in the case of
a negative outcome to the LBB/IBB ass<strong>is</strong>tance proceedings,
the result would be complete neutral<strong>is</strong>ation
of a restitution claim.
A part of the commitment by the Federal government,
described in detail in the Management Report,
relates to the spin-off of IBB’s government ass<strong>is</strong>tance
programme. Accordingly, the Federal Republic of
Germany must ensure that IBB’s government-ass<strong>is</strong>tance
programme <strong>is</strong> continued in an independent
development bank of the State of Berlin with effect
from January 1, 2005 at the latest and that the IBB
special-purpose reserve of the State <strong>is</strong> used for available
capital resources at the new development bank.
When spinning off IBB from LBB, the IBB specialpurpose
reserve must be separated from LBB to the
extent that it <strong>is</strong> possible as at January 1, 2004 without
falling short of a core capital ratio of 6.0% in the
<strong>Bankgesellschaft</strong> Group (after the spin-off of IBB),

whereby no more than a 1.1 billion may remain at
LBB in each case. The share of the special-purpose
reserve still required for the capital<strong>is</strong>ation of the
BGB Group, but not exceeding a 1.1 billion, will be
invested in LBB either directly or indirectly by the
State of Berlin by way of a contribution in kind as
dormant holdings in LBB and interest thereon will be
calculated at the normal market rate. <strong>Bankgesellschaft</strong>
Berlin <strong>is</strong> assuming that by implementing these
conditions, which in particular include coordination
with the EU Comm<strong>is</strong>sion regarding the amount of
the interest of the dormant capital contribution of the
State of Berlin, no financial ass<strong>is</strong>tance r<strong>is</strong>ks will
result from the LBB/IBB proceedings for the future.
<strong>Bankgesellschaft</strong> Berlin <strong>is</strong> prepared to fulfil the
restructuring plan and the conditions imposed by
the Comm<strong>is</strong>sion and the obligation agreements
entered into by the Federal government and the State
of Berlin, which the EU Comm<strong>is</strong>sion imposed as a
prerequ<strong>is</strong>ite to approving the restructuring ass<strong>is</strong>tance,
and to be involved in the relevant measures
of the Federal government and the State of Berlin
in relation to th<strong>is</strong>. The State of Berlin must also share
in the commitments in full. For <strong>Bankgesellschaft</strong>
Berlin, there <strong>is</strong> no doubt that the Federal government
and the State of Berlin will adopt the necessary
measures in order to meet the commitments.
It cannot be ruled out that third parties instigate
legal redress against the dec<strong>is</strong>ion by the Comm<strong>is</strong>sion
dated February 18, 2004. However, the Bank <strong>is</strong>
assuming that any legal redress will not be successful
as the Comm<strong>is</strong>sion has a great deal of d<strong>is</strong>cretion
according to the jur<strong>is</strong>diction of the European Court
when assessing and approving restructuring ass<strong>is</strong>tance.
Relevance to financial ass<strong>is</strong>tance of the
involvement of Norddeutsche Landesbank
in the capital increase
In addition to the State of Berlin, Norddeutsche
Landesbank – Girozentrale – was also involved in
the capital increase for <strong>Bankgesellschaft</strong> Berlin AG
pursuant to the resolution of the Annual General
Meeting on August 29, 2001 with approximately
a 166 million. In the resolution to initiate formal proceedings
dated April 9, 2002, the EU Comm<strong>is</strong>sion
stipulated that th<strong>is</strong> injection of capital could also
potentially represent financial ass<strong>is</strong>tance from the
State, which would require approval.
The Comm<strong>is</strong>sion did not believe that a definitive
assessment of th<strong>is</strong> measure was necessary in its
dec<strong>is</strong>ion dated February 18, 2004, as the weight of
th<strong>is</strong> measure in relation to the approved ass<strong>is</strong>tance <strong>is</strong>
marginal and therefore does not have any bearing on
the dec<strong>is</strong>ion already taken. <strong>Bankgesellschaft</strong> Berlin
therefore assumes that there are no more concerns
from a financial ass<strong>is</strong>tance perspective regarding the
injection of capital by NordLB.
Invalidity of the declarations of proxy in
agency agreements relating to concluding loan
agreements
As a result of the repeated legal dec<strong>is</strong>ions of the
Federal Court of Justice, comprehensive agency agreements
concluded between a customer and a broker,
who, for example, <strong>is</strong> not a lawyer or a tax consultant,
are invalid due to incompatibility with the German
Legal Advice Act pursuant to section 134 of the
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German Commercial Code. Therefore, the declaration
of proxy to the broker included in these agency
agreements to conclude with the bank the loan
agreement necessary for financing a property or a
share <strong>is</strong> also invalid. In turn, the consequence of th<strong>is</strong>
<strong>is</strong> that the loan agreement concluded as a result of
the declaration of proxy <strong>is</strong> prov<strong>is</strong>ionally invalid, i.e.
can only become valid with the customer’s approval.
Furthermore, the loan agreement also remains
effective even without the approval of the customer
if certain estoppel principles are applied, i.e. if the
bank had already received the original of the declaration
of proxy <strong>is</strong>sued by the customer at the time
the loan agreement was concluded or if there was
already contact in advance not only with the broker,
but also with the customer directly.
As a result of th<strong>is</strong> legal situation, some customers
have now turned to the Bank with reference to the
invalidity of the loan agreement. A large percentage
of these complaints has proven to be legally unfounded
following an in-depth examination of the respective
facts. If cases occur in which customers could have
a claim to repayment of the instalments paid to date
plus interest in accordance with the current legal
situation, it <strong>is</strong>, however, essential to ensure that the
Bank for its part has a claim against the recipient for
repayment of the loan proceeds plus interest in line
with market conditions.
Other r<strong>is</strong>ks
Business policy and strategic dec<strong>is</strong>ions
With regard to the main features of the reconstruction
objectives, we refer to the details under page 52
within the Management Report. The required amount
of prov<strong>is</strong>ioning was set up for the implementation of
the conditions imposed by the European Comm<strong>is</strong>sion
for approval of the financial ass<strong>is</strong>tance (see page 62).
The planned substantial reduction in staff costs
and operating expenditure will be achieved in part
through waiving bonuses and through optim<strong>is</strong>ation
of processes. A further part must be achieved in
keeping with the speed at which business <strong>is</strong> scaled
back. The r<strong>is</strong>ks of reducing staff costs and operating
expenditure ar<strong>is</strong>e when the control and processing
requirements of the business and reduction processes
are not in line with the reduction of services.
In order to counter r<strong>is</strong>ks ar<strong>is</strong>ing from reconstruction
measures (possible undershooting of expenditure
and personnel cost reductions due to measures not
being implemented or delayed implementation),
qualitative and strategic control of the implementation
process will be establ<strong>is</strong>hed in addition to the
financial control of the restructuring objectives, and
reports are made to the full Board of Management
on a monthly bas<strong>is</strong>. The reconstruction objectives
resulting from the factors “increasing earnings”,
“scaling back r<strong>is</strong>k items” and “reducing r<strong>is</strong>k assets”
will be reported to the Board of Management for each
business area on the bas<strong>is</strong> of the quarterly figures.

The large number of legally stipulated and
reconstruction-related project activities, for example
relating to IFRS accounting rules, the spin-off of IBB
and the companies within Real Estate Services or the
separate d<strong>is</strong>posal of Berliner Bank mean that a large
volume of resources are tied up.
R<strong>is</strong>ks from the Real Estate Services business and
implementation of the detailed agreement
The Group faces two types of r<strong>is</strong>ks in relation to the
implementation of the detailed agreement. The first
set of r<strong>is</strong>ks stems from the fact that the State does not
accept claims under certain circumstances if matters
that are covered by the detailed agreement were not
processed in line with the contract (non-compliance
with the State’s information and approval rights).
The assessment whether or to what extent r<strong>is</strong>ks must
be reported in connection with the implementation
of the detailed agreement <strong>is</strong> based on the following
types of r<strong>is</strong>k:
• r<strong>is</strong>ks that ar<strong>is</strong>e when approval rights, rights to
<strong>is</strong>sue instructions and management rights are
not observed
• r<strong>is</strong>ks from differences in the interpretation
of shielding mechan<strong>is</strong>ms
• r<strong>is</strong>ks from non-compliance with the obligation
to reduce losses
• r<strong>is</strong>ks that are not covered by the detailed
agreement
The second set of r<strong>is</strong>ks compr<strong>is</strong>es activities where
necessary approvals are refused for objective reasons.
Consequently, th<strong>is</strong> leads to cost r<strong>is</strong>ks as the resulting
continuing current expenditure <strong>is</strong> not shielded by
the detailed agreement.
Endeavours are being made for the committees
of the State of Berlin and <strong>Bankgesellschaft</strong> Berlin to
formally conclude the ordinance regulating responsibility
and procedure (ZuVo) planned in the detailed
agreement in 2004, which <strong>is</strong> set to regulate the
particulars of the approval conditions and approval
procedure in detail. Nevertheless, the contents of
the version already available have been used as the
bas<strong>is</strong> for the cooperation since the end of 2003 with
the joint understanding of the parties involved.
Practical experience when using the detailed
agreement and ZuVo demonstrate that there <strong>is</strong> still a
need for clarification and coordination here. With
the controlling company (BCIA) founded by the State
of Berlin at the end of 2002, the aim <strong>is</strong> jointly coordinated
and therefore safe and binding procedures
on the bas<strong>is</strong> of the agreements reached. Despite all
the difficulties, the matters submitted for approval
have been regulated to date. Improving the processes,
and ultimately also the cooperation between the
parties involved in the sense of pragmatic and efficient
procedures, <strong>is</strong> and remains the only targeted route
that can and must lead to cost savings, minim<strong>is</strong>ation
of losses and avoidance of flawed measures.
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IBAG and IBG submitted a conclusive l<strong>is</strong>t of
the positions covered by the book value guarantee
(“positive l<strong>is</strong>t”) to the State by the March 31, 2003
deadline. The joint determination of the positive l<strong>is</strong>t
in line with the detailed agreement <strong>is</strong> still pending
as no agreement has yet been reached with the State
for sub-div<strong>is</strong>ions.
The particular structure of the detailed agreement
covers r<strong>is</strong>k management, which <strong>is</strong> implemented
at a Real Estate Services level (IBAG, IBG und LPFV)
and at a Group level, not only of Group r<strong>is</strong>ks, but
also the r<strong>is</strong>ks assumed by the State of Berlin. These
are managed by the Group and monitored by a
corresponding r<strong>is</strong>k management and controlling
system.
The various stages of r<strong>is</strong>k management are first
implemented at the level of the relevant companies.
The particular significance of r<strong>is</strong>ks ar<strong>is</strong>ing from Real
Estate Services means that decentral<strong>is</strong>ed r<strong>is</strong>k management
<strong>is</strong> closely related to the overall bank r<strong>is</strong>k
management process at Group level.
In 2003, activities to further improve overall r<strong>is</strong>k
management once again centred on the following
areas:
• the completion of structures to ensure that the
detailed agreement with the State of Berlin and
with the controlling company BCIA set up by
the State of Berlin for th<strong>is</strong> purpose <strong>is</strong> handled in
line with the contract
• further improvement of the r<strong>is</strong>k management
system
LPFV Finanzbeteiligungs- und Verwaltungs
GmbH (LPFV) <strong>is</strong> a wholly-owned subsidiary of
<strong>Bankgesellschaft</strong> Berlin AG. In the agreements dated
December 28, 2000, LPFV assumed r<strong>is</strong>ks from Real
Estate Services with contractual effect from IBG
and certain companies that were subsidiaries and
second-tier subsidiaries at that time. LPFV was
exempted from these r<strong>is</strong>ks as a result of conclusion
of the detailed agreement, should the portion of the
loss to be borne exceed a 100 million. Th<strong>is</strong> excludes
specific funds and funds that were launched after
December 31, 2000. As the portion of the loss to be
borne has been used up in the development of
business in 2003, approval requests relating to the
accepted obligation pursuant to the detailed agreement
need to be submitted to BCIA for a dec<strong>is</strong>ion.
Within the <strong>Bankgesellschaft</strong> Berlin Group, the
tasks and functions of a contract and asset management
company in relation to the detailed agreement
were transferred to LPFV Finanzbeteiligungs- und
Verwaltungs GmbH.
The measures relating to the reorientation of
LPFV from a set-up and ongoing organ<strong>is</strong>ational
perspective started in 2002 were almost concluded
in 2003. The assessment and settlement procedure
of the various guarantees, both in relation to the
exempted Group companies as well as the State of
Berlin, were successfully establ<strong>is</strong>hed.

Two key measures were implemented in connection
with th<strong>is</strong>:
• Completion of a guarantee manual, which acts
as a central set of regulations and documents the
coordinated standards of guarantee processing
of all types of guarantees across the entire
guarantee chain and which has been used since
the summer of 2003 by all companies to whom
a guarantee has been made
• Conclusion of a pilot project relating to the introduction
of an integrated r<strong>is</strong>k controlling system on
the bas<strong>is</strong> of a database, forecasting and reporting
system for recording, assessing and managing r<strong>is</strong>ks
The current business r<strong>is</strong>ks of IBAG Immobilien und
Beteiligungen AG (IBAG) result from the r<strong>is</strong>ks
remaining at the IBAG Group from the ex<strong>is</strong>ting real
estate business of the former IBG Group, including
the portfolio of residential and commercial real
estate still available, both complete and still under
construction, and from organ<strong>is</strong>ational deficiencies of
the former IBG Group that have since been largely
rectified.
The “closed-end real estate funds” business area
<strong>is</strong> the responsibility of IBV Immobilien Beteiligungsund
Vertriebsgesellschaft der IBAG-Gruppe mbH
(IBV) within the IBAG Group. In the 2003 financial
year, as in the previous year, no new closed-end real
estate funds were initiated. During the course of the
restructuring, the core business of IBV <strong>is</strong> centred
on management and admin<strong>is</strong>tration of the closed-end
real estate funds initiated previously under IBG as
the parent company.
After analys<strong>is</strong> of all closed-end real estate
funds managed directly by IBV, specific commercial
options with regard to earnings and r<strong>is</strong>k aspects in
particular were developed in conjunction with LPFV.
In addition, for the 2001 and 2002 financial years, a
current account statement was prepared for the funds
in which IBV exerc<strong>is</strong>es the management function.
In terms of content, during the preparation of th<strong>is</strong>
current account statement, measures were taken to
ensure that the requirement criteria passed by the
associations during the 2003 financial year (Verband
geschlossener Immobilienfonds, VGI) were fully
met, thus achieving a high level of transparency.
Subscribers of various funds have instigated
prospectus liability proceedings against IBV. In one
case of proceedings relating to the fund IBV Fonds
Deutschland 3, the court decided in favour of the
plaintiff. IBV has lodged an appeal against the verdict.
No hearing dates have as yet been set for any other
proceedings. Further actions by subscribers have
since been brought.
Furthermore, IBV <strong>is</strong> itself involved to a considerable
extent in closed-end real estate funds. The management
<strong>is</strong> assuming that the dividend d<strong>is</strong>tribution
of the funds roughly corresponds to the refinancing
costs of the unit shares.
The non fund-linked real estate portfolio of
the IBAG Group <strong>is</strong> currently concentrated on approx.
90 property companies with around 190 properties
(volume currently approximately a 1 billion).
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The objectives of the restructuring of IBAG are
still to combine r<strong>is</strong>ks and opportunities relating to
the portfolio of non fund-linked real estate assets in
the Group, to create transparent structures and to
reduce the number of property companies. The
establ<strong>is</strong>hment of a new corporate structure for the
non fund-linked property companies was continued
in order to give companies a commercial function
and to simplify the structures. In th<strong>is</strong> connection,
extensive measures were introduced in 2003, in
particular the clarification of prerequ<strong>is</strong>ites in line
with company law, liability law and taxation.
In the business area “non fund-linked real estate
assets”, significant property sales were real<strong>is</strong>ed in
the year under review despite the difficult market
situation. In th<strong>is</strong> way, the non fund-linked real estate
portfolio of the IBAG Group was substantially
reduced by a 2.4 billion from around a 3.4 billion
originally to now almost a 1 billion since the start
of the restructuring measures in autumn 2001.
The accompanying r<strong>is</strong>k reduction was almost fully
real<strong>is</strong>ed in particular as a result of the withdrawal
of some countries from international business
(England, Holland, USA). The rapid sale of the real
estate portfolio, while safeguarding assets, remains
an important factor for the future success of the
Group.
Within IBAG, two important objectives in particular
were achieved in 2003:
• Adoption of a r<strong>is</strong>k manual and implementation
of an early warning system across companies
• Introduction of a real estate database and establ<strong>is</strong>hment
of an in-house r<strong>is</strong>k tool for property-
related r<strong>is</strong>k assessment
The restructuring was also successfully continued,
leading to a further substantial reduction in personnel,
location and cost r<strong>is</strong>ks. Across the companies, by the
end of the 2003 reporting year, the majority of the
original 33 Group locations, with the exception of the
main offices in Berlin and Nuremberg, were closed
and the personnel and operating costs were permanently
reduced. All participations that are not part of
the core business were or are to be liquidated or
sold.
In 2003, Immobilien- und Baumanagement der
<strong>Bankgesellschaft</strong> Berlin GmbH (IBG) continued
as scheduled with the expansion of the management
and controlling structures started in 2002. The implementation
of a r<strong>is</strong>k management system continued
as a result of the introduction of a r<strong>is</strong>k manual coordinated
with the <strong>Bankgesellschaft</strong> Berlin AG Group
in September 2003.

Over the course of 2003, IBG almost completely
withdrew from the EuroSpeedway Lausitz – Lausitzring
project.
As a result of the exemption agreement with LPFV
and the detailed agreement, IBG <strong>is</strong> exempt from
material r<strong>is</strong>ks. Nevertheless, the contractual obligations
from the ex<strong>is</strong>ting fund business result in
operating expenditure for controlling and contract
management, which <strong>is</strong> not covered by the exemption
agreements. As the company does not have any
material income in line with its strategy, the current
expenditure and payment obligations from the settlement
of the agreements result in capital and liquidity
r<strong>is</strong>ks, which require regular measures to provide
capital cover and the prov<strong>is</strong>ion of liquidity by the
shareholders.
R<strong>is</strong>ks from the Investitionsbank Berlin (IBB)
government-ass<strong>is</strong>tance programme
The government-ass<strong>is</strong>tance programme in the Real
Estate div<strong>is</strong>ion <strong>is</strong> still character<strong>is</strong>ed by the continued
price slump in the Berlin real estate market and
the accompanying fall in the credit rating of borrowers.
Moreover, the fact that there has been hardly
any improvement in economic development to date <strong>is</strong>
still not having a positive effect on the credit rating
of companies. Overall, IBB has taken account of th<strong>is</strong>
situation by further developing credit r<strong>is</strong>k management
and through adequate r<strong>is</strong>k prov<strong>is</strong>ions.
In the context of public subsidy of residential
housing, IBB financed residential property on the
bas<strong>is</strong> of the guideline on promoting rental and
cooperative housing construction in Berlin dated
April 3, 1992 (second development subsidy Berlin).
Appropriate prov<strong>is</strong>ioning was made for the
latent r<strong>is</strong>ks of default inherent in such financing
volumes. There are other latent r<strong>is</strong>ks inherent
in the lendings portfolio for subsid<strong>is</strong>ing residential
property ownership, for which adequate r<strong>is</strong>k prov<strong>is</strong>ions
were also made.
The d<strong>is</strong>continuation of ongoing ass<strong>is</strong>tance for
social residential construction for the residential
construction programme between 1987 and 1997
represents the r<strong>is</strong>k of a loss of income and indirect
credit r<strong>is</strong>ks for Investitionsbank Berlin.
When evaluating the r<strong>is</strong>ks in IBB’s lending
business, particular attention <strong>is</strong> to be paid to the fact
that IBB still does not carry any r<strong>is</strong>k for the major
share of the mortgage portfolio with regard to potential
interest loss r<strong>is</strong>ks and loan loss r<strong>is</strong>ks due to the
basic contract with the State of Berlin as well as an
approved framework guarantee from the State.
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EU financial ass<strong>is</strong>tance proceedings
relating to guarantor’s liability and liability
assumed at state clearing banks
The State of Berlin has implemented the conditions
of the “Brussels Agreement” reached in the summer
of 2001 relating to guarantor’s liability and liability
assumed at state clearing banks.
The liability assumed for Landesbank will be
revoked as at July 19, 2005. The conditions of
the guarantor’s liability were changed in such a
way that liabilities ar<strong>is</strong>ing after July 18, 2005 do not
come under the guarantor’s liability and liabilities
that ar<strong>is</strong>e in the period between July 18, 2001 and
July 18, 2005 only come under the guarantor’s
liability if their maturity date does not extend beyond
December 31, 2015. The guarantor’s liability <strong>is</strong> not
affected in relation to liabilities substantiated
before July 18, 2001.
For future business activities of Landesbank
Berlin – Girozentrale – the <strong>Bankgesellschaft</strong> Berlin
Group <strong>is</strong> assuming that it <strong>is</strong> sufficiently prepared
for the d<strong>is</strong>continuation of liability assumed and
guarantor’s liability. At th<strong>is</strong> point in time, it <strong>is</strong> not
possible to accurately predict the changes to the
refinancing possibilities resulting from th<strong>is</strong> d<strong>is</strong>continuation.
Consequently, it <strong>is</strong> impossible to prec<strong>is</strong>ely
quantify the extent of the negative effect of the
d<strong>is</strong>continuation of the aforementioned liability on the
earnings, financing and net assets situation of the
individual <strong>Bankgesellschaft</strong> Berlin Group companies.

Group Outlook
The Group achieved a turnaround with a pleasingly
positive operating result for the 2003 financial year.
Moreover, the approval of the restructuring ass<strong>is</strong>tance
on February 18, 2004 by the EU Comm<strong>is</strong>sion benefits
planning security at the Group. Th<strong>is</strong> means that the
reorientation of the Group can be continued. The
EU dec<strong>is</strong>ion also sets the course for further standard<strong>is</strong>ation
in business operations, which forms the
bas<strong>is</strong> for the successful stabil<strong>is</strong>ation of earnings and
repositioning of Bankgesell-schaft Berlin AG and
the Group in all business segments.
The finer points of the measures agreed to within
the framework of the approval will be translated
into a corresponding implementation plan after
they have been analysed in detail. Fulfilment of the
commitments, which impact the entire Group, can
only be achieved in close cooperation with the State
of Berlin, as a party involved in the financial ass<strong>is</strong>tance
proceedings.
Furthermore, the success of the restructuring
will be closely tied in with further progress in relation
to the strategic reorientation towards becoming a
strong regional bank with capital markets and real
estate financing throughout Germany, as well as
the development of the general economic situation.
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RISK REPORT / GROUP OUTLOOK
2004 will be more strongly character<strong>is</strong>ed by
the consolidation of the market position of the Group
and the further improvement of its efficiency and
profitability in all business segments. In future,
based on the results of the second half of 2003, we
will be intensifying our focus on the client business.
An important measure in 2004 will be the conclusion
of the project started in 2003 to spin off
Investitionsbank Berlin (IBB) as a legally independent
development bank. The associated tasks and
structures are regulated by the approval of the IBB
leg<strong>is</strong>lation planned for the spring and the related
agreement. The operational implementation of the
spin-off activities <strong>is</strong> at an advanced stage. The Board
of Management therefore assumes that the spin-off
will be completed by January 1, 2005 at the latest.
The involvement of the State of Berlin <strong>is</strong> essential in
order for the spin-off to succeed.
Real Estate Services must be sold or liquidated by
December 31, 2005 in accordance with a commitment
to the EU Comm<strong>is</strong>sion. On th<strong>is</strong> date, any ex<strong>is</strong>ting
participations in Real Estate Services companies, as
described in the dec<strong>is</strong>ion, are then to be transferred to
the State of Berlin in line with market conditions. A
corresponding plan for the spin-off <strong>is</strong> to be drawn up
by the Bank. New real estate funds or other real estate
investment products are no longer being developed.

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Group Outlook
Once the schedule and procedure have been
determined, the agreed sale of Berliner Bank by
February 2007 will be introduced in the second half
of 2005 with concrete implementation steps.
In addition, the continuation of the measures to
achieve the cost targets and the associated reduction
of personnel costs will remain a focus of the restructuring
in 2004.
The proposed merger of the business activities
of <strong>Bankgesellschaft</strong> Berlin AG and Landesbank
Berlin by the end of 2005 represents an important
step towards achieving a more transparent Group
structure. Project work has started and the first
necessary steps towards implementation are set to
be taken in 2004.
The withdrawal from nationwide Corporate
Banking and project financing, as well as the sale of
other participations, will continue to be pursued.
With the implementation of the planned measures
relating to profitability and strategic orientation,
the Board of Management considers the Group to be
well positioned for the period of the d<strong>is</strong>continuation
of liability assumed and guarantor’s liability in 2005.
With regard to all restructuring activities, it <strong>is</strong>
important to note that the projects required to prepare
for external banking industry requirements (Basel II
and accounting in line with IAS) and the implementation
for the commitments to the EU Comm<strong>is</strong>sion
carry operational implementation r<strong>is</strong>ks.
Once the identified effects of the EU dec<strong>is</strong>ion
have been incorporated in the 2003 result, the Board
of Management does not anticipate any special
charges from expenditure for resulting structural
measures in th<strong>is</strong> respect.
The reconstruction and restructuring measures
already successfully implemented, the positive
experiences in relation to the progressive change to
the Group along with the more optim<strong>is</strong>tic economic
outlook all underpin the Board of Management’s
expectations for 2004 of once more achieving a positive
overall result in the Group.

105
GROUP OUTLOOK / ANNUAL FINANCIAL STATEMENT FOR THE GROUP AND THE AG
Annual Financial Statement
for the Group and the AG
106 <strong>Bankgesellschaft</strong> Berlin Group Balance Sheet
110 Profit and Loss Account of the <strong>Bankgesellschaft</strong> Berlin Group
112 Consolidated Equity Capital Statement
114 Segment Reporting of the Group
116 Cash Flow Statement of the <strong>Bankgesellschaft</strong> Berlin Group
118 <strong>Bankgesellschaft</strong> Berlin AG Balance Sheet
122 Profit and Loss Account of <strong>Bankgesellschaft</strong> Berlin AG
124 Notes to the Consolidated and AG Financial Statements 2003
126 Information on Accounting and Valuation Methods
128 Valuation
132 Information on the Balance Sheet Items of the Group
142 Information on the Profit and Loss Account Items of the Group
151 Other Information on the Group
160 Information on the Balance Sheet Items of the AG
170 Information on the Profit and Loss Account Items of the AG
173 Other Information on the AG
177 Appendices to the Notes

106
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
<strong>Bankgesellschaft</strong> Berlin Group Balance Sheet
as of December 31, 2003
Assets See Notes Previous year
number in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Cash reserve
a) Cash in hand 648,492 577,785
b) Balance at central banks 652,687 814,636
of which: at the Bundesbank 611,429 (757,886)
c) Balance with post office banks 0 0
Debt <strong>is</strong>sues of public institutions and bills
red<strong>is</strong>countable at central banks 10
1,301,179 1,392,421
a) Treasury bills and treasury d<strong>is</strong>count notes
and similar public institution debt instruments 0 45,216
of which: red<strong>is</strong>countable at the Bundesbank 0 (0)
b) Bills of exchange 817 3,081
of which: red<strong>is</strong>countable at the Bundesbank 817 (3,081)
817 48,297
Loans and advances to banks 1, 3, 4, 5
a) Due on demand 4,705,064 11,014,637
b) Other loans and advances 23,415,470 19,783,678
of which: Mortgage loans from Hypothekenbank 9,908 (10,006)
Public sector loans from Hypothekenbank 2,794,645 (3,305,501)
28,120,534 30,798,315
Loans and advances to customers 1, 3, 4, 5, 10 77,708,023 89,578,886
of which: Mortgage loans from Hypothekenbank 15,161,863 (17,797,627)
Other loans secured by charges over property 14,304,382 (15,658,149)
Public sector loans 28,792,202 (25,812,066)
Debt securities and other
fixed-income securities
a) Money market securities
2, 3, 4, 5, 6, 8, 10
aa) <strong>is</strong>sued by public institutions 23,974 30,320
of which: eligible as security at the Bundesbank 0 (0)
ab) from other <strong>is</strong>suers 63,843 434,223
of which: eligible as security at the Bundesbank 35,049 (434,223)
87,817 464,543
b) Bonds and debt securities
ba) <strong>is</strong>sued by public institutions 3,568,720 4,970,720
of which: eligible as security at the Bundesbank 2,176,630 (2,919,794)
bb) from other <strong>is</strong>suers 28,372,750 33,333,160
of which: eligible as security at the Bundesbank 17,244,762 (19,989,681)
31,941,470 38,303,880
c) Own debt securities 944,239 827,024
Nominal value 1,050,899 (924,075)
32,973,526 39,595,447
Carryover 140,104,079 161,413.366

107
BANKGESELLSCHAFT BERLIN GROUP BALANCE SHEET
Liabilities See Notes Previous year
number in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Deposits by banks 1, 3, 4
a) Due on demand 2,985,002 10,509,746
b) With agreed term or notice period
of which: Reg<strong>is</strong>tered mortgage bonds
48,474,156 48,839,636
<strong>is</strong>sued by Hypothekenbank
Other reg<strong>is</strong>tered
334,398 (415,758)
mortgage bonds <strong>is</strong>sued
Reg<strong>is</strong>tered public mortgage bonds
1,883,346 (1,815,450)
<strong>is</strong>sued by Hypothekenbank 228,320 (281,932)
Other reg<strong>is</strong>tered public mortgage bonds <strong>is</strong>sued 2,357,302 (2,416,850)
51,459,158 59,349,382
Customer savings
a) Savings deposits with agreed notice period
1, 3, 4
aa) of three months 7,803,223 8,942,016
ab) of more than three months 221,670 281,848
8,024,893 9,223,864
b) Other liabilities
ba) Due on demand 11,205,579 13,009,406
bb) With agreed term or notice period
of which: Reg<strong>is</strong>tered mortgage bonds
28,944,773 34,858,014
<strong>is</strong>sued by Hypothekenbank 1,897,204 (2,131,137)
Other reg<strong>is</strong>tered mortgage bonds <strong>is</strong>sued
Reg<strong>is</strong>tered public mortgage bonds
1,766,491 (1,892,395)
<strong>is</strong>sued by Hypothekenbank 1,577,039 (1,868,503)
Other reg<strong>is</strong>tered public mortgage bonds <strong>is</strong>sued 2,444,013 (2,500,985)
40,150,352 47,867,420
48,175,245 57,091,284
Securit<strong>is</strong>ed liabilities
a) Debt securities <strong>is</strong>sued
1, 2, 3, 4
aa) Mortgage bonds <strong>is</strong>sued by Hypothekenbank 6,615,060 5,644,800
ab) Other mortgage bonds 1,290,815 1,775,279
ac) Public Pfandbriefe <strong>is</strong>sued by Hypothekenbank 12,665,013 16,550,937
ad) Other public Pfandbriefe 10,475,631 12,186,779
ae) Other debt securities 8,823,281 7,747,781
39,869,800 43,905,576
b) Other securit<strong>is</strong>ed liabilities 136,315 262,372
of which: money market securities 0 (126,209)
own acceptances and prom<strong>is</strong>sory notes outstanding 130,918 (102,977)
40,006,115 44,167,948
Liabilities held in trust 7 181,025 220,238
of which: trustee loans 143,553 (150,342)
Other liabilities 15 3,355,891 3,805,462
Carryover 143,177,434 164,634,314

