Bankgesellschaft is focussing on core business - Landesbank Berlin

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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%.