Annual Report 2001 - Landesbank Berlin

Annual Report 2001

Contents
1 Letter to shareholders
5 Corporate profile
6 Our share
8 Economic environment
10 Performance in the strategic business areas
15 Retail Banking
20 Regional Corporate Banking
23 Public Sector
25 Corporate/International Banking
27 Capital Markets
30 Real Estate Financing
33 Interest Rate Management
35 Corporate Centre
37 Real Estate Services
41 Government Assistance Programmes
44 Our Staff
46 Management Report
46 Overview of the 2001 financial year
54 Development of income
60 Development of volume
65 Bankgesellschaft Berlin AG
67 Risk report
96 Outlook
98 AG and Consolidated Financial Statements
98 Balance Sheet AG
102 Profit and Loss Account AG
104 Balance Sheet Group
108 Profit and Loss Account Group
110 Notes to the AG and Consolidated Financial Statements
119 Explanatory notes
181 Audit Certificates
185 Report of the Supervisory Board
192 Corporate Governance Structures of Bankgesellschaft Berlin AG
195 Group Banks and Selected Group Subsidiaries

Bankgesellschaft Berlin Group at a Glance
Equity Capital 2001 2000 1999 1998 1997
Reported equity € 4,525 m € 2,611 m € 4,366 m € 4,199 m € 4,280 m
Tier I capital ratio pursuant to KWG 5.7% 3.3% 1) 5.7% 5.5% 5.7%
Total capital ratio pursuant to KWG 9.4% 5.1% 1) 10.1% 8.5% 8.1%
Number of shares 999,327,870 218,077,870 218,077,870 218,077,870 218,077,870
Profit and Loss Account € million € million € million € million € million
Net interest income 1,876 1,642 2,048 2,007 1,887
Net commission income 386 462 420 447 422
Net results from trading activities – 106 139 105 559 70
Staff costs 984 973 965 968 934
Other administrative expenditure 696 572 583 670 562
Normal depreciation 148 129 136 134 136
Administrative expenditure 1,828 1,674 1,684 1,772 1,632
Balance of other operating income and expenses – 197 – 755 175 94 125
Operating loss/profit before risk provisioning 131 – 186 1,064 1.335 872
Risk provisioning (without section 340f HGB reserve)
Operating result
763 1,564 368 851 379
(without changes to section 340f HGB reserve) – 632 – 1,750 696 484 493
Changes to section 340f HGB reserve (“–” = release) 2 – 366 229 – 218 151
Operating result – 634 – 1,384 467 702 342
Balance of other income/expenditure 575 – 175 – 28 – 472 – 26
Result before tax – 59 – 1,559 439 230 316
Taxes2) 53 89 282 195 165
Result after taxes – 112 – 1,648 157 35 151
for information: Risk provisioning 765 1,198 597 633 530
Dividend per share – 3) – € 0.60 – € 0.56
Balance Sheet € million € million € million € million € million
Total assets 189,163 204,808 193,786 188,739 181,438
Customer loans 99,259 103,268 101,482 101,644 98,299
of which:
mortgage loans 34,580 34,652 35,415 33,660 32,351
public sector loans 28,141 30,886 31,980 32,955 32,695
Customer deposits 62,276 62,728 62,513 65,667 62,796
Securitised liabilities 47,086 57,985 56,368 54,324 49,080
Off-balance sheet
nominal value 888,300 1,009,404 860,770 851,413 706,974
credit risk equivalents (KWG) 1,492 1,912 1,936 4,115 2,829
1) After the 2001 capital increase, minimum ratios required by supervisory regulations were exceeded again.
2) 2000: taxes, i.e. including other taxes
3) Proposal to Annual General Meeting

Ratings
1. Moody’s (as of Nov. 5, 2001) Long-term Short-term Financial Public
Deposit Deposit Strength Pfandbriefe
Rating Rating Rating
Bankgesellschaft Berlin A2 P-1 E+ –
Landesbank Berlin
EMTN programme of Bankgesellschaft Berlin
Aa3 P-1 D Aaa
BGB Finance (Ireland) plc. Aa3
2. Fitch (as of Dec. 18, 2001) Long-term Short-term Individual Public
Rating Rating Rating Pfandbriefe
Bankgesellschaft Berlin A* F1 D/E
Landesbank Berlin
EMTN programme of Bankgesellschaft Berlin
AAA F1+ AAA
BGB Finance (Ireland) plc. AAA
* On rating watch negative
2. Standard & Poor’s (as of June 29, 2001) Public
Pfandbriefe
Berlin Hyp AAA

Letter to shareholders
Dear Shareholder,
Abteibrücke, Berlin-Treptow
In the past financial year, Bankgesellschaft Berlin faced the greatest challenges since its formation in 1994. You
have all followed the public debate about the Bank’s situation. Even though in the interim both owners and
employees alike made major contributions to the change for the better, we find ourselves looking back on a
very tough financial year.
The first half of 2001 was shaped by the announcement of considerable risks within the Group, especially in
the real estate fund business. The extensive risk provisionings set up for this purpose resulted in a dramatic
consolidated net loss for the year 2000. At times, the very future of Bankgesellschaft Berlin was under threat.
Tied in with this was the painful, but unavoidable fact, that the Group, in its complex structure and with its
current business policy, cannot meet the expectations placed in it.
The second half of 2001 and the first few months of the current year were shaped by decisive measures to stabilise
the Group and implement a forward-looking restructuring concept.
The new Board of Management has a clear objective: Bankgesellschaft Berlin will evaluate its regional market
and orient itself towards becoming a strong and efficiently structured bank for the Berlin-Brandenburg
region. Retail Banking and selected Corporate Banking, Real Estate and Capital Markets activities were defined
as the key business areas. There is a strict schedule for achieving these objectives: the restructuring programme
adopted in December 2001 is scheduled to turn Bankgesellschaft Berlin into a profitable and fully
competitive regional bank within the space of three to four years.
In this way, which is a show of strength for all those involved, we have reached important milestones over the
past few months:
• Thanks to the capital increase of approximately €2 billion, which was successfully concluded at the start of
October 2001 with the help of the State of Berlin, the regulatory requirements were met for the banking business
to continue.
• The restructuring programme approved in December 2001, contains the key steps for regenerating the
Group. These include an agreement with the State of Berlin to protect Bankgesellschaft Berlin from the substantial
risks from Real Estate Services. They also include an extensive cost cutting programme that provides
for savings of €450 million by 2005. This represents a good quarter of total administrative expenditure.
From the total volume, €300 million will relate to personnel costs and €150 million to operating
expenditure. The unavoidable reduction of the Group’s cost base includes cutting some 4,000 jobs, which
should be done as socially responsible as possible.
LETTER TO SHAREHOLDERS 1

• At the end of January 2002, the Federal Republic of Germany submitted an application to the European
Commission in Brussels to authorise the contributions towards reconstruction from the State of Berlin as
restructuring aid. These contributions take the form of an injection of capital and protection of the Group
from the substantial risks from Real Estate Services. The application also covers the restructuring programme
for the Bankgesellschaft Berlin Group, approved in December of the previous year. On April 9,
2002, the EU Commission started formal proceedings. The injection of capital by the State of Berlin had
already been approved for a limited period in July 2001.
The stabilisation and reconstruction measures were noticeable in the 2001 annual financial statements:
despite continued significant risk provisionings in the lending business, the net loss for the year within the
Group was limited to €112 million, mainly due to the protection from risks from Real Estate Services. Without
this contribution to reconstruction from the State of Berlin, Bankgesellschaft Berlin would have had to report
a consolidated loss in the billions, as it did in the previous year. The 2001 annual financial statements contain
additional special factors that both positively and negatively impacted the profit and loss account. These special
factors were largely directly associated with the reconstruction and reorientation measures.
The Bank will once again not post a profit this year. In subsequent years, priority will be given to strengthening
reserves ahead of resuming dividend payment in view of the recent reported loss. In addition, it must be
taken into account that the State of Berlin receives a contractually agreed advance dividend distribution as consideration
for its substantial financial contributions to the stabilisation and regeneration of Bankgesellschaft
Berlin. This will be paid as soon as the Group posts a profit and if certain equity ratios are exceeded. Furthermore,
the State of Berlin is to be paid a guarantee commission amounting to €15 million per annum for the
risks taken on from real estate transactions.
Dear Shareholder,
Following implementation of the reconstruction concept, our Bank will have a new face and will see itself in
a new light:
• We intend to considerably reduce the complexity of the Group and make it easier to manage. Consequently,
the Boards of Management of Bankgesellschaft Berlin and Landesbank Berlin are now largely made up of
the same individuals, for example. Centralised units such as Risk Management, Finance, Controlling and
IT Organisation/Operations are now universally responsible for both banks, thus making responsibilities
clearer. Decision-making is becoming more homogenous and transparency is clearly improving.
2 LETTER TO SHAREHOLDERS

• We intend to reorientate the Group’s scope of business. Market presence as a strong regional bank will form
the core of the new orientation. In Retail Banking, the two brands Berliner Sparkasse and Berliner Bank will
operate on the market under the umbrella of Landesbank Berlin. The dual-brand strategy with Berliner
Sparkasse and Berliner Bank will result in the sound market position in regional retail banking being
strengthened further. The two brands are set to be united in one legal entity by January 1, 2003. The Berliner
Bank brand in particular will continue to increase its profile in the demanding consultancy business. The
Berliner Sparkasse brand will be consistently positioned as a highly efficient market leader with a comprehensive
range of services and an excellent local presence within retail banking.
The real estate business is set to reach beyond the regional market and be established throughout Germany
to better diversify the risk. Wholesale banking will focus more strongly on retail banking clients with capital
market products and will concentrate its business abroad on Eastern Europe. These strategic cornerstones
will result in Bankgesellschaft Berlin cutting loose a number of activities over the next few years or
only continuing them to a limited degree. The Group’s balance sheet total will therefore fall significantly up
to 2005.
The reorientation of the Group also includes reappraisal of the past. The Board of Management, the Supervisory
Board and the Federal Banking Supervisory Authority commissioned numerous special audits in 2001 to
clarify failings of the past few years. Wherever findings from these special audits brought personal misconduct
to light, this resulted in the immediate dismissal of those responsible and to the evaluation of compensation
litigation. This also related to members of the Board of Management and former members of the Board of Management
of Bankgesellschaft Berlin AG and Landesbank Berlin.
The public prosecutor’s office has instigated investigations into various facts. The fact-finding committee of the
Berlin House of Representatives has to date mainly concerned itself with the Aubis real estate business and the
real estate fund business. Rest assured that the Board of Management will emphatically support the endeavours
to clarify failings. The only way in which the reorientation of the Bank will be successful, is to tackle the
past in an honest manner.
Bankgesellschaft Berlin not only faces changes in the operating business but also in terms of ownership. As
the major shareholder with an 81% capital stake, the State of Berlin has initiated negotiations with interested
parties to fully or partially sell its participation in the Bank. The sale carries certain conditions that are set to
safeguard Bankgesellschaft Berlin’s important role in financing the local economy and as one of the region’s
major employers. The Senate intends to make a decision regarding disposal of the participation held by the
State in 2002.
Regardless of possible changes on the ownership side, the Board of Management has the urgent task of returning
the Group to profitability as quickly as possible. Nobody should be under any illusions: Bankgesellschaft
LETTER TO SHAREHOLDERS 3

Berlin is still in the midst of reconstruction. We have still got a difficult way to go. However, one thing is sure:
in the past few months, key determinants have been set for the regeneration of the company.
We would like to thank the State of Berlin and the other shareholders who are standing by Bankgesellschaft
Berlin in these difficult times. We would also like to thank our employees for their dedication. A lot has been
asked of them in the past few months. Last but not least, we would like to express our thanks to our clients and
business partners for the trust that they have continued to place in us. Bankgesellschaft Berlin will make every
effort to turn the Bank into a strong and profitable regional bank for Berlin-Brandenburg.
The Board of Management
Hans-Jörg Vetter Serge Demolière Dr. Johannes Evers
Norbert Pawlowski Hubert Piel
4 LETTER TO SHAREHOLDERS

Corporate profile
En route to becoming
a strong regional bank
S-Bahnbrücke, Friedrichstrasse, Berlin-Mitte
In line with a fundamental change of strategy, Bankgesellschaft
Berlin sees itself as a strong regional bank in the Berlin area.
With the brands Berliner Sparkasse, Berliner Bank, Berlin Hyp and Bankgesellschaft
Berlin, the Bank will operate in three market segments in the Berlin
region:
Retail Banking • The majority of retail and regional corporate banking clients in
the Berlin area rely on advice and service from Berliner Sparkasse or Berliner
Bank. Within this major group of clients, we intend to make optimum use of our
high market share as a key relationship bank in future in the securities business
and in private real estate.
Wholesale Banking • We are a strong partner for capital market products such as
shares/share derivatives/share research and fixed-income products and an experienced
trading and export financier in Central and Eastern Europe. Wholesale
Banking forms one of the mainstays for ensuring income and providing liquidity
for the Bank. A close link with the Retail division ensures that the activities are
also specifically oriented towards Retail Banking and Regional Corporate Banking
in the Berlin region.
Commercial Real Estate Financing • We are a leading banking group in the region
for commercial real estate financing. The focus of our expertise is on business
with commercial investors and managing residential construction and development
companies. In future, we will concentrate on activities in Berlin and western
Germany.
CORPORATE PROFILE 5

Our share
As a result of the events at Bankgesellschaft Berlin, the share price performance in
2001 bore no relation to the development of the benchmark index CDax. The share
price was almost entirely shaped by the capital increase adopted in the late summer.
The share capital since October 4, 2001, amounts to €2.55 billion. The number
of shares increased by 781,250,000 to 999,327,870 as a result of the capital
increase. The issue price amounted to €2.56 per share certificate.
Up to the Annual General Meeting, the Bankgesellschaft was listed between €10
and €8 for several months. After the terms of the capital measures were decided,
the share price swiftly approached the issue price of the new shares of €2.56 and
at the end of April 2002 was actually listed even below that at just under €2. This
development was linked with share turnover falling significantly.
The State of Berlin now holds approximately 81% of the share capital of Bankgesellschaft
Berlin. The free float, amounting to approximately 6%, includes own
shares, which the Bank acquired thanks to authorisation by the Annual General
Meeting. The following illustrates the new ownership structure at Bankgesellschaft
Berlin:
State of Berlin Free float
On November 7, 2001, Deutsche Börse announced that Bankgesellschaft Berlin no
longer sufficiently meets the free float weighting criteria of the MDax, as the free
float is less than 20%. Therefore, since December 27, 2001, the share is no longer
included in the index.
6 OUR SHARE
Moltkebrücke, Berlin-Tiergarten
81% 11% 2% 6%
▼ ▼ ▼ ▼

Our share is still listed in official trading on the known stock exchanges. Willingness
to invest in the share is currently reserved due to open issues relating to the
future of the Bank. Our main task will be to regain investors’ trust over the next
few years.
Wie die Mehrzahl der börsennotierten Unternehmen werden auch wir dazu übergehen, nur noch die Kurz-
Share price
in comparison
with the sector index
CDax
18.00
550
fassung 16.00 des Jahresberichts allen Aktionären als Druck zur Verfügung zu stellen 500
und 14.00auf
die Versendung von Quartalsberichten zu verzichten. Dadurch können 450
12.00
400
wir einen spürbaren Beitrag zur Senkung der Sachkosten im Konzern leisten. Im
10.00
350
Internet sind die Quartalszahlen weiterhin unter www.bankgesellschaft.de abruf-
8.00
300
bar. 6.00
250
from Dec. 29, 2000
to April 29, 2002
in Euro
4.00
2.00
Bankgesellschaft Berlin
CDax banks
0.00
12/29/00 02/12/01 03/26/01 05/10/01 06/21/01 08/02/01 09/13/01 10/25/01 12/06/01 01/24/02 03/07/02 04/22/02
CDax banks
Like the majority of listed companies, we too will start sending only the summary
of the Annual Report in hardcopy to all shareholders and we will no longer send
out quarterly reports. This will enable us to make a noticeable contribution to
cutting operating expenditure within the Group. The quarterly figures can still
be downloaded on the internet at www.bankgesellschaft.de.
200
150
OUR SHARE 7

Economic environment
In 2001, economic activity weakened globally. Within the space of a few months,
the economic environment deteriorated dramatically. As a result, the previously
strong growth of the global economy practically came to a standstill over the
course of the year. Overall, global production only increased by an average of 2.4%
(1.1% in the industrial countries). This is the weakest economic growth since
1982.
The European economy was unable to avoid the global slowdown in growth.
Expectations that it might be possible for Euroland to unhitch itself from global
economic activity due to the size of its single market were thus thwarted.
Over the course of 2001, the European Central Bank (ECB) considerably relaxed
monetary policy. It cut key interest rates in four stages by a total of 150 base points
from 4.75% to 3.25%. The associated drop in money market interest rates, the 3month
Euribor fell from 4.81% at the start of the year to 3.29% in December, only
partially affected the long end of the capital market. At approximately 4.8% at the
end of December, the yield on 10-year Federal government bonds was almost
unchanged compared with the start of the year. All in all, the German bond market
trailed the American capital market again last year, even if the treasury bonds’
interest rate lead in relation to Federal government bonds was largely eroded over
the course of the year and the situation was actually temporarily reversed.
Although the US Central Bank cut key interest rates much more aggressively than
the ECB over the course of 2001, the interest rate level at the long end of the American
capital market hardly dropped at all from January to December.
Since the summer 2000, the Euro has practically been moving sidewards relative
to the US Dollar at a level of 90 US cents, +/– 6 US cents. In spite of short-term
volatility, the remarkable stability of the Euro/Dollar exchange rate is not so
astounding given that the monetary and real economic conditions in the USA and
Euroland and Germany respectively have now largely come into line.
Within Euroland, Germany continues to post the weakest growth by far. This is
partly the result of structural factors. Consequently, the continually adjusted
recession in the construction trade alone (construction investments –5.7%)
8 ECONOMIC ENVIRONMENT
Oberbaumbrücke, Berlin-Friedrichshain

curbed economic growth by approximately 0.7 percentage points. The links
between German companies and the US economy are also more intensive than in
other European countries. As a result, the repercussions of the slowdown abroad
were felt more strongly here.
In addition, several limiting factors were very marked in Germany. The development
of domestic demand in particular was significantly worse than in the rest of
the euro region. Investment in equipment was scaled back by 3.4% on average for
the year. Private consumption, which was already a considerable way behind the
momentum of other euro countries and has been for some time, could not compensate
for the economy’s fall in demand.
In Berlin, economic output in 2001 developed more weakly than expected. Berlin’s
real gross domestic product remained at the level of the previous year and was
unable to match the slightly positive performance of 2000 (+0.4%). However,
economic activity in the German capital cooled off less strongly in the past year
than in Germany as a whole, where gross domestic product growth slowed down
to 0.6% (2000: +3.0%).
Decisive for the economic slowdown was above all the sustained poor situation of
the Berlin construction trade, which was hit particularly hard by the countrywide
slump in the construction industry. In addition, public sector savings influenced
this development. Although there were some positive trends in other economic
sectors, these were not strong enough to trigger an increase in gross domestic
product overall.
The service sector in particular was one of the growth drivers. The transport and
communication sectors specifically as well as financing, leasing and corporate
services increased their performance exceptionally. In contrast, retail and hospitality
suffered losses. At the same time, the number of employed fell by 6,000
(–0.4%) and the positive performance seen in 2000 (+1.7%) failed to continue as a
result.
Economists at Bankgesellschaft Berlin are assuming that Berlin can expect a slight
upturn in economic activity in 2002, against the background of the widely anticipated
economic recovery. The economy will largely pick up again due to
nationwide impetus. Industry could become a stabilising factor.
ECONOMIC ENVIRONMENT 9