108
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
<strong>Bankgesellschaft</strong> Berlin Group Balance Sheet
as of December 31, 2003
Assets See Notes Previous year
number in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Carryover 140,104,079 161,413,366
Shares and other
non fixed-income securities 3, 4, 5, 6, 8 3,922,579 3,367,483
Participations 6, 8 359,000 407,034
of which: in banks 102,696 (102,862)
in financial service providers 257 (1,830)
Shares in associated companies 6, 8 31,771 95,284
of which: in banks 5,598 (5,701)
Shares in affiliated companies 6, 8 212,011 285,433
of which: in banks 0 (0)
in financial service providers 0 (1,046)
Assets held in trust 7 181,025 220,238
of which: trustee loans 143,553 (150,342)
Equal<strong>is</strong>ation claims against public institutions
including debt securities ar<strong>is</strong>ing from their exchange 11 367,447 561,375
Intangible assets 6, 12 88,696 21,891
Tangible assets 6, 12 491,233 580,216
Own shares or shareholdings 55,267 54,992
notional value 70,390 (70,390)
Other assets 13 6,982,705 7,191,900
Prepayments and accrued income 14
a) from the <strong>is</strong>sue and loan business 414,574 513,198
b) other 75,604 91,797
490,178 604,995
Total assets 153,285,991 174,804,207

109
BANKGESELLSCHAFT BERLIN GROUP BALANCE SHEET
Liabilities See Notes Previous year
number in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Carryover 143,177,434 164,634,314
Accruals and deferred income 16
a) from the <strong>is</strong>sue and loan business 934,881 1,001,829
b) other 117,468 113,303
1,052,349 1,115,132
Prov<strong>is</strong>ions
a) Prov<strong>is</strong>ions for pensions and similar obligations 17 623,122 646,955
b) Tax prov<strong>is</strong>ions 217,301 185,789
c) Other prov<strong>is</strong>ions 18 1,698,126 1,470,092
2,538,549 2,302,836
Special items with an equity portion 0 87
Subordinated liabilities 3, 4, 19 2,752,135 2,862,618
Profit participation capital 20 85 85
of which: due within two years 0 (0)
Fund for general banking r<strong>is</strong>ks 201,985 0
Shareholders’ equity 21
a) Subscribed capital 2,554,741 2,554,741
b) Capital reserve
c) Retained earnings
1,956,044 1,956,044
ca) Legal reserve 3,272 3,272
cb) Reserve for own shares 55,267 54,992
cd) Special-purpose reserve of Investitionsbank Berlin 1,342,326 1,342,326
ce) Other retained earnings 249,289 129,516
1,650,154 1,530,106
d) Adjustments for minority interests 56,729 70,321
e) Consolidated profit/consolidated loss – 2,654,214 – 2,222,077
3,563,454 3,889,135
Total liabilities 153,285,991 174,804,207
Contingent liabilities
b) Liabilities from guarantees and warranties
(refer to Notes for the Group)
c) Liability from the appointment of collateral
2,629,030 4,200,012
for external liabilities 708 158,843
2,629,738 4,358,855
Other obligations
a) Repurchase obligations from non-genuine pension transactions 14,777 14,777
c) Irrevocable loan commitments 5,846,742 9,208,009
5,861,519 9,222,786

110
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Profit and Loss Account of the <strong>Bankgesellschaft</strong> Berlin Group
for the period from January 1, 2003 to December 31, 2003
Expenditure See Notes Previous year
number in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Interest payable 22 5,001,434 6,338,995
Fees and comm<strong>is</strong>sion payable 23 85,257 72,867
Net expenditure from financial transactions
General admin<strong>is</strong>trative expenditure
a) Personnel costs
24 – 24,410
aa) Wages and salaries 583,459 675,231
ab) Social security costs and costs
relating to pensions and prov<strong>is</strong>ions 160,449 177,900
of which: for pensions 51,794 (55,969)
743,908 853,131
b) Other admin<strong>is</strong>trative expenditure 25 543,365 590,361
1,287,273 1,443,492
Depreciation and value adjustments
on intangible and tangible assets 6 93,441 107,846
Other operating expenses
Depreciation and value adjustments on loans
and advances and specific securities as well as
28 746,416 523,762
allocations to prov<strong>is</strong>ions in the lending business
Depreciation and value adjustments on
participations, holdings in affiliated companies
26 175,295 505,530
and securities held as fixed assets 6 91,491 448,893
Losses ar<strong>is</strong>ing from profit and loss transfer agreements 29,569 39,417
Earnings from holdings in associated companies 22 – 10,377
Extraordinary expenditure 29 404,380 111,619
Taxes on earnings
Other taxes, not posted under
30, 31 – 10,073 82,301
“Other operating expenses”
Expenditure ar<strong>is</strong>ing from transfers
10,227 2,079
to the fund for general banking r<strong>is</strong>ks 201,985 –
Total expenditure 8,116,695 9,711,588
Net profit/loss for the year – 316,432 – 698,700
Profit/loss carried forward from the previous year – 2,231,065 –1,552,353
Withdrawals from retained earnings
– 2,547,497 – 2,251,053
b) from the reserve for own shares 0 15,948
e) from other retained earnings 275 22,269
Allocations to retained earnings
275 38,217
b) to the reserve for own shares 275 0
d) to the special-purpose reserve of Investitionsbank Berlin 0 823
e) to other retained earnings 0 15,948
Profit/loss/rights to profit due to minorities 106,717 – 7,530
of which: calculation of right to profit 104,314
275 16,771
Consolidated profit/consolidated loss – 2,654,214 – 2,222,077

111
PROFIT AND LOSS ACCOUNT OF THE BANKGESELLSCHAFT BERLIN GROUP
Income See Notes Previous year
number in u ’000 in u ’000 in u ’000
Interest income from 22, 27
a) Lending and money market transactions 5,480,281 6,617,341
b) Fixed-income securities and debt reg<strong>is</strong>ter claims 938,773 1,253,180
6,419,054 7,870,521
Current income from
a) Shares and other non fixed-income securities 22, 27 154,243 161,365
b) Participations 39,623 8,681
c) Shares in affiliated companies 4,139 12,418
198,005 182,464
Result from participations in associated companies
Income from profit pooling, profit and loss
transfer agreements and partial
22 48,490 –
profit and loss transfer agreements 22 193 2,720
Comm<strong>is</strong>sion income 23, 27 399,295 415,035
Net result from financial transactions 24, 27 12,258 –
Other operating income
Income from the release of
27, 28 691,559 530,199
special items with an equity portion 0 2
Extraordinary income 29 31,409 11,947
Net loss for the year 316,432 698,700
Total income 8,116,695 9,711,588

112
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Consolidated Equity Capital Statement
for the period from December 31, 2002
to December 31, 2003
for the period from December 31, 2001
to December 31, 2002
Parent company
Subscribed capital Outstanding Capital Special- Consolidated Own shares
deposits not reserve purpose equity allocated
Ordinary Preference not called reserve of capital for
shares shares IBB generated collection
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
As at 31.12.2002 2,554,741 0 0 1,956,044 1,342,326 – 2,041,938 0
Issue of shares
Acqu<strong>is</strong>ition/calling in of own shares
Dividends paid
Changes to the consolidated companies – 20,959
Other changes
Consolidated net profit/loss for the year – 317,224
Other consolidated results 41,959
Overall consolidated result 0 0 0 0 0 – 275,265 0
As at 31.12.2003 2,554,741 0 0 1,956,044 1,342,326 – 2,338,162 0
As at 31.12.2001 2,554,741 0 0 1,956,044 1,341,503 –1,423,506 0
Issue of shares
Acqu<strong>is</strong>ition/calling in of own shares
Dividends paid
Changes to the consolidated companies –39
Other changes
Consolidated net profit/loss for the year – 690,916
Other consolidated results 823 72,523
Overall consolidated result 0 0 0 0 823 – 618,393 0
As at 31.12.2002 2,554,741 0 0 1,956,044 1,342,326 – 2,041,938 0

113
CONSOLIDATED EQUITY CAPITAL STATEMENT
Minority shareholders
Other accumulated Equity Own shares Equity Minority Other accumulated Equity Consolidated
consolidated results capital not capital capital consolidated results capital equity
according allocated capital
Adjustments Other to Group for Adjustments Other
ar<strong>is</strong>ing from neutral balance collection ar<strong>is</strong>ing from neutral
foreign trans- sheet foreign transcurrency
actions currency actions
invoicing invoicing
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
7,641 0 3,818,814 54,992 3,763,822 68,881 1,440 0 70,321 3,834,143
0 0 0 0
0 275 – 275 0 – 275
0 0 0 0
– 8,260 – 29,219 – 29,219 –14,060 –1,440 –15,500 – 44,719
0 0 0 0
– 317,224 – 317,224 792 792 – 316,432
– 7,605 34,354 34,354 1,116 1,116 35,470
– 7,605 0 – 282,870 0 – 282,870 1,908 0 0 1,908 – 280,962
– 8,224 0 3,506,725 55,267 3,451,458 56,729 0 0 56,729 3,508,187
14,690 0 4,443,472 70,940 4,372,532 79,786 1,301 0 81,087 4,453,619
0 0 0 0
0 –15,948 15,948 0 15,948
0 0 0 0
–39 –39 0 –39
0 0 0 0
– 690,916 – 690,916 – 7,787 – 7,787 – 698,703
– 7,049 66,297 66,297 – 3,118 139 – 2,979 63,318
– 7,049 0 – 624,619 0 – 624,619 –10,905 139 0 –10,766 – 635,385
7,641 0 3,818,814 54,992 3,763,822 68,881 1,440 0 70,321 3,834,143

114
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Segment Reporting of the Group
Pro rata earnings of the strategic business areas in the Group
Actual as at December 31, 2003/actual as at December 31, 2002
in t million Retail Banking Regional Capital Markets Real Estate
Corporate Banking Financing
2003 2002 2003 2002 2003 2002 2003 2002
Net interest income 466 501 183 176 406 548 278 281
Net comm<strong>is</strong>sion income 231 224 38 36 7 20 – 3 9
Profit from financial transactions 4 –24
Balance of other income/expenditure 9 6 34 26 –10 – 8
Total income 697 734 227 212 451 570 265 282
Personnel costs 207 231 65 79 73 83 49 55
Other admin<strong>is</strong>trative expenditure 359 421 67 67 127 138 51 42
Normal depreciation 8 8 1 1 10 2 2 2
Admin. expenditure 574 660 133 147 210 223 102 99
Operating result before r<strong>is</strong>k prov<strong>is</strong>ioning 123 74 94 65 241 347 163 183
R<strong>is</strong>k prov<strong>is</strong>ioning in lending business 46 93 18 52 91 97 208 289
Earnings from liquidity reserve securities –14 16
Change to the reserve acc. to § 340f of HGB
R<strong>is</strong>k prov<strong>is</strong>ioning 46 93 18 52 77 113 208 289
Operating result after r<strong>is</strong>k prov<strong>is</strong>ioning 77 –19 76 13 164 234 – 45 –106
Result from financial investments – 5 3 – 6 – 3 3
Balance of other items – 2 – 9 – 6 –1 –14 –13
Earnings before taxes 75 – 24 70 1 163 231 – 56 –119
Segment assets 5,853 6,058 9,293 16,974 51,488 62,017 26,077 28,820
Segment liabilities 14,082 14,630 4,279 3,854 51,453 91,933 1,242 1,846
R<strong>is</strong>k items 4,638 5,365 5,751 6,420 20,937 27,705 13,259 12,925
Balance sheet shareholders’ equity (average) 274 266 334 347 1,455 1,622 731 685
Employee capacity (reporting date) 3,516 3,980 944 1,131 508 609 667 652
Return on equity 27.4% – 9.0% 21.0% 0.3% 11.2% 14.2% – 7.7% –17.4%
Cost-income ratio 82.4% 89.9% 58.6% 69.3% 46.6% 39.1% 38.5% 35.1%
1) IBAG, IBG and LPFV: Other admin<strong>is</strong>trative expenditure and normal depreciation are shown
in the items other expenditure or in the balance of other operating income/expenditure
2) December 31, 2002 including Zivnostenská banka

115
SEGMENT REPORTING OF THE GROUP
Real Estate Corporate Government- Other/ GROUP Effects of GROUP
Services 1) Investments 2) Ass<strong>is</strong>tance Consolidation Excl. effects EU dec<strong>is</strong>ion
Programme of EU dec<strong>is</strong>ion
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
19 –14 151 220 157 160 4 –166 1,664 1,706 1,664 1,706
16 29 26 27 –1 – 3 314 342 314 342
2 7 6 –7 12 –24 12 – 24
34 19 19 6 –10 –115 – 47 – 42 5 – 23 – 65 5
53 5 188 262 173 187 –106 – 223 1,948 2,029 – 23 1,925 2,029
63 62 57 91 55 53 175 199 744 853 744 853
44 81 28 34 –133 – 193 543 590 543 590
6 16 15 16 50 58 92 103 92 103
63 62 107 188 98 103 92 64 1,379 1,546 1,379 1,546
–10 –57 81 74 75 84 –198 – 287 569 483 – 23 546 483
22 41 9 39 15 6 409 617 409 617
9 2 –2 –4 –51 –100 –58 –86 –58 –86
1 1 –176 – 26 –1 –176 – 25 –176 – 25
32 44 –169 9 – 37 – 94 175 506 175 506
–10 –57 49 30 244 75 –161 – 193 394 – 23 – 23 371 – 23
–3 –1 –2 –1 –19 –66 –58 –367 –76 –449 –15 –91 –449
11 – 4 –4 –7 –213 –8 –72 – 106 –304 –144 – 302 – 606 –144
–2 –62 43 22 12 1 –291 – 666 14 – 616 – 340 – 326 – 616
2,326 2,219 4,534 9,550 19,197 19,513 34,518 29,653 153,286 174,804 153,286 174,804
2,326 2,219 4,534 9,550 19,197 19,513 56,173 31,259 153,286 174,804 153,286 174,804
2,405 5,639 4,127 4,392 6,326 8,378 57,443 70,824 57,443 70,824
158 462 203 286 372 414 379 331 3,907 4,413 3,907 4,413
902 1,057 312 1,932 747 751 2,536 2,863 10,132 12,975 10,132 12,975
–1.3% –13.4% 21.2% 7.7% 3.2% 0.2% 0.3% –14.0% – 8.4% –14.0%
56.9% 71.8% 56.6% 55.1% 70.8% 76.2% 71.6% 76.2%

116
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Cash Flow Statement of the <strong>Bankgesellschaft</strong> Berlin Group
in t million 31.12.2003 31.12.2002
Net income for the year
Non-cash items contained in the net income for the year
and transfer to the cash flow from operating activities
– 316 – 699
Depreciation, value adjustments, additions 778 1,275
Changes to prov<strong>is</strong>ions –16 –475
Changes in other non-cash items – 277 – 83
Earnings from the d<strong>is</strong>posal of fixed assets – 4 0
Other adjustments (in net terms) – 2,278 –1,845
Subtotal – 2,113 –1,827
Change in the assets and liabilities from operating
activities after adjustment for non-cash components
Loans and advances
To banks 2,185 2,659
To customers 9,808 9,205
Trading and liquidity portfolio securities 5,863 950
Other assets from operating activities
Liabilities
607 – 763
Deposits by banks – 7,904 – 4,337
Customer savings – 6,174 – 5,076
Securit<strong>is</strong>ed liabilities – 3,798 – 2,840
Other liabilities from operating activities – 378 – 268
Interest and dividends received 6,425 8,330
Interest paid – 5,030 – 6,550
Extraordinary amounts paid out 95 –110
Income tax payments 115 108
Cash flow from operating activities – 299 – 519

117
CASH FLOW STATEMENT OF THE BANKGESELLSCHAFT BERLIN GROUP
in t million 31.12.2003 31.12.2002
Amounts received from the d<strong>is</strong>posal of
Financial assets 2,286 1,998
Tangible assets
Amounts paid out for the acqu<strong>is</strong>ition of
187 29
Financial assets – 2,145 –1,337
Tangible assets
Effects from the change to consolidated companies
– 178 – 66
Amounts received from the d<strong>is</strong>posal of consolidated companies 233 0
Amounts paid out for the acqu<strong>is</strong>ition of consolidated companies 0 0
Change in funds from other investing activities –100 – 21
Cash flow from investing activities 283 603
Amounts received from capital increases 0 0
Dividend payments 0 0
Change in funds from other financing activities –120 – 91
Cash flow from financing activities –120 –91
Total cash at the end of the previous period 1,441 1,453
Cash flow from operating activities – 299 – 519
Cash flow from investing activities 283 603
Cash flow from financing activities
Change in financial resources due to exchange rates,
– 120 – 91
consolidated companies, and valuations –3 –5
Total cash at the end of the period 1,302 1,441
„+“ = inflow of funds; „–“ = outflow of funds

118
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
<strong>Bankgesellschaft</strong> Berlin AG Balance Sheet
as of December 31, 2003
Assets See Notes BGB AG BGB AG Previous
number with BB year
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Cash reserve
a) Cash in hand 2 134,706 113,932
b) Balance at central banks 95,447 229,021 500,434
of which: at the Bundesbank 93,967 227,541 498,307
Debt <strong>is</strong>sues of public institutions and bills
red<strong>is</strong>countable at central banks 10
95,449 363,727 614,366
a) Treasury bills and treasury
d<strong>is</strong>count notes and similar public
institution debt instruments 0 0 0
of which: red<strong>is</strong>countable at the Bundesbank 0 0 (0) (0)
b) B/E 0 817 2,088
of which: red<strong>is</strong>countable at the Bundesbank 0 (817) (2,088)
0 817 2,088
Loans and advances to banks 1, 3, 4, 5
a) Due on demand 6,699,677 5,914,438 10,826,072
b) Other loans and advances 14,541,080 14,577,562 7,922,255
21,240,757 20,492,000 18,748,327
Loans and advances to customers
of which: secured by charges
1, 3, 4, 5, 6, 10 6,985,758 10,916,897 14,565,351
over property 75,587 (898,237) (769,016)
Public sector loans 1,952,117 (2,039,880) (1,360,154)
Debt securities and other
fixed-income securities
a) Money market securities
2, 3, 4, 5, 6, 8, 10
aa) <strong>is</strong>sued by public institutions
of which: eligible as security
0 0 0
at the Bundesbank 0 (0) (0)
ab) from other <strong>is</strong>suers
of which: eligible as security
53,787 53,787 0
at the Bundesbank 24,994 (24,994) (0)
53,787 53,787 0
b) Bonds and debt securities
ba) <strong>is</strong>sued by public institutions
of which: eligible as security
1,499,838 1,499,838 2,022,296
at the Bundesbank 967,066 (450,748) (1,213,058)
bb) from other <strong>is</strong>suers
of which: eligible as security
23,402,909 23,402,909 26,205,876
at the Bundesbank 14,810,529 (11,729,093) (16,932,010)
24,902,747 24,902,747 28,228,172
c) Own debt securities 253,303 253,303 290,571
Nominal value 370,961 (370,961) (408,573)
25,209,837 25,209,837 28,518,743
Carryover 53,531,801 56,983,278 62,448,875

119
BANKGESELLSCHAFT BERLIN AG BALANCE SHEET
Liabilities See Notes BGB AG BGB AG Previous
number with BB year
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Deposits by banks 1, 3, 4
a) Due on demand 7,662,190 5,495,621 14,333,434
b) with agreed term or notice period 41,398,661 41,514,883 33,675,894
49,060,851 47,010,504 48,009,328
Customer savings
a) Savings deposits
1, 3, 4
aa) with agreed notice period
of three months 0 774,776 1,082,315
ab) with agreed notice period
of more than three months 0 51,515 63,369
0 826,291 1,145,684
b) Other liabilities
ba) Due on demand 1,564,544 5,573,401 5,885,345
bb) with agreed term or notice period 1,236,191 1,824,859 3,232,961
2,800,735 7,398,260 9,118,306
2,800,735 8,224,551 10,263,990
Securit<strong>is</strong>ed liabilities 1, 2, 3, 4
a) Debt securities <strong>is</strong>sued 3,969,263 3,969,263 5,714,915
b) Other securit<strong>is</strong>ed liabilities 82,910 82,910 88,717
of which: money market securities
own acceptances and
0 (0) (0)
prom<strong>is</strong>sory notes outstanding 0 (0) (0)
4,052,173 4,052,173 5,803,632
Liabilities held in trust 7 0 14,271 14,709
darunter: trustee loans 0 (14,271) (14,709)
Other liabilities 3, 15 2,406,239 2,492,424 2,824,632
Accruals and deferred income 16
a) from the <strong>is</strong>sue and loan business 31,301 (38,262) (30,762)
b) other 42,321 (43,988) (34,673)
73,622 82,250 65,435
Prov<strong>is</strong>ions
a) Prov<strong>is</strong>ions for pensions
and similar obligations 17 204,805 224,622 231,259
b) Tax prov<strong>is</strong>ions 103,906 103,905 92,737
c) Other prov<strong>is</strong>ions 18 914,900 972,821 697,987
1,223,611 1,301,348 1,021,983
Subordinated liabilities 3, 19 1,853,484 1,853,484 2,465,062
Carryover 61,470,715 65,031,005 70,468,771

120
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
<strong>Bankgesellschaft</strong> Berlin AG Balance Sheet
as of December 31, 2003
Assets See Notes BGB AG BGB AG Previous
number with BB year
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Carryover 53,531,801 56,983,278 62,448,875
Shares and other
non fixed-income securities 3, 4, 5, 8, 10 2,407,989 2,407,989 1,970,959
Participations 6, 8 76,282 76,282 110,174
of which: in banks 3,621 (3,621) (3,621)
in financial service providers 257 (257) (257)
Shares in affiliated companies 6, 8 2,071,489 2,071,489 2,644,599
of which: in banks 1,916,008 (1,916,008) (2,487,328)
in financial service providers 0 (0) (0)
Assets held in trust 7 0 14,271 14,709
of which: trustee loans 0 (14,271) (14,709)
Equal<strong>is</strong>ation claims against
public institutions including dept
securities ar<strong>is</strong>ing from their exchange 10, 11 163,063 163,063 252,746
Intangible assets 6, 12 86,241 86,241 0
Tangible assets 6, 12 102,112 112,572 108,070
Own shares or shareholdings 21 55,267 55,267 54,992
Notional value 70,390 (70,390) (70,390)
Other assets 3, 13 5,126,045 5,158,745 5,459,546
Prepayments and accrued income 14
a) from the <strong>is</strong>sue and loan business 18,026 (62,864) (112,370)
b) other 10,859 (17,211) (14,894)
28,885 80,075 127,264
Total assets 63,649,174 67,209,272 73,191,934

121
BANKGESELLSCHAFT BERLIN AG BALANCE SHEET
Liabilities See Notes BGB AG BGB AG Previous
number with BB year
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Carryover 61,470,715 65,031,005 70,468,771
Shareholders' equity 21
a) Subscribed capital 2,554,741 2,554,741 2,554,741
b) Capital reserve
c) Retained earnings
1,956,044 1,956,044 1,956,044
ca) Legal reserve 1,534 1,534 1,534
cb) Reserve for own shares 55,267 55,267 54,992
ce) Other retained earnings 193,110 193,110 193,385
249,911 249,911 249,911
d) Unappropriated profit/net loss for the year – 2,582,237 – 2,582,429 – 2,037,533
2,178,459 2,178,267 2,723,163
Total liabilities 63,649,174 67,209,272 73,191,934
Contingent liabilities
b) Liabilities from guarantees and warranties
(refer to Notes) 2,068,610 2,311,927 3,047,658
2,068,610 2,311,927 3,047,658
Other obligations
c) Irrevocable loan commitments 2,588,840 2,741,017 4,095,149
2,588,840 2,741,017 4,095,149

122
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Profit and Loss Account of <strong>Bankgesellschaft</strong> Berlin AG
for the period from January 1, 2003 to December 31, 2003
Expenditure See Notes BGB AG BGB AG Previous
number with BB year
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Interest payable 22 1,313,124 1,383,369 1,982,507
Fees and comm<strong>is</strong>sion payable 23 38,952 47,524 41,160
Net expenditure from financial transactions 24, 27 0 0 28,700
General admin<strong>is</strong>trative expenditure
a) Personnel costs
25
aa) Wages and salaries 160,470 183,848 221,819
ab) Social security costs and costs
relating to pensions and prov<strong>is</strong>ions 39,111 44,934 59,563
of which: for pensions 11,681 13,147 24,175
199,581 228,782 281,382
b) Other admin<strong>is</strong>trative expenditure 275,940 333,262 382,709
475,521 562,044 664,091
Depreciation and value adjustments on
intangible and tangible assets 6 78,105 79,242 10,566
Other operating expenses 250,095 251,064 110,193
Depreciation and value adjustments
on loans and advances and
specific securities and allocations
to prov<strong>is</strong>ions in the lending business 26 136,224 150,438 250,430
Depreciation and value adjustments on
participations, holdings in affiliated companies
and securities held as fixed assets 149,809 149,809 537,778
Losses ar<strong>is</strong>ing from profit and loss transfer agreements 105,340 105,340 63,796
Extraordinary expenditure 258,145 259,991 73,067
Taxes on earnings 1,051 1,242 11,538
Other taxes, not posted under
“Other operating expenses” 1,611 1,612 105
Total expenditure 2,807,977 2,991,675 3,773,931
Net profit/loss for the year – 544,704 – 544,895 – 696,062
Profit/loss carried forward from the previous year – 2,037,533 – 2,037,533 –1,341,471
– 2,582,237 – 2,582,428 – 2,037,533
Withdrawals from retained earnings
b) from the reserve for own shares 0 0 15,948
e) from other retained earnings 275 275 0
275 275 15,948
Allocations to retained earnings
b) to the reserve for own shares 275 275 0
e) to other retained earnings 0 0 15,948
275 275 15,948
Net loss for the year – 2,582,237 – 2,582,428 – 2,037,533

123
PROFIT AND LOSS ACCOUNT OF BANKGESELLSCHAFT BERLIN AG
Income See Notes BGB AG BGB AG Previous
number with BB year
in u ’000 in u ’000 in u ’000 in u ’000 in u ’000 in u ’000
Interest income from 22, 27
a) Lending and money market transactions
b) Fixed-income securities
1,033,657 1,151,715 1,572,560
and debt reg<strong>is</strong>ter claims 618,934 618,934 857,701
1,652,591 1,770,649 2,430,261
Current income from
a) Shares and other
22, 27
other non fixed-income securities 89,643 89,643 86,796
b) Participations 8,170 8,170 4,915
c) Shares in affiliated companies 26,740 26,740 38,151
124,553 124,553 129,862
Income from profit pooling, profit and
loss transfer agreements and
partial profit and loss transfer agreements 22, 27 6,107 11,958 148,802
Comm<strong>is</strong>sion income 23, 27 95,280 152,389 163,506
Net income from financial transactions 24, 27 4,701 5,093 0
Other operating income 27 333,790 335,589 205,438
Extraordinary income 27 46,251 46,549 0
Net loss for the year 544,704 544,895 696,062
Total income 2,807,977 2,991,675 3,773,931

124
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Notes to the Consolidated and AG Financial Statements 2003
<strong>Bankgesellschaft</strong> Berlin AG <strong>is</strong> the <strong>Bankgesellschaft</strong> Berlin Group’s holding company. Pursuant to section 291
of the German Commercial Code (HGB), it compiles consolidated financial statements for the subsidiary
companies in the consolidated group with exempting effect, provided they are not excluded from exemption
in accordance with section 291 (3). The consolidated financial statements drawn up by IBAG Immobilien und
Beteiligungen AG, Berlin as a sub-group, and the individual financial statements of Berlin-Hannoversche
Hypothekenbank AG, Berlin and Hanover and their subsidiaries, are included in the consolidation.
Consolidated companies
In addition to <strong>Bankgesellschaft</strong> Berlin AG, the consolidated companies as at December 31, 2003 compr<strong>is</strong>ed
the 20 (previous year: 18) domestic and 5 (previous year: 6) foreign subsidiaries.
The consolidated financial statements of <strong>Bankgesellschaft</strong> Berlin again included the following
companies as in 2002:
BANKENSERVICE GmbH, Berlin
<strong>Bankgesellschaft</strong> Berlin (Ireland) plc, Dublin
<strong>Bankgesellschaft</strong> Berlin (Polska) S.A., Warsaw (in liquidation since March 1, 2004)
<strong>Bankgesellschaft</strong> Berlin (UK), London
<strong>Bankgesellschaft</strong> Berlin AG, Berlin
<strong>Bankgesellschaft</strong> Berlin International S.A., Luxembourg
Bauprojekt- und Facilitymanagement GmbH der Unternehmensgruppe <strong>Bankgesellschaft</strong> Berlin, Berlin
BB-DATA Gesellschaft für Informations- und Kommunikationssysteme mbH, Berlin
Berlin-Hannoversche Hypothekenbank AG, Berlin und Hanover 1)
BGB Finance (Ireland) plc, Dublin
Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong> Berlin GmbH, Berlin
Landesbank Berlin – Girozentrale –, Berlin
LPFV Finanzbeteiligungs- und Verwaltungs GmbH, Berlin
Weberbank Privatbankiers KGaA, Berlin
IBAG sub-group:
ARWOBAU Apartment- und Wohnungsbaugesellschaft mbH, Berlin 2)
Bavaria Objekt- und Baubetreuung GmbH, Nuremberg 2)
Bavaria Gewerbe GmbH, Nuremberg 2)
DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft mbH, Frankfurt am Main 2)
IBAG Immobilien und Beteiligungen AG, Berlin 2)
IBI Real Estate – Immobilien und Beteiligungen International GmbH 2)
Immobilien Beteiligungs- und Vertriebsgesellschaft der IBAG-Gruppe GmbH 2)
LBB Grundstücksentwicklungsgesellschaft mbH, Bau- und Projektentwicklungen, Berlin 2)
1) Berlin Hyp Group companies
2) IBAG Group companies

1) Berlin Hyp Group companies
2) IBAG Group companies
125
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The following companies were included in the consolidated companies for the first time:
Athena Immobilien Verwaltungs GmbH & Co. KG – Erster IBV-Universalfonds – 2)
Berlin Hyp Grundstücksverwaltung GbR, Berlin 1)
Berlin Hyp Immobilien GmbH, Berlin 1)
Universal Immobilien AG 2)
Two companies left the scope of consolidation in 2003:
Allgemeine Privatkundenbank AG, Hanover (on September 1, 2003)
Zivnostenská banka a.s., Prague (on January 1, 2003)
BG SYS <strong>Bankgesellschaft</strong> Berlin AG & Co. Systementwicklungsgesellschaft bh OHG, Berlin, as a partnership,
has increased as a result of the acqu<strong>is</strong>ition of a stake of <strong>Bankgesellschaft</strong> Berlin AG on July 1, 2003.
In view of the immaterial nature of the effect on the net-asset, financial and income position, the figures
from the previous year were not adjusted. De-consolidation successes amounted to a –5.0 million for ALLBANK
and a 12.5 million for Zivnostenská banka; the d<strong>is</strong>posal successes achieved equated to a 7.9 million and
a 91.0 million.
A passive difference of a 2 million, which <strong>is</strong> to be d<strong>is</strong>tributed over a period of 20 years, resulted from the
first-time consolidation of the Berlin Hyp Grundstücksverwaltung GbR. The share of a 1 million allocated up to
the past period of the acqu<strong>is</strong>ition was offset with a neutral effect on profits against the other retained earnings.
By exerc<strong>is</strong>ing the options allowed pursuant to section 296 of the German Commercial Code, 46 companies
at IBAG were not included in the consolidated companies. A total of 24 affiliated companies, small GmbHs and
shell companies, were not included in accordance with section 296 subsection 2 of the German Commercial
Code, since these companies are of minor importance in terms of representing a true and fair assessment of the
net-asset, financial and income position of the IBAG Group. The valid option in accordance with section 296
subsection 1 number 3 was exerc<strong>is</strong>ed for 20 companies, since these companies are only held for the purpose of
reselling them. Due to the limitation relating to the exerc<strong>is</strong>ing of business management pursuant to section 296
subsection 1 number 1, two companies were not included in IBAG’s consolidated financial statements. The
consolidated companies of IBAG account, in particular, for the prov<strong>is</strong>ions of the restructuring concept decided
on with regard to the companies that are to be wound up, merged, liquidated or sold and thus only compr<strong>is</strong>e
those companies that belong to the core business of the IBAG Group.
The IBB subsidiaries that do not belong overall to the core business of the <strong>Bankgesellschaft</strong> Berlin Group
were not included. The EU condition to spin off IBB <strong>is</strong> to be completed by January 1, 2005.

