Bankgesellschaft is focussing on core business - Landesbank Berlin

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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.