Performance in the strategic business areas
The endeavours to stabilise the Bankgesellschaft Berlin Group and the drafting of
a new forward-looking strategy characterised the 2001 financial year.
Within the framework of the strategic business areas, the Group Board of Management
ensures that the Group is managed uniformly. Each member of the
Group Board of Management is responsible for business areas or staff units and
service divisions across the sub-banks. The business areas, which are arranged
according to client groups, are Retail Banking (combination of the Retail Banking
and Private Banking segments which were reported separately last year), Regional
Corporate Banking, Public Sector, Corporate/International Banking, Capital Markets
and Real Estate Financing.
The heads of the business areas are directly responsible for earnings in the Group
companies and brands assigned to them.
The success-oriented management of the strategic business areas is derived from
the fundamental operating variables for the success of the Group (result before
taxes, return on equity and cost income ratio).
The allocation of equity provides a basis for the management of the business areas
and the structural units allocated to them as profit centres. This is internally
defined as economic capital, which we determine taking two components into
account. The risk positions allocated to the business area pursuant to Principle I
relating to section 10 of the German Banking Act form the reference figure of the
commitment of capital to cover market and counterparty risks. From 2001
onwards, average values are used to determine the allocation of capital. In order
to additionally account for the equity backing of the operational risks, a percentage
of the administration expenditure is the second factor that comes into the
equation. The transition to the shareholder equity on the balance sheet is carried
out in the statement of earnings by segment under “Consolidation”.
The management ratio “Return on allocated capital” relates result before taxes for
the relevant business area to the economic capital. The following overview of the
statement of earnings by segment is broken down and illustrated in terms of content
in line with the German Accounting Standard no. 3 (DRS 3) on segment
reporting and no. 3-10 (DRS 3-10) on segment reporting for banks. There is no secondary
segmentation by region. To fully illustrate banking activity, the operating
business areas are being supplemented with the segments Interest Rate Manage-
10 PERFORMANCE IN THE STRATEGIC BUSINESS AREAS

Eisenbrücke, Berlin-Friedrichshain
ment and Corporate Centre. Furthermore, the real estate services of IBAG, IBG
and LPFV and IBB’s government-assistance programmes form separate segments
of the statement of earnings for 2001 in the framework of the transition to the consolidated
earnings.
The segment table “Pro rata earnings of the Group’s strategic business areas”
shows that the client-oriented business areas of the Group made a contribution to
consolidated earnings in the amount of €84 million in 2001 overall. This amount
includes extraordinary earnings effects such as profit from incorporating Landesbausparkasse
into LBS Nord amounting to €40 million in the Retail Banking business
area and extraordinary income from writing back the provisions set up the
previous year amounting to €249 million in the Real Estate area. Excluding these
earnings effects, the client-oriented business areas generated a loss of approximately
€200 million thus a negative result, as in the previous year.
Compared with the previous year, declining income (€ –282 million) in all earnings
components and increased administration expenditure (€ +122 million) negatively
impacted earnings in the client-oriented business areas.
Taking the aforementioned special effects into account, only Capital Markets (€ 48
million), Regional Corporate Banking (€ 14 million) and Public Sector (€ 12 million)
generated positive earnings contributions.
The segments Regional Corporate Banking, Public Sector and Real Estate
improved profitability compared with the previous year. Only Corporate/International
Banking improved the cost-income ratio. With the exception of the Regional
Corporate Banking, all business areas posted an increase in tied-in economic
capital, with the greatest increase coming from Capital Markets.
As in the previous year, Retail Banking generated the highest income of all the
business areas but also tied up the most resources. Income, declining compared
with the previous year, resulted in terms of net interest income from volume and
margin drops in deposit banking on average for the year. In terms of net commission
income, the general stock market weakness negatively impacted the securities
business. Administration expenditure rose due to increased IT costs in particular.
In 2001, compared with 2000, employee capacity also showed 322 employees
of DirektBankService which was incorporated into Landesbank with effect from
January 1, 2002. Not taking DirektBankService into account, employee capacity
was on the wane. Personnel costs remained at the level of the previous year.
PERFORMANCE IN THE STRATEGIC BUSINESS AREAS 11

Pro rata earnings of the Group’s strategic business areas
Actual/ Actual
in € million Retail Regional Public Corporate/ Capital
Banking1) Corporate Sector International Markets
Banking Banking
Net interest income 2001 678 208 19 134 215
2000 733 224 18 135 231
Net commission income 2001 264 44 1 17 21
2000 311 44 1 16 32
Net result from financial transactions 2001 5 – 2 3 30
2000 10 – 1 1 133
Balance of other operating income and expenditure 2001 2 2 17
2000 13 1 1 11
Total income 2001 949 250 20 156 283
2000 1,067 267 20 153 407
Staff costs 2001 336 88 5 33 80
2000 316 86 5 24 77
Other administrative expenditure 2001 573 78 6 38 112
2000 508 82 5 51 91
Normal depreciation 2001 17 1 3
2000 11 1
Administrative expenditure 2001 926 166 11 72 195
2000 835 168 10 76 168
Operating result 2001 23 84 9 84 88
before risk provisioning 2000 232 99 10 77 239
Risk provisioning in lending transactions 2001 79 70 – 3 78 2
2000 118 199 4 40 10
Income from liquidity reserve securities 2001 – 12 1 41
2000 – 1 2 36
Changes to the reserve according to 2001
section 340f of the German Commercial Code 2000
Risk provisioning 2001 67 70 – 3 79 43
2000 117 199 4 42 46
Operating result 2001 – 44 14 12 5 45
after risk provisioning 2000 115 – 100 6 35 193
Earnings from financial investments 2001 40 – 3 3
2000 8 4 – 7 1
Balance of other items 2001 – 15 – 12
2000 – 17 – 1 – 1
Result before taxes 2001 – 19 14 12 – 10 48
2000 106 – 97 5 28 194
Division assets 2001 12,181 7,795 10,969 10,811 109,721
2000 13,886 8,165 11,555 11,015 125,554
Division liabilities 2001 22,257 3,340 1,073 2,244 135,363
2000 22,062 3,363 1,119 2,162 153,692
Risk items 2001 9,293 6,385 1,465 9,997 27,646
2000 9,732 7,154 1,434 10,993 29,145
Allocated capital 4) 2001 1,541 598 110 742 2,164
2000 1,445 623 100 622 1,764
Employee capacity (reporting date) 2001 6,258 1,297 63 314 510
2000 6,104 1,366 74 302 558
Return to allocated capital 2001 – 1.2% 2.3% 10.9% – 1.3% 2.2%
(related to result before taxes) 2000 7.3% – 15.6% 5.0% 4.5% 11.0%
Cost income ratio 2001 97.6% 66.4% 55.0% 46.2% 68.9%
2000 78.3% 62.9% 50.0% 49.7% 41.3%
1) 2001 incl. employee capacity of DirektBankService (322), a share of BG Polska (46) and excl. LBS (2000: 122)
2) 2001 excl. employee capacity of DirektBankService (322), shown in the Retail Banking segment
3) IBAG, IBG and LPFV: other administration expenditure and Normal depreciation are shown in the items Other expenditure
or Balance of other operating income and expenditure
4) Group: average balance sheet shareholders’ equity
12 PERFORMANCE IN THE STRATEGIC BUSINESS AREAS

Real Total client- Interest Corporate Total Real Estate Government Consoli- Group
Estate oriented rate centre2) banking Services3) Assistance dation
Financing SBAs management activities Programmes
357 1,611 221 1,832 12 156 – 124 1,876
374 1,715 – 62 1,653 1 157 – 169 1,642
17 364 – 11 353 33 386
33 437 – 10 427 35 462
36 – 146 – 110 4 – 106
143 2 145 – 6 139
11 32 – 27 562 567 – 124 – 51 – 589 – 197
4 30 598 628 16 2 – 1,401 – 755
385 2,043 37 562 2,642 – 112 138 – 709 1,959
411 2,325 – 70 598 2,853 17 194 – 1,576 1,488
60 602 244 846 89 52 – 3 984
58 566 269 835 86 54 – 2 973
52 859 362 1,221 37 – 562 696
46 783 305 1,088 31 – 547 572
3 24 117 141 14 – 7 148
2 14 104 118 10 1 129
115 1,485 723 2,208 89 103 – 572 1,828
106 1,363 678 2,041 86 95 – 548 1,674
270 558 37 – 161 434 – 201 35 – 137 131
305 962 – 70 – 80 812 – 69 99 – 1,028 – 186
473 699 9 708 28 2 738
1,106 1,477 – 8 1,469 68 1,537
– 9 21 22 43 – 5 – 13 25
–13 24 24 3 27
2 2 2
– 82 – 82 – 241 – 323 – 43 – 366
464 720 33 753 23 – 11 765
1,011 1,419 – 249 1,170 25 3 1,198
– 194 – 162 4 – 161 – 319 – 201 12 – 126 – 634
– 706 – 457 179 – 80 – 358 – 69 74 – 1,031 – 1,384
– 2 38 – 38 – 356 357 1
10 16 – 262 – 246 – 319 580 15
235 208 – 273 – 250 – 315 656 233 574
– 279 – 298 – 142 – 440 – 583 – 1 834 – 190
39 84 – 307 – 411 – 634 99 12 464 – 59
– 975 – 739 – 225 – 80 – 1,044 – 971 73 383 – 1,559
54,712 206,189 23,403 229,592 3,181 20,056 – 63,666 189,163
55,594 225,769 15,618 241,387 1,958 20,742 – 59,279 204,808
44,899 209,176 20,416 229,592 3,181 20,056 – 63,666 189,163
46,354 228,752 12,635 241,387 1,958 20,742 – 59,279 204,808
23,003 77,789 7,236 85,025 4,508 89,533
22,649 81,107 6,243 87,350 3,957 91,307
1,588 6,743 418 151 7,312 89 370 – 3,574 4,197
1,452 6,006 469 130 6,605 86 350 – 2,779 4,262
728 9,170 3,467 12,637 1,559 780 14,976
745 9,149 3,948 13,097 1,700 767 15,564
2.5% 1.2% – 8.5% 3.2% – 1.4%
– 67.1% – 12.3% – 15.8% 20.9% – 36.6%
29.9% 72.7% 83.6% – 79.5% 74.6% 93.3%
25.8% 58.6% 71.5% 505.9% 49.0% 112.5%
PERFORMANCE IN THE STRATEGIC BUSINESS AREAS
13

Following a loss in the previous year, Regional Corporate Banking generated a
slightly positive result. Drops on the income side were over-compensated by significantly
lower risk provisioning (€ –129 million).
The development of earnings in the Public Sector business area was impacted by
the write-backs in credit risk provisioning.
Despite increased income and reduced administration expenditure. Corporate/
International Banking was in deficit in 2001. Earnings were negatively impacted
by risk provisioning in the lending business being higher compared with the previous
year (€ +38 million) and a participation loss (€ –12 million).
In 2001, Capital Markets suffered a significant drop in earnings. The drop is predominantly
due to declining income (€ –124 million). At € –103 million, the net
results from financial transactions were responsible for the largest share of this
drop and thereof mainly shares and share derivatives trading. As a result of
increased IT costs, administration expenditure impacted earnings (€ +27 million).
The link between declining earnings and rising expenditure led to a sharp drop in
profitability.
The positive earnings from the Real Estate business area were only achieved
because provisions set up the previous year were written back and reported as
income, thus increasing earnings by €249 million. Reduced credit risk provisioning
also improved earnings. However, with a share of 68% in total credit risk provisioning
for all business areas, this is a substantial negative impact both for the
business area and the Group as a whole, as it was in the previous year.
14 PERFORMANCE IN THE STRATEGIC BUSINESS AREAS

Retail Banking
On the basis of high-street banking sales, the range of services offered by the
strategic Retail Banking business area includes loans and deposits, securities
investments and insurance, savings plans for home building and a range of payment
services including credit cards. We provide advice for high net worth retail
banking clients with the objective of optimally managing the entrusted assets and
providing private real estate financing on an individual basis.
Bankgesellschaft Berlin is the market leader in Berlin in business with retail
banking clients. In accordance with the wishes of our clients, additional services
were introduced in the past year and electronic sales channels were strengthened
in particular.
The Retail Banking business area resulted from the merger of the Retail Banking
and Private Banking business areas in the context of the restructuring. The comparable
figures for 2000 are based on adding together the figures from these two
business areas.
Retail Banking – loans
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Overnight and term money 472 332
Overdraft facilities 898 1,069
Near-money market loans 158 154
Real estate loans 5,482 5,967
Other loans (e.g. consumer loans) 3,030 2,870
Total loans and advances to customers 10,040 10,392
Retail Banking – deposits
Schlossbrücke, Berlin-Mitte
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Demand deposits 6,796 5,529
Overnight deposits 71 94
Term deposits 2,893 2,820
Savings deposits 9,540 9,958
Savings certificates and similar products 480 616
Total customer deposits 19,780 19,017
RETAIL BANKING 15

Branch banking
in the Berlin region
In the Berlin area, business with retail clients is managed with the
brands Berliner Bank, Berliner Sparkasse, ALLBANK, Landesbank
Berlin and Weberbank. It is based on a comprehensive network of
branches, complemented by modern direct sales channels. The modernisation of
the sites already underway, which promotes communication with clients, is continuing.
Within the framework of the individual advice we offer to our clients at the
branches, provisions for old age play an important role, not least due to the
reforms in state support as a result of the “Riester Pension”. Corresponding information,
sample statements and product ranges from our cooperation partners
have been included in the comprehensive finance and asset planning. Information
to clients about the euro, the procedure for introducing euro notes and coins and
the security features of the new currency formed additional focuses in the past
year.
As expected, usage of our internet and telephone banking services is
Electronic sales channels
increasing. Consequently, our call centre is used by 395,000 clients
(previous year 370,000). The number of internet users at Berliner Bank and
Berliner Sparkasse rose from 195,000 to 270,000 in 2001. The number of website
hits doubled over the course of the year to just under half a million. The increase in
internet banking in particular shows that this form of transaction is becoming more
widely accepted by all client groups. In 2003 at the latest, the number of internet
users is likely to exceed the number of call centre users for the first time.
The range of online services was once again increased in 2001. A significant milestone
was reached with the launch of the online brokerage. Accordingly, our clients
have access to their securities portfolio at all times regardless of where they are. In
the current year, the launch of the web branch is set to provide our clients with a
modern, virtual branch. Familiar transaction possibilities will be more closely
interlinked in the web branch and supplemented with information and other services,
thus completing our multi-channel strategy.
16 RETAIL BANKING

Deposit business
Lending business
Securities business
Total Retail Banking deposits developed positively with an increase of
4% to €19.8 billion. Demand deposits in particular are exhibiting
exceptional growth. This is due to continued sound growth and the launch of a
new product in high-interest investments as well as, in relation to the balance
sheet date, inflows of funds from DM notes and coins in connection with the
launch of euro notes and coins.
The Retail Banking lending business declined by approximately 3.5%
in 2001. The positive performance in terms of consumer loans
together with a noticeable recovery of new business in Private Real Estate Financing
in the second half of the year was unable to compensate for the drain on
volume due to repayments/redemptions in real estate financing and in terms of
overdraft facilities.
In terms of structuring the range of services as well as in terms of Private Real
Estate Financing processing methods, further advances were made that will once
more result in improved competitive positioning. Real estate brokerage through
our subsidiaries focused more sharply on high-value residential property in a
market that was very restrained overall.
Securities business was largely characterised by globally weakening
stock price quotations in the capital markets. In particular the telecommunications,
media and technology sectors were a source of considerable disillusionment.
In the wake of these developments, the securities commission result
also declined.
The software to support advisory services introduced the previous year was
expanded and optimised in many areas in client consultancy services. As a result,
advisors can now uniformly compare the client portfolio with specified portfolio
structures in line with investor and investment requirements and implement buy
and sell recommendations.
The structuring of the index and share certificates, newly launched in the previous
year, was brought into line with the volatile stock market environment. Consequently,
investors often limited potential share price losses in these products in
advance thanks to the hedging strategy incorporated into the products.
Also in the investment fund business, the objective of optimising asset structuring
was further pursued in 2001. The focus was still on products from the umbrella
RETAIL BANKING 17

Credit card business
Insurance brokerage
fund family BerolinaCapital and fund-linked asset management. In addition,
adaptable individual products completed the service range.
At the end of 2001, portfolio management for retail banking clients, including fund
units, contained a volume of securities totalling approximately €12.3 billion.
The number of credit cards issued within the Bankgesellschaft Berlin
Group increased to 1.3 million. The Group thus confirmed its position
as the largest credit card issuer in Germany.
The co-branding programme, started in 2000 with the company “webmiles”, performed
very well in the year under review. The range of credit cards offered in
conjunction with the ADAC (German Automobile Association) was relaunched
and equipped with bonus elements, as was the selection of cards in the course of
the reintroduction of the Berliner Bank BB Magic current accounts.
The credit cards were converted to the new currency before the launch of the euro
notes and coins. In connection with this, the fee within the EU for use outside Germany
ceased to apply and was reduced outside the EU.
With the launch of credit card banking, our clients are in a position to download
their credit card statements online.
In terms of brokering insurance policies for our cooperation partner
Gothaer Versicherungen, a significant improvement was made on the
result for the previous year. A great deal of significance was attached to pension
advice in all client segments, which was particularly reflected in the brokerage of
annuity insurance. Sales of fund-linked insurance products remained high and
represented approximately one-third of sales earnings.
Sales of tax-efficient investments to high net-worth retail banking
Tax-efficient investments
clients was not easy due to the difficulties in the real estate business.
The reversal in the trend already seen in the previous year away from tax-induced
fund products towards income-oriented fund products continued to gain strength.
This trend can also be seen in our sales structure.
18 RETAIL BANKING

Outlook
The next few years will largely be characterised by the redimensioning
of the branch-supported sales network. The result of focusing the
activities on the core market of Berlin is branches being ceded throughout Germany
and the bundling of consultancy competencies.
The Bankgesellschaft Berlin Group’s retail banking business is set to be combined
under the umbrella of Landesbank Berlin after 2003. In Retail Banking, we will in
future concentrate on the Berlin region with the brands Berliner Bank and
Berliner Sparkasse.
Extensive process optimisation is set to lead to a considerable reduction in operating
expenditure and personnel costs. All sales sites are being examined, which
will result in a reduction in the number of locations. Whilst the priority continues
to be providing a comprehensive service to our clients, the number of sites overall
will be reduced. Within the branches, we will reorganise the counter business
in particular and substantially scale back administrative capacity.
We are assuming that the cost-reducing measures and a slight improvement in the
income situation in the retail banking business will form the basis for a solid business
performance in the future.
RETAIL BANKING 19