126
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
The investment holdings are item<strong>is</strong>ed pursuant to sections 285 number 11 and 11a, 313 subsection 2 and 340a
subsection 4 number 2 of the German Commercial Code in a l<strong>is</strong>t, which <strong>is</strong> attached to these notes as Appendix 1.
These data are supplemented by a l<strong>is</strong>t of companies with profit and loss transfer agreements (Appendix 2).
Information on Accounting and Valuation Methods
Accounting
The annual financial statements and the consolidated financial statements of <strong>Bankgesellschaft</strong> Berlin were
drawn up in accordance with the regulations of the German Commercial Code as amended by the regulations
contained in the Ordinance Regulating Reporting by Banks (RechKredV). The formats of the Group balance
sheet and the Group profit and loss account were extended to provide information on mortgage banks. In
addition, the applicable DRSC accounting standards are observed.
In accordance with the options allowed under section 298 subsection 3 of the German Commercial Code,
the notes to the financial statements of <strong>Bankgesellschaft</strong> Berlin AG and the notes to the consolidated financial
statements were combined in a single report.
The accounting and valuation methods were wholly retained. The software was posted under the item
intangible assets instead of under the item tangible assets. <strong>Bankgesellschaft</strong> Berlin thus complies with the IDW
draft (IDW ERS HFA 11) in its 2003 financial statements. The valuation method (depreciation over three years)
was retained.
Receivables covered under the detailed agreement with the State of Berlin were reported separately from
the loans secured by mortgages and other receivables in the year under review and were allocated to publicsector
loans in line with the EU dec<strong>is</strong>ion that provides for a guarantee of these loans by the State of Berlin.
In view of the intended simplification of the Group structure in connection with the privat<strong>is</strong>ation stipulated
by the EU Comm<strong>is</strong>sion, the LBB dividend payment allocated to the profit-sharing rights (a 1 million) was
deducted from the profit-sharing rights reported under other assets; the same procedure was applied accordingly
to the income received in previous years (a 103 million).
The annual financial statements were drawn up on the bas<strong>is</strong> of the going concern principle (pursuant to
section 252 subsection 1 no. 2 of the German Commercial Code). As assumed in previous years, the European
Comm<strong>is</strong>sion decided in favour of an application by the Federal Republic of Germany for restructuring ass<strong>is</strong>tance
on February 18, 2004. As expected, the repayment agreement dated December 23/27, 2002 forms part of the
dec<strong>is</strong>ion.
The approval also encompasses the ass<strong>is</strong>tance granted by the State of Berlin in the form of participation
in a capital measure by <strong>Bankgesellschaft</strong> Berlin and the shielding of the Group from r<strong>is</strong>ks from Real Estate
Services. The response incorporates the obligation agreements offered by the Federal Republic of Germany as
well as the conditions formulated by the European Comm<strong>is</strong>sion.

127
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Business plans were drawn up and approved by the Board of Management for the implementation of
the dec<strong>is</strong>ion by the EU Comm<strong>is</strong>sion and adherence to the obligation agreements on the part of the Federal government.
The expenditure and losses identifiable as a result were taken into account in the annual financial statements
by creating separately reported prov<strong>is</strong>ions and through write-downs.
<strong>Bankgesellschaft</strong> Berlin AG has submitted a declaration to Berlin Hyp regarding the assumption of the
effect on the balance sheet of the EU approval, limited to effects on the balance sheet from the sale of IBG
(against a debtor warrant).
Consolidation
The financial statements of the companies included in the consolidated financial statements were drawn up
as at December 31, 2003 and were included in the consolidated financial statements, taking into account
Groupwide accounting. We translated the financial statements of the company that performs its accounting
in a foreign currency using the exchange rate prevailing on the reporting date and offset changes in the shareholders’
equity due to exchange rate fluctuations against the retained earnings of the Group. Prov<strong>is</strong>ions were
set up (a 5 million) for any possible losses resulting from the d<strong>is</strong>continuation of business activities in Poland.
The subsidiaries included for the first time in the 2003 financial year were consolidated at the time of
acqu<strong>is</strong>ition based on the revaluation method pursuant to section 301 subsection 1 clause 3 of the German
Commercial Code and on the bas<strong>is</strong> of DRS 4.
<strong>Bankgesellschaft</strong> Berlin AG’s dormant equity holding in Landesbank Berlin, which has a nominal value
of a 844 million, corresponds to the capital posted as dormant capital. Contractual claims on the dormant equity
holding are limited to 75.01% of Landesbank Berlin’s assets and earnings and furthermore exclude its Investitionsbank
Berlin department. The assets due to Landesbank Berlin that are not covered by the contract of
participation are reported under separate Group reserves.
“Adjustments for minority interests” are carried in the Group balance sheet to cover non-Group owned
shares in the equity and profits of subsidiary companies, in particular Berlin-Hannoversche Hypothekenbank AG
and Weberbank Privat-bankiers KGaA as well as Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong> Berlin
GmbH. The profit d<strong>is</strong>tributions received in the previous year on the bas<strong>is</strong> of the profit-sharing right acquired
from the state in 1998 to 24.99% of the LBB profit are deducted from th<strong>is</strong> amount on the asset-side in line with
the EU dec<strong>is</strong>ion.
Receivables and liabilities between companies included in the consolidated financial statements were
consolidated, as were corresponding expenditure and income. Interim earnings from intra-Group sales during
the financial year were eliminated with an impact on net income. The elimination amount carried forward from
the previous year was offset against retained earnings, provided that it was still relevant. Income from consolidated
subsidiaries paid to the Group for the year under review was offset.
Internal derivative transactions within the Group are concluded in line with customary banking practice for
the management of the market r<strong>is</strong>k. The individual Group companies conclude hedge transactions primarily
with <strong>Bankgesellschaft</strong> Berlin AG at relevant valid market conditions, which, for its part, concludes the corresponding
hedge transactions on the market based on its overall position. Th<strong>is</strong> ensures a uniform market presence
and coordinates the Group’s derivates business. No interim earnings in accordance with section 304 of the
German Commercial Code result. These transactions are therefore treated as external transactions in the Group
balance sheet.

128
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Associated companies (pursuant to section 311 of the German Commercial Code)
Out of a total of 12 (previous year: 109) associated companies, 4 (previous year: 6) report in accordance
with the equity method, the remaining associated companies report at cost of acqu<strong>is</strong>ition.
<strong>Bankgesellschaft</strong> Berlin AG and Landesbank Berlin – Girozentrale – have sold their shares reported in
accordance with the equity method to LHI Leasing GmbH and LHI Leasing GmbH & Co. Immobilien KG to
Nord-Ostdeutsche Bankbeteiligungs GmbH. As a result of an agreement relating to the granting of debtor
warrants in the context of the sale, additional income <strong>is</strong> to be generated in the following years (2004 – 2006)
from these companies.
Of the associated companies (98) reported in the previous year in the IBAG sub-group, the companies
intended to be sold on were allocated to current assets. As at the balance sheet date, three companies are
reported as associated companies.
The accounting and valuation of the associated companies <strong>is</strong> carried out in accordance with German
Accounting Standard no. 8 (DRS 8).
The valuation of the associated company Certa Immobilienverwaltung und Handelsgesellschaft mbH & Co.
Liegenschaften oHG as at December 31, 2003 in accordance with the equity method resulted in a participation
book value of a 6.9 million (previous year: a –21.3 million).
The associated companies are shown individually in the l<strong>is</strong>t of investment holdings (Appendix 1 to the Notes).
The equity values are updated to include the pro rata changes to the equity adjusted for the pro rata
investment earnings (book value method).
The companies included in the equity valuation report in line with the German Commercial Code. There
was no alignment with Group-wide accounting due to immateriality.
Th<strong>is</strong> resulted in earnings totalling a 48.5 million (previous year: a –10.4 million), which <strong>is</strong> reported under
“Result of holdings in associated companies” in the consolidated profit and loss account.
Valuation
General valuation methods
Assets, liabilities and pending transactions are valued in accordance with the prov<strong>is</strong>ions of sections 252ff of the
German Commercial Code in connection with sections 340ff of the German Commercial Code. The Ordinance
Regulating Reporting by Banks (RechKredV) was observed.
Loans and advances to banks and customers are reported at the nominal amount. Premium and d<strong>is</strong>count
amounts appear under prepayments and accrued income or accruals and deferred income and are written back
as scheduled. D<strong>is</strong>counted liabilities are reported at market value, other liabilities at the repayment amount.
Adequate account was taken of identifiable lending r<strong>is</strong>ks through the establ<strong>is</strong>hment of individual charges
for bad and doubtful debts and prov<strong>is</strong>ions. There are general charges for bad and doubtful debts for latent r<strong>is</strong>ks
in the receivables portfolio. Irrecoverable interest <strong>is</strong> not posted. Reserves in accordance with section 340f of
the German Commercial Code are available for smaller banks.

129
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
For government-ass<strong>is</strong>tance loans within the Group, the guaranteed subsidies were also reported with the
present value as collateral. Adequate loan loss prov<strong>is</strong>ioning was set up for identifiable r<strong>is</strong>k potential.
Financial assets are valued at cost of acqu<strong>is</strong>ition. If impairment on a sustained bas<strong>is</strong> <strong>is</strong> expected, write-downs
are always performed pursuant to the strict lower of cost or market principle. If declines in value are only
temporary, the value <strong>is</strong> retained pursuant to section 253 subsection 2 of the German Commercial Code in conjunction
with section 340e subsection 1 of the German Commercial Code. Th<strong>is</strong> procedure <strong>is</strong> in line with section
6 subsection 1 no. 2 of the Income Tax Act (EStG). Thus deviations between accounts prepared for financial
reporting purposes and tax purposes are largely avoided.
A a 138 million write-down (previous year: a 399 million) was taken on funds placed in investment funds
that track the EURO STOXX-50 index. The average unit price over the past twelve months formed the bas<strong>is</strong> for
determining the carrying value, whereby the current market price represents the lower limit. At year-end 2003,
the unit shares were valued at market price.
The Group’s financial assets include shares and securities not valued according to the lower of cost
or market amounting to a 1,300 million (previous year: a 1,080 million), of which a 36 million (previous year:
a 36 million) in the AG.
Securities from the trading portfolio and the liquidity reserve are valued at the strict lower of cost or
market. Portfolios put together in the context of an interest rate swap transaction that exactly match in terms
of amount, currency and maturity are regarded as a single valuation unit.
Assets with a limited useful life are depreciated according to a fixed schedule.
The amount of prov<strong>is</strong>ioning for pensions required by actuarial expert opinions <strong>is</strong> reported using an
assumed interest rate of 6%. The biometric accounting principles (Prof. Heubeck tables, 1998) are used for
calculations.
Other prov<strong>is</strong>ions are reported at the amount that <strong>is</strong> required in accordance with sound business
consideration.
Against the background of the detailed agreement with the State of Berlin dated April 16, 2002 relating
to shielding the <strong>Bankgesellschaft</strong> Berlin AG Group from material r<strong>is</strong>ks from Real Estate Services, no value
adjustments were made for the assets under the book value guarantee assumed by the State of Berlin as at
December 31, 2002. The positive dec<strong>is</strong>ion by the EU Comm<strong>is</strong>sion relating to the financial ass<strong>is</strong>tance proceedings
dated February 18, 2004 legitim<strong>is</strong>es the continuation of th<strong>is</strong> valuation approach to December 31, 2003.
In the case of the assets covered by the detailed agreement, the book value as at December 31, 2000 plus the
acqu<strong>is</strong>ition and manufacturing costs accrued since then continued to be used. Further, the State of Berlin
guarantees that sufficient prov<strong>is</strong>ion has been made for the other prov<strong>is</strong>ions as defined by section 266 subsection
3B number 3 of the German Commercial Code, including the prov<strong>is</strong>ions for contingent losses from pending
transactions, reported in the annual financial statements as at December 31, 2001. Only specific r<strong>is</strong>ks ar<strong>is</strong>ing
from Real Estate Services are reported. Specific loans and loan commitments extended by <strong>Bankgesellschaft</strong>
Berlin AG, Landesbank Berlin and Berlin Hyp to the IBG/IBAG Group up until December 31, 2001, including
the loans and loan commitments to property companies, are guaranteed by the State of Berlin. As a result
of the loan guarantee, the <strong>Bankgesellschaft</strong> Berlin Group <strong>is</strong> shielded against loan default of companies within
the IBAG Group/IBG Group. In as far as contingent liabilities and contingencies and so-called hard letters
of comfort and secondary liability as partners result from Real Estate Services and are not part of the accepted
obligation with regard to LPFV, but are nevertheless reported in the annual financial statements as at
December 31, 2001, the State of Berlin releases the Group companies from actual util<strong>is</strong>ation.

130
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Valuation of the trading portfolio
For the predominant share of our trading activities, transactions are structured and valued separately in the form
of portfolios or valuation units both for r<strong>is</strong>k management and for the purposes of commercial law accounting.
In the case of interest rate portfolios, all products in the same currency are regarded as a valuation unit.
In the case of the share portfolio, grouping <strong>is</strong> by category. With portfolios of credit derivatives and convertibles,
the breakdown <strong>is</strong> by underlying. Normal market indices based on share baskets are also treated as one category.
First, the results from the valuation of individual products (trading portfolio securities including derivative
financial instruments) are offset against each other at market prices. In the interest rate and share portfolios,
positive valuation surpluses are taken up to the maximum of the real<strong>is</strong>ed loss in the respective category or
currency in a portfolio by offsetting. For the remaining portfolios, allocation <strong>is</strong> only carried out at the level of
the unreal<strong>is</strong>ed valuation results. Any subsequently remaining positive valuation surplus <strong>is</strong> not taken pursuant
to the imparity principle. If the result of the valuation <strong>is</strong> negative, a prov<strong>is</strong>ion <strong>is</strong> set up for th<strong>is</strong>.
The r<strong>is</strong>ks of the portfolios are the subject of a r<strong>is</strong>k management and limit system that <strong>is</strong> tailored to each
portfolio. The portfolios are kept strictly separate from other transactions in accounting and r<strong>is</strong>k monitoring.
If trading transactions are not allocated to an interest rate or share portfolio, prov<strong>is</strong>ions are set up for
valuation losses. Valuation profit <strong>is</strong> not taken.
Currency translation
The annual financial statements of <strong>Bankgesellschaft</strong> Berlin AG and the Group were drawn up in euro.
Assets, debts and pending transactions denominated in foreign currencies are always translated at the
exchange rates publ<strong>is</strong>hed by the European Central Bank at year-end or at external rates fixed at the same time
for the currencies for which the ECB does not set exchange rates. Forward rates were derived from these rates.
Exceptions include assets denominated in foreign currencies that are allocated to fixed assets and are
not covered in the same currency. They are reported at translated h<strong>is</strong>torical cost of acqu<strong>is</strong>ition (section 340h
subsection 1 of the German Commercial Code).
The bank has exerc<strong>is</strong>ed the option of special treatment pursuant to section 340h subsection 2 clause 2 of
the German Commercial Code for all transactions in every currency. All expenditure and income from the
currency translation pursuant to section 340h subsection 2 clauses 1 and 2 of the German Commercial Code
are thus included in the profit and loss account. There was no resulting income to be set aside in the context
of the transactions establ<strong>is</strong>hed around the time of the balance sheet date.

131
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
<strong>Bankgesellschaft</strong> Berlin AG:
Integration of Berliner Bank subsidiary into Landesbank Berlin
With a contract of sale dated June 24, 2003, <strong>Bankgesellschaft</strong> Berlin AG sold the independent div<strong>is</strong>ion of the
business Berliner Bank, previously run as a subsidiary, to Landesbank Berlin – Girozentrale – as at July 1, 2003.
Due to the inapplicability of the German Transformation Act, the transition of rights and obligations as part of
the singular succession was structured so that the contract of sale meant that agreement was reached about
the transfer and the necessary assignments were declared. The transition of employees took the form of transfer
of ownership of the firm. Items sold were transferred. It was essential to get the consent of those customers
affected by the transfer of Berliner Bank.
The object of the sale was defined as the independent div<strong>is</strong>ion of the business managed under the “Berliner
Bank” company in Retail Banking along with all associated assets and liabilities, as they resulted from the
accounting of <strong>Bankgesellschaft</strong> Berlin AG as at June 30, 2003, as well as individually defined organ<strong>is</strong>ational units
of <strong>Bankgesellschaft</strong> Berlin AG.
The transfer, which was originally planned for the end of 2002, was postponed and was not instigated until
July 1, 2003 due to the fact that approval had not been granted by the State of Berlin at that point in time. As the
underlying value determination for the purchase price for Berliner Bank referred to January 1, 2003, Landesbank
Berlin – supplementary to the aforementioned transfer of rights and obligations – <strong>is</strong> also entitled to the
earnings from Berliner Bank for the first half of 2003.
The transfer of the banking operations of Berliner Bank resulted in the following changes for external
accounting:
With the transfer of Berliner Bank as at July 1, 2003, all expenditure and income from the subsidiary had to
be posted under Landesbank Berlin’s primary expenditure and income items after the cut-off date. Landesbank
Berlin had to reimburse <strong>Bankgesellschaft</strong> Berlin AG for the loss from the first half of the year at Berliner Bank.
As calculation of a mid-year result in 2003 at the Berliner Bank subsidiary was not available for all income
and expenditure items within banking operations in accordance with the requirements of commercial law
annual financial statements, it was necessary to split the earnings in relation to the on-balance sheet volume of
business over the course of the year. On the bas<strong>is</strong> of the monthly volume of business at Berliner Bank, the
resulting allocation of the profit for 2003 was 50.35% for the first half of the year and 49.65% for the second half
of 2003. The income statement for the entire financial year was divided on the bas<strong>is</strong> of th<strong>is</strong> ratio.
In order to post comparable figures from the previous year for <strong>Bankgesellschaft</strong> Berlin AG in accordance
with statement 5/1988 in the 1998 version from the German Institute of Certified Public Accountants in the fields
of accounting and auditing, an additional column was included in the AG’s balance sheet and profit and loss
account tables, where the values of the Berliner Bank subsidiary, including an increased Landesbank Berlin
profit d<strong>is</strong>tribution, were also recorded.
Separate explanatory notes to the balance sheet and the profit and loss account are provided for the AG
and the Group for the first time.

132
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Information on the Balance Sheet Items of the Group
1 Classification of deadlines
in t million
Loans and advances to banks
Other loans and advances
31.12.2003 31.12.2002
less than three months 6,906 4,452
between three months and one year 5,178 1,956
between one and five years 8,376 7,490
more than five years 2,955 5,886
Total 23,415 19,784
Loans and advances to customers
less than three months 11,993 14,123
between three months and one year 4,922 4,649
between one and five years 20,134 22,578
more than five years 40,659 48,229
of which with indefinite term (6,025) (4,828)
Total 77,708 89,579
Deposits by banks with
an agreed term or notice period
less than three months 27,431 29,508
between three months and one year 7,320 6,544
between one and five years 8,798 6,038
more than five years 4,925 6,750
Total 48,474 48,840
Customer savings
Savings deposits with an agreed notice period of more than three months
less than three months 31 41
between three months and one year 28 42
between one and five years 152 182
more than five years 11 17
Total 222 282
Customer savings
Other amounts due to customers with agreed term or notice period
less than three months 4,982 7,456
between three months and one year 2,745 2,128
between one and five years 6,980 8,379
more than five years 14,238 16,895
Total 28,945 34,858
Securit<strong>is</strong>ed liabilities
Other securit<strong>is</strong>ed liabilities
less than three months 131 79
between three months and one year 5 178
between one and five years
more than five years
5
Total 136 262

2 Amounts due in the following year
133
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
in t million
Included in the item:
31.12.2003 31.12.2002
Debt securities and other fixed-income securities
Securit<strong>is</strong>ed liabilities
4,872 6,368
Debt securities <strong>is</strong>sued 11,543 13,151
3 Business with affiliated companies
in t million 31.12.2003 31.12.2002
Loans and advances to banks
Loans and advances to customers 758 797
Debt securities and other fixed-income securities
Shares and other non fixed-income securities
Other assets
Deposits by banks
Customer savings 161 123
Securit<strong>is</strong>ed liabilities
Other liabilities
Subordinated liabilities
4 Business with companies in which investments are held
in t million 31.12.2003 31.12.2002
Loans and advances to banks 1,242 616
Loans and advances to customers 140 256
Debt securities and other fixed-income securities 476 463
Shares and other non fixed-income securities
Deposits by banks 107 139
Customer savings 54 18
Securit<strong>is</strong>ed liabilities

134
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
5 Subordinated assets
in t million 31.12.2003 31.12.2002
Loans and advances to banks 8 114
Loans and advances to customers 2,269 12
Debt securities and other fixed-income securities 323 235
Shares and other non fixed-income securities 393 178
6 Development of fixed assets
Financial assets Tangible Intangible
assets assets
Loans and Dept Shares and Participations Shares in Shares in
advances1) securities other non associated affiliated
and other fixed-income companies companies
fixed-income securities
in t million securities
Book value as at 31.12.2002
Cost of acqu<strong>is</strong>ition/manufacturing
4,470 626 407 95 285 580 22
as at 31.12.2002 7 4,461 1,063 443 146 453 1,505 133
Additions 2003 2,195 32 2 22 17 188 142
D<strong>is</strong>posals 2003 2,179 4 38 15 2 630 172
Account transfers 2003
Effect of exchange rate movements
Cost of acqu<strong>is</strong>ition/manufacturing
– 56 – 24 – 47 – 45 –11 10
as at 31.12.2003
Value appreciation
7 4,421 1,091 383 106 423 1,052 113
at at 31.12.2002 20 1 10 21 4
Additions 2003 1 1
D<strong>is</strong>posals 2003
Value appreciation
17
at at 31.12.2003
Accumulated depreciation
4 1 11 21 4
as of 31.12.2002 7 11 438 46 72 168 925 111
Additions 2003 5 144 1 23 39 95 31
D<strong>is</strong>posals 2003 11 12 6 434 121
Account transfers 2003 10 – 212) 3
Effect of exchange rate movements
Accumulated depreciation
as at 31.12.2003 7 5 582 35 95 211 565 24
Book value as at 31.12.2003 4,420 510 359 32 212 491 89
1) Convertible profit sharing rights from restructuring measures
2) Including adjustment of accumulated depreciation

135
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Tangible assets were adjusted by a 17.6 million as a result of the elimination of tax-related value approaches;
the accumulated depreciation to be adjusted accordingly by January 1, 2003 was offset with a neutral effect on
profits against the other retained earnings.
7 Trust transactions
in t million 31.12.2003 31.12.2002
Loans and advances to banks
Loans and advances to customers 144 150
Tangible assets
Other assets 37 70
181 220
Deposits by banks 14 30
Customer savings 130 120
Other liabilities 37 70
8 Qualification for stock exchange l<strong>is</strong>ting
181 220
Eligible for l<strong>is</strong>ting L<strong>is</strong>ted Not l<strong>is</strong>ted
in Mio.t
Debt securities and other
31.12.2003 31.12.2002 31.12.2003 31.12.2002 31.12.2003 31.12.2002
fixed-income securities 32,973 39,595 30,120 36,162 2,853 3,433
Shares and other non fixed-interest securities 1,954 2,606 1,668 1,069 286 1,537
Participations
Shares in associated companies
34 45 11 34 34
9 Foreign currency items
in t billion 31.12.2003 31.12.2002
Assets 20.6 25.3
Liabilities 20.4 21.9

136
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
10 Assets pledged as collateral
Assets pledged as collateral to the Bundesbank for monetary instruments in the framework of the European
System of Central Banks (ESCB) break down as follows:
in t million 31.12.2003 31.12.2002
Securities 15,819 19,228
of which: equal<strong>is</strong>ation claims 205 312
Industrial loans 248 379
of which: bills of exchange 3
loan receivables 248 376
Total 16,067 19,607
Loans and bonds with a nominal value of a 17,077 million (previous year: a 14,077 million) as well as shares
and other non fixed-income securities with a market value of a 0 million (previous year: a 116 million) were sold
under agreements to repurchase.
For the following liabilities, securities totalling a 1,729 million (previous year: a 879 million) were transferred
as collateral:
in t million 31.12.2003 31.12.2002
Deposits by banks 1,349 787
Other liabilities 410 118
Total 1,759 905
11 Equal<strong>is</strong>ation claims against public institutions including bonds from their exchange
Th<strong>is</strong> item cons<strong>is</strong>ts of equal<strong>is</strong>ation claims purchased in the form of bearer bonds.
Of the equal<strong>is</strong>ation claims, a 205 million (previous year: a 312 million) was pledged as collateral to the
relevant central banks for monetary policy instruments within the framework of the ESCB (cf. (10)).
12 Intangible and tangible assets
The Group’s intangible assets include an asset-side balancing item from the capital consolidation amounting
to a 0 million (previous year: a 7 million). As a result of the sale of ALLBANK and Zivnostenská banka, there <strong>is</strong>
no longer any capital<strong>is</strong>ed goodwill (previous year: a 36 million) in the banking group but a 2 million (previous
year: a 4 million) in the IBAG sub-group.

137
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Moreover, software amounting to a 89 million <strong>is</strong> reported in th<strong>is</strong> item. Depreciation occurs in accordance
with the straight-line method over a period of three years from the time of acqu<strong>is</strong>ition.
Of the land and buildings owned by the Group, properties with a book value of a 240 million (previous
year: a 229 million) are used in the course of our business operations.
Office furn<strong>is</strong>hings and equipment amounting to a 180 million (previous year: a 279 million, including
software) <strong>is</strong> included.
Tangible assets are valued at the cost of acqu<strong>is</strong>ition or manufacturing. In the case of depreciable assets,
we write off the highest depreciable values perm<strong>is</strong>sible under tax regulations according to a schedule using
either the straight-line method or the declining-balance method of depreciation, depending on the respective
useful life. In the case of movable fixed assets, the full annual depreciation <strong>is</strong> charged on additions in the
first half-year, half the annual depreciation on additions in the second half of the year.
Tangible assets Useful life
Buildings 33 years
Tenant installations 33 years
Furn<strong>is</strong>hings 8–13 years
Fixtures and fittings 5–25 years
Office machines/computer systems 3– 8 years
Telephone systems 10 years
Motor vehicles 6 years
Low-value assets are written down in full in the year of acqu<strong>is</strong>ition and shown in the schedule of fixed assets
as d<strong>is</strong>posals.
13 Other assets
in t million 31.12.2003 31.12.2002
Asset items from portfolios 1,848 2,238
Amounts due from collateral 1,841 1,702
LBB profit claims 583 767
Amounts due from tax authorities 81 158
Trade receivables 398 305
Deferred taxes on the asset side
Due from forward transactions and swaps
245
plus interest deferral from forward transactions 626 791
Collection documents 22 60
Other 1,339 1,171
Total 6,983 7,192

138
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
The asset items from portfolios include option rights for premiums paid in the context of capital market transactions
and variation margins as well as capital<strong>is</strong>ed profit-sharing claims.
The profit-sharing claims against LBB are claims to 24.99% of the income and any liquidation proceeds of
Landesbank Berlin acquired by <strong>Bankgesellschaft</strong> Berlin AG from the State of Berlin in 1998. The profit-sharing
claims were written down by a 80 million in total. Write-downs result from the application of previous valuation
methods (a 57 million) as well as a write-down due to the EU dec<strong>is</strong>ion (a 23 million). The income received
in the financial year under review and in previous years from the profit-sharing rights was assigned to the
Group (a 104 million).
Amounts due to IBAG and LPFV from the detailed agreement are included in the other assets remaining.
14 Prepayments and accrued income
The Group reports a 280 million (previous year: a 295 million) in differences between the face value of
receivables and the amount actually paid.
15 Other liabilities
in t million 31.12.2003 31.12.2002
Liabilities items from portfolios 1,404 1,749
Liabilities from collateral 662 429
Amounts due to tax authorities 71 59
Deferred interest for subordinated liabilities 78 41
Trade payables
Liabilities from forward transactions
114 59
and swaps plus interest deferral from forward transactions 454 842
Other 573 626
Total 3,356 3,805
The liability items from portfolios mainly contain option premiums and variation margins received in the
context of capital market transactions.
16 Accruals and deferred income
The Group reported a 56 million (previous year: a 788 million) in differences between the face value of
receivables and the amount actually paid.

17 Prov<strong>is</strong>ions for pensions and similar obligations
139
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Prov<strong>is</strong>ions for pensions and similar obligations fell by a 24 million (previous year: rose by a 12 million) to
a 623 million (previous year: 647 million) in the Group.
18 Other prov<strong>is</strong>ions
in t million 31.12.2003 31.12.2002
Prov<strong>is</strong>ions for portfolios, securities and foreign exchange transactions 224 127
Prov<strong>is</strong>ions for r<strong>is</strong>ks from the lending business 239 253
Personnel-related prov<strong>is</strong>ions 140 141
Prov<strong>is</strong>ions for restructuring measures 343 390
Prov<strong>is</strong>ions for EU dec<strong>is</strong>ion 317
IBG 1) 16 19
LPFV 1) 24 67
Other 395 473
Total 1,698 1,470
1) The IBG/LPFV personnel-related prov<strong>is</strong>ions are included in the relevant sub-item.
The portion of the loss to be borne by LPFV from the detailed agreement with the State of Berlin, which
originally totalled a 100 million, was fully util<strong>is</strong>ed in the year under review.
In 2003, the restructuring prov<strong>is</strong>ioning in the Group developed as follows:
Status Status
in Mio.t 01.01.2003 Used Transferred 1) Cancelled Allocated 31.12.2003
Personnel 163 46 – 6 46 157
Prem<strong>is</strong>es management 181 26 – 3 16 18 154
Operating expenditure 46 23 2 11 32
Total 390 95 – 9 18 75 343
1) Including specific usage

140
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Prov<strong>is</strong>ions for EU measures
In addition to the expenditure necessary to real<strong>is</strong>e the reconstruction plan, prov<strong>is</strong>ions for expenditure and
contingent losses had to be set up for the implementation of the compensation measures offered by the Federal
Republic of Germany and also for the conditions imposed by the EU as part of the approval of the financial
ass<strong>is</strong>tance.
in t million 31.12.2003
Sale/liquidation of Real Estate Services business 122
Sale of Berliner Bank branch 177
Spinning off of IBB 18
Total 317
19 Subordinated liabilities
Nominal value Issuer Interest rate
in t million in %
(1) 51 <strong>Bankgesellschaft</strong> Berlin AG 7.00
(2) 90 Landesbank Berlin – Girozentrale – 2.69 – 4.86
(3) 145 Berlin-Hannoversche Hypothekenbank AG 3.63 – 7.75
(4) 2,466 BGB Finance (Ireland) plc zero bond – 8.00
Of subordinated liabilities (4), a 829 million (previous year: a 920 million) was in foreign currencies.
Of the total subordinated liabilities amounting to a 2,752 million (previous year: a 2,863 million), a 2,681 million
(previous year: a 2,821 million) meets the requirements of the German Banking Act for recognition as
liable capital.
In 2003, the interest paid for subordinated liabilities in the Group amounts to a 107 million (previous
year: a 115 million).

20 Profit participation capital
141
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Companies included in the consolidated financial statements <strong>is</strong>sued profit participation rights of a 85,000
(previous year: a 85,000). These profit participation rights exclusively document creditor claims.
21 Information on equity
The statement of changes in shareholders’ equity was drawn up in line with the prov<strong>is</strong>ions of German Accounting
Standard DRS 7 Group Equity and Total Recogn<strong>is</strong>ed Results.
As at the reporting date December 31, 2003, <strong>Bankgesellschaft</strong> Berlin AG posted a balance sheet loss;
amounts for dividend payments to shareholders are therefore not available. Dividend limits do not come into play.
The remaining consolidated earnings in the statement of changes in shareholders’ equity contain in
particular the effects from deferred taxes and the consolidation of securities, equity and profit and the deduction
of the dividend payments received on the profit-sharing rights of LBB.
Development of other retained earnings in the Group:
in t million 2003 2002
Status 01.01. 130 70
Allocation from the net profit for the year 4
Changes in the consolidated companies
Withdrawals from other retained earnings for the
10
purpose of allocation to the reserve for own shares
1)
Allocation from withdrawal from the reserve for own shares 16
Withdrawals from other retained earnings for the purpose of loss off-setting – 22
Allocations/withdrawals from the valuation of associated compamies –10 –13
Allocations/withdrawals from currency translation
Allocations/withdrawals from the elimination of
– 4 – 7
unreal<strong>is</strong>ed intragroup profits, consolidation of debts/securities – 51 92
Effects of the consolidation of capital –2 –10
Change in deferred taxes/elimination of tax values 176
Status 31.12. 249 130
1) The valuation of the portfolio of own shares resulted in a write-up of s 275,000

142
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Information on the Profit and Loss Account Items of the Group
22 Net interest income
in t million 2003 2002
Interest income 6,419 7,871
from lending and money-market transactions 5,480 6,618
from fixed-income securities and debt reg<strong>is</strong>ter claims 939 1,253
Current income 246 171
from shares and other non fixed-income securities 154 161
from participations 1) 88 – 2
from affiliated companies 4 12
Income from profit pooling 3
Interest expenses 5,001 6,339
for depositsn 3,424 4,480
for securit<strong>is</strong>ed liabilities 1,470 1,744
for subordinated liabilities 107 115
Total 1,664 1,706
1) Including associated companies
23 Net comm<strong>is</strong>sion income
in t million 2003 2002
Securities and <strong>is</strong>sue business 96 100
Securities/investments 93 96
Issue and syndication business 3 4
Funds transfer/account management 139 131
Lending business 25 41
Lending business 15 17
Guarantee comm<strong>is</strong>sion 5 16
Business abroad 5 8
Card business 36 44
Other service business 18 26
Foreign currency/exchange business 2 3
Other services 16 23
Total 314 342

24 Profit from financial transactions
143
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The profit from financial transactions by company and nature of business breaks down as follows:
in t million 2003 2002
Profit
of which:
12 – 24
<strong>Bankgesellschaft</strong> Berlin 5 –29
Landesbank Berlin 1 –9
Other banks 2 8
Consolidation 4 6
in t million 2003 2002
Result from interest-related transactions 82 – 46
Result from share-related transactions –59 55
Result from other trading transactions –11 –17
Trading result 12 – 8
Valuation from own shares 1) –16
Result pursuant to the profit and loss account 12 – 24
1) The valuation of the portfolio of own shares resulted in a write-up of s 275,000
25 Other admin<strong>is</strong>trative expenditure
in t million 2003 2002
Cost of buildings and office space 107 130
IT expenditure 254 254
Advert<strong>is</strong>ing and marketing 24 31
Consultations, audits, dues 54 65
Business operating costs 69 68
Office furniture and equipment 8 10
Personnel-related operating expenditure 11 18
Turnover tax on Group services 16 14
Total 543 590

144
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
26 R<strong>is</strong>k prov<strong>is</strong>ioning
R<strong>is</strong>k prov<strong>is</strong>ioning breaks down as follows:
in t million 2003 2002
R<strong>is</strong>k prov<strong>is</strong>ioning in the lending business 409 617
Result from securities in the liquidity reserve – 58 – 86
Reserves pursuant to section 340f German Commercial Code –176 – 25
Total 175 506
R<strong>is</strong>k prov<strong>is</strong>ioning for the lending business developed as follows:
Country r<strong>is</strong>k thereof
Counterparty r<strong>is</strong>k lending bus. Total P&L impacting
Direct- Prov<strong>is</strong>ions
depreciation IVA 1) GC 2) lending bus.
in t million 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
Status 01.01. 5,077 4,654 182 246 253 258 23 23 5,535 5,181
Allocations 665 918 13 7 45 75 1 723 1,001 723 1,001
Util<strong>is</strong>ation 421 213 1 5 422 218
Write-backs 252 327 39 27 45 54 4 1 340 409 340 409
Direct depreciation
Receipts relating
to written-off
45 32 45 32
receivables 19 7 19 7
Account transfers 3) Exchange rate
– 104 66 – 42 – 44 – 8 –16 – 154 6
movements – 23 – 21 –1 – 6 – 5 –30 –26
Status 31.12. 4,942 5,077 113 182 238 253 19 23 5,312* 5,535* 409 617
1) Individual value adjustment
2) General charge for bad and doubtful debts
3) Including portfolio changes due to changes in the consolidated companies
* Excluding ex<strong>is</strong>ting loans (s 336.7 million; PY: s 360.9 million)
The scale of r<strong>is</strong>k prov<strong>is</strong>ioning <strong>is</strong> primarily determined by expectations on future loan losses, the structure and
the quality of the loan portfolios as well as general economic factors.
Throughout the Group, individual value adjustments and prov<strong>is</strong>ions in the amount of the expected losses
were made for all recogn<strong>is</strong>able r<strong>is</strong>ks in domestic and foreign lending. Individual value adjustments are written
back as soon as either the value of the receivable increases, because additional collateral was provided or the
security valuation or credit rating of the borrower has shown a fundamental and sustained improvement.

145
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The general charge for bad and doubtful debts was calculated in line with the recommendation of the Banking
Committee of the IDW “On the formation of general bad-debt prov<strong>is</strong>ioning for latent credit r<strong>is</strong>k in the annual
financial statements of lending institutions” (BFA 1/1990).
Prov<strong>is</strong>ion was made for transnational lendings that involve an acute transfer r<strong>is</strong>k through individual
value adjustments and prov<strong>is</strong>ions for guarantees. In the case of country value adjustments, the bank takes into
consideration the r<strong>is</strong>k exposure, which <strong>is</strong> the total of gross exposure less loans and advances from commercial
transactions (with a remaining term of less than 1 year) and all bank-to-bank financing (with a remaining term
of less than 1.5 years). Valuable collateral, which <strong>is</strong> not affected by the transfer r<strong>is</strong>k of the corresponding
country, also reduces the r<strong>is</strong>k exposure. The group of countries with acute transfer r<strong>is</strong>k and the amount of the
corresponding value adjustment rate <strong>is</strong> adapted to the respective current r<strong>is</strong>k situation.
Over and above the prov<strong>is</strong>ion for country r<strong>is</strong>ks set up for the lending business, no further prov<strong>is</strong>ioning
(previous year: a 0 million) ex<strong>is</strong>ts to cover country r<strong>is</strong>ks to securities.
Total credit r<strong>is</strong>k prov<strong>is</strong>ioning breaks down as follows:
in t million 2003 2002
Loans and advances to banks 71 91
Loans and advances to customers 5,003 5,180
Prov<strong>is</strong>ions 238 253
Other items 11
Total 5,312 5,535
27 Geographic d<strong>is</strong>tribution of earnings
The following geographic breakdown of earnings <strong>is</strong> carried out according to the location of the unit generating
the income (subsidiary, branch).
Domestic Income Total
income from abroad income
in t million 2003 2002 2003 2002 2003 2002
Interest income
Current income from shares and other
non fixed-income securities, participations
5,578 6,455 841 1,416 6,419 7,871
and shares in affiliated companies 171 138 27 47 198 185
Comm<strong>is</strong>sion income 384 387 15 28 399 415
Profit from financial transactions 28 –16 12
Other operating income 690 524 1 6 691 530

146
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
28 Other operating expenses and other operating income
2003 2002
Other Other Other Other
operating operating operating operating
in t million expenses income expenses income
Banks 364 482 184 336
IBG/IBAG/LPFV 593 627 439 458
Materials 225 222
Depreciation 9 22
Other operating expenses 359 195
R<strong>is</strong>k expenditure
Sales revenue 496 379
Portfolio increases/decreases – 35 – 39
Other operating income 166 118
Other companies 8 149 26 330
Consolidation – 219 – 5671) – 125 – 5941) Total 746 691 524 530
1) Scope of services from the service companies; in th<strong>is</strong> case, sales activity
The guarantee comm<strong>is</strong>sion to the State of Berlin for the shielding against r<strong>is</strong>ks from Real Estate Services <strong>is</strong>
included under “Other bank expenditure” at a 15 million.
29 Extraordinary expenses and income
Extraordinary expenses and income in the Group break down as follows:
2003 2002
Extra- Extra- Extra- Extraordinary
ordinary ordinary ordinary
in t million expenses income expenses income
Restructuring prov<strong>is</strong>ioning 75 18 112 12
Prov<strong>is</strong>ions for EU dec<strong>is</strong>ion 302
Other 27 13
Total 404 31 112 12
The item “Other extraordinary income” includes payments in the financial year from the settlement of a
legal d<strong>is</strong>pute.

30 Taxes on income
147
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
For tax purposes, the <strong>Bankgesellschaft</strong> Berlin Group cons<strong>is</strong>ts of two groups of integrated companies as well
as companies that do not belong to either of these groups. The dominating companies, <strong>Bankgesellschaft</strong>
Berlin AG and Landesbank Berlin, are 75.01% connected by <strong>Bankgesellschaft</strong>’s atypical dormant participation in
Landesbank.
75.01% of Landesbank Berlin’s taxable income <strong>is</strong> allocated to <strong>Bankgesellschaft</strong> Berlin and the tax on it <strong>is</strong>
paid by the latter, whereas trade earnings are liable to trade tax at Landesbank Berlin. Our foreign subsidiaries
and branches are taxed in the respective country in which they are based. Dividends flowing to the domestic
parent companies, mainly <strong>Bankgesellschaft</strong> Berlin AG, are essentially tax-free in Germany. The profits from
foreign branches are totally fax-free in Germany.
Taxes on income developed as follows:
in t million 2003 2002
Actual taxes 29 69
Deferred taxes –39 14
Reported income tax expenditure/tax proceeds (–) –10 83
The prov<strong>is</strong>ions of DRS 10 (German Accounting Standard no. 10: Deferred Taxes in Consolidated Financial Statements)
were observed. Th<strong>is</strong> standard <strong>is</strong> to be applied for the first time to the financial year beginning after
December 31, 2002. The comparative figures for the preceding financial year were adjusted accordingly to the
regulations of th<strong>is</strong> standard, with a neutral effect on earnings. As a result, the consolidated equity of the Group
increased by a 151 million. Deferred taxes on the assets side of a 8 million were posted in the previous year
under “Other assets” so that the initial total as at January 1, 2003 was a 159 million.
On December 19, 2003, the new so-called “Korb II Act” (act implementing the Federal government official
declaration on the mediation recommendation concerning the tax-privilege reduction act) was passed by the
German Bundestag and Bundesrat. The prov<strong>is</strong>ions relating to loss util<strong>is</strong>ation were redefined and a minimum
level of taxation was introduced. Taking into consideration the deferred taxes that were posted retroactively to
January 1, 2003 based on the application of DRS 10 for the first time with a neutral effect on earnings to the
accounts of the Group, we have already taken into account the effects of the new prov<strong>is</strong>ions. In th<strong>is</strong> regard, we
were influenced by the consideration that the principle of caution based on DRS 10 point 28 takes priority in
case of doubt over the regulation stipulating valuation of the deferred taxes with the current tax rates (DRS 10
point 25).
The deferred taxes of th<strong>is</strong> financial year and the adjustment with a neutral effect on earnings for the
preceding financial year were valued taking into consideration a tax rate of 38.9%. In addition to corporation
tax of 25%, the solidarity surcharge of 5.5% and trade income tax in the Group of 17.0% (tax levy rate 410%)
were also taken into account.

148
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
For the calculation of the deferred taxes on consolidation measures, a uniform tax rate throughout the
Group was used as a bas<strong>is</strong>, since all consolidated companies impacted by th<strong>is</strong> are based in Berlin and are thus
subject to a uniform tax rate.
The corporation tax rate was ra<strong>is</strong>ed to 26.5% for 2003 only due to the German Flood Victim Solidarity Act.
Th<strong>is</strong> increases the Group tax rate to 40.2%, which <strong>is</strong> reported for 2003 in the tax transition calculation.
The tax transition from the calculated to the reported tax expenditure in the Group <strong>is</strong> as follows:
in t million 2003 2002
Earnings before income taxes – 316 – 606
Tax rate 40.2% 38.9%
Notional income tax expenditure –127
Tax effects
Temporary and permanent differences for which no deferred taxes were recorded 127
Non-deductible expenditure 43
Losses in the financial year and no deferred taxes formed on the assets side 26
Change in the value adjustment deferred taxes on the assets side 12
Non-eligible taxes and back tax pursuant to section 37 (2) German Corporation Tax Act 12 11
Deviation of foreign tax rates from the expected tax rate of 40.2% 4
Use of deferred taxes 14
Current domestic tax expenditure 12
Income from abroad 16
Tax expenditure outside the period under review –1 30
Other 1
Deviation due to the bas<strong>is</strong> of calculation of the trade tax – 3
Creation of deferred taxes on the assets side for hitherto unestimated tax losses carried forward – 32
Tax-free income –72
Reported income tax expenditure/tax proceeds (–) –10 83
Temporary differences for which no deferred taxes were reported relate to prov<strong>is</strong>ions for contingent losses,
which only have an impact over a long period that clearly exceeds medium-term planning. We reported 50%
of the deferred taxes on the assets side under these prov<strong>is</strong>ions. Permanent differences generally result from
write-downs and prov<strong>is</strong>ions for contingent losses that, when written back, will have no effect on tax due to
the prov<strong>is</strong>ions of section 8b of the German Corporation Tax Act (KStG).
The non-tax-deductible expenses relate primarily to depreciation on the profit payment claims of
<strong>Bankgesellschaft</strong> Berlin to the State of Berlin.

149
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The losses incurred in the financial year relate primarily to <strong>Bankgesellschaft</strong> Berlin AG. As a result of
the ex<strong>is</strong>ting high loss carried forward at th<strong>is</strong> company, no deferred taxes on the assets side have been generated.
For the same reason, deferred taxes on the assets side from temporary differences of a 12 million have not
been reported.
The foreign tax rates are between 10% and 30%. The tax effect, which results due to the difference from
the Group tax rate, <strong>is</strong> represented in the transition calculation.
Taking into account previously unreported losses carried forward leads to a tax income after capital<strong>is</strong>ing
deferred taxes amounting to a 32 million as assets. Th<strong>is</strong> primarily impacts Berlin Hyp and LBB.
The tax effects from tax-free income relate primarily to capital gains from the sale of companies and
dividend income.
The tax effects of 2002 and 2003 are only comparable in terms of the tax expenditure in different periods
due to the varying systems of transition calculation. The domestic current tax expenditure relates to Group
companies with no profit and loss transfer agreement. The tax effects from income from abroad relate to taxes
on income at the foreign subsidiaries and branches, whose positive results cannot be offset against domestic
losses.
31 Tax accruals and deferrals
Asset-side tax accruals ex<strong>is</strong>t in connection with the following items:
in t million 2003
Loans and advances to banks and customers 73
Debt securities and other fixed-income securities 8
Shares and other non fixed-interest securities 6
Shares in affiliated and associated companies 2
Intangible assets 10
Tangible assets 20
Other assets 4
Prepayments and accrued income 14
Deposits by banks and customer savings 2
Other liabilities and accruals and deferred income 2
Prov<strong>is</strong>ions 180
Tax-related losses carried forward 105
Subtotal 426
Amounts netted against deferred tax liabilities in the individual financial statements and groups –158
Value adjustments –23
Total 245

150
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Deferred taxes were reported for corporation tax-related losses carried forward of a 245 million and trade taxrelated
losses carried forward of a 318 million. Using losses carried forward, deferred tax assets of a 13 million
(LBB and Berlin Hyp) were written back. No deferred tax assets were reported for corporation tax-related losses
carried forward of a 5,385 million and trade tax-related losses carried forward of a 5,423 million, of which more
than a 1 billion <strong>is</strong> allocated to Real Estate Services, which must be spun off by the end of 2005 in accordance
with the EU dec<strong>is</strong>ion. The losses carried forward have no time limits for use. The amount of deferred tax assets
on losses carried forward <strong>is</strong> based on commercial medium-term planning. It was adjusted primarily for effects
from investment earnings and losses that fall under the regulations of section 8b of the German Corporation
Tax Act (KStG). Only the corporation tax-related loss carried forward was taken into account for <strong>Bankgesellschaft</strong>
Berlin AG, since prov<strong>is</strong>ionally no significant business earnings will be generated in the medium-term planning
period due to the income structure of <strong>Bankgesellschaft</strong>. Depending on the further successful implementation
of the restructuring plan, it will, in future, be necessary to check whether deferred tax assets are also capital<strong>is</strong>ed
on the assets side for losses carried forward that will prov<strong>is</strong>ionally only be used in the longer term.
At <strong>Bankgesellschaft</strong> Berlin AG, extraordinary expenses of a 113 million were incurred for which deferred
tax assets were formed. Moreover, additional extraordinary items amounting to a 6 million were generated in
the Group for which deferred tax assets were formed.
The deferred tax assets are reported under “Other assets”.
Liabilities-side tax deferrals ex<strong>is</strong>t in connection with the following items:
in t million 2003
Loans and advances to customers 33
Participations, shares in affiliated companies 2
Tangible assets 6
Other assets 149
Prov<strong>is</strong>ions 5
Profit participation capital 3
Fund for general bank r<strong>is</strong>ks 7
Subtotal 205
Amounts netted against asset-side deferred taxes in the individual financial statements and groups –158
Total 47
The deferred tax liabilities are reported under “Other prov<strong>is</strong>ions”.
No potential corporation tax reduction claim ex<strong>is</strong>ts in the amount of the corporation tax credit unchanged
in accordance with section 37 subsection 2 of the German Corporation Tax Act. The potential mandatory corporation
tax increase resulting from the end amount in EK02, which <strong>is</strong> unchanged in accordance with section 38
subsection 1 of the German Corporation Tax Act, <strong>is</strong> a 45 million.

Other Information on the Group
32 Information on the cash flow statement
151
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The cash flow statement provides information on the status and development of the bank’s cash funds, broken
down into operating activities, investing activities and financing activities. It <strong>is</strong> drawn up in accordance with the
German Accounting Standard DRS 2, supplemented by the bank-specific German Accounting Standard DRS 2-10.
The cash flow <strong>is</strong> allocated to the operating activities depending on the demarcation of the operating result.
The cash flow from investing activities mainly results from inflows and outflows of funds in connection with the
d<strong>is</strong>posal or the acqu<strong>is</strong>ition of financial assets and tangible assets. The change in funds from financing activities
only takes into consideration relationships to investors.
The reported total cash includes the balance sheet items cash reserve (a 1,301 million) and public debt
<strong>is</strong>sues and bills of exchange, which are reg<strong>is</strong>tered for refinancing with central banks (a 1 million). There are
no restrictions on d<strong>is</strong>posal.
The change in other non-cash items includes valuation earnings from trading transactions, changes to
deferred taxes, write-downs and d<strong>is</strong>posal earnings real<strong>is</strong>ed on intangible assets as well as the valuation earnings
from associated companies.
The initial consolidation of Berlin Hyp Grundstücksverwaltung GbR, Berlin Hyp Immobilien GmbH,
Athena Immobilien Verwaltungs GmbH & Co. KG – Erster IBV-Universalfonds – and Universal Immobilien AG
of the IBAG Group resulted in an inflow of funds amounting to a 0 million. The de-consolidation of Allgemeine
Privatkundenbank AG and Zivnostenská banka a.s., Prague resulted in an outflow of funds amounting to
a 121 million.
As a result of these consolidation measures, assets and liabilities in the consolidated financial statements
changed as follows:
Additions D<strong>is</strong>posals
in t million
Assets
2003 2003
Total cash 121
Loans and advances to banks 878
Loans and advances to customers 2.370
Securities 178
Other operating assets 25 604
Liabilities
Deposits by banks 380
Customer savings 2.681
Securit<strong>is</strong>ed liabilities 182
Other operating liabilities 679
There were no investing and financing activities that did not impact liquidity.

152
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
33 Information on the segment reporting
The breakdown and contents of the presentation of segment results <strong>is</strong> in line with German Accounting
Standard number 3 (DRS 3) on segment reporting as well as numbers 3-10 (DRS 3-10) on segment reporting
for banks. We have not shown a secondary segment structure due to the regional concentration on the
Berlin-Brandenburg area.
Taking the integration of the retail activities of Berliner Bank and Landesbank Berlin as of July 1, 2003
into account produces the following breakdown of the segment statement:
• Retail Banking
Business with retail banking clients at Landesbank Berlin/Berliner Sparkasse including Berliner Bank
subsidiary of Landesbank Berlin.
• Regional Corporate Banking
Business with small and medium-sized regional corporate clients and with the public sector at
Landesbank Berlin/Berliner Sparkasse including Berliner Bank subsidiary of Landesbank Berlin.
• Real Estate Financing
Large-scale commercial real estate financing business at Landesbank Berlin, <strong>Bankgesellschaft</strong> Berlin AG
and Berlin Hyp and with retail banking clients and regional corporate banking clients, provided that
large-scale real estate business <strong>is</strong> the primary business.
• Capital Markets
All trading transactions at <strong>Bankgesellschaft</strong> Berlin AG, Landesbank Berlin and the companies abroad and
their business with major and international corporate clients and commercial international business.
• Corporate Investments
Th<strong>is</strong> <strong>is</strong> where we combine the earnings of ALLBANK (until August 31, 2003), BG Polska, Weberbank
and Zivnostenská banka (lastly on December 31, 2003). According to the current strategy, these banks
are no longer part of the Group’s core business.
• Real Estate Services
All activities at IBAG, IBG and LPFV.
• Government-Ass<strong>is</strong>tance Programme
Th<strong>is</strong> solely represents the business of Investitionsbank Berlin.
• Other/Consolidation
Th<strong>is</strong> <strong>is</strong> where we report Group management and service function costs and personnel capacity that
cannot be allocated to other segments or other minimal earnings components as well as the volume and successes
of the balance sheet structure management and the consolidation items in the Group.

153
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The earnings effects, resulting from the EU dec<strong>is</strong>ion relating to approval of the ass<strong>is</strong>tance granted by the State
of Berlin, are shown in the column “Effects of the EU dec<strong>is</strong>ion”. Accordingly, the result of ordinary business
activity <strong>is</strong> reported under “Group excluding effects of the EU dec<strong>is</strong>ion” and the consolidated result (including
effects of the EU dec<strong>is</strong>ion) <strong>is</strong> posted under “Group”.
Net interest income <strong>is</strong> determined for each business area on the bas<strong>is</strong> of the current interest rate method.
A margin result, defined as the difference between the client interest rate and an internal clearing rate, <strong>is</strong>
determined for each product on an individual transaction bas<strong>is</strong>. All other income and credit r<strong>is</strong>k prov<strong>is</strong>ioning
are allocated to the segments on a counterparty bas<strong>is</strong>. The basic principle in the allocation of admin<strong>is</strong>trative
expenditure <strong>is</strong> the principle of causation. For the client-oriented business areas, allocation <strong>is</strong> carried out
according to the sales assignment to the organ<strong>is</strong>ational units. The central staff costs are allocated in line with
the services that an organ<strong>is</strong>ational unit performs for a segment. With all cost allocations within the Group
between the companies or the segments, we apply actual cost rates for each service provided.
Segment assets are defined as the balance sheet assets relating to the respective segment (net). For the
segments operating in the banking business, these are largely loans and advances to customers. Accordingly,
segment liabilities are defined as the balance sheet liabilities, largely customer deposits and securit<strong>is</strong>ed liabilities.
In the Capital Markets segment, intra-Group transactions were eliminated for the first time in 2003 and
retroactively for 2002. Th<strong>is</strong> <strong>is</strong> the reason for the changes to the segment assets/liabilities in the Capital Markets
and M<strong>is</strong>cellaneous/Consolidation segments compared with 2002 segment reporting.
The r<strong>is</strong>k items are the r<strong>is</strong>k assets and market r<strong>is</strong>ks pursuant to Principle I to section 10 of the German
Banking Act at the level of the respective segment. In accordance with these r<strong>is</strong>k items, we provide the segments
with core capital and calculate investment benefit, which <strong>is</strong> included in the net interest income of the segments.
We apply an interest rate that would be in line with a r<strong>is</strong>k-free, rolling long-term investment on the capital
market. In line with the structure of the average commitment of core capital, we d<strong>is</strong>tribute the balance sheet
capital across the segments. Th<strong>is</strong> subsequently forms the reference bas<strong>is</strong> for determining the return on equity –
calculated for the segment results before taxes. We have been using th<strong>is</strong> standard industry method of calculating
the return since the 2002 annual financial statements.
The number of employees (translated to full-time staff, not including trainees and apprentices) <strong>is</strong> shown
at the balance sheet date as employee capacity. The cost-income ratio <strong>is</strong> determined by dividing admin<strong>is</strong>trative
expenditure by total income.

154
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
34 Contingencies and other financial obligations
With the exception of political r<strong>is</strong>ks, <strong>Bankgesellschaft</strong> Berlin AG ensures that its subsidiaries, as defined by
section 290 subsections 1 and 2 of the German Commercial Code, which are marked accordingly as currently
covered in the L<strong>is</strong>t of Investment Holdings pursuant to section 313 subsection 2 of the German Commercial Code,
are in a position to meet their commitments at the level of the calculated investment ratio of <strong>Bankgesellschaft</strong>
Berlin AG. The letters of comfort for the companies marked accordingly in the L<strong>is</strong>t of Investment Holdings
(Appendix 1 to the Notes) ended with the publication in the Federal Official Gazette dated March 28, 2003. The
letters of comfort are still valid for obligations entered into up to publication. Th<strong>is</strong> also applies for companies
sold in 2003, such as Allgemeine Privatkundenbank AG (Federal Official Gazette dated August 23, 2003 for
savings deposits as at November 30, 2003) and September 5, 2003 (cancellation of the letter of comfort with
immediate effect with the exception of the savings deposits) and Zivnostenská banka a.s. (Federal Official
Gazette dated March 7, 2003 in Germany or March 12, 2003 in the Czech Republic) and to Berlin Seed Capital
Fund GmbH, which was merged on January 1, 2003 with Berlin Capital Fund GmbH, and to LBB Landesbank
Berlin Finance Curaçao N.V., which was liquidated on January 28, 2003.
As at December 31, 2002, the Group has other contingencies from rental guarantees of a 9.9 billion
(previous year: a 11.2 billion), of which a 0.5 billion (previous year: a 0.5 billion) <strong>is</strong> due within one year. On
the bas<strong>is</strong> of the detailed agreement, the Group <strong>is</strong> predominantly indemnified from th<strong>is</strong> by the State of Berlin.
In the case of 22 (previous year: 22) closed-end real estate funds, Group companies undertook to acquire the
limited partners’ shares on request. The obligation breaks down as follows with regard to the nominal volume:
From Volume in Volume in
in t million 2003 2002
<strong>Bankgesellschaft</strong> Berlin AG 2019 83 83
Landesbank Berlin – Girozentrale – 2019 101 101
Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong> Berlin GmbH 1) 2019 5 5
a) at the Group's own r<strong>is</strong>k 189 189
Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong> Berlin GmbH 2008 31 31
Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong> Berlin GmbH 1) 2019 2,559 2,522
b) shielded by the detailed agreement 2,590 2,553
Total 2,779 2,742
1) Redemption values after 30 years (at 100, 115 and 120%): s 217 million at the Group's own r<strong>is</strong>k
and s 2,975 million shielded by the detailed agreement (PY: 217 and 2,901)
In accordance with the detailed agreement with the State of Berlin (for details see Management Report), in
some cases a joint and several liability of different companies was determined for the obligations of the
<strong>Bankgesellschaft</strong> Berlin Group companies concerned. Liability was d<strong>is</strong>tributed internally by means of an agreement
dated August 2002 and th<strong>is</strong> provides for liability equal<strong>is</strong>ation in accordance with the regulations defined
in more detail therein, which are largely oriented towards the investments in the company with which liability
originated. The detailed agreement also contains regulations for a debtor warrant bond, which <strong>is</strong> organ<strong>is</strong>ed as
a partial profit transfer agreement with a term of 15 years, and which <strong>is</strong> oriented towards defined equity quotas.
For the assumption of r<strong>is</strong>k shielding, there <strong>is</strong> a fixed amount of a 15 million to be paid annually to the State of

155
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Berlin starting with the 2002 financial year and presently continuing up to 2011 inclusive. D<strong>is</strong>cussions will then
subsequently be reopened. These costs were broken down within the Group on the bas<strong>is</strong> of the agreement dated
August 2002, whereby the intention <strong>is</strong> partial reimbursement of the costs by Landesbank Berlin – Girozentrale –
and Berlin Hannoversche Hypothekenbank AG in line with the volume ratios of the three sub-bank loans shielded
by the loan guarantee. In addition, <strong>Bankgesellschaft</strong> Berlin or, in as far as IBG <strong>is</strong> affected, <strong>Bankgesellschaft</strong> Berlin,
Landesbank Berlin and Berlin Hyp together, are making an irrevocable offer to the State of Berlin for a period
of five years from the time of signature of the detailed agreement to sell and transfer the shares currently held
by them in IBAG and/or IBG and/or LPFV to the State at conditions to be establ<strong>is</strong>hed.
Payment obligations ar<strong>is</strong>ing when shares have not yet been fully paid up no longer ex<strong>is</strong>t (previous year:
a 3 million). There are additional funding obligations from participations amounting to a 21 million (previous
year: a 33 million), of which a 13 million (previous year: a 14 million) from the participation in the liquidity
syndicate bank.
In 1994, Landesbank Berlin internally agreed a ceiling with the personally liable partners of Weberbank
Privatbankiers KGaA with regard to their personal liability. According to th<strong>is</strong> declaration, Landesbank Berlin <strong>is</strong>
to assume internal liability above th<strong>is</strong> ceiling. Th<strong>is</strong> <strong>is</strong> described in detail in the Management Report. Within
the framework of drawing up the 2002 annual financial statements, the bank has become aware of declarations,
according to which LBB undertook to repurchase Weberbank shares from personally liable partners in 1994 for
an unspecified period of time. These are non-genuine pension transactions in accordance with section 340b
of the German Commercial Code. The resulting repurchase obligation amounting to a 14.8 million <strong>is</strong> reported
under the balance sheet.
Pursuant to section 5 subsection 10 of the bylaws of the Deposit Guarantee Fund, <strong>Bankgesellschaft</strong> Berlin
AG <strong>is</strong> obliged to indemnify Bundesverband deutscher Banken e.V. (The Federal Association of German Banks) in
the event of any losses that it may incur as a result of measures taken in favour of banks that are majorityowned
subsidiary companies of the Group.
Like other Central Savings Banks and the German Savings Banks and Giro Association, corporation
under public law (Deutscher Sparkassen- and Giroverband), Landesbank Berlin was a guarantor of DekaBank
Deutsche Girozentrale. On November 30, 2002, Landesbank Berlin sold its stake in DekaBank. The obligations
of Landesbank from the liability that it assumed and the guarantor’s liability for DekaBank ended with the
cut-off date of the sale with effect for the future. Liabilities that arose before the cut-off date remain the liability
of Landesbank as guarantor. As a result of the participation in Weberbank Privatbankiers KGaA, an exemption
certificate was <strong>is</strong>sued to the Deposit Guarantee Fund of the Federal Association of German Banks. Landesbank
Berlin has an obligation to make supplementary contributions to the Deposit Security Reserve of the Central
Savings Banks of up to a 23 million (previous year: a 17 million).
The buildings used by the bank at Alexanderplatz, Prinzregentenstrasse, Hardenbergstrasse (central
buildings) and Brunnenstrasse (Service Centre) are held by closed-end real estate funds launched by Group
subsidiary companies. For <strong>Bankgesellschaft</strong> Berlin AG and other Group subsidiary companies, the use of these
facilities entails annual rent obligations of a 67 million. The Berlin Hyp sub-group incurs annual rent obligations
from long-term leasing agreements of a 4.3 million.
In IT service agreements with FinanzIT GmbH and Siemens Business Services Management GmbH, the
bank has agreed minimum acceptance quantities amounting to a 39 million – a 33 million (FinanzIT, decreasing
annually) and a 33 million – a 34 million (SBSM increasing) for 2003 to 2006. The minimum acceptance
quantities were reached in the 2003 financial year.