Regional Corporate Banking
In the 2001 financial year, the Group reaffirmed its market leadership in the
regional corporate banking business in Berlin-Brandenburg. Accordingly,
approximately 85,000 corporate clients throughout the value added chain are
managed from business start-up to IPO. Depending on the product group of the
lending and deposit business, the market share in terms of domestic companies is
still significantly above 40%. As a result of projects to optimise processes in the
lending business and to concentrate the sales sites, quality improvement and cost
reducing measures were prepared. These will be implemented in 2002 as part of
the reconstruction of the Group.
Regional Corporate Banking – loans
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Overnight and term money 439 430
Overdraft facilities 1,059 1,260
Near-money market loans 0 0
Loans secured by mortgages 2,421 2,479
Other loans 3,631 3,799
Total loans and advances to customers 7,550 7,968
Regional Corporate Banking – deposits
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Demand deposits 1,719 1,418
Overnight deposits 96 81
Term deposits 810 956
Savings deposits 141 145
Savings certificates and similar products 7 12
Total customer deposits 2,773 2,612
Bankgesellschaft Berlin’s Regional Corporate Banking is focused on
Focus on the
the Berlin-Brandenburg region with its small, medium and large
Berlin-Brandenburg region
companies. Financial services for companies are offered throughout
the value added chain. The range of products extends from consultation and
financing with the use of development funds for start-ups through to the lending
and investment business right up to selected corporate finance services. Bankge-
20 REGIONAL CORPORATE BANKING
Kronprinzenbrücke, Berlin-Mitte

Risks in Regional
Corporate Banking
Development of deposit
banking and commission
business
Restructuring
sellschaft Berlin’s presence in the market is largely with the brands Berliner
Sparkasse/Landesbank Berlin and Berliner Bank.
Compared with the previous year, the risk costs in Regional Corporate
Banking were significantly reduced in 2001. Economic development,
which is still weak compared with other German conurbations, and
the high number of company insolvencies in Berlin-Brandenburg place particular
demands on risk management within Regional Corporate Banking. As a result of
the high market share in the region, the economic situation in the domestic market
had a strong influence on the financial result of the Regional Corporate Banking
business area.
Whilst in the inventory portfolio all possibilities of regrouping in favour of good
credit standing were exploited, the Bank again pursued a conservative lending policy
in terms of new business in 2001.
In deposit banking, the planned objectives for 2001 with regard to
volume and margin were not achieved. With a slight recovery of the
volume of deposit banking, a margin decrease was reported in the
client business.
In the 2001 financial year, mid-cap products were incorporated into the product
range to minimise the risks from interest rate changes and factoring. The leasing
business with corporate clients delivered a pleasing performance in cooperation
with LGS Leasing Gesellschaft der Sparkasse GmbH, a 100% subsidiary of
Deutsche Leasing AG, and offers good prospects for the 2002 financial year. Overall,
net commission income therefore remained constant at €44 million in spite of
the unfavourable stock market situation.
In Regional Corporate Banking, 2001 was also characterised by the
restructuring of the Group as a whole. The concentration of sales
locations in the “Small Corporate Clients” segment at Berliner Sparkasse/Landesbank
Berlin continued. For the Berliner Bank brand, theoretical preparations for
condensing the sales locations were concluded and can therefore be implemented
in 2002.
REGIONAL CORPORATE BANKING 21

Improved
market management
Outlook
In 2001, the processes in the lending business formed the focus of internal quality
assurance and cost reducing activities. The optimisation of Regional Corporate
Banking divided into small segments was concluded with the development of a
scoring system to support lending decisions. Equally, the product range was modified
with the objective of standardisation. As a result, administrative expenditure
stabilised and the number of personnel employed fell in 2001.
In 2001, a Customer Relationship Management Tool (CRM) was
employed in Regional Corporate Banking. The Group is therefore
among the first banks in Germany to use a modern CRM system in
Regional Corporate Banking. Consequently, we provide an intelligent infrastructure
for an optimised range of products and services in the context of individual
customer service.
The focus in Regional Corporate Banking will continue to be on the
Berlin-Brandenburg region. The number of sales locations for our
brands will be further optimised in 2002. In addition, we will continue to sharpen
the profile of duties of the branches. The criteria are to increase the quality of services
for our clients, to coordinate with the internal and call centre sales channels
and to improve our cost structure.
In 2002, we are planning to create a range of regional B2B services for mid-sized
companies in Berlin-Brandenburg. In addition to financial products, this portal is
set to place the emphasis on e-procurement and services in the context of Application
Service Providing, which are oriented towards the demands of small and
medium-sized companies in the region and should help to reduce both procurement
and process costs.
Above all, income is set to be increased in the commission business, whilst the cost
structure will be significantly improved. In the medium term, the permanent
reduction of risk costs will be a key task through increased risk awareness in new
business and professional settlement management.
22 REGIONAL CORPORATE BANKING

Public Sector
The market share of the strategic business area Public Sector was maintained in a
tough competitive environment. As a result of the Group concentrating on the core
region of Berlin-Brandenburg, the business area will soon be restructured and
partially continued within Regional Corporate Banking.
Public Sector – loans
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Overnight and term money 909 862
Overdraft facilities 35 36
Near-money market loans 0 0
Real estate loans 233 159
Other loans (in particular public sector loans) 9,018 9,593
Total loans and advances to customers 10,195 10,650
Loans and advances to banks over 1 year 773 904
Total 10,968 11,554
Public Sector – deposits
Friedrichsbrücke, Berlin-Mitte
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Demand deposits 342 493
Overnight deposits 0 0
Term deposits 195 111
Savings deposits 6 7
Savings certificates and similar products 1 1
Total customer deposits 544 612
Bank deposits over 1 year 513 501
Total 1,057 1,113
In our core region and various other German states, we have maintained our position
in relation to the competition with sophisticated products for a number of
clients. These include financial services for local authorities and their companies
in the supply and waste disposal sector, in the area of public local passenger services
and in the health care sector. As a result of the search for suitable solutions
in lending, deposit banking and services, business continued at the level attained
even in the tough market environment with consistent orientation towards earnings
and a tight controlling system. Public-sector lending continued at approxi-
PUBLIC SECTOR 23

Outlook
mately the same extent as in the previous financial year, especially due to shortterm
loans granted.
Overall, a positive contribution to the consolidated result was generated once
more in spite of massive margin pressure and stringent credit risk monitoring.
New business delivered a restrained performance, particularly in terms of loan
extensions.
In the future, the usage potential of the Public Sector business area in
relation to infrastructure financing will not develop in the core region
to the extent necessitating an in-house business area organisation. Therefore,
these activities will be focused on financial services typical to regional corporate
clients; the Public Sector business area will be merged with Regional Corporate
Banking over the course of the year.
24 PUBLIC SECTOR

Corporate/International Banking
The strategic business area Corporate/International Banking has to date concentrated
on companies operating internationally, European insurance companies
and foreign banks and mandates for structured financing. With this business area,
the Bank has positioned itself as a specialist for structured capital market and
foreign products in the client-oriented business, without, however, having
reached a sufficient market depth and breadth to continue to successfully develop
the business.
Corporate/International Banking – loans
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Total loans and advances to customers 7,962 8,005
Loans to banks over 1 year 1,251 1,350
Total 9,213 9,355
Corporate/International Banking – deposits
Anhalterbrücke, Berlin-Kreuzberg
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Total customer deposits 843 1.133
Bank deposits over 1 year 322 500
Total 1,165 1,633
In 2001, the business area concentrated on continuing to improve the quality of the
portfolio and on stabilising existing client relationships under the exceptional circumstances
of the lending markets and the Group. This was tied to a great deal of
restraint in new business. This development is reflected by the fact that the commission
contribution was lower compared with 2000. As a result of the worsened
lending quality due to the recession, extensive risk provisioning of €79 million had
to be set up again for existing loan commitments.
The focus of business activity in the International Business division is on supporting
our clients’ short-term trade and export transactions. We successfully
maintained our sound position, especially in Central and Eastern Europe and in
the Middle East, and followed up on earlier successes as a leading arranger. In
2001, we started to expand our Commodity Trade Finance activities and we intend
to continue to concentrate on this expansion in 2002.
CORPORATE/INTERNATIONAL BANKING 25

Outlook
The Structured Financing division includes aircraft and ship financing, tax and
special financing as well as project financing. In line with maturities, this business
area will be phased out, new business has been halted with the submission of the
EU notification. The Structured Financing division does not represent a strategic
focus for the Bank for the future.
The Corporate Banking division, which combines cooperation with our major
industrial clients, will be ceded as an autonomous platform. In the last few years
and taking a justifiable risk profile into consideration, it was not possible to
achieve the necessary market depth and diversification.
As a result of the modified demands of the markets and the Group
focussing on its duties as a regional bank, we are withdrawing from
certain Corporate/International Banking activities. The remaining areas of
responsibility will be restructured together with Capital Markets and largely be
organised product-oriented.
26 CORPORATE/INTERNATIONAL BANKING

Capital Markets
In spite of the unfavourable stock market conditions and the difficult situation of
the Bankgesellschaft Berlin Group, a positive result was generated in Capital Markets
with pre-tax earnings of €48 million.
Capital Markets – loans
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Total loans and advances to customers 3,108 5,707
Loans to banks over 1 year 10,026 19,051
Total 13,134 24,758
Capital Markets – deposits
Grünstrassenbrücke, Berlin-Mitte
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Total customer deposits 16,426 16,852
Bank deposits over 1 year 10,365 11,145
Total 26,791 27,997
The unfavourable development in the stock markets had a noticeable
Shares/Share Derivatives
impact on the result for the Shares/Share Derivatives business area.
Nevertheless, the result generated was still positive, albeit significantly weaker.
In proprietary trading, we continued to expand the strategy portfolio. Following
the conclusion of the expansion phase, the London site also made a positive contribution
to the operating result.
We maintained our market position as an important provider of structured products
in stock exchange trading. A consistently conducted product policy and active
communication with private and professional investors helped us to continue the
successes of the previous year.
CAPITAL MARKETS 27

The business area Equity Research & Sales combines the stock mar-
Equity Research & Sales
ket-oriented analysis capacity and the share brokerage unit. Net commission
income was weaker compared with the previous year, brought about by
market forces.
The Bank is as a German partner member in the ESN European Securities Network,
a European Research and Sales association with about 130 corporate
analysts and strategists, whose capacity can be fully utilised reciprocally. Furthermore,
this body, consisting of a total of ten banks and brokerage houses, provides
access to many institutional investors on the distribution side.
The increased volatility on the capital markets placed great demands
Risk Management Derivatives
on risk management with derivative interest rate instruments for proprietary
trading. Positive earnings contributions were generated in individual
areas of activity within the RMD portfolio. However, the contribution to the overall
result did not meet expectations.
Money Market Trading/
Foreign Exchange
Trading/Bond Trading
Credit Derivatives
Debt Finance
The result generated in Money Market Trading far outstripped expectations.
Foreign Exchange Trading maintained its market position in client
and proprietary trading.
As in the previous year, the focus of activities in Bond Trading was trading credits,
jumbo mortgage bonds and government bonds. A further focus was satisfying the
retail banking demand for higher-interest corporate bonds.
Credit Derivatives business followed up on the successes of the previous
year and again generated a positive result.
Profitability was further increased in 2001 without reducing the lending
quality in any way (still an AA– average). Equal contributions
came from the divisions Securitisation, Syndicated Lending, High Grade Investments
and Fixed Income Primary Markets.
Substantial advances were made in optimising the portfolio mix to further reduce
the employment of capital, in particular due to arranging credit derivative port-
28 CAPITAL MARKETS

Outlook
folio transactions with third parties. As a result of corresponding securitisation
programmes, a volume of €5 billion was placed externally and the performance of
the portfolio was improved at the same time.
Like the other strategic business areas, Capital Markets, too, must
make a substantial contribution to the restructuring of the Group.
Some lines of business will be ceded in the course of the necessary adjustments,
others will be scaled back in order to significantly reduce tied-up capital.
Capital Markets business remains one of the Group’s important cornerstones. In
addition to proprietary trading, which needs further focussing, the client business
in particular with interest rate, share and lending products including associated
derivatives will play a significantly more important role in the future, once the
Group is reorganised. In addition, Capital Markets will be tied in with the activities
of Corporate/International Banking, which are to continue although the business
area itself is to be ceded.
CAPITAL MARKETS 29

Real Estate Financing
Following the difficult financial year in 2000, the past year unfolded against the
background of reorganisation and reorientation in the strategic business area of
Real Estate Financing. Decisive steps were taken as a result of earlier misjudgements
and shortcomings in loan processing. The Bank took account of findings
from the concluding audit in 2000 by creating new decision-making structures,
improving the data quality and further endeavours to diversify and consolidate the
loan portfolio. Accordingly, conduct of new business was extremely restrained
with increased risk perspectives.
Real Estate Financing – loans
30 REAL ESTATE FINANCING
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Overnight and term money 3,287 2,653
Overdraft facilities 1,494 1,198
Near-money market loans 178 0
Real estate loans 24,095 24,013
Other loans (in particular public-sector loans) 17,009 18,497
Total loans and advances to customers 46,063 46,361
Loans and advances to banks over 1 year 4,018 4,578
Total 50,081 50,939
Real Estate Financing – deposits
Lessingbrücke, Berlin-Tiergarten
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Demand deposits 836 812
Overnight deposits 869 34
Term deposits 9,053 10,106
Savings deposits 2 2
Savings certificates and similar products 0 0
Total customer deposits 10,760 10,954
Bank deposits over 1 year 2,176 2,685
Total 12,936 13,639

Clear decision-making
structures
Diversification of the
loan portfolio
After standardised guidelines relating to loan processing and risk
assessment were introduced throughout the sub-banks, the processing
and decision-making structures within the business areas are
now considerably tighter. The Group-wide standardised guidelines are stipulated
and monitored in a Real Estate Management Board. This consists of the Board
members and divisional managers from the Group and the sub-banks responsible
for Real Estate. The Board is able to perform its duties on the basis of improved
data quality. This applies for both sales management as well as loan processing
and risk controlling.
At the end of 2001, the book of client loans amounted to €46.1 billion, of
which €14.9 billion related to Berlin Hyp’s public-sector loans under the
item “Other loans”. In new business, which was scaled back from a risk
point of view, the portion of international activities increased and countered the previous
concentration on the core region of Berlin-Brandenburg. In order to continue
with the initiated diversification of the loan portfolio, Real Estate is retaining its
nationwide presence with the brands Bankgesellschaft Berlin and Berlin Hyp and is
targeting an adequate mix of client segments and property types.
In the year under review, the focus on low-risk commitments in new
Development of earnings
business, stronger regional risk diversification and instructions from
and risk provisions
the banking supervisory authorities relating to the modified positioning
of Berlin Hyp in terms of interest-change risk led to a considerable reduction
in income in the business area overall. Administrative expenditure rose due to the
projects and measures associated with the restructuring of the business area. The
ongoing difficult situation on the real estate market, in particular in the new Federal
states, and the continued auditing of the loan book under strict valuation criteria
necessitated credit risk provisions of €473 million.
The development of earnings was also largely characterised by effects due to the
agreement with the State of Berlin relating to the protection from substantial risks
connected with the Group’s Real Estate Services. A notable share (€9.6 billion) of
the lending volume for the Real Estate business area relates to financing in connection
with Real Estate Services within the Group. It was not necessary to set up
REAL ESTATE FINANCING 31

Outlook
further risk provisioning for this lending volume, which would have been
required without the protection from substantial risks from this business by the
State of Berlin. At the same time, the provision amounting to €249 million, set up
the previous year for portfolio real estate in Real Estate Services, was written back
and reflected in the profit and loss account. Both effects – the omission of additional
provisions and the write-back of provisions – are decisive for the business
area’s positive result of €39 million. The discharge of liability for the credit risks
in Real Estate Services also significantly eased the pressure on the equity formation
of the business area. As loans to the protected Real Estate Services are now
treated as publicly guaranteed loans, the key income ratios for the business area
in relation to tied-up capital will be visibly better in future.
Even if no fundamental trend reversal is seen in the German real
estate market for the time being, we are targeting an approximate
break-even result in 2002, in particular by improving the cost situation and
reduced risk provisioning. Additional measures to improve risk management
should also mean that this business area is once again able to make a substantial
contribution to consolidated earnings in the medium term.
32 REAL ESTATE FINANCING

Interest Rate Management
Tegeler-Hafen Brücke, Berlin-Reinickendorf
In the Interest Rate Management segment, earnings contributions are posted
that are not allocated to the client-oriented business areas. This primarily occurs
in net interest income, but it is also possible to post earnings contributions in the
items net commission income, net results from financial transactions, risk provisioning
and other earnings components. To limit this, administration expenditure
for Corporate Centre and other operating income/expenditure from the service
companies’ business activities are shown in the Corporate Centre segment.
Net interest income: the net interest income posted in the Interest Rate Management
segment essentially includes three components:
– Structural contributions that arise in the client business, in Capital Markets
or as a result of balance sheet structure management planning measures
– Interest rate contributions from non-interest bearing Group sub-bank assets
and liabilities, in particular from equity investing
– Profit distributions from companies within the scope of consolidation.
Including interest rate contributions primarily generated from investing equity
and distributions attributed to Interest Rate Management, the resulting net interest
income in Interest Rate Management is €221 million (2000: € –62 million). In
the previous year, the positive earnings contribution from investing equity was
over-compensated by negative structural contributions and as a result of a lack of
profit distributions by the sub-banks. The result was a loss in net interest income
in Interest Rate Management.
Net commission income: a marginal earnings contribution amounting to € –11
million was shown in net commission income.
Net results from financial transactions: in terms of the trading result for the Group,
a € –106 million loss was reported in 2001. Whilst the client-oriented business
areas generated a positive trading result, a loss of € –146 million is also shown in
Interest Rate Management, which is almost entirely due to share price losses in
relation to own shares.
INTEREST RATE MANAGEMENT 33

Balance of other income and expenditure: taxes irrespective of income and various
compensation claims are posted here for the first time in 2001.
Risk provisioning: in the Interest Rate Management segment, realised valuation
earnings losses from securities in the liquidity reserve in particular are shown in
2001. In the previous year, the write-back of section 340f HGB reserves was primarily
reported here.
Result from financial investments: depreciation on various companies, which are
not allocated to any business area, is responsible for the reported losses.
Balance of other items: losses taken over from IBAG and IBG as well as various
property companies are the key components here; however, for IBAG and IBG,
these will be eliminated within the Group.
34 INTEREST RATE MANAGEMENT