156
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
35 Average number of employees for the year
20031) 2002
In the banking business
Full-time employees 8,306 11,276
Part-time employees 1,878 2,155
Trainees and apprentices 278 392
10,462 13,823
In Real Estate Services 2)
Full-time employees 952 1,135
Part-time employees 81
Trainees and apprentices 30 46
1,063 1,181
Total 11,525 15,004
1) Excluding the subsidiary companies that are no longer consolidated companies
2) IBG, LPFV, IBAG
36 Remuneration of the Board of Management and the Superv<strong>is</strong>ory Board
and loans granted to the same
The following remuneration was paid to members of the Board of Management and Superv<strong>is</strong>ory Bodies:
in t ’000 2003 1) 2002
Total remuneration of the Board of Management 11,698 13,416
Total remuneration of the Superv<strong>is</strong>ory Board 851 638
former Board members or their surviving dependents 9,316 9,247
Amount set aside for pension obligations towards th<strong>is</strong> group of people 93,944 107,710
1) Excluding the subsidiary companies that are no longer consolidated companies
37 Mandates held in Superv<strong>is</strong>ory Boards and other Control Bodies
Mandates held by members of the Board of Management and the Superv<strong>is</strong>ory Board of <strong>Bankgesellschaft</strong> Berlin AG
in Superv<strong>is</strong>ory Boards and other Control Bodies (section 285ff no. 10, 340a subsection 4 no. 1 of the German
Commercial Code) and by <strong>Bankgesellschaft</strong> Berlin AG employees in Superv<strong>is</strong>ory Bodies of major corporations
prescribed by law (section 340a subsection 4 no. 1 of the German Commercial Code) are shown in Appendices 3
and 4 of the notes.

38 Information on derivative transactions
157
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Derivative transactions – in particular currency and share/index-related transactions – are allocated largely to
the trading portfolio. Both own account trading strategies and the undimin<strong>is</strong>hed strong demand from our customers
for structured financing influence trading with derivative transactions. A large share <strong>is</strong> thus allocated
to covering resulting interest rate, currency and market price fluctuations. In addition, derivative transactions
are also included in asset and liability management for managing interest rate r<strong>is</strong>ks in the investment book.
Product areas of derivatives business
as at 31.12.2003 Remaining term Nominal Replacement
amount cost 1)
in t million 5 years Total
Interest rate-related transactions 126,452 240,223 141,265 507,940 10,662
Traded products 6,523 133 3,291 9,947 1
Interest rate futures 6,127 133 3,283 9,543 1
Interest rate options 396 8 404
OTC products 119,929 240,090 137,974 497,993 10,661
Interest rate swaps 103,572 182,260 105,452 391,284 9,568
FRAs 6,913 608 7,521 10
Swaptions 23,258 24,368 47,626 677
Interest rate options, purchases
Interest rate options, sales 4 4
Other interest rate futures 9,444 33,964 8,150 51,558 406
Currency-related transactions 9,589 7,398 6,434 23,421 798
Traded products
Currency futures
Currency options
OTC products 9,589 7,398 6,434 23,421 798
Forward exchange deals 6,006 210 6,216 301
Cross currency swaps 3,533 7,116 6,434 17,083 493
Currency options, purchases 47 36 83 4
Currency options, sales 3 36 39
Other currency futures
Equity/index-related transactions 8,492 1,908 24 10,424 236
Traded products 5,358 177 5,535 11
Equity/index futures 4,710 4,710
Equity/index options 648 177 825 11
OTC products 3,134 1,731 24 4,889 225
Equity/index swaps
Equity/index options, purchases 185 901 9 1,095 225
Equity/index options, sales 1,744 830 15 2,589
Other transactions with market r<strong>is</strong>ks 1,205 1,205
Credit derivatives 1,015 3,698 1,857 6,570 25
Total 145,548 253,227 149,580 548,355 11,721
1) Synonym for counterparty loan default

158
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
The stated counterparty default r<strong>is</strong>k <strong>is</strong> given as the replacement cost in the event of default by the counterparty.
The replacement costs are the sum of all positive market values of the derivative transactions. Negative market
values are not offset.
The nominal amount was reduced by some 20% within the context of the amended trading strategy within
the Group.
Counterparty structure in derivatives business by credit r<strong>is</strong>k equivalents
in t million 31.12.2003 31.12.2002
OECD banks; other banks (only original maturity up to one year) 791 910
Other companies, private individuals 373 493
Total 1,164 1,403
The reported credit r<strong>is</strong>k equivalents were determined according to the market exposure method in line with
Principle I of the Federal Financial Superv<strong>is</strong>ory Authority. The credit r<strong>is</strong>k equivalents are l<strong>is</strong>ted in weighted
form according to counterparty r<strong>is</strong>k. Counterparty netting <strong>is</strong> taken into account.
39 Group statement of collateral
Separate collateral reg<strong>is</strong>ters are kept for current <strong>is</strong>sues of Landesbank Berlin and Berlin-Hannoversche
Hypothekenbank AG.
The statement of collateral breaks down as follows:
Collateral reg<strong>is</strong>ter
in t million 31.12.2003 31.12.2002
Pfandbriefe outstanding
Cover assets
15,505 16,137
Mortgage loans and other loans 17,835 17,796
Cover surplus 2,330 1,659
Public-sector debt securities
Public Pfandbriefe outstanding 31,407 37,313
Covered bearer debt securities outstanding
Cover assets
Securities from public-sector banks 2,479 3,886
Public-sector loans and other loans 31,808 36,083
Cover surplus 2,880 2,656

40 Corporate Governance
159
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The declarations of conformity from the Board of Management and the Superv<strong>is</strong>ory Board required in accordance
with section 161 of the German Stock Corporation Act relating to the Corporate Governance Code were and
are to be publ<strong>is</strong>hed by the Group’s l<strong>is</strong>ted public limited companies (<strong>Bankgesellschaft</strong> Berlin AG, Berlin Hyp) on
the companies’ internet sites (see Management Report, chapter “Corporate Governance”).
Details relating to the acqu<strong>is</strong>ition of shares by members of the Board of Management and Superv<strong>is</strong>ory
Board are publ<strong>is</strong>hed on the internet site of <strong>Bankgesellschaft</strong> Berlin under “Meldepflichtige Geschäfte gemäß
§15a WpHG” (Notifiable transactions in line with section 15a of the German Securities Trading Act). Both the
shares held by an individual member of the Board of Management or Superv<strong>is</strong>ory Board and the total shares
held by all members of the Board of Management and Superv<strong>is</strong>ory Board are below 1% of the shares <strong>is</strong>sued
by the company (6.6 German Corporate Governance Code [DCGK]).
41 Business with closely associated entities
State of Berlin
The State of Berlin holds 81% of the shares in <strong>Bankgesellschaft</strong> Berlin and <strong>is</strong> therefore to be considered a closely
associated partner that can control the company in accordance with German Accounting Standard DRS 11.
The detailed agreement dated April 16, 2002 <strong>is</strong> to be seen as a major transaction with the State of Berlin. Notes
on the detailed agreement can be found in the Management Report (chapter “Detailed agreement with the State
of Berlin”) and in the Notes (under chapters “Valuation” and “Contingencies ...”).
The companies that are held by the State of Berlin are not given. In th<strong>is</strong> respect, we refer to the participation
report of the State of Berlin.
As at December 31, 2003, the sphere of interests of the State of Berlin used a 1.6 billion of the <strong>is</strong>sued loans
of the two major Group companies. Additional receivables amounting to a 1.7 billion ex<strong>is</strong>t at Berlin Hyp.
Affiliated companies
The affiliated companies are shown in the “L<strong>is</strong>t of Investment Holdings” (Appendix 1 to the Notes) under
“Consolidated and non-consolidated subsidiary companies”. Receivables or liabilities connected with affiliated
companies are specified in the Notes under “(3) Business with affiliated companies”.
Associated companies
The associated companies are also shown in the “L<strong>is</strong>t of Investment Holdings”; more information can be found
in the chapter “Associated Companies (pursuant to section 311 of the German Commercial Code)”.
The loans <strong>is</strong>sued to th<strong>is</strong> group amount to a 925 million, deposits amount to a 74 million. The loans were
granted in line with market conditions. In so far as a deposit interest rate was agreed, th<strong>is</strong> was in line with
the conditions valid in the Group for first-class counterparties (prime rate).

160
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Members of the corporate management and the controlling bodies
In addition to the members of the Board of Management and the Superv<strong>is</strong>ory Board (see Appendix 3 to the Notes),
the following managers also belong to the closely associated partners in accordance with German Accounting
Standard DRS 11:
Boenke, Frank-Michael
Böhmer, Willi
Brummel, Beate
Burmester, Dr. Chr<strong>is</strong>tian
Butzer, Arnold
Ghassemi-Moghadam, Dariush
Grosse Wiesmann, Peter
Hirschhäuser, Dr. Karl-Friedrich
Kipp, Dirk
König, Peter
Lange, Axel
Müller, Martin
The presentation of the transactions <strong>is</strong> no longer provided for reasons of materiality.
Close relatives
Papesch, Uwe
Paulick, Thomas
Reinhardt, Ludwig
Reutter, Dr. Georg
Roller, Gerhardt
Sawahn, Wolf-Joachim
Schölper, Siegfried
Schröder, Bartho
Siegert, Dr. Uwe-Jens
Spicker, Klaus
Trägler, Stefan
Close relatives have no influence on business policy.
In the case of both legal entities and natural persons, no further information on the transactions has been
provided due to an obligation to maintain secrecy.
Information on the Balance Sheet Items of the AG
Explanatory notes on the individual items are only provided if they differ from the statements made under the
relevant numbers (e.g. (1) Classification of deadlines) for the Group.
The column “31.12.2003 1) ” shows the comparative figures that would have resulted without the restructuring
of Berliner Bank, including a higher profit d<strong>is</strong>tribution of Landesbank Berlin. There <strong>is</strong> no separate
presentation in th<strong>is</strong> form if no or no material effects result.

1 Classification of Deadlines
161
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
in t million 31.12.2003 31.12.2003 1) Loans and advances to banks
Other loans and advances
31.12.2002
less than three months 9,562 9,599 5,619
between three months and one year 3,677 3,677 710
between one and five years 1,098 1,098 1,145
more than five years 204 204 448
Total 14,541 14,578 7,922
Loans and advances to customers
less than three months 3,423 4,982 6,316
between three months and one year 502 661 945
between one and five years 1,004 1,588 2,076
more than five years 2,057 3,686 5,228
of which with indefinite term (566) (2,157) (2,097)
Total 6,986 10,917 14,565
Deposits by banks with
an agreed term or notice period
less than three months 33,379 33,415 27,604
between three months and one year 6,024 6,060 5,672
between one and five years 1,756 1,787 97
more than five years 240 253 303
Total 41,399 41,515 33,676
Customer savings
Savings deposits with an agreed notice period of more than three months
less than three months 7 9
between three months and one year 3 3
between one and five years 37 46
more than five years 4 5
Total 51 63
Customer savings
Other amounts due to customers with agreed term or notice period
less than three months 455 1,012 2,152
between three months and one year 59 70 56
between one and five years 233 252 254
more than five years 489 491 771
Total 1,236 1,825 3,233
Securit<strong>is</strong>ed liabilities
Other securit<strong>is</strong>ed liabilities
less than three months
between three months and one year 8
between one and five years 32 32 33
more than five years 51 51 48
Total 83 83 89
1) Comparative figures including Berliner Bank

162
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
2 Amounts due in the following year
in t million
Included in the item:
31.12.2003 31.12.2002
Debt securities and other fixed-income securities
Securit<strong>is</strong>ed liabilities
3,822 3,792
Debt securities <strong>is</strong>sued 1,500 2,442
3 Business with affiliated companies
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Loans and advances to banks 8,376 9,373 8,109
Loans and advances to customers 934 985 990
Debt securities and other fixed-income securities 7,464 7,464 7,200
Shares and other non fixed-income securities 291 291 327
Other assets 236 236 110
Deposits by banks 2) 29,200 29,210 22,090
Customer savings 171 232 185
Securit<strong>is</strong>ed liabilities 3,075 3,075 3,761
Other liabilities 25 97 1
Subordinated liabilities 1,803 1,803 2,414
1) Comparative figures including Berliner Bank
2) Of which Landesbank Berlin (including branches) 22,550 22,560 20,265
4 Business with companies in which investments are held
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Loans and advances to banks 288 288 3
Loans and advances to customers 16 16 73
Debt securities and other fixed-income securities 476 476 461
Shares and other non fixed-income securities
Deposits by banks 92 92 8
Customer savings 5 53
Securit<strong>is</strong>ed liabilities
1) Comparative figures including Berliner Bank

5 Subordinated assets
163
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
in t million 31.12.2003 31.12.2002
Loans and advances to banks 8 108
Loans and advances to customers 8 8
Debt securities and other fixed-income securities 323 230
Shares and other non fixed-income securities 219 214
6 Development of fixed assets
Financial assets Tangible Intangible
assets assets
Loans and Debt Shares and Participations Shares in
advances1) securities other non affiliated
and other fixed-income companies
fixed-income securities
in t million securities
Book value as at 31.12.2002
Cost of acqu<strong>is</strong>ition/manufacturing
129 594 110 2,645 108
as at 31.12.2002 7 129 1,021 134 3,615 187
Additions 2003 2 24 67 123
D<strong>is</strong>posals 2003 16 33 461 79
Account transfers 2003 –10 10
Effect of exchange rate movements
Cost of acqu<strong>is</strong>ition/manufacturing
as at 31.12.2003
Value appreciation
7 113 1,021 103 3,178 165 133
at at 31.12.2002 10
Additions 2003 1
D<strong>is</strong>posals 2003
Value appreciation
10
as at 31.12.2003
Accumulated depreciation
1
at at 31.12.2002 7 427 34 970 79
Additions 2003 144 6 1372) 34 44
D<strong>is</strong>posals 2003 12 47
Account transfers 2003 –3 3
Effect of exchange rate movements
Accumulated depreciation
as at 31.12.2003 7 571 28 1,107 63 47
Book value as at 31.12.2003 113 450 76 2,071 102 86
1) Convertible profit sharing rights from restructuring measures
2) Including expenditure for prov<strong>is</strong>ioning in previous year of s 15 million

164
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
The write-down of shares and other non fixed-income securities amounting to a 144 million results primarily
from the valuation of the investment funds that track the EURO STOXX-50 index.
Additions of shares in affiliated companies result from the contribution to the capital reserve of Berlin
Capital Fund GmbH and the capital increase at Berlin Hannoverschen Hypothekenbank AG (Berlin Hyp). The
write-downs relate largely to <strong>Bankgesellschaft</strong> Berlin (Ireland) plc., <strong>Bankgesellschaft</strong> Berlin (Polska) S.A.,
Berlin Hyp and Berlin Capital Fund GmbH. Participations were d<strong>is</strong>continued as part of the restructuring of the
participation portfolio. Th<strong>is</strong> largely involved Zivnostenská banka a.s., Allgemeine Privatkundenbank Aktiengesellschaft
and <strong>Bankgesellschaft</strong> Berlin (UK).
Additions to intangible assets result primarily from the application of the IDW ERS HFA 11 balance sheet
reporting of software for the first time for the user and the purchase of the fixed assets of BB-Data GmbH.
7 Trust transactions
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Loans and advances to customers 14 15
Deposits by banks 14 15
1) Comparative figures including Berliner Bank
8 Qualification for stock exchange l<strong>is</strong>ting
Eligible for l<strong>is</strong>ting L<strong>is</strong>ted Not l<strong>is</strong>ted
in t million
Debt securities and other
31.12.2003 31.12.2002 31.12.2003 31.12.2002 31.12.2003 31.12.2002
fixed-income securities 25,210 28,519 23,480 26,180 1,730 2,339
Shares and other non fixed-interest securities 1,886 1,329 1,880 1,322 6 7
Participations 34 45 11 34 34
Shares in affiliated companies
of which
1,027 1,597 630 986 397 611
Berlin Hyp 630 730 630 730
BG Intern.S.A.Lux. 246 246 246 246
BG Berlin (UK) 205 205
ALLBANK 175 175
Zivnostenská banka 81 81
Others 151 160 151 160

9 Foreign currency items
165
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
in t million 31.12.2003 31.12.2002
Assets 12.7 14.8
Liabilities 12.0 12.7
10 Assets pledged as collateral
Assets pledged as collateral to the Bundesbank for monetary instruments in the framework of the European
System of Central Banks (ESCB) break down as follows:
in t million 31.12.2003 31.12.2002
Securities 7,955 11,121
of which: equal<strong>is</strong>ation claims 161 243
Industrial loans 7 4
of which: bills of exchange 2
loan receivables 7 2
Total 7,962 11,125
As at the balance sheet date, there were the following pledges as additional collateral: loans and bonds
amounting to a nominal a 410 million (previous year: a 105 million) were deposited as collateral at EUREX
Deutschland. In addition, loans and bonds of a nominal a 8 million (previous year: a 209 million) as well as
shares and other non fixed-income securities with a market value of a 509 million (previous year: a 69 million)
serve as collateral, which the bank deposited as collateral in connection with repurchase transactions and
securities lending transactions.
Loans and bonds with a nominal value of a 12,090 million (previous year: a 9,549 million) as well as
shares and other non fixed-income securities with a market value of a 0 million (previous year: a 116 million).
11 Equal<strong>is</strong>ation claims against public institutions including bonds from their exchange
Th<strong>is</strong> item cons<strong>is</strong>ts of equal<strong>is</strong>ation claims purchased in the form of bearer bonds. Furthermore, the AG’s portfolio
contains borrowed securities worth a 10 million (previous year: a 15 million). No securities were lent out.
Of the equal<strong>is</strong>ation claims, a 161 million (previous year: a 243 million) was pledged as collateral to the
responsible Central Banks for monetary policy instruments within the framework of the ESCB (cf. 10).

166
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
12 Intangible and tangible assets
As a result of the dec<strong>is</strong>ion of the Group to apply the regulations of IDW ERS HFA 11 balance sheet reporting of
software for the user, the AG <strong>is</strong> reporting software under intangible assets for the first time. Until now, software
was reported on the balance sheet under office furniture and equipment or leased from BB-Data.
Office furniture and equipment amounting to a 102 million (previous year: a 108 million) <strong>is</strong> included. The
comparative value, including Berliner Bank figures, <strong>is</strong> a 113 million.
13 Other assets
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Asset items from portfolios 1,856 1,856 2,260
Amounts due from collateral 1,841 1,841 1,702
LBB profit claims 687 687 767
Amounts due from tax authorities
Due from forward transactions and swaps plus
59 59 139
interest deferral from forward transactions 232 232 281
Collection documents 9 18 54
Other 442 466 257
Total 5,126 5,159 5,460
1) Comparative figures including Berliner Bank
14 Prepayments and accrued income
Th<strong>is</strong> item mainly contains differences between the face value of receivables and the amounts actually paid,
d<strong>is</strong>counts from bearer bonds and premiums from derivatives.

15 Other liabilities
167
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Liabilities items from portfolios 1,404 1,404 1,750
Liabilities from collateral 662 662 429
Amounts due to tax authorities 26 34 36
Deferred interest for subordinated liabilities 41 41 46
Trade payables
Liabilities from forward transactions and swaps
52 130 19
plus interest deferral from forward transactions 214 214 383
Other 7 7 162
Total 2,406 2,492 2,825
1) Comparative figures including Berliner Bank
16 Accruals and deferred income
Th<strong>is</strong> item mainly contains differences between the face value of receivables and the amount actually paid,
deferred interest and fees, as well as premiums from derivatives.
17 Prov<strong>is</strong>ions for pensions and similar obligations
Prov<strong>is</strong>ions for pensions and similar obligations fell by a 26 million (previous year: a 12 million) to
a 205 million (previous year: a 231 million).
18 Other prov<strong>is</strong>ions
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Prov<strong>is</strong>ions for portfolios, securities and foreign exchange transactions 224 224 127
Prov<strong>is</strong>ions for r<strong>is</strong>ks from the lending business 162 189 191
Prov<strong>is</strong>ions for IBG capital measures 12 12 26
Personnel-related prov<strong>is</strong>ions 47 51 53
Prov<strong>is</strong>ions for restructuring measures 363 386 195
Prov<strong>is</strong>ions for EU dec<strong>is</strong>ion of 18.2.2004 212 212
Other 108 112 106
Total 1,128 1,186 698
1) Comparative figures including Berliner Bank

168
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
19 Subordinated liabilities
Nominal values Interest rate Maturity
Currency in millions in t million in %
(1) DM 100 51 7.00 2005
(2) DM 300 * 153 6.71 2006
(3) JPY 10,000 * 74 3.36 2007
(4) DM 50 * 26 6.06 2007
(5) JPY 10,000 * 74 3.32 2007
(6) EUR 14 * 14 Zero bond 2007
(7) JPY 4,000 * 30 2.80 2008
(8) JPY 5,000 * 37 2.30 2008
(9) DM 10 * 5 5.03 2008
(10) DM 30 * 15 5.33 2008
(11) EUR 150 * 150 3-month Euribor + 35 BP 2009
(12) FRF 1,500 * 229 5.75 2009
(13) FRF 750 * 114 5.75 2009
(14) EUR 375 * 375 4.75 2009
(15) EUR 7 * 7 Zero bond 2009
(16) JPY 5,000 * 37 2.014
(3-month JPY Libor + 8 BP)
2009
(17) FRF 1,000 * 152 5.375 2010
(18) DM 250 * 128 5.375 2010
(19) EUR 75 * 75 at least 4.75 2019
(20) JPY 15,000 * 111 5.15 2027
Subordinated liabilities marked with (*) were taken up by affiliated companies. The subordinated liabilities
(1), (2), (10) and (18) stem from the former Berliner Bank AG. Of the subordinated liability (1), a 0.5 million
(previous year: a 0.5 million) <strong>is</strong> held in the company’s own portfolio as at the balance sheet date. Borrowing
(12) and (13) combined and subordinated liability (14) currently exceed 10% of the total subordinated capital.
The subordinated liabilities (17) and (18) were redenominated in 1999 (a 152 million and a 128 million
respectively). The interest rate for subordinated liability (19) was agreed as follows: 4.75% to March 31, 2009,
thereafter 4.75% + 81% of the 10-year euro swap rate (Constant Maturity Swap) valid on the interest day,
but at least 4.75%.

169
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
In 2003, the interest paid for subordinated liabilities amounts to a 80 million (previous year: a 97 million).
The interest paid <strong>is</strong> made up of current interest expenses amounting to a 94 million (previous year: a 135 million)
and income from swap transactions amounting to a 15 million (previous year: a 38 million).
Claims by creditors for repayment of these liabilities are subordinate to other creditors. There can be no
early repayment obligation. In the event of liquidation, they may not be repaid until all other non-subordinate
creditors have been sat<strong>is</strong>fied.
Of the total subordinated liabilities amounting to a 1,853 million (previous year: a 2,456 million),
a 1,814 million (previous year: a 2,395 million) meets the requirements of the German Banking Act for recognition
as liable capital.
21 Information on equity
The subscribed capital of <strong>Bankgesellschaft</strong> Berlin AG amounts to a 2,555 million and <strong>is</strong> divided into
999,327,870 ordinary shares.
The Annual General Meeting of July 19, 2002 author<strong>is</strong>ed <strong>Bankgesellschaft</strong> Berlin AG to acquire own
shares for the purpose of securities trading to September 30, 2003 pursuant to section 71 subsection 1 no. 7 of
the German Stock Corporation Act. The acqu<strong>is</strong>ition prices may not fall short of or exceed the average closing
price of the shares for the ten preceding trading days by more than 10%. The trading portfolio of the shares
acquired for th<strong>is</strong> purpose may not exceed the share capital of <strong>Bankgesellschaft</strong> Berlin AG by more than 5% at
the end of each day.
Moreover, in accordance with a resolution of the Annual General Meeting, we have the option to acquire
own shares for purposes other than securities trading in own shares pursuant to section 71 subsection 1 no. 8 of
the German Stock Corporation Act from July 4, 2003 to September 30, 2003. No use was made of th<strong>is</strong> option in
the 2003 reporting year.
The bank did not trade any own shares over the course of the year under review.
At year-end, there were 27,090,540 (previous year: 27,090,540) ordinary shares with a book value of
a 54.5 million (previous year: a 54.2 million) in the bank’s portfolio for the purpose of trading. The ratio of the
share capital <strong>is</strong> 2.711% (previous year: 2.711%).
In addition, there are 405,695 ordinary shares with a book value of a 0.8 million in the bank’s portfolio.
These were acquired via the stock exchange to protect against damage as a result of a resolution by the Board
of Management dated May 29, 2001 pursuant to section 71 subsection 1 no. 1 of the German Stock Corporation
Act. The share in subscribed capital amounts to 0.041%.
In the lending business, 277,875 (previous year: 342,230) of our own ordinary shares were accepted as a
pledge at year-end 2003 pursuant to section 71e of the German Stock Corporation Act. Th<strong>is</strong> corresponded to
0.03% (previous year: 0.03%) of the share capital.
The balance sheet loss for the 2003 financial year at <strong>Bankgesellschaft</strong> Berlin AG amounts to a 2,582 million
taking into account the loss carried forward from the previous year of a 2,038 million.

170
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Information on the Profit and Loss Account Items of the AG
22 Net interest income
in t million 2003 2003 1) 2002
Interest income 1,652 1,771 2,431
from lending and money market transactions 1,033 1,152 1,573
from fixed-income securities and debt reg<strong>is</strong>ter claims 619 619 858
Current income 125 125 130
from shares and other non fixed-income securities 90 90 87
from participations 8 8 5
from affiliated companies 27 27 38
Income from profit pooling 6 12 149
Interest expenses 1,313 1,383 1,983
for deposits 1,133 1,203 1,647
for securit<strong>is</strong>ed liabilities 100 100 236
for subordinated liabilities 80 80 100
Total 470 525 727
1) Comparative figures including Berliner Bank
23 Net comm<strong>is</strong>sion income
in t million 2003 2003 1) 2002
Securities and <strong>is</strong>sue business 24 38 45
Securities/investments 22 36 43
Issue and syndication business 2 2 2
Funds transfer/account management 13 27 27
Lending business –1 1 14
Lending business 3
Guarantee comm<strong>is</strong>sion – 3 – 2 6
Business abroad 2 3 5
Card business 17 33 35
Other service business 3 6 1
Foreign currency/exchange business 1 1
Other services 3 5
Total 56 105 122
1) Comparative figures including Berliner Bank

24 Profit from financial transactions
171
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
in t million 2003 2002
Result from interest-related transactions 82 – 46
Result from share-related transactions – 59 55
Result from other trading transactions –18 – 22
Trading result 5 –13
Valuation from own shares 1) –16
Result pursuant to the profit and loss account 5 – 29
1) The valuation of the portfolio of own shares led to a write-up of s 275,000
25 Other admin<strong>is</strong>trative expenditure
in t million 2003 2003 1) 2002
Cost of buildings and office space 83 89 98
IT expenditure 93 113 146
Advert<strong>is</strong>ing and marketing 4 6 7
Consultations, audits, dues 24 24 28
Business operating costs 14 17 13
Office furniture and equipment 1 2 2
Personnel-related operating expenditure 5 5 8
Consolidated charges related to services 52 77 80
Total 276 333 382
1) Comparative figures including Berliner Bank
26 R<strong>is</strong>k prov<strong>is</strong>ioning
R<strong>is</strong>k prov<strong>is</strong>ioning breaks down as follows:
in t million 2003 2003 1) 2002
R<strong>is</strong>k prov<strong>is</strong>ioning in the lending business 140 142 229
Result from securities in the liquidity reserve
Reserves pursuant to section 340f German Commercial Code
– 4 – 4 22
Total 136 138 251
1) Comparative figures including Berliner Bank

172
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
R<strong>is</strong>k prov<strong>is</strong>ioning for the lending business in the AG developed as follows:
Country r<strong>is</strong>k thereof
Counterparty r<strong>is</strong>k lending bus. Total P&L impacting
Direct Prov<strong>is</strong>ions
depreciation IVA 1) GC 2) lending bus.
in t million 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
Status 01.01. – – 1,833 1,721 51 71 191 194 16 16 2,091 2,002
Allocations – – 194 284 32 52 226 336 226 336
Util<strong>is</strong>ation – – 229 108 1 230 108
Write-backs 64 63 15 20 25 36 3 107 119 107 119
Direct depreciation
Receipts relating
to written-off
27 14 27 14
receivables 6 2 6 2
Account transfers 3) Exchange rate
– – –933 19 –11 – 28 –14 – 972 5
movements – – – 20 – 20 – 7 – 5 –27 –25
Status 31.12. – – 781 1,833 25 51 162 191 13 16 981* 2,091* 140 229
1) Individual value adjustment
2) General charge for bad and doubtful debts
3) The account transfers result primarily from the sale of the Berliner Bank branch (total: s 1,068 million)
* Without ex<strong>is</strong>ting loans
Total credit r<strong>is</strong>k prov<strong>is</strong>ioning breaks down as follows:
in t million 31.12.2003 31.12.2003 1) 31.12.2002
Loans and advances to banks 52 52 65
Loans and advances to customers 767 1,679 1,835
Prov<strong>is</strong>ions
Other items
162 188 191
Total 981 1,919 2,091
1) Comparative figures including Berliner Bank

27 Geographic d<strong>is</strong>tribution of earnings
173
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
The following geographic breakdown of earnings <strong>is</strong> carried out according to the location of the unit generating
the income (subsidiary, branch, affiliate).
Domestic Income Total
income from abroad income
in t million 2003 2002 2003 2002 2003 2002
Interest income
Current income from shares and other
non fixed-income securities, participations
1,082 1,509 570 922 1,652 2,431
and shares in affiliated companies 125 94 36 125 130
Comm<strong>is</strong>sion income 92 158 3 5 95 163
Profit from financial transactions 24 –19 5
Other operating income 326 194 8 11 334 205
Other Information on the AG
35 Average number of employees for the year
2003 2003 1) 2002
Full-time employees 2,160 2,510 3,247
Part-time employees 342 442 527
Trainees and apprentices 40 70 112
Total 2,542 3,022 3,886
1) Comparative figures including Berliner Bank

174
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
36 Remuneration of the Board of Management and the Superv<strong>is</strong>ory Board
and loans granted to the same
The following remuneration was paid to members of the Board of Management and Superv<strong>is</strong>ory Bodies:
in t ’000 2003 2002
Total remuneration of the Board of Management 5,923 4,527
Total remuneration of the Superv<strong>is</strong>ory Board 474 167
Former Board members or their surviving dependents 4,319 4,090
Amount set aside for pension obligations towards th<strong>is</strong> group of people 45,671 49,494
The aforementioned remuneration of the Board of Management contains a performance-related payment
amounting to a 200,000.
The advances and loans granted by the Berliner Bank subsidiary, as well as the contingencies arranged are
taken into consideration through the transfer in the financial statements of Landesbank Berlin, the total amount
in the previous year was reported as follows:
in t ’000 2002
To members of the Board of Management 63
To members of the Superv<strong>is</strong>ory Board 204

38 Information on derivative transactions
175
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003
Product areas of derivatives business
as at 31.12.2003 Remaining term Nominal Replacement
amount cost 1)
in t million 5 years Total
Interest rate-related transactions 116,987 219,487 134,287 470,761 10,418
Traded products 6,325 124 3,285 9,734 1
Interest rate futures 5,929 124 3,277 9,330 1
Interest rate options 396 8 404
OTC products 110,662 219,363 131,002 461,027 10,417
Interest rate swaps 95,139 162,743 99,001 356,883 9,331
FRAs 6,158 577 6,735 10
Swaptions 22,797 24,368 47,165 676
Interest rate options, purchases
Interest rate options, sales
Other interest rate futures 9,365 33,246 7,633 50,244 400
Currency-related transactions 9,146 6,521 5,747 21,414 646
Traded products
Currency futures
Currency options
OTC products 9,146 6,521 5,747 21,414 646
Forward exchange deals 5,745 210 5,955 300
Cross currency swaps 3,353 6,243 5,747 15,343 342
Currency options, purchases 46 34 80 4
Currency options, sales 2 34 36
Other currency futures
Equity/index-related transactions 8,433 1,902 24 10,359 236
Traded products 5,299 172 5,471 11
Equity/index futures 4,708 4,708
Equity/index options 591 172 763 11
OTC products 3,134 1,730 24 4,888 225
Equity/index swaps
Equity/index options, purchases 185 900 9 1,094 225
Equity/index options, sales 1,744 830 15 2,589
Other transactions with market r<strong>is</strong>ks 1,205 1,205
Credit derivatives 1,015 3,697 1,857 6,569 25
Total 135,581 231,607 141,915 509,103 11,325
1) Synonym for counterparty loan default