Corporate Centre
Gertraudenbrücke, Berlin-Mitte
The statement of earnings by segment for the Group comprises the centralised
management and service divisions as well as the service companies available to
all the Group’s banks as centralised service providers within the Corporate Centre
segment. Service companies are BB-DATA, BG-SYS, BANKENSERVICE and
Bauprojekt- und Facilitymanagement GmbH. However, in contrast to the previous
year, DirektBankService is no longer included.
DirektBankService was integrated into Landesbank Berlin as a corporate division
with effect from January 1, 2002. Already in 2001, it is allocated to the strategic
business area Retail Banking.
The balance of other operating income/expenditure amounting to €562 million
reported in the statement of earnings mainly consists of the sales revenue from the
service companies. The reduction compared with 2000 is exclusively due to the
fact that DirektBankService is no longer shown here.
In the statement of earnings for the segment, sales revenue and administrative
expenditure for the service companies are reported at gross value. Consequently,
the negative balance of €161 million (operating result before/after risk) represents
the true cost situation of the Corporate Centres. Compared with the previous year,
this has worsened by €81 million, whereby in particular special factors as a result
of the restructuring requirements of the Group come into play here. In 2001, projects
and measures involving external consultants to redraft the Group’s reconstruction
and restructuring concept increased expenditure to a large extent.
In addition, individual projects such as investment in standardising previously
heterogeneous application landscapes resulted in increased IT costs. Special
depreciation as a result of valuation requirements for the Bank’s own real estate
led to an increase in normal depreciation.
CORPORATE CENTRE 35

Staff costs for Corporate Centre continued to fall due to declining employee capacity.
The personnel cutbacks affected 189 employees capacities after adjustment for the
employees of DirektBankService.
The Group’s reorganisation and reconstruction measures necessitated the creation
of restructuring provisions in the Group’s banks, which are reflected as
extraordinary expenditure in the amount of €250 million in the Corporate Centre
segment. The provisions for the restructuring of IBAG is included in the Real
Estate Services segment.
In the context of implementing the Bankgesellschaft Berlin reconstruction concept,
there will also be a significant reduction in personnel costs and operating
expenditure in the Corporate Centre segment. The targeted reduction of the complexity
of the Group, outsourcing measures and alignment to the requirements of
a regional bank will contribute to this.
36 CORPORATE CENTRE

Real Estate Services
IBV’s fund business
In the context of its reorientation in the 2001 financial year, IBAG Immobilien und
Beteiligungen AG Berlin is focussed increasingly on two areas of activity, namely
innovative capital investment products (fund business) and the development of
high-income premium real estate. In terms of sales of closed-end real estate funds,
caution was exercised in a market diminishing overall. IBV Fonds Deutschland 3,
which was already for sale in 2000, was fully placed. The direct sale of residential
property to investors and owner-occupiers increased slightly.
Sale of closed-end real estate funds
Dec. 31, 2001* Dec. 31, 2000
Funds of sale 3 5
Volume of investment in € million 351.6 1,324.8
Subscription capital in € million 167.2 514.3
Total subscriptions 78,077 82,100
Sale of residential property
Dec. 31, 2001 Dec. 31, 2000
Units sold 705 636
Sales in € million 120.6 114.9
* adjusted for the retro-liquidated IBV Fonds Universal 1
Moabiterbrücke, Berlin-Tiergarten
The fund business is for the most part represented by Immobilien
Beteiligungs- und Vertriebsgesellschaft der IBAG-Gruppe mbH (IBV).
In 2001, the fund IBV Fonds Deutschland 3 was fully placed and 74% of the fund
IBV Fonds International 2 was placed. Sales of the fund IBV Fonds Deutschland 4
“Shopping Select”, a fund from the new line with significantly less volume of
investment and guarantees in line with the market, started in December 2001. To
date, 75% of the preference capital and 2% of the base capital has been placed (status:
February 20, 2002).
As a result of market conditions having altered in the meantime, the IBV Fonds
Universal 1 fund, launched in 2000, has no longer been distributed since November
2001. The concept behind the fund was an IPO in the medium term. With the
slowdown of the stock market – a development that analysts describe as perma-
REAL ESTATE SERVICES 37

Bavaria
ARWOBAU
IBG
nent for pure real estate companies – it was no longer possible to view the forecast
share price development and thus the concept of the fund as secured. The equity
financing plus interest was paid out to those who had subscribed to the fund, or
they were given the option of reinvesting the subscription capital in other IBV
funds. Approximately 77% of the subscribers took advantage of the reinvestment
option.
The volume of investment of the IBV funds was €351.6 million in 2001 (2000:
€1,324.8 million); acquired equity was €167.2 million (2000: €514.3 million). 34%
of the volume of sales (2000: 23%) was generated by Bankgesellschaft Berlin
Group companies, the remaining sales share was placed through about 700 external
sales partners of IBV, including banks, savings banks and independent financial
service providers.
The IBAG Group’s project development activities are focused at
Bavaria Objekt- und Baubetreuung GmbH. This field of activities not
only includes residential property for direct sale to investors and owner-occupiers,
but also the development of commercial real estate. In 2001, Bavaria and its
sister companies oversaw the completion of a total of approximately 40,000 m2 of
residential floor space (2000: 90,000 m2 ) and commercial properties covering
about 132,000 m2 (2000: 127.000 m2 ).
Compared with the previous year, the sale of residential property increased by just
under 11% in 2001. 705 units with a total volume of approximately €120 million
were sold (2000: 636 units/about €115 million). Thus the trend towards increasingly
buying property for own usage is continuing and the individual property as
a capital investment only ranks second.
In 2001, IBAG’s real estate management was performed at the subsidiary
ARWOBAU Apartment- und Wohnungsbaugesellschaft mbH.
This company currently manages approximately 116,000 contracts (2000:
118,000).
In the course of the split between IBG and IBAG at the end of 2000, the
guarantor and underwriter function for various fund companies
remained at IBG. The resulting obligations and risks were taken on internally by
LPFV. In addition, some operating companies, which are set to be sold in the short
term, were domiciled at IBG.
38 REAL ESTATE SERVICES

LPFV Finanzbeteiligungs-
und Verwaltungs GmbH
Outlook
IBG’s business activity is limited to managing the guarantor and underwriter
function as well as adjusting the participation portfolio. There are no plans to
include new activities.
LPFV is a 100% subsidiary of Bankgesellschaft Berlin AG and took
over the following risks in the context of the reorganisation of the real
estate business:
– Original obligation of LPFV, to provide financial means to secure the distribution
of funds and, in the case of property guarantees, to ensure rental and incidental
cost income
– Original obligations of IBG such as general rental and rental guarantee contracts,
agreement relating to granting interest and redemption subsidies, securing
the distribution of two funds, exemption commitment from calling on
repayment of expenditure contributions, servicing rights for shares
– Exemption agreements with IBV, ARWOBAU and Bavaria
The exemption relates to the risks that resulted from the business activity of the
companies named up to December 31, 2000.
The IBG rental guarantee model within risk controlling was adopted and refined
to process these adopted risks. Work continued on developing an additional model
for calculating the risks from distribution guarantees. The focus of risk management
is on processing disorders of performance and vacancies, unfinished individual
properties and those awaiting revitalisation. It also combines property
measures regionally and provides specialised marketing and efficient external
centre management in the field of shopping and specialist-store centres. Another
area of activity is credit management.
The IBAG Group will continue on its reconstruction track this year
and focus on two core business areas (high-margin and high-quality
investment products as well as project developments in the premium sector).
Activities that no longer form part of the IBAG Group’s core business will be sold
off in the short to medium term; similarly, the residential development business
will largely be ceded.
REAL ESTATE SERVICES 39

40
At IBV, the optimisation of the structure of the funds will be promoted whilst
reducing the volume of the funds at the same time. IBV’s focus is on small to midsized
real estate funds in the high-margin premium segment without the previously
customary comprehensive guarantee packages but also new commitments
such as institutional funds and pension funds.
With the newly formed IBI Real Estate – Immobilien und Beteiligungen International
GmbH on January 1, 2002, which has completely taken over Bavaria’s business
abroad, we have introduced a further step towards transparent reorientation
of the IBAG Group. IBI Real Estate is taking over portfolio real estate worth about
€550 million; key countries are currently the USA, England and France.
The companies Bavaria Projektentwicklung, Public Consult and Bautrako
Bauträger- und Koordinierungsgesellschaft mbH were closed or are being liquidated.
Negotiations relating to the sale of further participations are on the verge of
being concluded.
REAL ESTATE SERVICES

Government Assistance Programmes
Investitionsbank Berlin (IBB) is an organisationally and economically independent
public-sector agency with no legal capacity, which is 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. Bankgesellschaft Berlin has no right to issue
instructions to IBB. IBB’s activity is not geared towards generating a profit.
IBB is the State of Berlin’s central bank for development funding and is set to be
expanded to become a State Structure Bank in accordance with the resolution by
the Berlin House of Representatives.
IBB volume of government assistance
Gotzkowskybrücke, Berlin-Tiergarten
in € million Subsidies Loans Participations
(disbursements) (new approvals)
12/31/01 12/31/00 12/31/01 12/31/00 12/31/01 12/31/00
Assistance to trade
and industry 173.2 224.9 12.3 15.6 10.0 16.9
Real estate assistance 1,119.2 1,096.9 334.3 506.5 – –
Total 1,292.4 1,321.8 346.6 522.1 10.0 16.9
Dec. 31, 2001 Dec. 31, 2000
€ million € million
Balance sheet total 20,056 20,742
Of which loans to clients 15,161 15,213
Net income for the year 12.4 73.1
The net income for 2001 amounting to €12.4 million was allocated to the specialpurpose
reserve, which thus increased to €1,342 million. The special-purpose
reserve, which largely remains tied to IBB’s assistance policy objectives, will be
taken into account as equity for the purpose of determining the regulatory equity
ratios of Landesbank Berlin and the Group. IBB’s risk assets are included in the
corresponding amounts for Landesbank Berlin and the Group respectively as part
of the aggregate totals.
GOVERNMENT ASSISTANCE PROGRAMMES 41

The State of Berlin’s most important programmes to provide assis-
Scope of Investitionsbank
tance to trade and industry and real estate are combined under the
Berlin’s duties
umbrella of Investitionsbank Berlin. IBB provides assistance in the
form of loans at favourable interest rates, non-repayable subsidies, guarantees,
participations and free-of-charge consultations. As State Structure Bank, IBB can
launch its own development programmes and can take participations in companies
running industrial parks, site marketing and development and maintenance
of state-owned land for Berlin or perform similar structural policy functions. In
2001, IBB facilitated the revitalisation of school and sports facilities in the State of
Berlin. With IBB subsidies of approximately €51 million from own funds, structural
shortcomings at Berlin school and sports facilities were overcome.
Assistance to trade
and industry
In assisting to trade and industry, Investitionsbank Berlin is supporting
the structural change to the Berlin economy with its programmes
and measures. It provides assistance to young, innovative companies
in the sectors of the future and supports start-ups at all stages of the process of formation.
In addition to financial assistance, the focus is on providing advice: special
innovation consultants help to initiate, maintain and intensify IBB’s contacts
with founders and companies from the sectors of the future. Furthermore, they
analyse where there is particular need for assistance and where advice and programmes
can best be employed.
Investitionsbank Berlin is represented in real estate assistance by the
Real estate assistance
segments Promotion of Housing Ownership, Rental Housing Construction
as well as Modernisation and Maintenance of Housing. After years of
intensively supporting new builds, IBB principally supports the acquisition and
maintenance of living space with its programmes. The focus of Promotion of
Housing Ownership is the acquisition of owner-occupier housing from Berlin’s
housing portfolio and the establishment and foundation of new ownership-oriented
housing associations. Priority is given to using the funds for modernisation
and maintenance in the eastern part of Berlin because the need for reconstruction
is still as high as ever there.
42 GOVERNMENT ASSISTANCE PROGRAMMES

In addition to the implementation of the regional development programmes,
it is also IBB’s responsibility to acquire and optimise strategic
participations in the interest of the State. Having acquired the business operations
of Königliche Porzellan-Manufaktur (KPM) in July 2000 from the State of
Berlin, IBB acquired its second Structure Bank participation at the end of 2001 in
the form of Gewerbesiedlungs-Gesellschaft (GSG). GSG develops and operates
industrial estates in Berlin. The premises are predominantly made available to
small and mid-sized companies at favourable rates. With 650,000 m2 Structure Bank participations
of industrial
space at 48 locations in Berlin, GSG considerably increases the range of services
offered by IBB.
Cooperations
with universities
In conjunction with Humboldt-Universität (HU), Technische Universität
(TU), Freie Universität (FU) and Technische Fachhochschule
(TFH) as well as Fachhochschule für Technik und Wirtschaft
(FHTW), IBB founded the patent utilisation agency ipal in 2001. The aim of the
agency is to protect and utilise economically relevant research results by registering
a patent.
GOVERNMENT ASSISTANCE PROGRAMMES 43

Our Staff
In the Bankgesellschaft Berlin AG Group there was an annual average of 16,181
employees. In addition, we trained 526 entry-level employees.
The resolutions adopted in autumn for the reconstruction and restructuring of the
Group had significant impacts on staff development as a whole. In the next few
years to 2005, staff costs must be reduced considerably.
The savings of €300 million which are required for reconstruction will be provided
by the reduction of around 4,000 staff capacities, and by additional major
restructuring contributions made by the employees. These include salary losses
and waivers, the curtailment of special voluntary payments for senior staff,
employees not covered by agreed rates and employees covered by agreed rates as
well as reductions in current salaries. The basis for this is a reconstruction agreement
between Bankgesellschaft Berlin AG and the employee representatives. We
have aligned the existing framework agreement for structured staff reduction
measures with the reconstruction requirements.
Our qualification and staff development measures will subsequently be aligned
with the new strategic direction of the Group with emphasis on retail banking and
selected areas of corporate banking, capital markets and real estate.
Measures for strengthening the sales power of sales units are the focal point of the
retail banking areas in vocational and advanced professional training alike. The
Group does justice to the rapid development in telecommunications technology
and IT, in that young people are trained to be integrated-system specialists, information
specialists, information and IT systems workers or they study IT at the
vocational training institute.
We have aligned the existing systems in the Group for selecting and developing of
management potential with the reconstruction of the bank. These proved their
value in choosing the new management in connection with the reconstruction.
We would particularly like to thank our employees for their special commitment
in accepting the challenges given to them and who have shown great dedication
to the Group in their areas of responsibility under the most difficult circumstances.
44 OUR STAFF

Liebknechtbrücke, Berlin-Mitte
We would like to thank all our employee representatives for their understanding
and constructive cooperation, especially in the elaborating of agreements on
reducing staff costs.
We honour the memory of both active and retired members of staff who passed
away in 2001.
OUR STAFF 45

Management Report
46
1. Overview of the 2001 financial year
The 2001 financial year was characterised in particular by the strategic reorientation
of the Bank, by further adjustments in the lending portfolios and by tackling
the problems of Real Estate Services. From a legal, business, and strategic point of
view, the Group’s structures were revised and an extensive restructuring concept
was developed to return Bankgesellschaft Berlin AG to profitability with lasting
effect.
Restructuring and reorientation • To support the capital increase implemented on
October 4, 2001, the Board of Management drew up a restructuring plan in the
summer of the financial year in question. This plan represented the prerequisite
for a positive decision from the supervisory committees with regard to a capital
increase of up to € 2 billion and the registration of financial aid with the EU authorities
responsible. The cornerstones of this plan were significant restructuring of
the business activities within Real Estate Financing and a reduction of Corporate
and International Banking. In addition, it was decided to restructure and redimension
Real Estate Services. Furthermore, it was planned to combine
the Group’s regional core business in the sense of “one Bank”.
Extensive analyses of the market environment and the financial strengths of the
Bank were carried out on this basis. In November of the financial year under
review, a reworked and concrete version of the reconstruction and restructuring
concept was submitted. From this, a business model for the future orientation of
the Bank was developed. The overall concept was unanimously approved on
November 30, 2001 by the Bank’s Supervisory Board.
The reorientation is aimed at positioning the Bank as a strong regional partner in
the Berlin area. In adjunct to this, activities in both internationally-oriented business
and the presence throughout Germany will be scaled back considerably. Significantly
lower risk assets, a substantially improved risk profile and the sustained
reduction of administration costs are set to safeguard the Group’s operating earnings
power. In future, this will rely on Retail Banking and Regional Corporate
Banking in the Berlin area, whose improvements in efficiency will be vigorously
promoted.
MANAGEMENT REPORT