176
Notes
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Counterparty structure in derivatives business by credit r<strong>is</strong>k equivalents
in t million 31.12.2003 31.12.2002
OECD banks; other banks (only original maturity up to one year) 639 796
Other companies, private individuals 332 427
Total 971 1,223
Berlin, March 23, 2004
Board of Management
Hans-Jörg Vetter
Norbert Pawlowski
Serge Demolière Uwe Kruschinski
Dr. Thomas Veit

177
NOTES TO THE CONSOLIDATED AND AG FINANCIAL STATEMENTS 2003 / APPENDIX 1
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
<strong>Bankgesellschaft</strong> Berlin Aktiengesellschaft, Berlin
Consolidated subsidiaries
ARWOBAU Apartment- und Wohnungsbaugesellschaft
mit beschränkter Haftung, Berlin 1) Athena Immobilien Verwaltungs GmbH & Co. KG
100.0 100.0 51,295 3,240
– Erster IBV-Universalfonds –, Berlin 1) 99.0 99.0 50 – 273
BankenService GmbH Unternehmensgruppe Landesbank Berlin, Berlin 1) 10) 100.0 100.0 –11,883
<strong>Bankgesellschaft</strong> Berlin (Ireland) plc, Dublin 2) (P) 100.0 100.0 123,861 – 8,373
<strong>Bankgesellschaft</strong> Berlin (Polska) S.A., Warsaw 14) 11) <strong>Bankgesellschaft</strong> Berlin (UK)
100.0 100.0 49,454 1,244
(formerly <strong>Bankgesellschaft</strong> Berlin (UK) Ltd.), London 11) 100.0 100.0 3,445
<strong>Bankgesellschaft</strong> Berlin International S.A., Luxembourg
Bauprojekt- und Facilitymanagement GmbH der
(P) 100.0 100.0 201,909 16,340
Unternehmensgruppe <strong>Bankgesellschaft</strong> Berlin, Berlin
Bavaria Gewerbe GmbH, Nuremberg
(formerly Bavaria Projektentwicklung GmbH -Bau-,
10) 100.0 100.0 27
Sanierungs-, Stadtentwicklungsprojekte-, Nuremberg) 1) 100.0 100.0 – 3,213 – 754
Bavaria Objekt- und Baubetreuung GmbH, Nuremberg 1) , 4) BB-DATA Gesellschaft für Informations-
100.0 100.0 18,603
und Kommunikationssysteme mbH, Berlin 4) 10) 100.0 100.0 3,068
Berlin Hyp Grundstücksverwaltung GbR, Berlin 1) , 13) 10) 100.0 100.0 30,785 863
Berlin Hyp Immobilien GmbH, Berlin 1) , 4) , 13) 10) 100.0 100.0 26
Berlin-Hannoversche Hypothekenbank Aktiengesellschaft, Berlin/Hanover (P) 89.7 89.7 582,125 4,311
BGB Finance (Ireland) plc, Dublin 2) 10) DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft mbH,
100.0 100.0 758 – 396
Wiesbaden 1) , 4) 99.0 99.0 10,736
IBAG Immobilien und Beteiligungen AG, Berlin 4) , 12) 100.0 100.0 135,018
IBI Real Estate – Immobilien und Beteiligungen International GmbH, Berlin 1) Immobilien Beteiligungs- und Vertriebsgesellschaft
100.0 100.0 3,091 3,917
der IBAG-Gruppe mbH, Berlin 1) , 4) Immobilien- und Baumanagement der <strong>Bankgesellschaft</strong>
100.0 100.0 511
Berlin GmbH, Berlin 2) 100.0 100.0 13,793 –1,798
Landesbank Berlin – Girozentrale –, Berlin (P) atyp. atyp. 2,301,423 14
dormant dormant
LBB Grundstücksentwicklungsgesellschaft mbH Bauholding
holding
und Projektentwicklungen, Berlin 1) , 4) 100.0 100.0 5,113
LPFV Finanzbeteiligungs- und Verwaltungs GmbH, Berlin 100.0 100.0 1,648 – 397
Universal Immobilien AG der IBAG-Gruppe, Berlin 1) 100.0 100.0 3,788 40
Weberbank Privatbankiers KGaA, Berlin 1) (P) 95.0 95.0 187,880 9,880

178
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Non-consolidated subsidiaries
ABT No. 2 Ltd., London 1) 10) Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
100.0 100.0 110 13 31.12.2002
ABT No. 3 Ltd., London 1) 10) 100.0 100.0 475 24 31.12.2002
ARWOBAU Immobilien- und Beteiligungsgesellschaft mbH, Berlin 1) , 4) 100.0 100.0 254 31.12.2001
ATIRA Immobilien- Verwaltungsgesellschaft mbH, Berlin 1) 100.0 100.0 213 –112 31.12.2002
Babefi-Holding GmbH, Berlin
Bau- und Projektentwicklungsgesellschaft mbH der
100.0 100.0 69 – 3 31.12.2002
Unternehmensgruppe <strong>Bankgesellschaft</strong> Berlin, Berlin 7) BAUTRAKO Bauträger- und
100.0 100.0 276 777 31.12.2002
Koordinierungsgesellschaft mbH i. L., Berlin 1) , 4) Bavaria Beteiligungsgesellschaft für Gewerbeimmobilien
100.0 100.0 732 – 569 31.12.2002
(formerly Bavaria Gewerbe GmbH), Berlin 100.0 100.0 24 31.12.2002
Bavaria Emden GmbH & Co. KG, Nuremberg 1) 100.0 100.0 47 70 31.12.2002
Bavaria Emden Verwaltungs GmbH, Nuremberg 1) Bavaria Immobilien Projektsteuerungs GmbH & Co. KG
100.0 100.0 34 31.12.2002
– BB Fonds International Drei Holland –, Berlin 1) 99.9 99.9 21,006 397 31.12.2000
Bavaria Immobilienconsult und Baurev<strong>is</strong>ion GmbH i.L., Berlin 1) , 4) 100.0 100.0 256 31.12.2002
Bavaria KLS Wohnbauten GmbH, Berlin 1) 65.0 65.0 – 3,418 –1,011 31.12.2002
Bavaria Projektentwicklung GmbH, Berlin 1) 100.0 100.0 25 31.12.2002
Bavaria Vertriebs GmbH, Berlin 1) 100.0 100.0 25 31.12.2001
Bavaria Wohnungsbau GmbH, Berlin 1) 100.0 100.0 25 31.12.2002
BB Aval Gesellschaft für Außenhandelsfinanzierungen mbH, Berlin (P) 100.0 100.0 – 20,421 237 31.12.2002
BB Privat Immobilien GmbH, Berlin 5) , 7) 100.0 100.0 1,206 31.12.2002
BB-Grundstücksgesellschaft mit beschränkter Haftung, Berlin 4) 10) 100.0 100.0 51 31.12.2002
BB-Haus der Deutschen Wirtschaft GmbH, Moscow 1) , 17) 98.0 98.0 4,355 492 31.12.2002
BB-Hausverwaltung GmbH i. L., Berlin 1) , 4) 100.0 100.0 26
BB-Immobilien-Service GmbH, Berlin 4) 100.0 100.0 300 31.12.2002
BB-Leasing GmbH, Berlin 11) 100.0 100.0 3,092 1,558 31.12.2002
BB-Lincoln Inc., Wilmington, Delaware 1) 90.0 90.0 n/a n/a
BB-Miete GmbH, Berlin 1) , 4) 100.0 100.0 51 31.12.2002
BCA Hotels GmbH, Berlin 1) BEGOHA-Verwaltungsgemeinschaft GbR der <strong>Bankgesellschaft</strong> Berlin AG,
der Metro Vermögensverwaltung GmbH & Co. KG
100.0 100.0 1,657 35 31.12.2002
und der Gothaer Lebensversicherung AG, Berlin 65.3 65.3 369 6 31.12.2002
BGB US Real Estate, Inc., Wilmington, Delaware 1) 100.0 100.0 – 61 – 91 31.12.2002
Berlin Capital Fund Asset Management GmbH, Berlin 1) 100.0 100.0 26 1
Berlin Capital Fund GmbH, Berlin 2) 10) 100.0 100.0 947 – 7,909
Berlin Hyp Projekt GmbH, Berlin 1) , 4) 10) 100.0 100.0 250 31.12.2002
BG Property (Dublin) Limited, Dublin 1) 100.0 100.0 – 68 24 31.12.2002
BGB Reinsurance Ltd., Dublin
BILDUNGSAKADEMIE DER BANKGESELLSCHAFT
100.0 100.0 5,347 1,833 31.12.2002
Gesellschaft mit beschränkter Haftung, Berlin 4) , 5) 100.0 100.0 153 – 83 31.12.2002

BSI Immobilien-Beteiligung GmbH & Co.
Objekt Wilmersdorf oHG, Pöcking 1) 10) 100.0 71.4 –11,304 899
179
APPENDIX 1
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
BUVI Besitz- und Verwaltungsgesellschaft für Immobilien mbH, Berlin 4) 10) 100.0 100.0 26 31.12.2002
Certa Immobilienverwaltung und Handelsgesellschaft mbH, Berlin 1) con Finanz GmbH Gesellschaft für Beratung
62.6 62.6 15 31.12.2002
und Vermittlung von Finanzdienstle<strong>is</strong>tungen i. L., Hanover 1) 100.0 100.0 26 1 31.12.2002
Crown Court Furniture London Ltd., London 1) , 15) 10) 100.0 100.0 31.12.2002
Crown Court Property London Ltd., London 1) , 15) 10) 100.0 100.0 17,693 383 31.12.2002
DEFAS Beteiligungs GmbH & Co. Vermietungs-KG, Munich 1) 10) 100.0 50.0 – 2,890 54
DELTAG Aktiengesellschaft für Investitionen, Berlin 1) DirektBankService GmbH Unternehmensgruppe
61.0 61.0 – 273 3,773 31.12.2002
<strong>Bankgesellschaft</strong> Berlin, Berlin 2) , 4) 10) Erschließungs-GbR ARGE Landsberger Tor
100.0 100.0 103 31.12.2002
mit Haftungsbeschränkung (ELT), Berlin 1) 81.4 81.4 495 9 31.12.2001
Eurospeedway Lausitz Entwicklungs GmbH, Berlin 1) 100.0 100.0 –1,564 – 537 31.12.2002
Fördergesellschaft der Weberbank gemeinnützige GmbH, Berlin 1) Gaia Immobilien Verwaltungs GmbH & Co.
100.0 100.0 2,750 –13
Objekt London St. Mark's House KG, Berlin 1) GbR LandesBank Berlin Grundstücks-Gesellschaft mbH/
100.0 100.0 –1,405 – 622 31.12.2001
Berlin Hyp Immobilien GmbH Leipzig, Berlin 1) 10) 100.0 100.0 1,023 31.12.2002
GbR Potsdam Waldstadt, Berlin 1) Gesellschaft für Immobilien und Beteiligungen
100.0 100.0 2,283 6 31.12.2000
der IBAG-Gruppe mbH, Berlin 1) 100.0 100.0 25 31.12.2002
Gesellschaft für Wohnungsbau Lübeck mbH, Lübeck 1) Gesellschaft mit beschränkter Haftung LBB Seed Capital/
55.4 55.4 1,210 244 31.12.2002
Kartte Foundation, Vladimir 1) , 17) 99.8 99.8 136 1 31.12.2001
Gewerbesiedlungs-Gesellschaft mbH, Berlin 1) , 6) 95.0 95.0 118,180 2,404 31.12.2002
Grundstücksgesellschaft „Berlin“ mit beschränkter Haftung, Berlin 4) 10) Grundstücksgesellschaft „URSUS“ mit beschränkter Haftung,
100.0 100.0 5,624 31.12.2002
Frankfurt am Main 2) , 4) 10) 100.0 100.0 722 31.12.2002
Grundstücksgesellschaft Forckenbeckstraße 63 mbH, Berlin 1) , 4) 97.7 94.0 – 79 31.12.2002
Grundstücksgesellschaft Lockkoppel Eins GbR, Nuremberg 1) 67.0 67.0 – 51 86 31.12.2002
Grundstücksgesellschaft Schulstraße 56 mbH, Berlin 1) , 4) 97.0 97.0 –132 31.12.2002
Grundstücks-Verwaltungsgesellschaft Wegelystraße mbH, Berlin 1) , 6) 100.0 100.0 19 –1 31.12.2001
GWL Wohnungsbetreuungsgesellschaft mbH, Lübeck 1) , 4) 100.0 100.0 26 31.12.2000
H.A.D.R.I.A.N. Immobilien Verwaltungs GmbH, Berlin 100.0 100.0 17 – 6 31.12.2002
Harpalus Verwaltungsgesellschaft mbH & Co. Vermietungs KG, Munich 1) 78.1 78.1 1,817 149 31.12.2002
HaWe Immobilien GmbH & Co. Berlin Süd KG, Berlin 1) 100.0 100.0 8,941 1,138
HaWe Immobilien GmbH & Co. Holzhauser Straße KG, Berlin 1) 100.0 100.0 3,671 – 474
HaWe Immobilien GmbH & Co. Spreeschanze KG, Berlin 1) 100.0 100.0 9,360 – 37
HaWe Immobilien GmbH & Co. Zitadellenweg KG, Berlin 1) 100.0 100.0 1,090 – 88
HaWe Immobilien GmbH, Berlin 1) 100.0 100.0 57 5
HaWe Verwaltungsgesellschaft mbH, Berlin 1) , 4) 10) 100.0 100.0 6,136

180
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
Hohenzollernring 38-40 Liegenschaften GmbH i. L., Berlin 1) 100.0 100.0 152 31.12.2001
Hotel Alleestraße Betriebsgesellschaft mbH, Berlin 1) 100.0 100.0 –18 – 44 31.12.2002
IBB Beteiligungsgesellschaft mbH, Berlin 1) , 6) 100.0 100.0 13,502 – 2,021 31.12.2002
IBB-Gewerbesiedlungs-Beteiligungsgesellschaft mbH & Co. KG, Berlin 1) , 3) 100.0 100.0
IBB-Holding für Immobilienbeteiligungen GmbH, Berlin 1) , 6) 100.0 100.0 156,907 – 59,285 31.12.2002
IBB-Holding für Industriebeteiligungen GmbH, Berlin 1) , 6) 100.0 100.0 – 9,994 –19 31.12.2002
IBI Real Estate – Management GmbH, Berlin 1) 100.0 100.0 25 31.12.2001
IBV-Immobilienfonds International 1 USA, LLC, Wilmington, Delaware 1) 100.0 100.0 n/a n/a
IBV-Immobilienfonds International 2 USA, LLC, Wilmington, Delaware 1) IDBG-Immobilien Dienstle<strong>is</strong>tungs-
100.0 100.0 n/a n/a
und Beteiligungsgesellschaft mbH i. L., Berlin 1) IDL Beteiligungsgesellschaft mbH, Berlin, (formerly JFVVG
100.0 100.0 419 – 68 31.12.2002
Zweiundvierzigste Vermögensverwaltungsgesellschaft mbH) 1) IDL Objektbeteiligungsgesellschaft mbH & Co. KG (formerly JFVVG
100.0 100.0 24 31.12.2002
Zweiundvierzigste Beteiligungs GmbH & Co. KG) 1) , 3) 100.0 100.0
IDLG Immobiliendienstle<strong>is</strong>tungen GmbH, Berlin 1) , 4) 100.0 100.0 1,816 31.12.2002
Immobiliengesellschaft Spreestadt-Wegelystraße mbH, Berlin 1) , 6) 100.0 100.0 – 40,112 – 2,579 31.12.2001
INKUR Verwaltung GmbH & Co. Vermietungs-oHG, Munich 1) 10) 100.0 50.0 – 2,926 99 31.12.2002
ipal Gesellschaft für Patentverwertung Berlin mbH, Berlin 2) , 6) 52,5 52,5 – 92 – 93 31.12.2002
„KB Kyritz“ Grundbesitz GmbH, Berlin 1) 100.0 100.0 – 7 –1 31.12.2002
KPM Königliche Porzellan-Manufaktur GmbH, Berlin 1) , 6) 100.0 100.0 3,631 – 2,187 31.12.2002
KPM Grundstücks-GmbH & Co. KG, Berlin 1) , 6) 100.0 100.0 3,631 – 2,187 31.12.2002
Lausitzring Betriebs- und Managementgesellschaft mbH i. L., Klettwitz 1) 100.0 100.0 392 334 31.12.2001
Lausitzring Eurodrom Verwaltungs-GmbH i.L., Klettwitz 1) 60.0 60.0 13 – 6 31.12.2001
Lausitzring GmbH & Co. KG i.L., Klettwitz 1) 70.0 70.0 – 23,278 – 9,504 31.12.2001
LBB Bauprojektgesellschaft mbH, Berlin 1) , 4) LBB Grundstücksentwicklungsgesellschaft mbH Bau-
100.0 100.0 511 31.12.2002
und Projektentwicklungen & Co. Pablo-Picasso-Straße KG i.L., Berlin 1) , 4) LBB Grundstücks-Gesellschaft mbH der
100.0 100.0 21 – 2,451 31.12.2000
Landesbank Berlin – Girozentrale –, Berlin 1) , 4) 10) 100.0 100.0 256 31.12.2002
LBB Immobilien Handelsgesellschaft mbH, Berlin 1) 62.5 62.5 –107 –150 31.12.2002
LBB Kommunalbaugesellschaft mbH, Potsdam 1) , 4) , 5) 100.0 100.0 511 31.12.2002
LBB Kommunal-Betriebsführungsgesellschaft mbH, Potsdam 1) 100.0 100.0 – 324 66 31.12.2002
LBB Liegenschaften in Berlin GmbH, Berlin 1) , 4) 97.8 97.8 9,033 31.12.2002
LBB – REALITY spol. s r.o., Prague 1) Ld Leasing Babefi GmbH i. L., Berlin
100.0 100.0 1,941 396 31.12.2002
(formerly LdA LEASING GMBH DER ALLBANK i. L., Berlin) 1) , 5) 10) 100.0 100.0 51 31.12.2002
Lenscare AG, Kiel 1) 53.5 53.5 1,216 486 31.12.2002
LHGS Grundstücksentwicklungs Beteiligungs GmbH, Berlin 1) 100.0 100.0 – 56 4 31.12.2001
LHGS Grundstücksentwicklungs GmbH & Co. KG Nennhauser Damm, Berlin 1) 100.0 100.0 –1 – 8 31.12.2002

Long Beach Property, LLC, Wilmington, Delaware 1) 100.0 100.0 n/a n/a
181
APPENDIX 1
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
Long Beach Town Center, L.P., Wilmington, Delaware 1) 100.0 100.0 –188 –1,500 31.12.2002
MARON Beteiligungs GmbH & Co. Vermietungs-KG, Pöcking 1) 11) 99.0 19.0 – 48 14
Mario Göhr Grundstücks GmbH, Berlin 1) 100.0 100.0 66 –1,034 31.12.2002
NEC Las Colinas, LLC, Wilmington, Delaware 1) 100.0 100.0 n/a n/a
NEC Las Colinas, L.P., Wilmington, Delaware 1) Nordversicherungsdienst Versicherungs-Vermittlungs-
100.0 100.0 n/a n/a
gesellschaft mbH, Hanover 1) Odin Immobilien Verwaltungs GmbH & Co. KG
100.0 100.0 26 31.12.2002
– BB Fonds International Vier Holland –, Berlin 1) Odin Immobilien Verwaltungs GmbH & Co.
100.0 100.0 4 – 46 31.12.2000
Objekt Frankfurt am Main, Niddastraße KG, Berlin 1) 57.0 57.0 – 2,084 – 598 31.12.2002
Okeanos GmbH & Co. Objekt Autohof Thiendorf KG, Berlin 1) Okeanos GmbH & Co. Objekt Berlin-Friedrichshain,
51.0 51.0 – 53 –19 31.12.2002
Pufendorfstraße KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 – 780 – 575 31.12.2002
Objekt Berlin, Eldenaer Straße KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 –1,193 855 31.12.2002
Objekt Bürogebäude Berlin-Steglitz; Quartier McNair KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 50 31.12.2000
Objekt Erfurt, Martinsgasse KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 – 94 – 82 31.12.2002
Objekt Hannover, Spielhagenstraße KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 43 – 3 31.12.2002
Objekt Lübeck-Kino KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 24 –1 31.12.2001
Objekt Lüneburg-Kaltenmoor KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 – 69 680 31.12.2002
Objekt Mainz – Pflegeheim KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 24 –1 31.12.2001
Objekt Mannheim-Neckarau, Rhenaniastraße KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 49 –1 31.12.2001
Objekt München, Bayerstraße KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 46 – 2 31.12.2002
Objekt Quartier McNair, Nahversorgungszentrum KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
51.0 51.0 – 266 –150 31.12.2002
Objekt Schweinfurt – Pflegeheim KG, Berlin 1) 51.0 51.0 – 54 – 45 31.12.2002
Okeanos Immobilien Verwaltungs GmbH, Nuremberg 1) Prometheus Immobilien Verwaltungs GmbH & Co.
100.0 100.0 81 22 31.12.2001
Objekt Par<strong>is</strong>-Ro<strong>is</strong>sy, Dorint-Hotel KG, Berlin 1) public consult Gesellschaft für die Beratung
51.0 51.0 50 n/a
der Öffentlichen Hand mbH, Berlin 1) REBA Beteiligungs GmbH & Co. Projektentwicklungs-
100.0 100.0 – 2,114 – 518 31.12.2002
und Verwaltungs KG, Berlin 1) 100.0 100.0 – 406 – 330 31.12.2001
REBA Beteiligungs- und Projektentwicklungs GmbH, Berlin 1) 100.0 100.0 – 38 31.12.2002

182
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
SenioRent GmbH, Berlin 1) SOMAG Soziale Wohnheimmanagement
100.0 100.0 25 31.12.2002
und Betreuungsgesellschaft mbH, Berlin 1) 100.0 100.0 760 118 31.12.2002
TCC Technologie-Coaching-Center GmbH, Berlin 1) , 6) 100.0 100.0 511 31.12.2002
Tempelhofer Feld Aktiengesellschaft für Grundstücksverwertung, Berlin 1) , 4) 98.9 98.9 5,064 31.12.2002
Thesaurus GmbH & Co. Achtundzwanzigste Immobilien KG, Berlin 1) 51.0 51.0 888 – 82 31.12.2002
Thesaurus GmbH & Co. Dreißigste Immobilien KG, Berlin 1) 51.0 51.0 – 59 – 42 31.12.2002
Thesaurus GmbH & Co. Einunddreißigste Immobilien KG, Berlin 1) 51.0 51.0 –168 –160 31.12.2001
Thesaurus GmbH & Co. Fünfunddreißigste Immobilien KG, Berlin 1) 51.0 51.0 –16 – 9 31.12.2002
Thesaurus GmbH & Co. Fünfundzwanzigste Immobilien KG, Berlin 1) 100.0 49.0 – 470 – 394 31.12.2002
Thesaurus GmbH & Co. Neunundzwanzigste Immobilien KG, Berlin 1) 51.0 51.0 – 46 – 70 31.12.2001
Thesaurus GmbH & Co. Sechsunddreißigste Immobilien KG, Berlin 1) 100.0 100.0 2,572 2,201 31.12.2002
Thesaurus GmbH & Co. Siebenundzwanzigste Immobilien KG, Berlin 1) 51.0 51.0 443 435 31.12.2002
Thesaurus GmbH & Co. Vierunddreißigste Immobilien KG, Berlin 1) 51.0 51.0 681 611 31.12.2002
Thesaurus I Immobilien Development GmbH, Berlin 1) 100.0 100.0 744 –12 31.12.2001
Thesaurus VI Vermögensverwaltungsgesellschaft mbH, Nuremberg 1) 100.0 100.0 21 1 31.12.2001
Thesaurus X Vermögensverwaltungsgesellschaft mbH, Nuremberg 1) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
100.0 100.0 13 – 6 31.12.2002
Objekt Alte Messe Leipzig Halle Elf KG, Berlin 1) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
100.0 100.0 40 – 6 31.12.2001
Objekt Alte Messe Leipzig Halle Zwölf KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
100.0 100.0 36 –13 31.12.2001
Objekt Berlin Adlershof KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
99.9 99.9 –1,076 – 248 31.12.2002
Objekt Kohlrabizirkus Leipzig Mitte KG, Berlin 1) 98.0 98.0 25 1 31.12.2001
Trans-Innova Kurze Straße 2 GbR, Berlin 1) Versicherungsservice GmbH
95.0 95.0 653 –1 31.12.2001
Unternehmensgruppe <strong>Bankgesellschaft</strong> Berlin, Berlin 2) 100.0 100.0 2,177 865 31.12.2002
VOVI-Beteiligungs AG, Berlin 9) 57.0 57.0 2,024 – 352 31.12.2002
Wilkendorf Bau- und Projektentwicklungsgesellschaft mbH, Gielsdorf 1) 100.0 100.0 34 34 31.12.2002
Wilkendorf Golf Betriebsgesellschaft mbH, Gielsdorf 1) 100.0 100.0 22 – 626 31.12.2002
Wohnbau Tafelgelände Beteiligungs GmbH, Nuremberg 1) 75.0 75.0 33 1 31.12.2001
Wohnbau Tafelgelände GmbH & Co. KG, Nuremberg 1) 75.0 75.0 – 831 – 5,503 31.12.2001
Wotan Vermögensverwaltungsgesellschaft mbH, Nuremberg 1) 100.0 100.0 950 253 31.12.2001
ZAS Zentrum Alter Schlachthof Berlin Verwaltungs-GmbH, Berlin 1) 100.0 100.0 27 1 31.12.2001

Associated companies
(section 311/section 312 of German Commercial Code) – valued –
183
APPENDIX 1
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
<strong>Bankgesellschaft</strong> Berlin INVESTMENT GmbH, Berlin 2) 50.0 50.0 13,328 2,667 31.12.2002
BB-ASSET MANAGEMENT Vermögensverwaltung GmbH, Berlin 50.0 50.0 1,285 507 31.12.2002
BerlinOnline Stadtportal GmbH & Co. KG, Berlin
Certa Immobilienverwaltung und Handelsgesellschaft mbH & Co.
45.0 45.0 12,581 – 4,424 31.12.2002
Liegenschaften oHG, Berlin 1) 62.5 50.0 – 34,019 – 2,051 31.12.2002
Associated companies
(section 311/section 312 of German Commercial Code) – not valued –
Apollon Immobilien Verwaltungsgesellschaft mbH, Berlin 1) Apollon Immobilien Verwaltungs GmbH & Co. KG
30.0 30.0 46 21 31.12.2002
– Vierter IBV-Immobilienfonds für Deutschland –, Berlin 1) 36.1 36.1 42,189 – 5,871 31.12.2002
BerlinOnline Stadtportalbeteiligungsgesellschaft mbH, Berlin 45.0 45.0 22 2 31.12.2002
BHS Berliner Hannoversche Software GmbH, Hanover 50.0 50.0 443 – 51 31.12.2001
CidS! Computer in die Schulen gemeinnützige Gesellschaft mbH, Berlin 50.0 50.0 525 –177 31.12.2002
ib-bank-systems GmbH, Potsdam 1) , 6) 50.0 50.0 502 2 31.12.2002
Thesaurus GmbH & Co. Sechste Immobilien KG, Berlin 1) Wirtschaftsförderung Berlin International GmbH
49.0 49.0 – 24 – 42 31.12.2001
(formerly Wirtschaftsförderung Berlin GmbH), Berlin 1) , 6) 37.5 37.5 375 –136 31.12.2002
Other companies – minimum holding of 20%
Ableton AG, Berlin 1) , 6) 20.8 20.8 –1,307 – 533 31.12.2002
Altavier Informationssysteme und Consulting GmbH, Berlin 1) , 6) ARGE Birkenstraße Schönwalde GmbH & Co. Entwicklungs-
30.0 30.0 – 746 – 411 31.12.2002
und Bauträger KG, Berlin 1) 49.0 49.0 324 14 31.12.2002
Athena GmbH & Co. Objekt Bietigheim-B<strong>is</strong>singen KG, Berlin 1) Athena Immobilien Verwaltungs GmbH & Co. KG
49.0 49.0 – 9 –1 31.12.2002
– Vierter IBV-Immobilienfonds International –, Berlin 1) Athena Immobilien Verwaltungs GmbH & Co. KG
49.0 49.0 – 3,036 – 270 31.12.2000
Beteiligungsgesellschaft UK Eins, Berlin 1) Athena Immobilien Verwaltungs GmbH & Co.
49.0 49.0 47 – 2 31.12.2000
Objekt Gießen, Flutgraben KG, Berlin 1) Athena Immobilien Verwaltungs GmbH & Co.
49.0 49.0 –1,454 – 652 31.12.2002
Objekt Lörrach, Baseler Straße KG, Berlin 1) 49.0 49.0 90 335 31.12.2002
Atos Origin Processing Services GmbH, Frankfurt am Main 2) 25.1 25.1 10,678 4,174 31.12.2002
ATTO-TEC GmbH, Siegen 1) Aufbau- und Dienstle<strong>is</strong>tungsgesellschaft mbH
30.0 30.0 – 206 – 739 31.12.2002
Objekt- und Baubetreuung Mecklenburg-Vorpommern, Stralsund 1) 50.0 50.0 – 618 – 654 31.12.2000
AVECS Corporation AG, Fichtenwalde 1) 31.2 31.2 3,577 312 31.12.2002
B + S Card Service GmbH, Frankfurt am Main 2) Bavaria Immobilien Management GmbH & Co. KG
25.1 25.1 8,254 1,174 31.12.2002
– Immobilienfonds Zwei –, Berlin 1) Bavaria Immobilien Management GmbH & Co.
47.0 47.0 233 158 31.12.2001
Objekt Basel, Dorint-Hotel KG, Berlin 1) 49.0 49.0 405 508 31.12.2002