Business with regional private and corporate clients, which to date has been managed
in various legal entities (Berliner Sparkasse/Landesbank Berlin – Berliner
Bank/Bankgesellschaft Berlin AG), is set to be combined in Landesbank Berlin
whilst still maintaining the Berliner Bank and Berliner Sparkasse brands. With
this dual-brand strategy, the Bank is endeavouring to consolidate the sound market
position within regional retail banking and significantly increase earnings
from the business areas. The two brands are set to be united in one legal entity (as
departments within Landesbank Berlin) by January 1, 2003. A uniform settlement
organisation for both brands should underpin more efficient management of the
retail banking business and systematic exploitation of the market potential. The
Berliner Bank brand in particular will continue to increase its profile in the
demanding consultancy business. The Berliner Sparkasse brand will be consistently
positioned as a highly efficient market leader with a comprehensive range of
services and an excellent local presence within Retail Banking. We are examining
the possibility of selling the other Group participations where the focus of activities
is in Retail Banking.
Within Real Estate and Capital Markets, both the quality of the portfolios as well
as risk-carrying capability appropriate to the Bank are at the fore. Commercial
Real Estate Financing is limited to selected regional and property-related investments,
whereby this business is also managed nationwide to spread the risk.
Berlin Hyp will continue to operate in this segment as a specialised bank. The redimensioning
of Capital Markets is mainly aimed at releasing tied-in capital and
focusing on high-income business areas.
This reorientation and redimensioning of the Bank will result in considerably
more streamlined and more transparent organisational and procedural structures.
It will also lead to the number of employees being reduced and space being
relinquished in conjunction with the rationalisation of locations. The associated
expenditure required the additional allocation of restructuring provisions
amounting to €318 million (of which: Bankgesellschaft Berlin, LBB and Berlin
Hyp € 250 million in total, IBAG €59 million). On the other hand, administration
expenditure will fall by €450 million (€150 million operating expenditure, €300
million personnel costs) by 2005 after the concept has been successfully implemented.
A key part of this concept is a corresponding framework agreement with
the employee representatives within the Group.
Protection of risk from Real Estate Services • An additional focus in the 2001
financial year was uncovering and tackling problems in Real Estate Financing and
Real Estate Services. Critical examination of the risk portfolio delayed the preparation
of the 2000 annual financial statements until the summer. Special audits
by the Federal Banking Supervisory Authority, extensive audits of the annual
MANAGEMENT REPORT
47

financial statements for the individual Group companies, special audits commissioned
by Supervisory Boards and the Group Board of Management, plus a large
number of audits of the Internal Audit department unveiled weak points at the
sub-banks and at the former IBG, both in the assessment of Real Estate and Real
Estate Services and in the valuation and processing of real estate risks. These risks
were up-dated from a market point of view which led to amended procedures and
to correspondingly high value adjustments. This process continued in the second
half of the year. For IBAG (new fund business) this means a move away from large
parts of its value-added chain and the intended orientation towards premium real
estate and new fund conception, with liability on guarantees reduced to the market
norm, and lower sales volume.
In addition, weakening real estate markets in Berlin and throughout Germany
gave rise to further value adjustments for Real Estate Services (guarantees from
existing business, portfolio real estate).
Against this background, protection from substantial risks from Real Estate Services
was successfully obtained from the State of Berlin with the objective of
ensuring the existence of the Group in the long run. In the balance sheets of the
companies covered by the agreement, it was possible to dispense with the revaluation
normally required for the loans, guarantees and letters of comfort existing in
conjunction with Real Estate Services thanks to this agreement.
Detailed agreement with the State of Berlin • The agreement between Bankgesellschaft
Berlin AG and its subsidiaries with the State of Berlin, concluded in an
initial agreement in principle in December 2001 and replaced by a detailed agreement
on April 16, 2002 protects the Group from the substantial risks in this business
that had arisen by December 31, 2001. This does not include risks from new
business established thereafter, such as the launch of real estate funds after
December 31, 2000.
With the exception of individual commitments with named borrowers, the
guarantees cover loans and loan commitments to the IBG/IBAG Group companies
named in the agreement as well as certain property and fund companies, which
Bankgesellschaft Berlin, LBB or Berlin Hyp have originated or guaranteed.
Furthermore, the key balance sheet assets of the IBAG Group and the IBG Group
companies are incorporated, including certain provisions and exemption from
contingent liabilities and contingencies. Claims from the book value guarantee
only arise in the event of disposal or liquidation of guaranteed balance sheet assets
or final realisation of a risk covered by the exemption up to final settlement to be
performed by December 31, 2031 at the latest. In the course of this, losses realised
48 MANAGEMENT REPORT

are to be reimbursed by the State and capital gains are to be transferred to the
State. Book values in IBAG participations in which this company manages its new
business are excluded from this guarantee.
The State has also exempted LPFV, the Bank’s subsidiary specialising in the management
of the fund guarantee, from its liability risks should the portion of the loss
to be borne exceed €100 million. With the exception of certain individual funds,
the result is that the Group is protected against substantial liability risks from the
fund guarantees issued. Furthermore, the State has largely exempted the Group
from enforcement from the letters of comfort that existed until December 31, 1998
for IBG, IBV and Bavaria.
The State has been granted audit rights in accordance with the Federal Law on
Budgetary Principles (HGrG) at the Group companies involved and additional
information and controlling rights. Thus, certain measures are only covered by
the guarantee or exemption if the State has approved the measures in question in
advance.
For the obligations of the parties resulting from the detailed agreement, joint and
several liability has been fixed covering various companies including Bankgesellschaft
Berlin AG. The Group is still to distribute liability internally.
In future, the State will receive guarantee commission from the Group for assuming
the various guarantees, which will amount to €15 million per annum at least
up to and including 2011. A final ruling will be made on the breakdown of these
costs within the Group. In addition, the State of Berlin has received a debtor warrant,
which carries with it certain conditions.
Overall, the agreement is conditional on adoption of the resolution by the Berlin
House of Representatives, which occurred on April 9, 2002, and the European
Commission approval of the financial aid.
Together with the decision on the ruling relating to the protection agreement, the
Berlin House of Representatives has decided that the shares in Bankgesellschaft
Berlin AG held by the State of Berlin are to be sold as quickly as possible at conditions
acceptable to the State of Berlin. In conjunction with such a reorganisation
of the ownership structure of Bankgesellschaft Berlin, Investitionsbank Berlin
(IBB), as an autonomous public sector investment bank, is to be detached from
Bankgesellschaft Berlin.
MANAGEMENT REPORT 49

Capital increase • The loss in the 2000 financial year led to the regulatory equity
ratios not being met and necessitated a €2 billion capital increase in October 2001.
As a result of the development of the Bank over the course of the year, the subscription
price of €2.56 and the open issues relating to the ownership structure in
particular, the stock market price of our share performed at the subscription price
level for the remainder of the past financial year. With a reporting date rate of
€2.56, the stock market value of the Bank’s shares in circulation remains approximately
30% below the shareholders’ equity reported on the balance sheet.
The Board of Management believes that the €2 billion injection of capital, the State
of Berlin assuming the risks from Real Estate Services as at December 31, 2001
and the Group’s orientation towards a strong regional bank in the Berlin area –
conditional on approval by the EU Commission – have formed the basis for positive
future-oriented development. This is supported by an agreement with the
employee representation to reduce operating expenditure and personnel costs.
The assumption of the majority of the capital increase at Bankgesellschaft Berlin
from August 29, 2001 and the exemption from the Real Estate Services risks by the
State of Berlin are part of the application to the EU Commission to approve the
restructuring aid.
The injection of capital by the State of Berlin, in accordance with the capital
increase, resolved by the Bankgesellschaft Berlin AG Annual General Meeting on
August 29, 2001, relates to its approval by the EU Commission as financial aid for
a limited period from July 25, 2001. In order that aid is available for Bankgesellschaft
Berlin AG in the long term, additional approval as restructuring aid is
required.
EU aid proceedings relating to the capital increase and risk protection • On January
28, 2002, the Federal Republic of Germany submitted the application for
approval of restructuring aid relating to Bankgesellschaft Berlin AG to the European
Commission. The application for approval of restructuring aid covers both
the injection of capital by the State of Berlin into Bankgesellschaft Berlin AG
amounting to approx. €1.7 billion, as implementation of the capital increase resolution
from August 29, 2001, as well as the agreement between the State of Berlin
on the one hand and Bankgesellschaft Berlin AG and individual Bankgesellschaft
Berlin Group companies, namely Landesbank Berlin –Girozentrale–, Berlin-
Hannoversche Hypothekenbank AG, LPFV Finanzbeteiligungs- und Verwaltungs-
GmbH, IBAG Immobilien und Beteiligungen AG and Immobilien- und Baumanagement
der Bankgesellschaft Berlin GmbH, on the other hand relating to
protection from substantial risks from Real Estate Services of Bankgesellschaft
50 MANAGEMENT REPORT

Berlin AG and individual Bankgesellschaft Berlin Group companies up to December
31, 2001.
With a resolution dated April 9, 2002, the European Commission began formal
proceedings to examine in detail the restructuring aid granted by the State of
Berlin for Bankgesellschaft Berlin AG. As a result of a preliminary audit of the
application for approval of restructuring aid submitted by the Federal government,
the European Commission has come to the conclusion that, on the basis of information
available to date, there are currently serious objections to the compatibility
of the aid with the Common Market. The opening of the formal proceedings is
a procedural step that simply expresses the European Commission’s preliminary
view but does not anticipate the final outcome of the audit proceedings. The serious
doubts expressed by the European Commission at the institution of proceedings
about whether approval could be granted therefore have no prejudicial
impact of the outcome of the proceedings.
Based on the course of the proceedings to date, Bankgesellschaft Berlin AG is very
confident that the European Commission will approve the application for
approval of the restructuring aid submitted by the Federal government on January
28, 2002. On the basis of the decision by the European Commission from April
9, 2002 on the initiation of formal proceedings, the Commission attach approval of
the restructuring aid to additional, in part drastic, structural measures of Bankgesellschaft
not yet provided for in the restructuring plan, such as the dismantling of
further business areas including the disposal of further Group companies. It is
also possible that the European Commission will demand additional reductions in
the amount of aid applied for. On the basis of the opening resolution by the European
Commission dated April 9, 2002, it can also be assumed that the Commission
will tie approval of the restructuring aid with a solution to the legal problem of aid
associated with the transfer of Wohnungsbau-Kredit-Anstalt (now: IBB) to LBB.
Against this background, it is to be expected that the European Commission will
combine approval of the restructuring aid with the obligation to privatise Bankgesellschaft
in the near future.
A more detailed illustration of the risks associated with the EU approval proceedings
can be found in the Risk Report.
General development of business • Against the background of the weak domestic
economy, the continued decline of the real estate markets in eastern Germany and
Berlin, plus the tough capital market environment, it was only the protection of the
Real Estate Service risks that made it possible to limit the net loss for the year
within the Group to € –112 million in the 2001 financial year.
MANAGEMENT REPORT 51

The results of the individual components of the operating business developed as
follows:
• Net interest income rose by € +234 million, or +14.3%, to €1,876 million. The
drop posted in operating client business was over-compensated by strategic
interest rate management measures.
• At €386 million, net commission income was € –76 million or –16.5% below the
figure for the previous year. The most important individual factor in this context
is the significantly weaker result from securities transactions as a result of the
sustained unfavourable stock market climate.
• The trading performance (net results from financial transactions) was € –106
million (previous year: € +139 million). This includes a negative impact from
own shares in the order of €143 million. Earnings components that are included
in the trading result according to international practices, are shown under interest
and commission income due to German accounting principles for banks.
• Administrative expenditure increased by € +154 million or +9.2% to €1,828 million
(previous year: €1,674 million) mainly due to expenditure in connection with
the restructuring measures and measures to further develop the IT landscape
within the Group.
• For risk provisions within the lending business, a total of €738 million was
employed. Without the protection of substantial risks from Real Estate Services by
the State of Berlin, considerably greater provision would have been necessary in
2001.
52 MANAGEMENT REPORT

The following table provides an overview of the provisioning expenditure within the Group overall:
in € million Group AG LBB Berlin Hyp Real Other
Estate Group
Services1) companies2) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
Risk provisioning in the
lending business (net) 738 1,537 227 284 224 572 253 640 0 0 34 41
Depreciation on participations
Gains from sale of securities
54 20 398 398 14 84 0 106 0 3 – 358 – 571
in the liquidity reserve 25 27 44 26 10 17 – 9 – 13 0 0 – 20 – 3
Loss takeovers from participations
Reconstruction contribution
49 71 264 27 18 35 7 8 1 0 – 241 1
from participations 0 0 0 146 0 98 0 83 0 0 0 – 327
Provisions for Real Estate Services 102 972 0 116 0 117 0 16 102 723 0 0
Write-backs – 965 0 – 116 0 – 117 0 – 16 0 – 716 0 0 0
Total provisioning expenditure 3 2,627 817 997 149 923 235 840 – 613 726 – 585 – 859
1) previous year: fund business
2) less consolidation effects
The risk provisioning in the lending business mainly relate to the divisions Real
Estate Financing (€473 million), Retail Banking (€79 million), Corporate/International
Banking (€78 million) and Regional Corporate Banking (€70 million).
In the 2001 financial year, we gave the following activities the highest priority.
In 2001, the focus of our attention was on Group-wide risk management. A Risk
Review Committee was founded as a key measure for improving structural and
organisational conditions. The objective is to implement a uniform risk management
office. In addition, the Board of Management approved a Group risk manual
that combines the principles of risk controlling throughout the Group.
The work on the projects ARMADA (control and management of market price
risks by decentralised risk architecture) and KOLIBRI (design for an exposure
and limit management system, which are to form the basis for a uniform credit
risk management system) continued as planned.
With the implementation of SAP for administration expenditure at Bankgesellschaft
Berlin AG and certain service companies, the Group is getting closer
to achieving a standardised IT platform.
MANAGEMENT REPORT 53

Under the leadership of the staff unit Credit Risk and Portfolio Management, work
commenced on preparing for the new requirements of the Basel Agreement (Basel
II). A pre-study, which determined the need for action by the Group and formulated
recommendations for action, was successfully concluded and forms the
basis of a project to be started in 2002.
The Bank is optimising its capacity and cost structures. This is mainly happening
through foregoing services and equipment within administration, streamlining
numerous processing procedures and investments in projects with a promising
future.
Following the capital increase adopted by the Annual General Meeting in August
2001, the following ownership ratios exist at Bankgesellschaft Berlin (rounded
off): State of Berlin 81% (previously: 57%), NORD/LB 11% (previously: 20%),
Parion financial holding 2% (previously: 7%) and free float 6% (previously: 16%).
As at December 31, 2001, 2.75% of that was held by the Bank.
2. Development of income
Thanks to the protection of the Real Estate Services risks and positive special
effects, Bankgesellschaft Berlin Group posted a result before taxes amounting to
€ –59 million (previous year: € –1,559 million) in 2001. The result after taxes
amounted to € –112 million (previous year: € –1,648 million).
Net interest income • Net interest income rose by € +234 million or +14.3% to
€1,876 million. The drop posted in operating client business was over-compensated
by strategic interest rate management measures. Overall, the interest rate
spread comes to 0.94% (previous year: 0.81%), excluding strategic interest rate
management measures 0.74% (previous year: 0.81%).
Depending on their balance sheet structure, the Group’s sub-banks are involved
in this development to varying degrees. Bankgesellschaft Berlin AG and LBB produced
a significant share of income from strategic interest rate management.
Interest income from the lending and money market business, fixed-income
securities and debt register claims fell by € –311 million or –3.0% to €10,228 million.
The even more marked drop in interest payable by € –627 million or –6.8% to
€8,639 million over-compensated this development.
54 MANAGEMENT REPORT

Earnings from current operations fell by € –82 million or –22.7% to €280 million.
This development was largely characterised by the € –78 million or –22.1% drop
in income from shares and other non-fixed-income securities to €275 million as a
result of declining dividend distributions from public limited companies and the
specific reduction in trading portfolios.
Net commission income • At €386 million, net commission income remained
€ –76 million or –16.5% down on the high figure for the previous year.
The most important single factor is the considerably weaker result in the securities
and issue business as a result of the sustained weak stock market environment.
The other key pillars in the commission business, payment services/account management,
contributed a result approximately at the level of the previous year. In
contrast, commission for the lending business dropped considerably in view of the
conscious restraint in loan commitments in the real estate business in a regionally
weak market. We successfully defended our position as the largest credit card
issuer on the German market in conjunction with our cooperation partners. The
result from the credit card business amounting to €47 million is up on the result
for the previous year (€44 million).
Net results from financial transactions • The trading performance (net results
from financial transactions) amounts to € –106 million (previous year: € +139 million).
Excluding the negative impact from our own shares, the trading performance
amounts to € +37 million.
Interest-related business negatively impacted the trading performance by € –42
million (previous year: € –54 million). It must be stressed that key earnings components
from interest rate-oriented trading are shown as net interest income
according to German accounting principles.
Trade with shares and share derivatives achieved earnings in the amount of €58
million compared with €147 million the previous year, thus reflecting the weak
stock market environment.
Other trading generated €21 million (previous year: €47 million), predominantly
through foreign exchange trading.
MANAGEMENT REPORT 55

Administrative expenditure • Administrative expenditure within the Group rose by
€ +154 million or +9.2% to €1,828 million (previous year: €1,674 million). This development
is mainly due to a moderate increase in personnel costs (+1.1%) and a
significant increase in other administration expenditure (+21.7%).
Staff costs amounted to €984 million compared with €973 million in the previous
year (+1.1%). The increase in agreed pay rates in particular had a negative impact
in 2001.
In the sense of the restructuring of the Group, substantially lower provisions for
bonus payments and other voluntary payment were set up in the financial year
under review.
The reduction of staff costs within the Group (excluding sub-group IBAG) as a
result of introducing measures to cut the number of employees by 600 in 2001, did
not have a conclusive impact on the financial year in question. Furthermore,
approximately 400 additional personnel agreements were concluded in 2001,
including pre-retirement regulations and part-time contracts for those approaching
retirement, which will only reduce staff costs in the future.
Other administrative expenditure increased by € +124 million or +21.7% to €696
million.
The main reason for this is the expenditure for improving risk management and
risk controlling as well as for the further development of the IT landscape within
the Group. Work continued on the ARMADA project (completion 2nd quarter
2002) for controlling and managing market price risks. In addition, the KOLIBRI
project (completion end of 2003), that is set to create the technological data basis
for comprehensive credit risk management, was further developed as scheduled.
The standard application, SAMBA, was introduced at Landesbank Berlin for bank
regulatory reporting and preparations were completed for the implementation of
SAP R/3. SAP R/3 records administration expenditure after 2002, a step that was
completed for Bankgesellschaft Berlin AG and certain service companies already
in 2001. In this way, the Group is getting closer to its aim of a uniform IT platform.
Operating cost accounting procedures could then be carried out on a uniform
basis.
56 MANAGEMENT REPORT

The Euro II project for the euro cash launch (including processing and transporting
money, conversion of cash points) was continued in 2001 and is now concluded
as scheduled.
Normal depreciation and value adjustments on intangible and tangible assets in
the amount of €148 million (previous year: €129 million) result from depreciation
of bank buildings, IT hardware and office furnishings and fixtures.
Balance of other operating income and expenditure • The balance of other operating
income and expenditure amounts to € –197 million. It consists of the balance
of other operating income and expenditure (€ –186 million) and other taxes (€ –11
million).
The balance of other operating income and expenditure is definitely marked by
the business of the Group companies IBAG, IBG and LPFV.
IBAG’s contribution to earnings amounting to € –37 million reflects the low sales
of unit trust shares and the necessary risk provisioning in the fund business. IBG
and LPFV negatively impacted earnings by € –84 million.
As a result of risk protection by the State of Berlin, the provisions set up in 2000 for
risks from fund business guarantees (€723 million) at LPFV via the balance of
other operating income and expenditure were largely written back in the 2001
financial year. The write back is shown under extraordinary earnings.
The balance of other operating income and expenditure also contains expenditure
relating to Investitionsbank Berlin in the context of the public development funding
contract (€51 million).
Risk provisioning • The balance of risk provisioning amounts to €765 million and
breaks down into the following components:
For risk provisioning in the lending business, a total of €738 million (previous
year: €1,537 million) was set up, of which €227 million at Bankgesellschaft, €224
million at Landesbank Berlin (including Investitionsbank Berlin) and €253 million
at Berlin Hyp.
The predominant share (€473 million) relates to Real Estate, which is consequently
substantially below the level of the previous year (€1,106 million).
In net terms, earnings from securities in the liquidity reserve amount to € –25 million
(previous year: € –27 million).
MANAGEMENT REPORT 57

Risk provisioning break down as follows:
in € million Group AG
2001 2000 2001 2000
Risk provisioning in lending business
value adjustments debited
from the P&L account 1,020 1,787 291 368
direct write-backs
value adjustments credited
38 29 26 14
to the P&L account
receipts related to
311 254 86 93
written-off receivables 9 25 4 5
Total risk provisioning – net
Earnings from securities
in the liquidity reserve
738 1,537 227 284
income components 95 65 35 4
cost components 120 92 79 30
Earnings from securities – net
Total before change in
– 25 – 27 – 44 – 26
§ 340f HGB reserve
Change in
763 1,564 271 310
§ 340f HGB reserve 2 – 366 – – 242
Total risk provisioning 765 1,198 271 68
Earnings from financial investments • The earnings from financial investments
(participations, investment securities) within the Group amount to €1 million
(previous year: €15 million).
This includes income from incorporating Landesbausparkasse Berlin (€40 million)
into LBS Norddeutsche Landesbausparkasse Berlin-Hannover as well as the
€15 million proceeds from the sale of shares in Deutsche Börse AG.
Balance of other items • This summary item mainly includes expenditure from
transferred losses as well as extraordinary expenditure and extraordinary income.
Extraordinary expenditure and income are substantially characterised by the
restructuring and the associated reorientation of the Group.
Taking into account the provisions already set up the previous year, an additional
€ 318 million in total was set up for the restructuring measures adopted and introduced
within the Group. The costs relating to personnel and operating expenditure
as well as premises management identified in the context of the restructuring
concept are covered.
58 MANAGEMENT REPORT