184
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
Bavaria Immobilien Management GmbH & Co.
Objekt Berlin-Nikolassee Schopenhauerstraße 53/55 KG, Berlin 1) Bavaria Immobilien Management GmbH & Co.
49.0 49.0 29 –12 31.12.2001
Objekt Jahrhunderthalle, Frankfurt am Main KG, Berlin 1) Bavaria Immobilien Projektsteuerungs GmbH & Co.
50.0 50.0 48 31.12.2002
Objekt Berlin-Mitte Leipziger Straße KG, Berlin 1) 48.0 48.0 404 247 31.12.2001
BBB Bürgschaftsbank zu Berlin-Brandenburg GmbH, Berlin 2) 24.4 24.4 6,218 –1,435 31.12.2002
BB-Rentaco-Immobilien GmbH i. L., Berlin 1) 50.0 50.0 520 3 31.12.1999
Berlin Tour<strong>is</strong>mus Marketing GmbH, Berlin 1) , 6) 25.0 21.8 513 21 31.12.2002
Berliner Seilfabrik GmbH & Co., Berlin 1) 33.0 33.0 46 391 31.12.2002
Biogenes GmbH, Berlin 1) , 6) 20.0 20.0 –177 3 31.12.2002
BLEG Berliner Landesentwicklungsgesellschaft mbH i. L., Berlin 1) 49.0 49.0 5,408 5 31.12.2002
Borrmann Brenner Berlin GmbH, Berlin 1) 40.0 40.0 388 115 31.12.2002
Chiracon GmbH, Berlin 1) 35.1 35.1 391 – 278 31.12.2002
Cluster Labs GmbH, Berlin 1) , 6) 23.7 23.7 –11 – 319 31.12.2002
CML Wohnbauten GmbH, Berlin 1) 49.0 49.0 – 7,232 324 31.12.2002
comtas software consulting GmbH, Berlin 1) , 6) 30.0 30.0 – 429 15 31.12.2002
ConCom Beteiligungs- und Management GmbH & Co. KG, Berlin 1) 50.0 50.0 1,076 2 31.12.2001
Cupertino Property LLC, Wilmington, Delaware 1) 20.0 20.0 n/a n/a
DEFAS Beteiligungs GmbH & Co. Objekt Neukölln KG, Munich 1) 100.0 50.0 – 281 – 22
DEKAGRUND Grundstücksentwicklungs GmbH, Berlin 1) 45.0 45.0 – 6,724 – 34 31.12.2002
Dots Gesellschaft für Softwareentwicklung mbH, Berlin 1) , 6) 24.6 24.6 – 99 101 31.12.2002
EPIGAP Optoelektronik GmbH, Berlin 1) , 6) 29.2 29.2 –1,287 – 490 31.12.2002
fairform GmbH Objekt- und Messebau Fullservice, Berlin 1) 34.6 34.6 117 127 31.12.2002
FILMBOARD Berlin-Brandenburg GmbH, Potsdam 1) , 6) 50.0 50.0 60 31.12.2002
Friedrichsfelder Viertel Bauprojekt GmbH, Berlin 1) 47.6 47.6 260 169 31.12.2002
FURIS Verwaltung GmbH & Co. Vermietungs-KG, Pöcking 1) 94.0 50.0 – 52 –1,530 31.12.2002
Gaia GmbH & Co. Objekt „Altes Hallenbad Heidelberg“ KG, Berlin 1) 49.0 49.0 24 –1 31.12.2001
Gaia GmbH & Co. Objekt Chemnitz KG, Berlin 1) Gaia Immobilien Verwaltungs GmbH & Co. KG
49.0 49.0 653 583 31.12.2002
– Dritter IBV-Immobilienfonds International –, Berlin 1) Gaia Immobilien Verwaltungs GmbH & Co.
49.0 49.0 773 693 31.12.2002
Objekt Bautzener Gesundbrunnen KG, Berlin 1) 50.0 50.0 – 55 4 31.12.2000
Gartenstadt Stahnsdorf GmbH & Co. Projektentwicklungs KG, Berlin 1) 48.5 48.5 – 59,836 – 3,253 31.12.2002
Gartenstadt Stahnsdorf GmbH, Berlin 1) 49.0 49.0 4 –1 31.12.2002
GbR TOCOTAX
GEG Grundstücksentwicklungsgesellschaft
20.0 20.0 –130 31.12.2002
Wasserstadt Berlin-Oberhavel mbH, Berlin 1) 49.0 49.0 –181 – 35 31.12.2002
Gesellschaft bürgerlichen Rechts Möllendorffstraße/Parkaue, Berlin 1) 50.0 50.0 –1,834 – 286 31.12.2002
GeTeMed Gesellschaft für Techn<strong>is</strong>che Medizin mbH, Teltow 1) Graphikon Gesellschaft für Bildverarbeitung
32.0 32.0 1,598 –184 31.12.2002
und Computergrafik mbH, Berlin 1) , 6) 49.0 49.0 – 704 – 44 31.12.2002
Green Line Hotels GmbH, Berlin 1) 40.0 40.0 – 3 –16 31.12.2002

185
APPENDIX 1
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
Grundstücksgesellschaft Lunik-Berlin/Pankow, Berlin 1) 20.0 20.0 –1,420 – 9 31.12.2002
Gumes Verwaltung GmbH & Co. Objekt Rostock KG, Munich 1) 39.6 20.0 26
Heliocentr<strong>is</strong> Energiesysteme GmbH, Berlin 1) , 6) 37.1 37.1 – 3,074 – 832 31.12.2002
Hiper Ceramics GmbH, Eichstädt 1) 26.0 26.0 568 171 31.12.2002
HTM Reetz GmbH, Berlin 1) , 6) 30.0 30.0 – 52 34 31.12.2002
Immobilien Beratungs- und Anlagen GmbH, Potsdam 1) 49.2 49.0 416 208 31.12.2002
InnoConsult GmbH, Dresden 1) 45.0 45.0 416 – 40 31.12.2002
insel urlaub rügen Appartement-Vermietung GmbH, Binz 1) 50.0 50.0 – 279 55 31.12.2001
inUBIT AG, Berlin 1) , 6) 25.0 25.0 –1,746 – 826 31.12.2002
InvestitionsBank des Landes Brandenburg, Potsdam 1) 25.0 14.3 162,181 9,809 31.12.2002
jobs in time Holding AG, Hamburg 1) 39.4 39.4 595 – 999 30.06.2003
KARUS Beteiligungs GmbH & Co Grundbesitz KG, Munich 1) 33.0 33.0 26 1 31.12.2002
K<strong>is</strong>ta Galleria AB, Stockholm 1) , 18) 50.0 50.0 10
K<strong>is</strong>ta Galleria KB, Stockholm 1) , 18) 50.0 50.0 94,975 1
KMB Bauträger GmbH & Co. Franço<strong>is</strong>gärten KG, Hanau 1) 50.0 50.0 683 282 31.12.2001
KMB Bauträger GmbH, Hanau 1) Kommunalconsult Gesellschaft für die Beratung
50.0 50.0 26 –1 31.12.2001
der Öffentlichen Hand mbH, Berlin 1) , 7) 50.0 50.0 51 31.12.2001
L & S Straßen- und Tiefbau GmbH, Wustermark-Dyrok 1) LBB, Prajs & Drimmer Grundstücksgesellschaft
25.0 25.0 –14 40 31.12.2002
Hausvogteiplatz bürgerlichen Rechts, Berlin 1) 50.0 50.0 – 4,792 – 799 31.12.2002
Le<strong>is</strong>tungselektronik JENA GmbH, Jena 1) 30.0 30.0 203 274 31.12.2002
Linear Software & Systeme GmbH, Berlin 1) , 6) 29.9 29.9 – 866 – 209 31.12.2002
Marabu EDV-Beratung und -Service GmbH, Berlin 1) , 6) 25.0 25.0 – 610 – 62 31.12.2002
MIKOS Verwaltungs GmbH & Co. Vermietungs KG, Munich 95.0 56.0 25 3
MikroM Mikroelektronik für Multimedia GmbH, Berlin 1) 23.5 23.5 – 491 – 589 31.12.2002
New Europe Insurance Ventures Limited Partnership, Edinburgh 1) , 16) NORD EK Norddeutsche Einkaufskoordination der <strong>Bankgesellschaft</strong>
21.9 21.9 85 – 519 31.12.2002
Berlin AG und der Norddeutsche Landesbank Girozentrale GbR
Odysseus Immobilien Verwaltungs GmbH & Co. KG
0.0 50.0
– Immobilienfonds gamma –, Berlin 1) 48.0 48.0 24 31.12.2001
Okeanos GmbH & Co Objekt Dietzenbach KG, Berlin 1) 47.0 47.0 13 – 88 31.12.2001
Okeanos GmbH & Co. Objekt Kassel Erste Immobilien KG, Berlin 1) Okeanos Immobilien Verwaltungs GmbH & Co.
49.0 49.0 14 –12 31.12.2001
Objekt Fürth, „Am Kavierlein“ KG, Berlin 1) 26.0 26.0 – 86 – 33
OPIX AG, Berlin 1) , 6) 20.8 20.8 –186 –198
PACE Aerospace Engineering and Information Technology GmbH, Berlin 1) , 6) 21.0 21.0 495 312 31.12.2002
PEB Capital B.V., Utrecht 42.4 42.4 40,234 14,363 31.12.2002
Planungsbüro Schmitz-Aachen GmbH, Aachen 1) Pluton Immobilien Verwaltungs GmbH & Co. –
50.0 50.0 433 364 31.12.2001
Objekt Erlangen, Werner-von-Siemens-Straße KG, Berlin 1) Pluton Immobilien Verwaltungs GmbH & Co.
48.0 48.0 –1,110 140 31.12.2001
– Objekte Groß-Zimmern und Wiesbaden, Narz<strong>is</strong>senweg KG –, Berlin 1) 48.0 48.0 605 – 296 31.12.2001

186
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
Pluton Immobilien Verwaltungs GmbH & Co.
in u ’000 in u ’000 Dec. 31, 2003
Objekt Berlin-Prenzlauer Berg KG, Berlin 1) Pluton Immobilien Verwaltungs GmbH & Co.
48.0 48.0 – 612 – 536 31.12.2001
Objekt Fachmarktzentrum Schöneweide KG, Berlin 1) Pluton Immobilien Verwaltungs GmbH & Co.
49.0 49.0 34 – 36 31.12.2001
Objekte Fre<strong>is</strong>ing, Leipzig-Gohl<strong>is</strong> und Schönau KG, Berlin 1) 48.0 48.0 171 867 31.12.2001
Pro Alpha AG, Ka<strong>is</strong>erslautern 1) Projektgesellschaft Forum Neukölln GbR mit auf das
20.5 20.5 7,908 1,998 31.03.2003
Gesellschaftsvermögen beschränkter Haftung, Berlin 1) Prometheus Immobilien Verwaltungs GmbH & Co.
40.0 40.0 – 3,792 –1,593 31.12.2000
Objekt Berlin Landsberger Tor KG, Berlin 1) Prometheus Immobilien Verwaltungs GmbH & Co.
48.0 48.0 991 1,006 31.12.2001
Objekt Berlin Steglitz McNair KG, Berlin 1) Prometheus Immobilien Verwaltungs GmbH & Co.
49.0 49.0 – 24,160 – 7,854 31.12.2001
Objekt Cottbus, Töpferstraße 2 KG, Berlin 1) Prometheus Immobilien Verwaltungs GmbH & Co.
49.0 49.0 – 215 50 31.12.2002
Objekt Kassel-Wilhelmshöhe, Baunsbergstraße KG, Berlin 1) Prometheus Immobilien Verwaltungs GmbH & Co.
48.0 48.0 80 276 31.12.2001
Objekt Leonberg, Neue Ramtelstraße KG, Berlin 1) Prometheus Immobilien Verwaltungs GmbH & Co.
49.0 49.0 – 2,849 – 2,504 31.12.2001
Objekt Zweite Landsberger Tor KG, Berlin 1) 48.0 48.0 234 480 31.12.2001
ProSyst Software AG, Cologne 1) 27.7 27.7 656 –1,913 31.12.2002
Sarros GmbH, Berlin 1) 29.0 29.0 551 – 727 31.12.2002
SEPIAtec GmbH, Berlin 1) 37.5 37.5 – 598 –1,066 31.12.2002
SINTO Verwaltungs GmbH & Co. Vermietungs KG, Munich 100.0 58.8 26 1 31.12.2002
SOLARC Innovative Solarprodukte GmbH, Berlin 1) , 6) 20.0 20.0 –1,544 – 283 31.12.2002
Spree-Kliniken GmbH i. L., Berlin 1) 25.0 25.0 – 7 30.11.2003
Tanto Xipol<strong>is</strong> GmbH, Munich 1) 23.5 23.5 – 2,339 2,376
tecneos software + engineering GmbH, Berlin 1) , 6) 43.5 43.5 – 920 – 653 31.12.2002
Thesaurus GmbH & Co. Achtundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 26 – 33 31.12.2001
Thesaurus GmbH & Co. Achtundsechzigste Immobilien KG, Berlin 1) 49.0 49.0 47 – 3 31.12.2001
Thesaurus GmbH & Co. Achtundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 – 29 – 53 31.12.2001
Thesaurus GmbH & Co. Achtzehnte Immobilien KG, Berlin 1) 49.0 49.0 136 114 31.12.2001
Thesaurus GmbH & Co. Dreiundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 – 30 – 26 31.12.2002
Thesaurus GmbH & Co. Dreiundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 26 – 28 31.12.2001
Thesaurus GmbH & Co. Dreiundzwanzigste Immobilien KG, Berlin 1) 49.0 49.0 – 95 –115 31.12.2001
Thesaurus GmbH & Co. Einundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 – 30 – 26 31.12.2002
Thesaurus GmbH & Co. Einundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 50 31.12.2000
Thesaurus GmbH & Co. Einundzwanzigste Immobilien KG, Berlin 1) 49.0 49.0 – 30 – 30 31.12.2002
Thesaurus GmbH & Co. Elfte Immobilien KG, Berlin 1) 49.0 49.0 – 64 – 36 31.12.2002
Thesaurus GmbH & Co. Erste Immobilien KG, Berlin 1) 49.0 49.0 535 501 31.12.2001
Thesaurus GmbH & Co. Fünfundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 – 39 – 31 31.12.2002
Thesaurus GmbH & Co. Fünfundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 – 47 – 36 31.12.2002
Thesaurus GmbH & Co. Fünfzigste Immobilien KG, Berlin 1) 49.0 49.0 177 225 31.12.2002

187
APPENDIX 1
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
Thesaurus GmbH & Co. Neunundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 26 – 36 31.12.2001
Thesaurus GmbH & Co. Neunundsechzigste Immobilien KG, Berlin 1) 49.0 49.0 50 31.12.2000
Thesaurus GmbH & Co. Neunundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 183 135 31.12.2001
Thesaurus GmbH & Co. Neunzehnte Immobilien KG, Berlin 1) 49.0 49.0 – 317 – 313 31.12.2001
Thesaurus GmbH & Co. Sechsundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 26 – 64 31.12.2001
Thesaurus GmbH & Co. Sechsundsechzigste Immobilien KG, Berlin 1) 49.0 49.0 26 – 24 31.12.2001
Thesaurus GmbH & Co. Sechsundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 635 339 31.12.2002
Thesaurus GmbH & Co. Sechzehnte Immobilien KG, Berlin 1) 49.0 49.0 21 12 31.12.2000
Thesaurus GmbH & Co. Sechzigste Immobilien KG, Berlin 1) 49.0 49.0 50 31.12.2001
Thesaurus GmbH & Co. Siebenundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 – 40 – 32 31.12.2002
Thesaurus GmbH & Co. Siebenundsechzigste Immobilien KG, Berlin 1) 49.0 49.0 – 35 – 30 31.12.2002
Thesaurus GmbH & Co. Siebenundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 –124 – 248 31.12.2002
Thesaurus GmbH & Co. Siebte Immobilien KG, Berlin 1) 49.0 49.0 18 –14 31.12.2000
Thesaurus GmbH & Co. Siebzehnte Immobilien KG, Berlin 1) 49.0 49.0 52 59 31.12.2002
Thesaurus GmbH & Co. Siebzigste Immobilien KG, Berlin 1) 49.0 49.0 48 31.12.2002
Thesaurus GmbH & Co. Vierundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 – 39 – 31 31.12.2002
Thesaurus GmbH & Co. Vierundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 171 183 31.12.2002
Thesaurus GmbH & Co. Vierundzwanzigste Immobilien KG, Berlin 1) 49.0 49.0 – 203 –192 31.12.2002
Thesaurus GmbH & Co. Vierzigste Immobilien KG, Berlin 1) 49.0 49.0 6,510 4,075 31.12.2002
Thesaurus GmbH & Co. Zehnte Immobilien KG, Berlin 1) 49.0 49.0 – 40 26 31.12.2002
Thesaurus GmbH & Co. Zwanzigste Immobilien KG, Berlin 1) 49.0 49.0 –15 – 34 31.12.2001
Thesaurus GmbH & Co. Zweiundfünfzigste Immobilien KG, Berlin 1) 49.0 49.0 – 4 – 29 31.12.2001
Thesaurus GmbH & Co. Zweiundvierzigste Immobilien KG, Berlin 1) 49.0 49.0 – 32 – 28 31.12.2002
Thesaurus GmbH & Co. Zweiundzwanzigste Immobilien KG, Berlin 1) Theseus Immobilien Beteiligungs GmbH & Co.
49.0 49.0 – 74 – 35 31.12.2002
Objekt Röthenbach-Speckschlag KG, Berlin 1) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
49.0 49.0 23 31.12.2001
Objekt Barsinghausen KG, Berlin 1) Theseus Immobilien Management GmbH & Co. KG
48.0 48.0 – 290 – 228 31.12.2001
– Zweiter IBV-Immobilienfonds International –, Berlin 1) Theseus Immobilien Management GmbH & Co.
27.7 27.7 22,090 – 2,578 31.12.2000
KPM-Gelände Berlin Bauteil Drei KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
49.0 49.0 – 285 –159 31.12.2000
KPM-Gelände Berlin Bauteil Eins KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
49.0 49.0 – 213 –125 31.12.2000
KPM-Gelände Berlin Bauteil Fünf KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
49.0 49.0 –166 –103 31.12.2000
KPM-Gelände Berlin Bauteil Sechs KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
49.0 49.0 – 33 – 40 31.12.2000
KPM-Gelände Berlin Bauteil Sieben KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
49.0 49.0 –189 –114 31.12.2000
KPM-Gelände Berlin Bauteil Vier KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
49.0 49.0 – 206 –121 31.12.2000
KPM-Gelände Berlin Bauteil Zwei KG, Berlin 1) 49.0 49.0 –136 – 88 31.12.2000

188
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t of Investment Holdings
(Sections 285 no. 11, 313 Subsection 2, 340a Subsection 4 no. 2 of the German Commercial Code, including
Information Pursuant to Section 285 no. 11a of the German Commercial Code) Appendix 1 to the Notes
Company, reg<strong>is</strong>tered office Letter of Total % Voting Equity Result Date of annual
comfort Group rights financial
owned statement if not
in u ’000 in u ’000 Dec. 31, 2003
Theseus Immobilien Management GmbH & Co.
Objekt Du<strong>is</strong>burg-Hamborn KG, Berlin 1) Theseus Immobilien Management GmbH & Co.
48.0 48.0 181 177 31.12.2001
Objekt Zentrum Schöneweide KG, Berlin 1) Trigoba Immobilien Verwaltungs GmbH & Co.
48.0 48.0 46 21 31.12.2000
Objekt Rathauspassagen Berlin-Steglitz KG, Berlin 1) 49.5 49.5 – 427 – 208 31.12.2002
Trigoba Immobilien Verwaltungs GmbH, Berlin 1) Wasserstadt GmbH Treuhänder<strong>is</strong>cher Entwicklungsträger
48.0 48.0 20 – 4 31.12.2002
des Landes Berlin, Berlin 1) 49.5 49.5 201 8 31.12.2002
WEBA Beteiligungsgesellschaft mbH, Limburg 40.0 40.0 255 32 31.12.2000
WISUS Beteiligungs GmbH & Co. Zweite Vermietungs KG, Munich 1) 49.0 36.3 – 2,980 – 232
Wohnbau- und Planungsgesellschaft Mahlow mbH i. L., Mahlow 1) 45.0 45.0 – 5,390 –1,132 31.12.2001
Wohnpark Klosterhof GmbH, Cologne 1) 49.0 49.0 – 6,050 – 418 31.12.2002
xtradyne Technologies AG, Berlin 1) 25.0 25.0 –1,239 –1,213 31.12.2002
X-Verleih AG, Berlin 1) 20.0 20.0 2,485 –1 31.12.2002
Yozma III Management GmbH & Co. KG, Munich 1) , 16) 21.9 21.9 451 71 31.12.2002
Z & B Gesellschaft für angewandte Computertechnologie GmbH, Berlin 1) , 6) 40.0 40.0 – 249 10 31.12.2002
ZAS Zentrum Alter Schlachthof Berlin GmbH & Co. KG, Berlin 1) 49.0 49.0 140 – 62 31.12.2001
Zellwerk GmbH, Eichstädt 1) 24.5 24.5 283 – 43 31.12.2002
Holdings in major corporations
(section 285 no. 11, 4. subclause of German Commercial Code and
section 340a subsection 4 no. 2 of German Commercial Code)
FinanzIT GmbH (formerly dvg Hannover Datenverarbeitungsgesellschaft
mit beschränkter Haftung), Hanover 2) 15.0 15.0 12,245 – 6,777 31.12.2002
(P) <strong>Bankgesellschaft</strong> Berlin Aktiengesellschaft's letter of comfort applies to th<strong>is</strong> company
1) Held indirectly
2) Including stakes held indirectly
3) The company was founded in 2003
4) A profit and loss transfer agreement has been agreed with the company
5) Profit and loss transfer agreement ended December 31, 2003
6) Participation of Investitionsbank Berlin - Anstalt der Landesbank Berlin – Girozentrale –
7) In liquidation as of January 1, 2004
8) In liquidation as of January 7, 2004
9) In d<strong>is</strong>solution as of January 1, 2004
10) The letter of comfort ended March 28, 2003 (see Federal Official Gazette no. 61 dated March 28, 2003, p. 5756)
11) The letter of comfort ended March 20, 2004 (see Federal Official Gazette no. 56 dated March 20, 2004, p. 5468)
12) The bas<strong>is</strong> was the individual financial statements
13) Th<strong>is</strong> company was included in consolidated companies for the first time
14) In liquidation since March 1, 2004; trading under: <strong>Bankgesellschaft</strong> Berlin (Polska) S.A. i.L., Warsaw
ECB rates on December 31, 2003
14) 1 EUR = PLN 4.70190
15) 1 EUR = GBP 0.70480
16) 1 EUR = USD 1.26300
17) 1 EUR = RUB 36.87356
18) 1 EUR = SEK 9.08000

189
APPENDIX 1 / APPENDIX 2
L<strong>is</strong>t of Companies with Control and Profit and Loss Transfer
Agreements within the <strong>Bankgesellschaft</strong> Berlin Group
Appendix 2 to the Notes
Company Controlling company Profit before Date of annual
profit/loss financial
transfer statements if not
in u ’000 Dec. 31, 2003
ARWOBAU Immobilien- und Beteiligungs- ARWOBAU Apartment- und Wohnungsbaugesellschaft
gesellschaft mbH, Berlin mit beschränkter Haftung 2 31.12.2001
BAUTRAKO Bauträger- und Koordinierungsgesellschaft Bavaria Objekt- und Baubetreuung GmbH
mbH i. L., Lohfelden 52 31.12.2002
Bavaria Immobilienconsult und Baurev<strong>is</strong>ion GmbH i. L., Immobilien- und Baumanagement der
Berlin <strong>Bankgesellschaft</strong> Berlin GmbH – 30,179 31.12.2002
Bavaria Objekt- und Baubetreuung GmbH, Nuremberg IBAG Immobilien und Beteiligungen AG 13,421
BB-DATA Gesellschaft für Informations- und <strong>Bankgesellschaft</strong> Berlin AG
Kommunikationssysteme mbH, Berlin 4,565
BB-Grundstücksgesellschaft mit beschränkter Haftung, Berlin <strong>Bankgesellschaft</strong> Berlin AG – 4,278 31.12.2002
BB-Hausverwaltung GmbH, Berlin Grundstücksgesellschaft „Berlin“ mit beschränkter Haftung 8
BB Privat Immobilien GmbH, Berlin 1) , 2) <strong>Bankgesellschaft</strong> Berlin AG – 2,356 31.12.2002
BB-Immobilien-Service GmbH, Berlin <strong>Bankgesellschaft</strong> Berlin AG –1,489 31.12.2002
BB-Miete GmbH, Berlin BB-Leasing GmbH 2,008 31.12.2002
Berlin Hyp Immobilien GmbH, Berlin Berlin-Hannoversche Hypothekenbank Aktiengesellschaft – 7,103 31.12.2002
Berlin Hyp Projekt GmbH, Berlin Berlin-Hannoversche Hypothekenbank Aktiengesellschaft 28 31.12.2002
BILDUNGSAKADEMIE DER BANKGESELLSCHAFT <strong>Bankgesellschaft</strong> Berlin AG
Gesellschaft mit beschränkter Haftung, Berlin 1) – 1,865 31.12.2002
BUVI Besitz- und Verwaltungsgesellschaft für <strong>Bankgesellschaft</strong> Berlin AG
Immobilien mbH, Berlin – 5,251 31.12.2002
DirektBankService GmbH Unternehmensgruppe <strong>Bankgesellschaft</strong> Berlin AG
<strong>Bankgesellschaft</strong> Berlin, Berlin 31.12.2002
DSK Deutsche Stadt- und Grundstücksentwicklungs- IBAG Immobilien und Beteiligungen AG
gesellschaft mbH, Frankfurt am Main 18,830
Grundstücksgesellschaft „Berlin“ mit <strong>Bankgesellschaft</strong> Berlin AG
beschränkter Haftung, Berlin – 5,080
Grundstücksgesellschaft Forckenbeckstraße 63 mbH, Certa Immobilienverwaltung und
Berlin Handelsgesellschaft mbH & Co. Liegenschaften oHG – 55 31.12.2002
Grundstücksgesellschaft Schulstraße 56 mbH, Berlin Certa Immobilienverwaltung und
Handelsgesellschaft mbH & Co. Liegenschaften oHG – 237 31.12.2002
Grundstücksgesellschaft „URSUS“ mit
beschränkter Haftung, Frankfurt am Main
Grundstücksgesellschaft „Berlin“ mit beschränkter Haftung 5
GWL Wohnungsbetreuungsgesellschaft mbH, Lübeck Gesellschaft für Wohnungsbau Lübeck mbH – 90 31.12.2000
HaWe Verwaltungsgesellschaft mbH, Berlin Weberbank Privatbankiers KGaA –1,353
IBAG Immobilien und Beteiligungen AG, Berlin <strong>Bankgesellschaft</strong> Berlin AG – 89,185
IDLG Immobiliendienstle<strong>is</strong>tungen GmbH, Berlin Landesbank Berlin – Girozentrale – –1,401 31.12.2002
Immobilien Beteiligungs- und Vertriebsgesellschaft IBAG Immobilien und Beteiligungen AG
der IBAG-Gruppe mbH, Berlin 3,287
LBB Bauprojektgesellschaft mbH, Berlin Immobilien- und Baumanagement der
<strong>Bankgesellschaft</strong> Berlin GmbH – 630 31.12.2002
LBB Grundstücksentwicklungsgesellschaft mbH IBAG Immobilien und Beteiligungen AG
Bau- und Projektentwicklungen, Berlin – 2,390
LBB Grundstücks-Gesellschaft mbH der Landesbank Berlin – Girozentrale –
Landesbank Berlin – Girozentrale –, Berlin – 12,005 31.12.2002
LBB Kommunalbaugesellschaft mbH, Potsdam Landesbank Berlin – Girozentrale – 29
LBB Liegenschaften in Berlin GmbH, Berlin Certa Immobilienverwaltung und
Handelsgesellschaft mbH & Co. Liegenschaften oHG – 200 31.12.2002
Ld Leasing Babefi GmbH i. L., Berlin
(formerly: LdA LEASING GMBH DER ALLBANK i. L., Berlin) 3) Allgemeine Privatkundenbank Aktiengesellschaft 1 31.12.2002
Tempelhofer Feld Aktiengesellschaft Certa Immobilienverwaltung und
für Grundstücksverwertung, Berlin Handelsgesellschaft mbH & Co. Liegenschaften oHG 974 31.12.2002
1) Control and profit/loss transfer agreement ended on Dec. 31, 2003
2) Control agreement only
3) The profit/loss transfer agreement with Allgemeine Privatkundenbank AG ended on Dec. 31, 2003.
The new sole shareholder of Ld Leasing Babefi GmbH i. L. <strong>is</strong> Babefi-Holding GmbH.

190
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t Pursuant to Section 285 Number 10 of the German Commercial Code
as at the Balance Sheet date December 31, 2003 or the date of Departure
Appendix 3 to the Notes
a) Membership of Superv<strong>is</strong>ory Boards prescribed by law pursuant to section 100 of the German Stock Corporation Act
a)*Membership of Group companies pursuant to section 100 of the German Stock Corporation Act
b) Membership of comparable Superv<strong>is</strong>ory Bodies at domestic and foreign business enterpr<strong>is</strong>es
*Employee representative
Superv<strong>is</strong>ory Board
Dr. h.c. Klaus G. Adam
Chairman (since September 26, 2003)
(Member since September 9, 2003)
Chairman of the Board of Management at
Landesbank Rheinland-Pfalz, Mainz
a) Chairman of the Superv<strong>is</strong>ory Board at
– Bitburger Brauerei Th. Simon GmbH, Bitburg
Member of the Superv<strong>is</strong>ory Board at
– Deutscher Sparkassen Verlag GmbH,
Stuttgart
b) Chairman of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin
– Meridian Vermögensverwaltungsgesellschaft
mbH, Mainz
Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Deutsche Anlagen-Leasing GmbH, Mainz
Chairman of the Shareholders’ Committee at
– Bitburger Getränke Verwaltungsgesellschaft
mbH, Bitburg
Deputy Chairman of the Board of
Admin<strong>is</strong>tration at
– Landesbank Rheinland-Pfalz
International S. A., Luxembourg
Member of the Board of Admin<strong>is</strong>tration at
– DekaBank – Deutsche Girozentrale –,
Frankfurt am Main/Berlin
Ernst-Otto Sandvoß
Chairman (until September 4, 2003)
(Member of the Superv<strong>is</strong>ory Board until
September 4, 2003)
Former Chairman of the Management
Board at DekaBank Deutsche
Girozentrale, Frankfurt am Main
Helmut Tesch*
Deputy Chairman
Chairman of the Central Personnel
Committee and the Personnel Committee
at Landesbank Berlin – Girozentrale –,
Berlin
a) Deputy Chairman of the Superv<strong>is</strong>ory Board at
– DAWAG Deutsche Angestellten
Wohnungsbau AG, Hamburg
b) Member of the Superv<strong>is</strong>ory Board at
– DAG-TVG GmbH Treuhandverwaltung von
Gewerkschaftsvermögen, Hamburg
– Landesbank Berlin – Girozentrale –, Berlin
– ver.di GmbH, Berlin
Dr. h.c. Manfred Bodin
Chairman of the Board of Management at
Norddeutsche Landesbank Girozentrale,
Hanover
a) Chairman of the Superv<strong>is</strong>ory Board at
– MHB Mitteleuropä<strong>is</strong>che Handelsbank AG
Deutsch-Poln<strong>is</strong>che Bank, Frankfurt am Main
Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Berlin-Hannoversche Hypothekenbank AG,
Hanover/Berlin
Member of the Superv<strong>is</strong>ory Board at
– CeWe Color Holding AG, Oldenburg
– Continental AG, Hanover
b) Chairman of the Superv<strong>is</strong>ory Board at
– LBS Norddeutsche Landesbausparkasse
Berlin-Hannover, Hanover/Berlin
– LHI Leasing GmbH, Munich
Member of the Superv<strong>is</strong>ory Board at
– Bremer Landesbank Kreditanstalt
Oldenburg – Girozentrale –, Bremen
– Provinzial Lebensversicherung Hannover,
Hanover
Chairman of the Board of Admin<strong>is</strong>tration at
– Nord/LB Luxembourg S.A., Luxembourg
Deputy Chairman of the Board of
Admin<strong>is</strong>tration at
– DekaBank Deutsche Girozentrale,
Frankfurt am Main
Member of the Board of Admin<strong>is</strong>tration at
– Skandifinanz AG, Zürich
Dagmar Brose*
Deputy Chairwoman of the Works Council
at Betriebsrats der <strong>Bankgesellschaft</strong>
Berlin AG, Berlin
Thomas Dobkowitz
Management Consultant, Berlin
a) Chairman of the Superv<strong>is</strong>ory Board at
– ASDIS Software AG Enterpr<strong>is</strong>e Management
Solutions, Berlin
b) Member of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin
Dr. Michael Endres
Former member of the Board of Directors
at Deutsche Bank AG, Frankfurt am Main
Chairman of the Board of Directors at
Gemeinnützige Hertie-Stiftung,
Frankfurt am Main
a) Chairman of the Superv<strong>is</strong>ory Board at
– DEUTZ AG, Cologne
Member of the Superv<strong>is</strong>ory Board at
– ARCOR Verwaltungs-AG, Eschborn
– Heidelberger Druckmaschinen AG, Heidelberg