Profit and loss account
Extraordinary income also includes the write-back of provisions set up the previous
year for the risks from guarantees at LPFV (€716 million) and other real
estate fund risks within Group banks (€249 million).
Income taxes • Income tax expenditure within the Group amounts to €53 million
(previous year: €89 million). This includes income from the write-back of tax provisions
amounting to €65 million as a result of settling the law-suit with the city of
Hanover regarding recognition of the partial integrated inter-company relationship
between Bankgesellschaft and Berlin Hyp. Units abroad negatively impacted
earnings by €47 million.
in € million Group AG
2001 2000 Change 2001 2000 Change
Net interest income 1,876 1,642 234 582 342 240
Net commission income 386 462 – 76 142 169 – 27
Net results from financial transactions – 106 139 – 245 – 105 158 – 263
Administrative expenditure 1,828 1,674 154 777 705 72
staff costs 984 973 11 314 307 7
other administrative expenditure
depreciation and value adjustments
696 572 124 451 385 66
on intangible and tangible assets 148 129 19 12 13 – 1
Balance of other operating income and expenditure – 197 – 755 558 42 62 – 20
Operating profit before risk provisioning 131 – 186 317 – 116 26 – 142
Risk provisioning (excl. reserve pursuant to § 340f HGB) 763 1,564 – 801 271 310 – 39
Operating profit (excl. reserve pursuant to § 340f HGB) – 632 – 1,750 1,118 – 387 – 284 – 103
Changes to § 340f HGB reserve 2 – 366 368 0 – 242 242
Operating profit – 634 – 1,384 750 – 387 – 42 – 345
Earnings from financial investments 1 15 – 14 – 383 – 381 – 2
Balance of other items 574 – 190 764 437 – 492 929
Earnings before taxes – 59 – 1,559 1,500 – 333 – 915 582
Income taxes 1) 53 89 – 36 33 83 – 50
Net loss for the year – 112 – 1,648 1,536 – 366 – 998 632
1) 2000: taxes, i.e. including other taxes
MANAGEMENT REPORT 59

3. Development of volume
The consolidated balance sheet total as at December 31, 2001 fell by € –15.6 billion
or –7.6% to €189.2 billion (31.12.2000: €204.8 billion). The drop mainly relates
to the scheduled reduction of both loans and advances to banks as well as loans
and advances to customers by relinquishing high-risk and low-margin business.
As at the balance sheet date, the nominal volumes of derivative transactions
amounted to €888.3 billion. This equates to a deferred notation in the sense of
Principle I of the German Banking Act (risk of counter-party default) amounting
to €1.5 billion.
The balance sheet total breaks down as follows over our key Group companies:
Dec. 31, 2001 Dec. 31, 2000
% %
Bankgesellschaft Berlin AG 33.4 32.4
Landesbank Berlin 35.6 36.3
of which:
Investitionsbank Berlin (8.2) (7.8)
Berlin-Hannoversche Hypothekenbank AG 17.5 17.1
Bankgesellschaft Berlin International S.A. 2.5 3.3
Weberbank Privatbankiers KGaA 2.2 2.3
91.2 91.4
Other banks 3.9 3.7
Other Group companies 4.9 4.9
100.0 100.0
The lending volume within the Group reached €117.3 billion, –5.4% or € –6.7 billion
less than in the previous year.
60 MANAGEMENT REPORT

The lending volume breaks down as follows:
Lending volume in the Group
Dec. 31, 2001 Dec. 31, 2000 Change
€ million € million € million %
Acceptances
(if not posted under
loans and advances) 92 44 48 109.1
Loans to banks
Loans and advances
17,935 20,726 – 2,791 – 13.5
to customers1) of which:
mortgage loans from the
99,259 103,239 – 3,980 – 3.9
mortgage bank 19,039 19,077 – 38 – 0.2
public sector loans
other loans secured
28,141 30,886 – 2,745 – 8.9
by mortgages
other loans and advances
15,541 15,575 – 34 – 0.2
to customers 36,538 37,701 – 1,163 – 3.1
Lending volume 117,286 124,009 – 6,723 – 5.4
1) Excluding reverse repos and receivables from securities lendings
Assets • The increased cash reserve is due to a rise in the balances held by
Bankgesellschaft and LBB at Deutsche Bundesbank on the basis of balance sheet
date-related trading.
Loans and advances to banks fell by € –4.7 billion, or –12.2%, to €33.6 billion. The
main reason for this is the drop in both the long-term lending business as well as
the short-term money market business.
The drop in loans and advances to customers of € –4.0 billion or –3.8% to €99.3
billion is largely due to the significantly reduction in public sector loans in longterm
lending.
Risk provisioning in the lending business amount to €5,181 million (previous
year: €4,832 million). In terms of the total lending volume, this results in an
increase in the ratio from 3.9% to 4.4%.
Bonds and other fixed-income securities were increased by €807 million to €40.2
billion. The increase is mainly connected with the collateralisation of refinancing
transactions.
MANAGEMENT REPORT 61

The substantial drop in the item shares and other non fixed-income securities of
€ –4.5 billion or –47.7% to €4.9 billion is due to the fact that the significant share
index strategies were extensively and deliberately scaled back.
The item participations and shares in affiliated companies grew predominantly as
a result of the non-consolidated subsidiaries and participations of IBAG. The IBAG
Group is made up of the subsidiaries that were sold by IBG as at December 31,
2000 with the aim of reselling them. The intended sale to third parties was
retracted with effect from January 2, 2001. The key subsidiaries will be reintegrated
into the consolidation of the Bankgesellschaft Group under the umbrella of
IBAG. On August 29, 2001, the Annual General Meeting of Bankgesellschaft
resolved to conclude a profit and loss transfer agreement with IBAG starting
January 2001.
Equalisation claims fell by € –470 million or –38.7% to €744 million as a result of
becoming due, in particular from the Group’s business activity in Luxembourg.
The drop in other assets results almost exclusively from the equalisation claims
pending payment that were included in this item in the previous year.
Group assets
Dec. 31, 2001 Dec. 31, 2000 Change
€ million € million € million %
Cash reserve
Debt issues of public
1,361 796 565 71.0
banks and bills 92 44 48 > 100
Loans and advances to banks
Loans and advances
33,604 38,261 – 4,657 – 12.2
to customers 99,305 103,268 – 3,963 – 3.8
Debt securities 40,184 39,377 807 2.0
Shares
Participations, shares in
associated and affiliated
4,938 9,437 – 4,499 – 47.7
companies 854 425 429 > 100
Assets held in trust 274 336 – 62 – 18.5
Equalisation claims 744 1.214 – 470 – 38.7
Tangible assets 624 534 90 16.9
Other assets 7,183 11,116 – 3,933 – 35.4
Total assets 189,163 204,808 – 15,645 – 7.6
62 MANAGEMENT REPORT

Liabilities and shareholders’ equity • Deposits by banks fell by € –4.9 billion or
–7.2% to €63.9 billion in line with reduced money dealing activities and lending
transactions.
Customer savings dropped by € –452 million or –0.7% to €62.3 billion. The spinoff
of Landesbausparkasse Berlin played a decisive part in this.
Due issues in particular, which were not compensated by new issues were decisive
for the € –10.9 billion or –18.8% drop in securitised liabilities to €47.1 billion.
This development is due to the delayed 2000 annual financial statements 2000 and
the uncertainty concerning the shareholder structure, which made access to the
capital markets more difficult. The market environment for issuing securitised
liabilities within the Group was also marked by the pending elimination of public
sector liability and guarantor’s liability for public banks after July 2005, which resulted
in medium to long-term refinancing becoming more expensive.
Total provisions were reported at €2,930 million (December 31, 2000: €3,380 million).
The downward development comprises contrary effects, in particular in
other provisions. Provisions for restructuring measures increased by €300 million
to €506 million. Provisions for portfolios, securities and foreign exchange transactions
rose by €147 million to €409 million. The write back of provisions reported
at LPFV for the fund business and the provisions set up the previous year at Group
banks for portfolio real estate amounted to €965 million.
The € –0.7 billion drop in other liabilities is largely due to the de-consolidation and
subsequent reintegration of the Real Estate Services companies.
Consolidated shareholders’ equity reflects the €2.0 billion capital increase at
Bankgesellschaft Berlin AG from October 2001.
MANAGEMENT REPORT 63

Group liabilities
Dec. 31, 2001 Dec. 31, 2000 Change
€ million € million € million %
Deposits by banks 63,868 68,790 – 4,922 – 7.2
Customer savings 62,276 62,728 – 452 – 0.7
of which:
savings deposits incl.
home loan savings deposits
other liabilities
9,684 10,088 – 404 – 4.0
due to demand 14,139 11,428 2,711 23.7
other term liabilities 38,453 41,212 – 2,759 – 6.7
Securitised liabilities
of which:
mortgage Pfandbriefe
47,086 57,985 – 10,899 – 18.8
and public Pfandbriefe 34,667 37,743 – 3,076 – 8.1
other bonds 12,053 19,815 – 7,762 – 39.2
other securitised liabilities 366 427 – 61 – 14.3
Trust liabilities
Provisions for liabilities
274 336 – 62 – 18.5
and charges 2,930 3,380 – 450 – 13.3
Subordinated capital 3,016 3,054 – 38 – 1.2
Shareholders’ equity
of which:
4,525 2,611 1,914 73.3
share capital 2,555 558 1,997 357.9
reserves1) 1,970 2,053 – 83 – 4.0
Other liabilities 5,188 5,924 – 736 – 12.4
Total liabilities 189,163 204,808 – 15,645 – 7.6
1) Including unappropriated profit/loss of € –1,553 million (previous year: € –1,471 million) and adjustment
items for minority interests of € 81 million (previous year: € 29 million).
Capital ratios • As at December 31, 2001, the total bank regulatory total capital resources
of the Group pursuant to the German Banking Act amount to €7.7 billion.
In relation to the risk items amounting to €82.7 billion, the overall key ratio pursuant
to the German Banking Act principle is 9.4% and the core capital ratio is
5.7% (after approval of the annual financial statements and taking into account the
protection of substantial Real Estate Services risks by the State of Berlin). The
overall key ratio for the AG comes to 11.5% and the core capital ratio is 7.0%.
64 MANAGEMENT REPORT

4. Bankgesellschaft Berlin AG
The balance sheet total of Bankgesellschaft Berlin AG fell in the reporting year
from €85.5 billion to €81.7 billion, i.e. by –4.4%. The €1.4 billion growth in bonds
and other fixed-income securities is offset by a fall in the share portfolio of € –3.4
billion as a result of modified trading strategies. On the refinancing side, securitised
liabilities fell by € –7.1 billion as a result of becoming due. The Bank replaced
this to the extent necessary through borrowings with banks.
AG assets
Dec. 31, 2001 Dec. 31, 2000 Change
€ million € million € million %
Cash reserve 504 187 317 > 100
Loans and advances to banks
Loans and advances
21,023 23,153 – 2,130 – 9.2
to customers 19,261 18,795 466 2.5
Bonds 29,742 28,352 1,390 4.9
Shares 3,496 6,910 – 3,414 – 49.4
Participations 140 140 0 0.0
Shares in affiliated companies 2,659 2,092 567 27.1
Equalisation claims 334 122 212 > 100
Tangible assets 97 92 5 5.4
Other assets 4,445 5,652 – 1,207 – 21.4
Total assets 81,701 85,495 – 3,794 – 4.4
Loans and advances to banks and deposits by banks also include internal transactions
in the Group.
The item shares in affiliated companies increased by €567 million to €2,659 million.
The increase mainly relates to the reacquisition of IBAG shares and participation
in the Berlin Hyp capital increase.
The increase in the item equalisation claims is due to transactions with Zivnostenska
banka.
MANAGEMENT REPORT 65

AG liabilities and shareholders’ equity
Dec. 31, 2001 Dec. 31, 2000 Change
€ million € million € million %
Deposits by banks 48.091 45.918 2.173 4,7
Customer savings 13.472 13.453 19 0,1
Securitised liabilities
Provisions for liabilities
10.132 17.209 – 7.077 – 41,1
and charges 1.359 1.386 – 27 – 1,9
Subordinated capital 2.577 2.588 – 11 – 0,4
Shareholders’ equity
of which:
3.419 1.786 1.633 91,4
share capital 2.555 558 1.997 357,9
reserves1) 864 1.228 – 364 – 29,6
Other liabilities 2.651 3.155 – 504 – 16,0
Total liabilities 81.701 85.495 – 3.794 – 4,4
1) Including unappropriated profit/loss of € –1,341 million (previous year: € –975 million)
Affiliated companies • Pursuant to section 312 of the German Stock Corporation
Act, the Board of Management of Bankgesellschaft Berlin AG has submitted a
report on business relations with affiliated companies for the 2001 financial year.
The declaration at the end of this report is as follows:
“The Board of Management of Bankgesellschaft Berlin AG hereby declares that
the Bankgesellschaft 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 the respective transaction and that these companies were not disadvantaged
by the measures taken.”
66 MANAGEMENT REPORT

5. Risk report
Qualified risk management was set out as a key component of Group management,
in particular since the principles of uniform management of the Bankgesellschaft
Berlin Group were adopted in 1999. Weak points at sub-banks and subsidiaries
came to light when preparing the 2000 financial statements and during
the various audits in 2001. These weak points included the implementation of
organisational and work process plans and the application of valuation benchmarks
imposed throughout the Group. We tackled these issues by continuing ongoing
projects and starting new ones, in particular to reorganise the lending and
work-out business.
Additional structural and organisational improvements were achieved by establishing
a Risk Review Committee and creating the “Group Risk Evidence” business
area as well as by introducing a Group Risk Manual.
The problems of the declarations of excemption and the resultant consequences
in the financial year under review in relation to sections 13 a to 14 of the German
Banking Act and Principle I were largely solved with regard to supervisory regulations.
The continued taxing situation of the real estate market, in particular in the core
region of Berlin-Brandenburg, once again made it necessary to provide considerable
funds for risk provisioning in this sector.
The unfavourable development on the real estate market also made it necessary
to further adjust the valuation carried out the previous year of real estate that IBG
had previously acquired for launching additional funds. Accordingly, it is mainly
the so-called “portfolio real estate” that is affected by this. Irrespective of this, a
comprehensive restructuring concept was drawn up in the IBAG Group division
and work started on implementing the same. Within LPFV, the subsidiary founded
to monitor fund risks, the risk models were both reworked and refined and additional
risk analyses were carried out, which would have resulted in additional provision
requirements for fund guarantees.
Against this background, an agreement in principle was successfully concluded
with the State of Berlin, and subsequently replaced by a detailed agreement to protect
the substantial risks from Real Estate Services entered into up to the end of
2000 and 2001 respectively. These agreements were subject to approval by the
Berlin House of Representatives, which was granted on April 9, 2002 by the adoption
of a corresponding law, and are conditional on financial aid approval by the
European Commission. Thanks to the corresponding agreement, made on
MANAGEMENT REPORT 67

December 19, 2001 and on April 2002, it was possible to write-back a large share
of the provisions for Real Estate Services set up within the Group in previous
years.
5.1 Overall system for planning, managing and monitoring risks
The functional separation of risk monitoring units from risk-taking business areas
has been in place within the Bankgesellschaft Berlin Group for several years now.
The task of identifying, assessing, monitoring and managing risks has been transferred
to various central divisions of the Bank, most of which are attached to the
Board department “Risk Management and Control”. The department is made up of
the following staff units: Credit Risk and Portfolio Management, Risk & Performance
for Capital Markets, Asset/Liability Management, Controlling, Finance,
Compliance and the staff unit established in 2001 Group Risk Evidence. Outside
this Board department, Treasury is responsible for the risk management of the liquidity
risk. A Risk Review Committee was set up in the financial year under
review, which consists of Members of the Board of Management of Bankgesellschaft
Berlin AG, Landesbank Berlin and Berlin Hyp as well as all the heads of
the specialist divisions responsible for the various risk categories. The committee
meets monthly, discusses both the methodical risk management procedures as
well as the current risk situation and should draw up management proposals for
the Board committees within the Group. The general risk policy principles and
concrete implementation of these principles were reworked in the financial year
in question and were documented in a group-wide risk manual. The Internal
Audit department monitors adherence to the criteria and the procedures for risk
management through internal audits.
Within the Group, we still differentiate between the following risk classifications
in terms of content:
• Risk of counterparty default
– Credit risk
– Counterparty risk
– Country risk
– Participation risk
• Liquidity risks
• Market price risks
• Operational risks
– System risks
– Personnel risks
68 MANAGEMENT REPORT

• Other risks
– Business policy and strategic decisions
– Declarations of exemption from liability
– Risks connected with IBAG Group real estate and fund business
– Risks from government-assistance programmes
– Legal risks
Special audits • Mandated by the Federal Banking Supervisory Office (BAKred),
various special audits took place at Bankgesellschaft Berlin AG, Landesbank
Berlin, Berlin-Hannoversche Hypothekenbank AG as well as IBAG, IBG and LPFV
in the 2001 financial year pursuant to section 44 of the German Banking Act.
The subject of these audits in particular was the lending business (valuableness
of receivables, adequacy of risk provisions, compliance with section 18 of the German
Banking Act, propriety of loan processing).
Furthermore, on the instruction of the Board of Management and the Supervisory
Board respectively, the Internal Audit department and external auditors carried
out various special audits, which concentrated specifically on the real estate business.
Necessary measures were implemented wherever the results of these audits, only
some of which are available, revealed a need for action. The increased risk provision
requirement, which came to light in the context of the audits of the lending
business, was, when known, taken into account in the 2000 financial statements
and subsequent information in the 2001 financial statements.
5.2 Risk of counterparty default
5.2.1 Credit risk
In terms of managing credit risks the overriding objective is to assess, monitor and
selectively reduce the risk potential of the Group. For this it is necessary to
• recognise and weigh up the risks of new business
• identify and assess the risks of the existing portfolio and
• diversify the structure of the loan portfolio and thus reduce the risk potential
MANAGEMENT REPORT 69