Claudia Fieber* (since September 1, 2003)
Member of the Adv<strong>is</strong>ory Council at the
Berliner Bank/Landesbank Berlin integration
group, Berlin
Hartmut Friedrich*
Deputy Regional Manager at ver.di
Berlin-Brandenburg region, Berlin
a) Member of the Superv<strong>is</strong>ory Board at
– Berliner Gaswerke (GASAG)-AG, Berlin
– Berlinwasser Holding AG, Berlin
Dr. Thomas Guth
Managing Director at Gesellschaft für
Industriebeteiligungen Dr. Schmidt AG &
Co., Berlin
a) Chairman of the Superv<strong>is</strong>ory Board at
– R-Biopharm AG, Darmstadt
Member of the Superv<strong>is</strong>ory Board at
– Berliner Kindl Brauerei AG, Berlin
a)*Chairman of the Superv<strong>is</strong>ory Board at
– Comline Computer + Softwarelösungen AG,
Hamburg
b) Chairman of the Adv<strong>is</strong>ory Council at
– Norddeutsche M<strong>is</strong>chwerke GmbH, Berlin
– Preusse Bauholding GmbH & Co. KG,
Hamburg
– Dr. Schmidt Biotech GmbH
Member of the Adv<strong>is</strong>ory Council at
– Piepenbrock Dienstle<strong>is</strong>tungsgruppe,
Osnabrück
Member of the Superv<strong>is</strong>ory Board at
– Wirtschaftsförderung Berlin International, Berlin
Carmen Hümpel*
(until August 31, 2003)
Chairwoman of the Central Works Council
at Allgemeine Privatkundenbank AG,
Hanover
a) Member of the Superv<strong>is</strong>ory Board at
– Allgemeine Privatkundenbank AG, Hanover
Dr. Klaus Murmann
Chairman at Sauer-Danfoss Inc.,
Ames, Iowa (Neumünster)
Lincolnshire, Illino<strong>is</strong>/Neumünster
a) Chairman of the Superv<strong>is</strong>ory Board at
– Sauer-Danfoss Inc., Lincolnshire,
Illino<strong>is</strong>/Neumünster
– PARION Finanzholding AG, Cologne
b) Chairman of the Superv<strong>is</strong>ory Board at
– PSVaG Pensions-Sicherungs-Verein, Cologne
– Gothaer Versicherungsbank VVaG, Cologne
Member of the Superv<strong>is</strong>ory Board at
– Maschinenbau-Konzern GKN plc., London
Member of the Board of Admin<strong>is</strong>tration at
– Gerling-Konzern Allgemeine Versicherungs-
Aktiengesellschaft, Cologne
Member of the Adv<strong>is</strong>ory Council at
– Accumulatorenwerk Hoppecke Carl Zoellner
GmbH & Co. KG, Brilon
– Institut der Deutschen Wirtschaft, Cologne
191
APPENDIX 3
Bernd Reinhard*
Chairman of the Adv<strong>is</strong>ory Council at
the Berliner Bank/Landesbank Berlin
integration group, Berlin
Andreas Rohde*
Member of the Works Council at
<strong>Bankgesellschaft</strong> Berlin AG, Berlin
Dr. Thilo Sarrazin
Finance Senator, Berlin
a) Member of the Superv<strong>is</strong>ory Board at
– Berlinwasser Holding AG, Berlin
– Vivantes – Netzwerk für Gesundheit GmbH,
Berlin
b) Chairman of the Superv<strong>is</strong>ory Board at
– Berliner Verkehrsbetriebe (BVG), Berlin
– BCIA Berliner Gesellschaft zum Controlling
der Immobilien-Altr<strong>is</strong>iken mbH, Berlin
– BIM Berliner Immobilien Management GmbH,
Berlin
Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin
Member of the Superv<strong>is</strong>ory Board at
– LPFV Finanzbeteiligungs- und
Verwaltungs GmbH, Berlin
Member of the Board of Admin<strong>is</strong>tration at
– Feuersozietät Berlin-Brandenburg, Berlin
– Öffentliche Lebensversicherung
Berlin-Brandenburg, Berlin
Hans-Chr<strong>is</strong>tian Seidel*
Bank Manager at Landesbank Berlin
– Girozentrale –, Berlin

192
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
L<strong>is</strong>t Pursuant to Section 285 Number 10 of the German Commercial Code
as at the Balance Sheet date December 31, 2003 or the date of Departure
Appendix 3 to the Notes
a) Membership of Superv<strong>is</strong>ory Boards prescribed by law pursuant to section 100 of the German Stock Corporation Act
a)*Membership of Group companies pursuant to section 100 of the German Stock Corporation Act
b) Membership of comparable Superv<strong>is</strong>ory Bodies at domestic and foreign business enterpr<strong>is</strong>es
*Employee representative
Dr. Heinz-Gerd Stein
Former member of the Executive Board
at ThyssenKrupp AG, Düsseldorf
a) Member of the Superv<strong>is</strong>ory Board at
– AXA Versicherung AG, Cologne
– Dürr AG, Stuttgart
– Howaldtswerke-Deutsche Werft AG, Kiel
– WILO AG, Dortmund
b) Member of the Superv<strong>is</strong>ory Board at
– Evangel<strong>is</strong>ches und Johanniter Klinikum
Du<strong>is</strong>burg/Dinslaken/Oberhausen gem.
GmbH, Du<strong>is</strong>burg
– Institut für Management und Technologie IMT
Berlin GmbH, Berlin
– Thumann & Heitkamp Verwaltungs-GmbH,
Düsseldorf
– Landesbank Berlin – Girozentrale –, Berlin
Member of the Board of Directors at
– ThyssenKrupp Budd Company,
Troy/Michigan, USA
– ThyssenKrupp Elevator Holding Corp.,
Dover/Delaware, USA
– INTAC International Inc., Dallas, USA
Chairman of the Adv<strong>is</strong>ory Council at
– Kunststoffwerk Philippine GmbH & Co. KG,
Lahnstein am Rhein
– Saarpor Klaus Eckhardt GmbH Neunkirchen
Kunststoffe KG, Neunkirchen/Saar
Member of the Adv<strong>is</strong>ory Council at
– Hülskens Holding GmbH & Co., Wesel
Peter Strieder
(until March 27, 2003)
Senator for Urban Development, Berlin
b) Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin
Member of the Superv<strong>is</strong>ory Board at
– BBB Management GmbH
Campus Berlin-Buch, Berlin
– BEWAG Aktiengesellschaft & Co. KG, Berlin
– Technologiestiftung Berlin, Berlin
– W<strong>is</strong>ta-Management GmbH, Berlin
Joachim Tonndorf*
Head of Department, Financial
Services at ver.di Berlin-Brandenburg
region, Berlin
a) Member of the Superv<strong>is</strong>ory Board at
– Deutsche Beamten-Versicherung AG,
Wiesbaden
Frank Wolf*
Financial Services Secretary at ver.di
Berlin-Brandenburg region, Berlin
b) Member of the Superv<strong>is</strong>ory Board at
– Berliner Volksbank eG, Berlin
Harald Wolf
(since July 8, 2003)
Senator for Economic Affairs,
Employment and Women, Berlin
a) Member of the Superv<strong>is</strong>ory Board at
– Berlinwasser Holding AG, Berlin
b) Chairman of the Superv<strong>is</strong>ory Board at
– BEHALA Berliner Hafen- und
Lagerhausbetriebe, Berlin
– Berliner Stadtreinigungsbetriebe, Berlin
– Berliner Wasserbetriebe, Berlin
– Wirtschaftsförderung Berlin international
GmbH, Berlin
Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin
Member of the Superv<strong>is</strong>ory Board at
– The New German Länder Industrial
Investment Council GmbH, Berlin
– Messe Berlin GmbH, Berlin
– TSB Technologiestiftung Innovationsagentur
Berlin GmbH, Berlin
Chairman of the Board of Admin<strong>is</strong>tration at
– Feuersozietät Berlin-Brandenburg, Berlin
– Öffentliche Lebensversicherung
Berlin-Brandenburg, Berlin
Member of the Board of Trustees at
– TSB Technologiestiftung Innovationszentrum
Berlin, Berlin
– Fachhochschule für Technik und Wirtschaft
Berlin, Berlin
– Fachhochschule für Wirtschaft, Berlin
– Universität der Künste, Berlin
Substitute member of the Adv<strong>is</strong>ory Council at
– Regulierungsbehörde für Telekommunikation
und Post, Bonn
Bernd Wrede
Former Chairman of the Executive Board
at Hapag-Lloyd AG, Hamburg
a) Member of the Superv<strong>is</strong>ory Board at
– ERGO Versicherungsgruppe AG, Düsseldorf
– Weberbank Privatbankiers KGaA, Berlin
b) Member of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin
Vice President of the Board of Admin<strong>is</strong>tration at
– Kühne & Nagel International AG, Schindellegi,
Switzerland
Bärbel Wulff*
Deputy Chairwoman of the Central
Personnel Committee and the Personnel
Committee at Landesbank Berlin
– Girozentrale –, Berlin
b) Member of the Superv<strong>is</strong>ory Board at
– Landesbank Berlin – Girozentrale –, Berlin

Hans-Jörg Vetter
Chairman of the Board of Management
Chairman of the Board of Management at
Landesbank Berlin – Girozentrale –, Berlin
a) Member of the Superv<strong>is</strong>ory Board at
– Interseroh AG, Cologne •
a)*Chairman of the Superv<strong>is</strong>ory Board at
– Berlin-Hannoversche Hypothekenbank AG,
Berlin/Hanover •
– IBAG Immobilien und Beteiligungen AG,
Berlin •
b) Chairman of the Superv<strong>is</strong>ory Board at
– LPFV Finanzbeteiligungs- und Verwaltungs
GmbH, Berlin
Member of the Superv<strong>is</strong>ory Board at
– LHI Leasing GmbH, Munich 1)
Member of the Board of Admin<strong>is</strong>tration at
– DekaBank Deutsche Girozentrale,
Frankfurt am Main
Serge Demolière
Chairman of the Board of Directors
(executive member) at <strong>Bankgesellschaft</strong>
Berlin (UK) plc., London (until July 25, 2003)
a) Chairman of the Superv<strong>is</strong>ory Board at
– Berliner Börse AG, Berlin •
– <strong>Bankgesellschaft</strong> Berlin INVESTMENT GmbH,
Berlin
Member of the Superv<strong>is</strong>ory Board at
– Nasdaq Deutschland AG, Bremen
– RTS Realtime Systems AG, Frankfurt am Main
a)*Member of the Superv<strong>is</strong>ory Board at
– IBAG Immobilien und Beteiligungen AG,
Berlin •
b) Member of the Superv<strong>is</strong>ory Board at
– France Growth Fund, Inc., New York
Mitglied des Board of Directors
(non-executive) at
– <strong>Bankgesellschaft</strong> Berlin (Ireland) plc., Dublin
– BGB Finance (Ireland) plc., Dublin
Chairman of the Board of Admin<strong>is</strong>tration at
– <strong>Bankgesellschaft</strong> Berlin International S.A.,
Luxembourg
Dr. Johannes Evers
Member of the Board of Management
(until November 30, 2003)
Member of the Board of Management at
Landesbank Berlin – Girozentrale –, Berlin
a)* Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Weberbank Privatbankiers KGaA, Berlin • 2)
Member of the Superv<strong>is</strong>ory Board at
– IBAG Immobilien und Beteiligungen AG,
Berlin •
193
APPENDIX 3
Board Membership According to Section 285 Number 10 of the
German Commercial Code and Section 340a Subsection 4 Number 1
of the German Commercial Code
as at the Balance Sheet date December 31, 2003 or the date of Departure
Appendix 3 to the Notes
a) Membership of Superv<strong>is</strong>ory Boards prescribed by law pursuant to section 100 of the German Stock Corporation Act
a)*Membership of Group companies pursuant to section 100 of the German Stock Corporation Act
• also mandates held in major corporations that must be declared pursuant to section 340a subsection 4 number 1 of the German Commercial Code
b) Membership of comparable Superv<strong>is</strong>ory Bodies at domestic and foreign business enterpr<strong>is</strong>es
Board of Management
1) Mandate resigned on December 31, 2003
2) Mandate for <strong>Bankgesellschaft</strong> ends with departure from the Board of Management at <strong>Bankgesellschaft</strong> Berlin AG
3) Mandate resigned with departure from <strong>Bankgesellschaft</strong> Berlin AG
b) Chairman of the Superv<strong>is</strong>ory Board at
– <strong>Bankgesellschaft</strong> Berlin (Polska) S.A.,
Warsaw
– Cids! Computer in die Schulen gemeinnützige
Gesellschaft mbH, Berlin
Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Atos Origin Processing Services GmbH,
Frankfurt am Main
Member of the Superv<strong>is</strong>ory Board at
– B + S Card Service GmbH, Frankfurt am Main
– LBS Norddeutsche Landesbausparkasse
Berlin – Hannover, Berlin/Hanover
Member of the Board of Directors
(non-executive) at
– V<strong>is</strong>a EU, London
– V<strong>is</strong>a International Service Association,
San Franc<strong>is</strong>co
Uwe Wilhelm Kruschinski
Member of the Board of Management at
Landesbank Berlin – Girozentrale –, Berlin
(since March 10, 2003)
a) Member of the Superv<strong>is</strong>ory Board at
– FWU AG, Munich
a)*Member of the Superv<strong>is</strong>ory Board at
– IBAG Immobilien und Beteiligungen AG,
Berlin •
b) Deputy Chairman of the Superv<strong>is</strong>ory Board at
– <strong>Bankgesellschaft</strong> Berlin (Polska) S.A.,
Warsaw
Member of the Superv<strong>is</strong>ory Board at
– LHI Leasing GmbH, Munich 1)
– Zivnostenská banka a.s., Prague

194
MANAGEMENT BUSINESS AREAS SHARE MANAGEMENT REPORT FINANCIAL STATEMENTS
Board Membership According to Section 285 Number 10 of the
German Commercial Code and Section 340a Subsection 4 Number 1
of the German Commercial Code
as at the Balance Sheet date December 31, 2003 or the date of Departure
Appendix 3 to the Notes
a) Membership of Superv<strong>is</strong>ory Boards prescribed by law pursuant to section 100 of the German Stock Corporation Act
a)*Membership of Group companies pursuant to section 100 of the German Stock Corporation Act
• also mandates held in major corporations that must be declared pursuant to section 340a subsection 4 number 1 of the German Commercial Code
b) Membership of comparable Superv<strong>is</strong>ory Bodies at domestic and foreign business enterpr<strong>is</strong>es
Norbert Pawlowski
Member of the Board of Management at
Landesbank Berlin – Girozentrale –, Berlin
Member of the Board of Directors
(executive member) at <strong>Bankgesellschaft</strong>
Berlin (UK) plc., London (until July 25, 2003)
a) Member of the Superv<strong>is</strong>ory Board at
– <strong>Bankgesellschaft</strong> Berlin INVESTMENT GmbH,
Berlin
– Deutscher Sparkassenverlag GmbH,
Stuttgart •
a)*Chairman of the Superv<strong>is</strong>ory Board at
– BankenService GmbH Unternehmensgruppe
Landesbank Berlin, Berlin •
– Weberbank Privatbankiers KGaA, Berlin •
Deputy Chairman of the Superv<strong>is</strong>ory Board at
– IBAG Immobilien und Beteiligungen AG,
Berlin •
Member of the Superv<strong>is</strong>ory Board at
– Berlin-Hannoversche Hypothekenbank AG,
Berlin/Hanover •
b) Member of the Superv<strong>is</strong>ory Board at
– Berliner Stadtreinigungsbetriebe (BSR), Berlin
– Berliner Wasserbetriebe (BWB), Berlin
– LPFV Finanzbeteiligungs- und Verwaltungs
GmbH, Berlin
Member of the Board of Directors
(non-executive) at
– <strong>Bankgesellschaft</strong> Berlin (Ireland) plc., Dublin
Member of the Board of Admin<strong>is</strong>tration at
– <strong>Bankgesellschaft</strong> Berlin International S.A.,
Luxembourg
Hubert Piel
Member of the Board of Management
(until March 31, 2003)
Member of the Board of Management at
Landesbank Berlin – Girozentrale –, Berlin
(until March 31, 2003)
a)*Deputy Chairman of the Superv<strong>is</strong>ory Board at
– Allgemeine Privatkundenbank
Aktiengesellschaft, Hanover •
(until April 29, 2003)
b) Deputy Chairman of the Superv<strong>is</strong>ory Board at
– <strong>Bankgesellschaft</strong> Berlin (Polska) S.A.,
Warsaw 3)
Member of the Superv<strong>is</strong>ory Board at
– Atos Origin Processing Services GmbH,
Frankfurt am Main 3)
Dr. Thomas Veit
a) Member of the Superv<strong>is</strong>ory Board at
– FinanzIT GmbH, Hanover •
a)*Member of the Superv<strong>is</strong>ory Board at
– Berlin-Hannoversche Hypothekenbank AG,
Berlin/Hanover •
b) Member of the Superv<strong>is</strong>ory Board at
– Atos Origin Processing Services GmbH,
Frankfurt am Main
1) Mandate resigned on December 31, 2003
2) Mandate for <strong>Bankgesellschaft</strong> ends with departure from the Board of Management at <strong>Bankgesellschaft</strong> Berlin AG
3) Mandate resigned with departure from <strong>Bankgesellschaft</strong> Berlin AG

L<strong>is</strong>t Pursuant to Section 340a Subsection 4 no. 1
of the German Commercial Code
as at the Balance Sheet date December 31, 2003, Appendix 4 to the Notes
Mandates held by Employees in Superv<strong>is</strong>ory Bodies Prescribed by Law
Dariush Ghassemi-Moghadam
Member of the Superv<strong>is</strong>ory Board at
– Berlin-Hannoversche Hypothekenbank AG,
Berlin/Hanover
Member of the Superv<strong>is</strong>ory Board at
– LPFV Finanzbeteiligungs- und Verwaltungs
GmbH, Berlin
Dr. Karl-Friedrich Hirschhäuser
Member of the Superv<strong>is</strong>ory Board at
– Bankenservice GmbH, Berlin
Martin Müller
Member of the Superv<strong>is</strong>ory Board at
– BGB Finance, Dublin
Gerhard Roller
Member of the Board of Management
(appointed by the Superv<strong>is</strong>ory Board,
Superv<strong>is</strong>ory Board mandate suspended
until further notice) at
– <strong>Bankgesellschaft</strong> Berlin (Polska), S.A.,
Warsaw
Bartho Schröder
Member of the Superv<strong>is</strong>ory Board at
– Bankenservice GmbH, Berlin
Stefan Trägler
Member of the Superv<strong>is</strong>ory Board at
– Bankenservice GmbH, Berlin
195
APPENDIX 3 / APPENDIX 4

196
Group and AG Audit Certificates
1. <strong>Bankgesellschaft</strong> Berlin Group
We audited the consolidated financial statements with the notes to the financial statements incorporated in the
notes to the consolidated financial statements, and the Group Management Report of <strong>Bankgesellschaft</strong> Berlin
Aktiengesellschaft, Berlin, which <strong>is</strong> incorporated in the Management Report, for the financial year from January 1
to December 31, 2003. The preparation of the consolidated financial statements and the Group Management
Report in accordance with German Commercial Code regulations and the supplementary statutory rules <strong>is</strong> the
responsibility of the Board of Management at <strong>Bankgesellschaft</strong> Berlin Aktiengesellschaft, Berlin. Our responsibility
<strong>is</strong> to express an opinion on the consolidated financial statements and the combined Management Report
on the bas<strong>is</strong> of our audit.
We performed our audit of the consolidated financial statements pursuant to section 317 of the German
Commercial Code in accordance with German generally accepted standards for the audit of financial statements
as formulated by the German Institute of Chartered Accountants (IDW). According to these principles,
an audit must be planned and carried out in such a way as to sufficiently reveal any incorrect statements or
infringements that could have a significant impact on the picture of the net-asset, financial and income position
presented by the consolidated financial statements in line with the principles of proper and orderly accounting
and by the combined Management Report. Knowledge of the Group’s business activity and its economic and
legal environment, as well as expectations of possible errors, are taken into consideration when deciding upon
the individual actions to be carried out during the audit. During the audit, we examine, for the most part by
spot checks, the effectiveness of the internal monitoring system and the evidence provided to support the
information in the consolidated financial statements and the Group Management Report. The audit involves
assessing the annual financial statements of the companies included in the consolidated financial statements,
the definition of the consolidated companies, the accounting and consolidated methods used and significant
estimates made by the Board of Management, and critically examining the overall picture presented by the
consolidated financial statements and the combined Management Report. We believe that our audit provides
a reasonable bas<strong>is</strong> for our assessment.
Our audit did not result in any objections or exceptions.
It <strong>is</strong> our opinion that, from the point of view of generally accepted accounting principles, the consolidated
financial statements represent a true and fair assessment of the net-asset, financial and income position of the
Group. The combined Management Report presents an accurate overall picture of the Group’s situation and
accurately describes the r<strong>is</strong>ks to future development.
Berlin, April 2, 2004
PwC Deutsche Rev<strong>is</strong>ion
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Borgel ppa. Berninger
Auditor Auditor

2. <strong>Bankgesellschaft</strong> Berlin AG
197
GROUP AND AG AUDIT CERTIFICATES
We audited the annual financial statements, including the accounting records with the notes to the financial
statements incorporated in the notes to the consolidated financial statements, and the Management Report of
<strong>Bankgesellschaft</strong> Berlin Aktiengesellschaft, Berlin, which <strong>is</strong> incorporated in the Group Management Report,
for the financial year from January 1 to December 31, 2003. The accounting and the preparation of the annual
financial statements and the Management Report in accordance with German Commercial Code regulations
and the supplementary statutory rules are the responsibility of the Board of Management at <strong>Bankgesellschaft</strong>
Berlin Aktiengesellschaft, Berlin. Our responsibility <strong>is</strong> to express an opinion on the annual financial statements,
including the accounting records and the combined Management Report, on the bas<strong>is</strong> of our audit.
We performed our audit of the annual financial statements pursuant to section 317 of the German
Commercial Code in accordance with German generally accepted standards for the audit of financial statements
as formulated by the German Institute of Chartered Accountants (IDW). According to these principles, an audit
must be planned and carried out in such a way as to sufficiently reveal any incorrect statements or infringements
that could have a significant impact on the picture of the net-asset, financial and income position
presented by the annual financial statements in line with the principles of proper and orderly accounting and
by the combined Management Report. Knowledge of the company’s business activity and its economic and
legal environment, as well as expectations of possible errors, are taken into consideration when deciding upon
the individual actions to be carried out during the audit. During the audit, we examine, for the most part by
spot checks, the effectiveness of the internal monitoring system and the evidence provided to support the
information in the accounting records, annual financial statements and the Management Report. The audit
involves assessing the accounting methods used and significant estimates made by the Board of Management,
and critically examining the overall picture presented by the annual financial statements and the combined
Management Report. We believe that our audit provides a reasonable bas<strong>is</strong> for our assessment.
Our audit did not result in any objections or exceptions.
It <strong>is</strong> our opinion that, from the point of view of generally accepted accounting principles, the annual financial
statements represent a true and fair assessment of the net-asset, financial and income position of the company.
The combined Management Report presents an accurate overall picture of the company’s situation and
accurately describes the r<strong>is</strong>ks to future development.
Berlin, April 2, 2004
PwC Deutsche Rev<strong>is</strong>ion
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Borgel ppa. Berninger
Auditor Auditor

198
Group Banks and Selected Group Participations
Banks
<strong>Bankgesellschaft</strong> Berlin
International S.A.
30, Boulevard Royal
L-2449 Luxembourg
Luxembourg
Tel.: (+352) 47 78-1
Fax: (+352) 47 78-2999
Internet: www.bankgesellschaft.lu
Management
Horst-Dieter Hochstetter
(Spokesperson and Admin<strong>is</strong>trateur-Délégué)
Uwe Jungerwirth
BANKGESELLSCHAFT BERLIN
INVESTMENT GmbH
Kurfürstendamm 201
10719 Berlin
Tel.: (+49 30) 2 45-6 45 00
Fax: (+49 30) 2 45-6 46 50
Internet: www.bb-invest.de
Management
Dyrk Vieten
Hans-Werner Wilms
<strong>Bankgesellschaft</strong> Berlin (Ireland) plc
No. 5 George’s Dock
I.F.S.C. Dublin 1
Ireland
Tel.: (+353-1) 819 4400
Fax: (+353-1) 819 4499
Board of Directors
David Allen
Serge Demolière
Heinz D. Gottschalk
Norbert Pawlowski
Dr. Noel Whelan
Berlin-Hannoversche
Hypothekenbank AG – Berlin Hyp –
Budapester Straße 1
10787 Berlin
Tel.: (+49 30) 25 999-0
Fax: (+49 30) 25 999 131
Landschaftstr. 8
30159 Hanover
Tel.: (+49 5 11) 30 11-0
Fax: (+49 5 11) 30 11-384
Internet: www.BerlinHyp.de
Board of Management
Jan Bettink
(Spokesperson)
Horst von Behren
(until March 31, 2004)
Heinz Dieter Gottschalk
Erich Wilke
Landesbank Berlin – Girozentrale –
Bundesallee 171
10715 Berlin
Tel.: (+49 30) 86 98 01
Fax: (+49 30) 86 98 30 74
Internet: www.berliner-sparkasse.de
Board of Management
Hans-Jörg Vetter
(Chairman)
Dr. Johannes Evers
Uwe Kruschinski
Hans Jürgen Kulartz
Norbert Pawlowski
(until June 30, 2004)
Prof. Dr. Dieter Puchta
Weberbank Privatbankiers KGaA
Hohenzollerndamm 134
14199 Berlin
Tel.: (+49 30) 8 97 98-0
Fax: (+49 30) 8 97 98-900
Internet: www.weberbank.de
Personally liable partners
Dr. Chr<strong>is</strong>tian Grün
(Spokesperson)
Dr. Andreas Bödecker
Michael Graf Strasoldo

Financial Service Providers
BB-ASSET MANAGEMENT
Vermögensverwaltung GmbH
Kurfürstendamm 201
10719 Berlin
Tel.: (+49 30) 2 45-6 45 00
Fax: (+49 30) 2 45-6 46 50
Management
Dyrk Vieten
Hans-Werner Wilms
Finance Companies
Berlin Capital Fund GmbH
Hauptstraße 65
12159 Berlin
Tel.: (+49 30) 859 54 30
Fax: (+49 30) 859 54 320
Internet: www.berlin-capitalfund.de
Management
Eberhard Langner
Dr. Chr<strong>is</strong>tian Segal
BGB Finance (Ireland) plc
No. 5 George’s Dock
I.F.S.C. Dublin 1
Ireland
Tel.: (+353-1) 819 44 00
Fax: (+353-1) 819 44 99
Board of Directors
David Allen
Serge Demolière
Martin Müller
Carlos Sant<strong>is</strong>tevan
Other Companies
199
GROUP BANKS AND SELECTED GROUP PARTICIPATIONS
BankenService GmbH
Unternehmensgruppe Landesbank
Berlin
Brunnenstraße 111
13355 Berlin
Tel.: (+49 30) 245 5 38 82
Fax: (+49 30) 245 5 46 70
Management
Stefan Haemmerling
BerlinOnline Stadtportal GmbH & Co. KG
Karl-Liebknecht-Str. 29
10178 Berlin
Tel.: (+49 1805) 80 77 37
Fax: (+49 1805) 00 28 97
Internet: www.berlinonline.de
Management
As Managing Director of BerlinOnline
Stadtportalbeteiligungsgesellschaft mbH:
Dr. Robert Daubner
IBAG Immobilien und Beteiligungen AG
Kurfürstendamm 207/208
10719 Berlin
Tel.: (+49 30) 224 99-0
Fax: (+49 30) 224 99-630
Internet: www.ibag.de
Board of Management
Reinhardt Gennies
(Chairman)
Klaus Hansen
Wolfgang Pritzsche
Immobilien- und Baumanagement
der <strong>Bankgesellschaft</strong> Berlin GmbH
Berliner Straße 44
10713 Berlin
Tel.: (+49 30) 864 720-0
Fax: (+49 30) 873 438-8
Internet: www.ibg.de
Management
Dr. Matthias von B<strong>is</strong>marck-Osten
Versicherungsservice GmbH
Unternehmensgruppe
<strong>Bankgesellschaft</strong> Berlin
Wexstr. 1
10825 Berlin
Tel.: (+49 30) 3 10-9 32 75
Fax: (+49 30) 3 10-9 33 88
Management
Dirk Bachnick
Detlef Bienkowski

200
Ownership Structure of <strong>Bankgesellschaft</strong> Berlin
State of Berlin NORD/LB
Allocation of Responsibilities on the Board of Management
of <strong>Bankgesellschaft</strong> Berlin and Landesbank Berlin
Hans-Jörg Vetter
(Chairman) BGB und LBB
Corporate Development
Personnel
Legal
Audit
Real Estate Services
Serge Demolière
BGB
Capital Markets
Dr. Johannes Evers
LBB
Retail Banking
Gothaer
Finanzholding AG
Uwe Kruschinski
BGB and LBB
Lending
R<strong>is</strong>k Management
Hans Jürgen Kulartz
LBB
Regional Corporate Banking
Norbert Pawlowski
BGB and LBB
Controlling
Loan Office
R<strong>is</strong>k Controlling
Compliance
Free float
81% 11% 2% 6%
Landesbank Berlin
Berliner Sparkasse Berliner Bank
89.9%
Berlin Hyp
Prof. Dr. Dieter Puchta
LBB
Investitionsbank Berlin
Dr. Thomas Veit
BGB
Finance
Real Estate Financing
Organ<strong>is</strong>ation
Information Technology

Banks and Finance Companies
Real Estate
Other Services
Berliner Sparkasse 1)
Investitionsbank des
Landes Brandenburg AöR,
Potsdam
Weberbank
Privatbankiers KGaA
LBS Norddeutsche
Landesbausparkasse
Berlin-Hannover AöR
IDLG Immobiliendienstle<strong>is</strong>tungen
GmbH
LBB Grundstücks-
Gesellschaft mbH
der Landesbank Berlin
– Girozentrale –
BankenService GmbH
Landesbank Berlin
Corporate Group
atypical dormant
holding
Berliner Bank 2)
25,0% 25,0%
95,0%
12,0 %
Investitionsbank
Berlin 3)
60,0%
33,3%
10,0%
10,0%
25,0%
40,0%
66,7%
15,1%
30,0%
Immobilien- und
Baumanagement der
<strong>Bankgesellschaft</strong> Berlin GmbH
40,0%
5,0%
52,4%
Th<strong>is</strong> chart shows the key holdings within the <strong>Bankgesellschaft</strong> Berlin Group.
Unless otherw<strong>is</strong>e stated, holdings are 100% and company head offices are in Berlin.
<strong>Bankgesellschaft</strong>
Berlin INVESTMENT GmbH
Berlin Capital Fund GmbH
BGB Finance
(Ireland) plc, Dublin
Atos Origin Processing
Services GmbH,
Frankfurt am Main
B+S Card Service GmbH,
Frankfurt am Main
FinanzIT GmbH,
Hanover
Versicherungsservice GmbH
<strong>Bankgesellschaft</strong> Berlin
Corporate Group
15,1%
10,0%
47,6%
1) Berliner Sparkasse <strong>is</strong> a department of LBB
2) Berliner Bank <strong>is</strong> a branch of LBB
3) Investitionsbank Berlin <strong>is</strong> an institution of LBB

<strong>Bankgesellschaft</strong> Berlin
International S.A., Luxembourg
BB-ASSET MANAGEMENT
Vermögensverwaltung GmbH
BB-Immobilien-Service GmbH
Grundstücksgesellschaft
„Berlin“ mbH
IBAG Immobilien
und Beteiligungen AG
BerlinOnline Stadtportal
GmbH & Co. KG
50,0%
45,0%
80,0% <strong>Bankgesellschaft</strong>
Berlin (Ireland) plc, Dublin
20,0%
30,0%
89,9%
Berlin Hyp Immobilien GmbH
Berlin Hyp
Grundstücksverwaltung GbR
Status: February 2004

Imprint
Publ<strong>is</strong>hed by
<strong>Bankgesellschaft</strong> Berlin AG
Corporate Communications
Alexanderplatz 2
D-10178 Berlin
Designed and produced by
HGB Hamburger Geschäftsberichte GmbH & Co. KG,
Hamburg
Photos
Sabine Wenzel, Berlin
Photo design
Adjouri, Berlin
Printed by
Druckerei Zertani, Bremen
German version of th<strong>is</strong> report <strong>is</strong> definitive.

<strong>Bankgesellschaft</strong> Berlin AG
Alexanderplatz 2
D-10178 Berlin
P. O. Box 110801
D-10838 Berlin
Tel.: (+49 30) 245 500
Fax: (+49 30) 245 509
Should you have any questions regarding
the Annual Report, please contact:
Corporate Communications
Chr<strong>is</strong>tina Hoff
Tel.: (+49 30) 245 663 89
Fax: (+49 30) 245 663 93
E-Mail: IR@bankgesellschaft.de
www.bankgesellschaft.de
<strong>Bankgesellschaft</strong> Berlin Annual Report 2003