The prerequisite for reaching these objectives on a sustained basis is a reliable
database, which is not yet fully in place. As scheduled, the Group continued the
risk management projects from 2000. Above all, the IT basis for extensive credit
risk management and control will be created within the Group. The objectives
will be realised in various modules, which all build on each other:
• Creation of a loan evidence database: This database is set to centrally record
and consolidate risk-related data for all products (“traditional loans” as well as
capital market derivatives) from all sub-banks and all clients.
• Implementation of a limit management system: The introduction of a limit
management system will create the conditions for defining portfolios and
assessing and limiting their exposure risk.
• Establishing statistical risk assessment procedures (Credit-value-at-risk): On
the basis of the loan evidence database and after improved rating systems have
been introduced, it will be possible to use risk assessment procedures of this
kind throughout the Group.
• Redevolopment of the rating methods: The methods for retail banking and
wholesale banking transactions are being fundamentally redeveloped in two
projects. The projects are being carried out together with the German Savings
Banks’ and Giro Association (DSGV) and the German Central Savings Banks
and are being supported by the consultancy firm Oliver, Wyman & Company.
Landesbank Berlin has assumed a leading role in some of the modules.
In contrast to the methods used to date, namely regulation-based qualified expert
opinions, the new rating will be based on forecast procedures, thus ensuring that
• the exposure risk of the loan commitment can be better identified
• the accuracy of the forecast of the expected lending risk increase considerably
meaning that
• the risk potential can be determined earlier
The objective of the projects is that the new rating methods meet the legal requirements
of the Basle Agreement (Basle II) and are recognised by the regulatory
authorities as internal rating.
70 MANAGEMENT REPORT

In the year under review, a preliminary study was carried out on the legal requirements
of the 2nd Basel Agreement. Extensive need for action came to light, which
will lead to a Basel II project in 2002. In particular, it will be necessary to establish
a new collateral system. The on-going rating projects are to be considered part of
the Basle II project.
Current project status and future project progress • The first version of the new
loan evidence database was introduced at the start of the second quarter 2001 as
scheduled. Therefore it is now possible for all borrowers, who have drawn on at
least €1.5 million at one of the three banks, Berlin Hyp, Landesbank Berlin or
Bankgesellschaft Berlin/Berliner Bank, to query the current utilisation level, the
extent of the approved lines and the total collateral as well as the credit rating and
risk classification, which are updated daily. On-going work is being carried out on
improving the quality of the data.
On the basis of this data, a new credit risk report was drawn up for the Board of
Management and the Supervisory Board.
The second version of the loan evidence database will be ready in 2002, with the
objective of recording interdependence between borrowers and creating the prerequisites
for the application of statistical risk calculations (credit-value-at-risk) at
a portfolio level. It allows users to select and analyse data right up to account level.
In addition, it will be possible to map the lending business payment flows in a uniform
manner throughout the Group.
For limit management, the software product RICOS from Algorithmics was
selected in the fourth quarter of 2000. Following a positive test run in the first half
of 2001, the software will be implemented throughout the Group in 2002.
The rating procedure for corporate and commercial clients was successfully
tested at the end of 2001 and is in the launch phase in 2002. It is expected that initially
corporate and commercial clients will be rated according to the new methods
in the second quarter of 2002. Other segments will follow in succession over
the course of the year.
MANAGEMENT REPORT 71

Risk-oriented portfolio management • The first version of the new loan evidence
database should make it possible in the future to manage the lending business
risks at a portfolio level in a targeted manner. Therefore, a risk-oriented portfolio
management was adopted in the financial year under review, which will gradually
be implemented. The key idea is to reduce the exposure risk of the loan portfolios
step by step through targeted limitation. To this end, sales and marketing
will have the following targets in future:
• maximum lines per borrower, graded according to rating
• maximum concentration of certain portfolios (e.g. in terms of
categories of variables, borrower rating, sector rating)
• maximum terms depending on the nature of the business and the rating
• commercial real estate conditions
(including rating, collateral, minimum redemption rates)
• negative sectors
• country limits
Lending process at Bankgesellschaft • In organisational terms, loan processing
has largely remained unchanged, i.e. the loan commitments are managed by central
divisions. Each division processes and approves the loan commitment of one
or more strategic business areas for all sub-banks concerned:
• Banks, insurance companies (“financial institutions”) and
international groups
• Regional Banking, Private Banking and Regional Corporate Banking;
• Real Estate investments
• Public Sector and project financing
• IBAG real estate
The last named division was newly created in the financial year under review for
one-stop processing of the Real Estate Services loan commitment.
Problematic loan commitments (fundamentally rating E and worse) are managed
and processed by two risk management divisions (Regional Corporate Banking
and Real Estate). These divisions are generally responsible for both the market
and loan function.
72 MANAGEMENT REPORT

Compared with the previous year, the approval powers of Bankgesellschaft Berlin
AG remained unchanged, i.e. approval powers are now uniform across all loan
divisions and explicitly take into account the exposure risk inherent in the loan
commitment, measured in the form of risk classifications. The worse the risk classification
is, the lower the approval powers of the respective decision-maker. With
business that carries credit risks (i.e. > € 250,000 loan commitment volume), the
market divisions do not have individual approval powers; a lending decision must
be approved by the respective loan processing divisions. Approval powers are
soon to be brought into line with the risk-oriented portfolio management
approaches.
Work has started on creating a central appraisal position to guarantee uniform
standards within the Group when assessing the value of real estate in the future.
In addition, uniform guidelines on lending against real estate were approved
throughout the Group in 2001, with the objective of valuation in line with the market
and which guarantee the regulatory division of duties between loan processing
and value estimation.
Structure of the Group’s loan portfolio • Half of the lending within the Group
related to loans extended within Berlin. However, the most extensive lending volume,
namely 42% of the total lending volume, was drawn on within the former
federal states (Corporate Banking, Real Estate, Capital Markets). In terms of volume,
loans in the new federal states played a very secondary role. Less than one
in twenty loans were extended abroad. However, the amount of the loans is generally
so exceptionally high with this form of lending that these loans constitute
1/3 of the total lending volume (International Banking and Capital Markets).
Regional breakdown of the Group’s loan portfolio
Region Volume Number
in % in %
Abroad 33.3 4.3
Former federal states 42.3 30.3
Berlin 20.1 49.9
New federal states 4.3 15.5
Development in the financial year • In the financial year under review, the equity
base was at times significantly reduced by the loss in the 2000 financial statements.
The original equity base was only restored by the capital increase in October
2001. In order to nevertheless meet all regulatory requirements during the
phase when equity was tight and guarantee a risk-oriented and equity-sparing
MANAGEMENT REPORT 73

Overview of credit risk provisions by segment
business policy, new lending business was only entered into in certain segments
under very restrictive conditions. This resulted in a notable drop in lending; in
Wholesale Banking and Capital Markets, fundamentally only extensions and commitments
with a low Principle I encumbrance were entered into. Retail Banking
was – against the background of the strategic significance – not affected by these
measures; the risk volume of Retail Banking is also very low in relation to overall
Group risk assets.
As at December 31, 2001, the credit risk provisions situation was as follows:
Risk Risk Value Loan Value
provision provision adjustment volume adjustment
require- require- (excl. §340f (gross) ratio**)
ment 2001 ment 2000 HGB) as at unconsoli-
Dec 31, 2001 dated
Dec 31, 2001
€ million € million € million € million in %
Retail Banking 79 119 557 11,746 4.74
Regional Corporate Banking 70 199 1,395 9,691 14.39
Public Sector – 3 4 2 10,983 0.02
Corporate/International Banking 78 40 413 12,307 3.35
Capital Markets 2 10 61 56,384 0.11
Commercial Real Estate*) 473 1,106 2,518 31,377 8.02
Government-Assistance Programmes (IBB) 28 68 215 19,252 1.12
Interest Rate Management & Other 11 – 9 20 10,684 0.18
Total 738 1,537 5,181 162,424 3.19
*) The reported lending volume does not include Berlin Hyp’s public-sector loans or lending in connection with the IBG Group’s fund business;
provision requirement, connected with latter risk potential, that does not represent credit risks, existed and was covered by provisions. Loans
extended to state residential construction companies are included in the lending volume.
**) The lending volume is expressly shown – gross unconsolidated – and thus the stated value adjustment ratio relates to this information.
Risk provisions in Retail Banking are at a comparably low level despite the difficult
overall economic development and is showing a value adjustment ratio of
4.74%.
In Regional Corporate Banking, the risk inherent in the portfolio was reduced further
by continuing to focus the business orientation on the Berlin-Brandenburg
market and the associated decrease in loan extensions to national counterparties.
Critical individual cases as well as certain sectors are subject to intensive monitoring.
The necessary risk provisioning were accordingly reduced compared with
the previous year.
74 MANAGEMENT REPORT

In Corporate and International Banking as well as project financing, the Group
concentrated on new business with clients with strong credit rating. Overall, new
business was very limited in 2001. The portfolio structure chosen in 2000 proved
to be comparably robust, even under the impaired conditions in the second half of
2001. However, the provisions for existing commitments had to be increased
again.
Commercial Real Estate Financing traditionally represented one of the focuses of
business activity; as a result of the change of orientation in new business, the aim
is to significantly reduce risks. The general situation on the commercial real estate
market in Germany and the often weak equity base of real estate clients led to a
continued deterioration of the serviceability of objects for which loans were
extended. In addition, latent risks from lending against publicly funded residential
property are increasing, as scheduled redemption of these loans cannot compensate
for falling development market values and unfavourable rent developments.
The result is an increased shortfall of cover between collateral and loan
utilisation. However, a positive decision for on-going assistance for publicly
funded residential construction in Berlin could significantly help to reduce the
future valuation requirement for the lending business. For this reason, considerable
value adjustments also had to be set up in real estate business in 2001.
5.2.2 Counterparty risk
Bankgesellschaft mainly trades with counterparties with good and very good rating.
Moreover, the risk is reduced still further by concluding netting agreements
with the most important trading partners. This makes it possible for both contracting
parties to offset receivables and liabilities against each other so that the
risk only covers the net volume. Moreover, an agreement is made with the most
important contracting parties to provide collateral.
5.2.3 Country risk
Managing country risk • In managing country risk, the Board of Management is
advised by a country committee. The main task of this committee is to draw up
proposals for risk assessing the countries and for setting the appropriate limits.
The country committee is a Group body made up of the heads of International
Business, the corresponding Loan division and the Group staff unit Credit Risk
and Portfolio Management.
MANAGEMENT REPORT 75

The countries are broken down into six country risk groups depending on transfer
risk. These run from group 1 (risk-free countries) through to group 6 (countries
with acute risk). Classification depends on a joint, formal process by the
Group staff units Macroeconomics, Credit Risk and Portfolio Management as well
as the International Business division. The evaluation is specifically based on key
economic ratios (e.g. capacity to generate currency, level of indebtedness, economic
growth) and on the assessment of the political and administrative risks.
Country limits • To limit the transfer risk, the Bank sets country limits at Group
level. To calculate the utilisation of a country limit, first-class collaterals (including
cash collateral from other countries, Hermes guarantees) are deducted from
total utilisation and external commitments in each country. This generates the net
utilisation per country. The table shows an overview of the utilisation of country
limits as at the end of 2001. The results show that transactions are especially conducted
with group 1. In groups 4 to 6 the majority of transactions are on behalf of
clients and are predominantly covered by collateral and geared towards the
client’s counterparty.
Country limits and utilisation per risk group
Country risk group Bankgesellschaft Berlin
Group Dec 31, 2001
Country limit Utilisation
(gross)
€ million € million
Countries without rating/international organisations – 253
1 Risk-free countries 1) – 58,624
2 Countries with limited risk 11,166 3,119
3 Countries with manageable risk 1,729 447
4 Countries with increased risk 1,098 459
5 High-risk countries 1,101 1,121 2)
6 Countries with acute risk 352 230
Total 15,446 64,253
1) as a result of the limited transfer risk, no country limit is issued for countries in risk group 1.
2) no exceeding as collateral available
76 MANAGEMENT REPORT

5.2.4 Participation risk
All Group participations have been allocated to strategic business areas. The management
in charge of the respective segment is also responsible for determining
and sustaining the operational and strategic objectives for its participations as a
condition from which an operational planning and management is derived and
laid down. The Group staff units Controlling and Participation Management monitor
overall Group-wide shareholding. In 2002, a project was set up to redesign
controlling of the participation risk.
Outside the scope of consolidation, the Group banks directly hold 125 participating
interests. The Group shows participating interests with a book value of €427
million, shares in associated companies amounting to €48 million and shares in
affiliated companies amounting to €382 million. The loss takeovers of €49 million
relate to 14 companies.
The number of participations remained unchanged in the year under review:
Group banks took new participations in 9 companies and in the same period ceded
9 participations.
The Bankgesellschaft scope of consolidation consists of 20 Group companies, in
which IBAG with 9 subsidiaries is considered one Group company (sub-Group).
5.3 Liquidity risk
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 Banking Supervisory Office assesses whether a bank’s liquidity is sufficient
pursuant to Principle II. The Treasury division is in charge of ensuring that
Principle II is adhered to. This is managed on the basis of accurate daily cash flow
forecasts as well as daily alternative scenario calculations and includes, Principle
II approved measures prior to the key ratio potentially not being met, where
applicable.
Key liquidity ratios
Bank Key liquidity
ratios as at
Dec 31, 2001
Bankgesellschaft Berlin AG 1.34
Landesbank Berlin 1.83
Berlin-Hannoversche Hypothekenbank AG 1.53
Allgemeine Privatkundenbank AG 1.18
Weberbank Privatbankiers KGaA 1.96
MANAGEMENT REPORT 77

For recording and managing risk aspects, which Principle II does not cover or covers
in too general terms, an extended liquidity analysis is generated. This principally
includes:
• Consolidated depiction of the Group overall
• Determination of the concentration risk for the refinancing sources
• Scenario-related stress test with assumptions on outflows of short-term deposits
and drawing on agreed credit lines
• Classification of the securities portfolio according to liquidability
In 2001, the development of income, the delayed 2000 financial statements and the
uncertainty concerning the ownership structure resulted in it being more difficult
to access the capital markets. However, this was largely compensated by extending
money market business.
5.4 Market price risk
The Group is exposed to market price risks in the form of interest rate, currency,
share price and other price risks in the various business areas of Capital Markets
(trading book) and in Asset/Liability Management (banking book).
Market price risks in trading book activities • Trading book 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 area’s tasks in terms of the type
and extent of transactions entered into, the instruments approved for that purpose
and the risk levels that are considered acceptable from the point of view of the
bank as a whole. Through the annual planning, the strategic framework is transformed
into firm annual targets (income targets, stop-loss limits, capital-at-risk
limits or CAR limits) and approved by the Board of Management on the basis of a
viability concept. Market income development on a net present value basis and
risk limit exposures are calculated and reported daily.
Market price risks in banking book activities • Once a year, the Board of Management
fixes for each Group bank a CAR limit for the market price risks of the entire
banking book on the basis of the objectives laid down for strategic balance sheet
structure management. The Risk and Performance (RaP) division calculates the
market price risks daily on the basis of the cash flow profile generated by
Asset/Liability Management (ALM). The additional appraisals by ALM with
regard to interest rate risk include analyses of economic income effects (changes
in net asset value) and thus enable management based on net present value and
78 MANAGEMENT REPORT

maturity criteria. Furthermore, analyses are also carried out on current income,
especially net interest income; these also cover aspects relating to the management
of the Profit and Loss Account. Random walk simulations are one of the
methods used in this context. A distinction is made between risk management and
risk monitoring.
Capital-at-risk limits and utilisation within the Group in 2001
by trading book and banking book activities
in € million CAR limits CAR utilisation
Average Minimum Maximum
Trading book activities 146.6 37.3 20.8 71.7
Risk management derivatives 40.0 14.7 6.4 40.7*)
Shares/Share derivatives 53.0 19.9 11.8 51.9
Credit derivatives 3.5 0.4 0.1 2.0
Money trading
Bond trading (incl. Fixed
30.0 12.1 4.6 26.9
Income Primary Markets) 15.5 3.2 1.1 7.2
Foreign exchange trading 4.6 1.2 0.2 2.8
Banking book activities 945.6 297.5 188.0 540.1
Group total 1,092.2 323.6 201.5 593.2
*) Exceeded on one working day following strong leap in volatility
by risk categories
in € million CAR utilisation
Average Minimum Maximum
Interest rate risk 287.1 210.4 433.9
Currency risk 8.2 1.4 60.6
Share price risk 141.5 26.3 198.3
Group total 323.6 201.5 593.2
Managing market price risks • In the case of trading book activities, risk management
is carried out by the front office divisions on the basis of CAR limits per business
area and per desk or trader. This is supplemented by 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, base-point value limits, duration limits, vega limits etc.).
In the case of the banking books, risk management is carried out every day. Every
14 days at the latest, the Board of Management’s Central Management Committee
discusses and decides on business policy revaluation and, if appropriate, a readjustment
of the interest rate and share price risk incurred.
MANAGEMENT REPORT 79

Monitoring market price risks • The Risk and Performance for the Capital Markets
division is independently responsible for the risk monitoring in trading book and
banking book activities in accordance with the minimum requirements for trading.
Market risks that must be backed with equity are determined according to the
standard procedures set out in the German Banking Act and reported to the supervisory
authorities. The internal monitoring of market risks is based on the capitalat-risk
concept. The positions of both the trading books and the banking books are
independently appraised every day and the resultant market price risk (CAR)
determined.
Risk assessment methods in the case of market price risks • In terms of methodology,
the procedures applied for risk assessment (CAR exposure) are based on a
Delta-Gamma approach including volatility risks on the base of a 10 day holding
period and a 99% confidence level. Risks that cannot be reported using this
approach are added to the analytically determined risk through add-ons. The conservative
scenario matrix method is used for complex and highly structured portfolios.
Share price risks are split into a general price risk and a special price risk. This is
done with the help of a single index model. Risk factor correlations are taken into
account in full for each business area and for the statement of the Bank as a whole.
The Board of Management members responsible for Risk Controlling and Capital
Markets are informed of the results of the CAR and the profit and loss (P&L) analyses.
These analyses incorporate a system of limits to restrict risk and loss and
related procedural rules. In addition to the CAR limits per business area, the basis
for this are dynamic stop-loss limits, some of which are dependent on the P&L
level reached. Both are monitored daily. Thanks to the introduction of 80% prior
warning levels, monitoring processes are triggered, which provide the Board of
Management with additional information.
In addition to the regulations mentioned, the risk content of the positions is examined
on a monthly basis in a large number of different scenarios by means of stress
tests. Furthermore, the forecasting quality of the models is determined by means
of back testing.
A market risk committee has also been set up to monitor and manage market risks
in the Capital Markets business. This meets on a monthly basis under the chairmanship
of the staff unit Risk and Performance. It involves the heads of the business
areas in the Capital Markets business as well as the head of Asset/Liability
Management. Any peculiarities in the current market development are discussed
here and measures are coordinated if necessary.
80 MANAGEMENT REPORT

Furthermore, the New Product Committee meets regularly and when required to
assess risks and organisational effects from new forms of business not listed in the
product catalogue, 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 mutually agreed proposal of the New Product Committee.
With the ARMADA project, the methodology of risk assessment is being systematically
improved (integrated treatment of gamma and vega risks instead of add-ons,
historical simulation as an additional control procedure, clean back-testing, intraday
depiction of the risks, Principle I- delivery etc.) and transferred to a new IT
architecture. The project includes all transactions subject to MaH and was concluded
as scheduled on March 31, 2002.
Reporting market price risks • The Group has introduced a comprehensive and
detailed risk reporting system for market price risks:
• a daily report pursuant to minimum requirements for trading to the responsible
Board member
• an asset/liability report every 14 days for discussion by the Central Management
Committee
• a monthly report pursuant to minimum requirements for trading to the Group
Board of Management
The risk monitoring procedures employed at Bankgesellschaft proved their worth
in all market situations in the past year. Risks are recognised quickly, reported and
managed by the decision-makers. The CAR-oriented calculations as well as the
decision-making processes based on them are being further refined all the time on
the basis of practical experience and corresponding projects. The aim is still to
equip all internal computation processes in such a way that, in the future, they can
also be used as the only procedure (internal model) for reporting market risks
according to Principle I of the German Banking Act.
5.5 Operational risks
The subject of “Operational risks” was part of the preliminary study on the necessity
of implementation for Basel II. The objective was to select a suitable equity
approach and to determine the necessary activities and their time sequence to
meet the conditions for approval for the standard approach and the internal
assessment approach.
In the past year, the risk management process, which determines the division of
functions within risk management and controlling, was defined for the operational
risk. Risk management is the responsibility of the company divisions
MANAGEMENT REPORT 81

within the framework of their responsibility for earnings. Risk Controlling is
responsible for the introduction of the risk management process, for the development
of qualitative and quantitative methods of assessment and for the data evidence.
Following the conclusion of the prepared projects in 2000, a central department
“Operational Risks” was established in the first quarter of the year under
review and allocated to the “Group Risk Evidence” division, which was also set up
in 2001.
The concept of a damage-event database was developed to assess operational
risks, which includes internal loss data and their breakdown across risk categories,
business areas and products. This application is currently being technically
implemented and should be ready for practical use in 2002. In addition, the
new edition of the risk inventory was started throughout the Group. The first time
this was carried out was in 2000 and involves self-assessment of the likelihood of
occurrence and loss potential within the framework of scoring.
The terrorist attacks in the USA in September 2001 did not have any substantial
impact on the Group due to the geographical business focus of the Bank. Nevertheless,
security precautions were stepped up in terms of guarding buildings and
controlling access as a consequence of the events and precautions in the event of
disaster were tested and examined in the IT division.
In addition to the practical introduction of the damage-event database, the focus of
the current year will be the development and implementation of a key ratio system,
which is set to act as an early warning to instantly indicate changes to the risk
situation.
5.5.1 System risks
The implementation of the measures adopted from the Group-wide IT strategy
continued in 2001 thus meeting the requirement to expand to a homogeneous and
stabile system environment.
The standardisation and thus reduction of the various system and application platforms
will implicitly guarantee this with regard to operating, maintenance and
future development. Examples include consolidation onto a host operating system
largely completed in 2001 (MVS), a till system (dvg-Kasse), standardisation onto a
desktop platform (Citrix, Windows2000, Microsoft Office) and a messaging and
calendaring platform (Microsoft Exchange) or even the introduction of a Groupwide
configuration management system.
82 MANAGEMENT REPORT

Furthermore, the existing cooperation project with the dvg (computer centre production)
and the venture already concluded with Siemens Business Services (IT
service and network) is targeting a reduction in system complexity and thus also
further risk minimisation (e.g. server consolidation and service level fixing).
The introduction of new technologies (e.g. internet banking and brokerage) and
necessary system adjustments and expansions (e.g. Euro project, deposit money
conversion) will be implemented exclusively through, or in agreement with, the
cooperation partners within the dvg association. The resulting systems will be
subject to defined quality assurance measures (dvg integration and test, piloting at
selected banks) before they are put into operational use.
As a result of this orientation, there are no identifiable system risks. With the
restructuring of the Group, the IT structure also needs to be brought into line with
the strategic objectives.
5.5.2 Personnel risks
The personnel management units oriented towards our business segments still
form the basis of our personnel work. They guarantee that development and
reduction of personnel needed for our business goes according to plan.
The “Programme to strategically improve earnings”, launched in 2000 with identified
savings potential of 1,600 employee capacities, was for the most part implemented
and will be transferred to the reconstruction concept for Bankgesellschaft
Berlin within the framework of reconstructing the Bank. Since the start of the
“Programme to strategically improve earnings”, personnel were reduced by some
600 employee capacities within banking. In addition, retirement agreements were
concluded with approx. 400 employees (including pre-retirement, part-time contracts
for those approaching retirement). The fundamental plans for the new
reconstruction concept were made in 2001, the corresponding framework agreement
relating to cutting costs and capacity was also concluded in 2001 with the
relevant employee representation within the Group.
The planned reduction in personnel costs is in line with the new requirements to
redimension business and the necessity for control and management. The Bank
will introduce suitable measures to account for the resultant risk of losing quality
and expertise due to the personnel cutbacks and due to the permanent change in
demands made on the workforce. Details were contractually fixed in April 2002. A
concrete decision was taken to abolish the 14th month salary (final remuneration,
MANAGEMENT REPORT 83

Christmas money) for all employees, including the greatest possible reduction in
payments above the agreed rate. Comparable remuneration cuts will be made in
the case of employees not covered by the agreed rates.
5.6 Other risks
5.6.1 Business policy and strategic decisions
To support the capital increase carried out on October 4, 2001, the Board of Management
had drawn up a restructuring plan. This plan represents the prerequisite
for a positive decision by the supervisory committees relating to a capital measure.
The cornerstones of this plan were a significant reduction in business activities in
Real Estate and Capital Markets, Corporate/International Banking.
Extensive analyses of the market environment and the financial strengths of the
Bank carried out on this basis in November of the financial year under review led
to a reworked and concrete version of the reconstruction and restructuring concept.
From this, a business model for the future orientation of the Bank was developed.
The overall concept was unanimously approved on November 30, 2001 by
the Bank’s Supervisory Board.
Accordingly, the banking Group will concentrate on business as a major regional
bank in the Berlin area. In adjunct to this, business activities will be ceded and
Capital Markets will be restructured. Participations, that are not in line with the
business model, will be ceded. Furthermore, IBAG’s Real Estate Services will be
restructured and redimensioned.
Business with regional private and corporate clients, which to date has been managed
in various legal entities (Berliner Sparkasse/Landesbank Berlin – Berliner
Bank/Bankgesellschaft Berlin AG), is set to be combined in Landesbank Berlin
whilst still maintaining the Berliner Sparkasse and Berliner Bank brands.
Commercial Real Estate is limited to selected regional and property-related
investments, whereby this business is also managed nationwide to spread the risk.
Berlin Hyp will continue to operate in this segment as a specialised bank.
Real Estate Services concentrated in IBAG, in particular the real estate fund business,
were scaled back considerably and oriented towards special fund products
for the future. The risks from the existing business, i.e. for funds launched up to
the end of 2001, were protected by the State of Berlin through the agreement in
84 MANAGEMENT REPORT

principle and the detailed agreement respectively. The existing business is being
administrated and settled under the control of the State of Berlin and by IBAG and
its subsidiaries on the basis of agreements concluded for this purpose.
Various risks are associated with restructuring of this magnitude. The reduction
of portfolios in Corporate/International Banking and the redimensioning of Capital
Markets could result in value losses depending on market conditions. Even
ceding participations could lead to disposal losses. In addition, there are associated
transaction costs. Therefore, a longer time period of up to five years is
planned for the realisation of the measures, thus reducing the danger of realising
disproportionate losses.
The planned substantial reduction in personnel costs and operating expenditure
will in part be achieved through foregoing services and equipment. A further part
must be achieved in harmony with the speed at which business is scaled back. The
risks of reducing personnel costs and operating expenditure are due to the fact that
the control and processing requirements of the business and reduction process do
not keep step with the reduction of services. In order to counter risks arising from
outsourcing measures, qualitative/strategic control of the implementation process
will be established, in addition to the financial control of the restructuring objectives.
5.6.2 Landesbank Berlin (LBB) and Immobilien- und Baumanagement der Bankgesellschaft
Berlin GmbH (old IBG) declarations of exemption from liability for personally
liable partners of individual limited partnerships
At the beginning of 2001, the Board of Management of LBB informed the Supervisory
Board that, between 1994 and 1997, two of its members at that time and one
former member of the Board of Management had issued declarations of exemption
from liability to various individuals who had assumed the position and functions
of personally liable partners in various real estate funds. According to these
declarations, Landesbank exempts the personally liable partners from their full
liability to third parties as personally liable partners.
In connection with the LBB declarations of exemption, various declarations of
exemption also came to light, which were circulated by the management of IBG at
the time, which were also made available to individuals acting as personally liable
partners of real estate funds. In terms of the outcome, the content of the declarations
of exemption issued by IBG fundamentally equates to those of LBB.
MANAGEMENT REPORT 85

The exemption of individuals acting as personally liable partners of real estate
funds became the subject of a regulatory audit by the Federal Banking Supervisory
Office. According to the Federal Banking Supervisory Office, the declarations of
exemption are obligations, which are to be classed as guarantee transactions in
the spirit of the German Banking Act (KWG). Since the declarations of exemption
are unrestricted in terms of time and content, the Federal Banking Supervisory
Office believes that the liability of LBB and IBG respectively from the respective
declarations of exemption extends to all actual and potential contingent liabilities
of the fund companies. This must be taken into account in the reporting of large
loans and loans in the millions pursuant to sections 13a–14 of the German Banking
Act and Principle I reporting for LBB, Berlin-Hannoversche Hypothekenbank
AG, Bankgesellschaft Berlin AG and the Bankgesellschaft banking Group. However,
this would result in the individual ceilings for large-scale loans on the investment
book and the aggregate book being exceeded for certain borrower units.
Having consulted various external legal experts, it was clarified that the declarations
of exemption issued by LBB and IBG, in so far as they had not already been
returned by the personally liable partners who they benefited, were invalid. The
Federal Banking Supervisory Office agreed with this opinion, with one exception,
and determined that the declarations of exemption were irrelevant in terms of
commercial and regulatory law.
5.6.3 Landesbank Berlin (LBB) declarations of exemption from liability to personally
liable partners of Weberbank Privatbankiers KGaA (Weberbank)
Furthermore, in 1994, Landesbank Berlin internally agreed a ceiling with the personally
liable partners of Weberbank Privatbankiers KGaA with regard to their
personal liability. Landesbank Berlin is alleged to have exempted the personally
liable partners from their legal obligation as personally liable partners of Weberbank
Privatbankiers KGaA above this ceiling. The declarations of exemption for
the personally liable partners of Weberbank Privatbankiers KGaA came to light in
the context of an audit of the Internal Audit department in January 2002. The
Board of Management of Landesbank Berlin immediately informed the Federal
Banking Supervisory Office. The Board of Management is of the opinion that these
declarations of exemption are invalid in terms of civil law and that any contractual
obligation to pay on the part of Landesbank Berlin can be ruled out permanently
and this evaluation is based on the opinion of external legal experts.
Accordingly, the declarations of exemption were not taken into account in terms
of commercial and regulatory law, as in previous years.
86 MANAGEMENT REPORT

5.6.4 Risks connected with the real estate and fund business of the IBAG Group,
IBG mbH and LPFV GmbH
Risks connected with the real estate and fund business of the IBAG Group •
Other Bankgesellschaft Berlin Group risks include the risk from Immobilien- und
Beteiligungen Aktiengesellschaft (IBAG), into which the key operations of IBG
have been incorporated. A profit transfer and controlling agreement was concluded
with IBAG as a 100% subsidiary on July 19, 2001, covering the next five
years.
The current business risks of the IBAG Group result, on the one hand, from the
risks remaining at IBAG from the former real estate business of IBG still in force,
including the portfolio of residential real estate still available, both complete and
still under construction. On the other hand, risks could possibly come to light from
the future new business on the basis of the strategic reorientation of the Group, for
which provisioning will have to be made in time.
One of the main reasons for the sizeable risks of the former real estate business is
the concept practised in the past by IBG of offering all the services throughout the
real estate value-added chain from one source and generally marketing them via
funds. These included fund conception/sales and marketing, property development
business, project development and the associated auxiliary and secondary
transactions in the broader sense. The risks from these transactions will be covered
by the “Agreement to cover substantial risks from Real Estate Services” concluded
with the State of Berlin. This also applies to contingent liabilities resulting
from these transactions. Intangible assets, investment securities, cash in hand,
balances as well as prepayments and accrued income are excluded from the
guarantee. As a result, no risk provisionings have to be set in relation to items covered
by the protection in the course of the 2001 annual financial statements, as
potential defaults will be taken on by the State should they occur.
On the basis of the agreement between the Bankgesellschaft Berlin Group and the
State of Berlin, the only IBAG Group transactions covered will be those that either
exist or are set up by December 31, 2001. Through suitable measures, it can be
ensured that new IBAG transactions, set up after January 1, 2002, are separated
from an accounting point of view from former transactions founded by December
31, 2001. In this context, an inventory of the corresponding assets and liabilities
was carried out as at December 31, 2001, which is to be used as the basis for determining
the respective scope of the guarantees pursuant to the agreement. A stan-
MANAGEMENT REPORT 87

dardised scope of accounting, separated from new business ensures that improvements
in the value of the existing portfolio of assets can only compensate
decreases in the value of the existing portfolio of assets elsewhere.
The earnings situation of IBAG in 2001 results from sales and gross income
slumps in the core business (sales and marketing of funds, project development)
and in the property development business with the cost structures within the corporate
Group at the same high levels and an unsatisfactory settlement of the business
processes in the first eight months of the past financial years. Against this
background, a concept to restructure and strategically realign the IBAG group was
developed, adopted after the summer 2001, and work started on implementing it
in the year under review. The key elements of the concept include concentrating
on just two important core competencies in the new real estate business: in the
area of project development and in the fund business, the IBAG Group will position
itself in the premium segment with the project and fund volume scaled back
considerably compared with the past. This is tied in with a sizeable risk reduction.
In the fund business, the extensive guarantees that have been the norm to date
will, in future, not be employed; the marketing of smaller funds with quality real
estate will, in selected individual cases, be supported by guarantees in line with
the market.
In accordance with this orientation, the following structural measures were
adopted and have in part already been realised:
• IBAG Holding acts as a strategic body of management and control and runs risk
management throughout the Group with corresponding rights of intervention
• Cost structures are being adjusted by withdrawing from premises, reducing the
number of employees and reducing operating and administration expenditure
in terms of the scaled back volume of business
• Participations that do not relate to the future key businesses of the IBAG Group,
are to be sold or liquidated
This process, started in 2001, is accompanied by the expansion and further development
of adequate risk management, controlling and accounting systems, in particular
from the point of view of improved transparency. Other key measures
include:
88 MANAGEMENT REPORT

• Establishing autonomous administrative functions in the subsidiaries in place
of the current execution of these functions, e.g. financing, in the holding company
• Posting the liquidity from the holding company through to the subsidiaries, in
part right up to project level
• Further development of an internal controlling system with clearly defined
responsibility and delegated competencies, in terms of both strategic Group
management and the operating responsibility of individual units
• Development of a new Management Information System (MIS); the Groupwide
launch of MIS started at the beginning of 2002
In the course of the restructuring of the IBAG Group, both the project management
and the cooperation within the Group and the Bankgesellschaft Group as a whole
was improved in order to timely identify risks within the company in future.
The considerable sales successes from IBV and Bavaria achieved in the fourth
quarter 2001 demonstrate that these companies were successfully repositioned on
the market. In this way, the IBAG Group overall should succeed in maintaining its
position on the market with high-quality products.
Risks of IBG mbH (Immobilien- und Baumanagement der Bankgesellschaft
Berlin GmbH) • In the framework of the reorientation of the real estate activities
within the Bankgesellschaft Group at the end of 2000, key parts of IBG’s business
activities were transferred to IBAG. IBG retained its legal obligations (underwriter
and guarantor function) and some participations.
Certain value risks and contingent liabilities from this company are also covered
by the “Agreement to cover substantial risks from Real Estate Services” concluded
with the State of Berlin.
After IBG was released by LPFV from the obligations of the guarantees, which
were issued up to December 31, 2000, the operating losses of some of its participations
represent the greatest negative impact on earning, the Lausitzring companies
being a prime example.
MANAGEMENT REPORT 89

The management will – in line with the conditions of the IBG Supervisory Board
and the detailed agreement with the State of Berlin – realise the IBG participations
in a well-ordered process: the intention of the Group’s reconstruction concept is
that the activities of IBG and its subsidiary and participation companies are not
part of the core business of the Bankgesellschaft Berlin Group. Therefore, the
objective is to withdraw from the properties and participations in the IBG Group
over the next few years in a well-ordered manner. It is possible that this will result
in expenditure that is not covered by the detailed agreement with the State of
Berlin and that financial demands will be made on the Group.
The management of IBG prepared the annual financial statements on the going
concern premise.
Risks of LPFV Finanzbeteiligungs- und Verwaltungs GmbH from the exemptions
with regard to the real estate and fund business • LPFV Finanzbeteiligungs- und
Verwaltungs GmbH is a 100% subsidiary of Bankgesellschaft Berlin AG. In 2000,
the following risks were taken on from IBG and the then subsidiaries with contractual
effect, without affecting external relations:
General rental and rental guarantee contracts together with the resulting ancillary
obligations, financing pricing guarantees, maximum price guarantees, securities
income guarantees, original rental guarantees, agreements relating to granting
interest and redemption subsidies, securing the distribution of funds, exemption
commitment from calling on repayment of expenditure contributions, servicing
rights for shares, liability for statements made in the prospectus, fund company
management liability, reconstruction expenditure for certain properties, other
risks associated with the sale of real estate and funds etc. Furthermore, LPFV
undertook to provide financial means to ensure the guarantee payments.
In addition to auditing the enforcement of guarantees, the IBG rental guarantee
model within risk controlling was improved to process these adopted risks and at
the same time take the still downward-oriented real estate market into account. In
2001, work started on an additional model for calculating the risks from distribution
guarantees and development was complete by the start of 2002. Risk management
clarifies fundamental issues associated with the guarantees and obligations
taken on. The focus is on reappraising the disruption of performance and
serious vacancies, unfinished individual properties and those awaiting revitalisation.
Another area of activity is credit management with the focus on amounts
due from commercial rent.
90 MANAGEMENT REPORT

LPFV is also exempted from the pending obligations should the portion of the loss
to be borne exceed €100 million by the “Agreement to cover substantial risks from
Real Estate Services” with the State of Berlin. Funds with real estate used exclusively
by Bankgesellschaft in particular are excluded. The exemption also
excludes risks established due to the launch of new funds after December 31, 2000.
This relates to the IBV Deutschland 4 fund launched in December 2001.
5.6.5 Risks from the Investitionsbank Berlin government-assistance programme
The government-assistance programme is characterised by the continued price
slump in the Berlin real estate market and the weak credit rating of borrowers. In
the assistance to trade and industry area, the weak economic development is having
a negative impact on the companies. Overall, Investitionsbank Berlin has
taken account of this situation by installing earning warning indicators, developing
a rating procedure especially for the government-assistance programme and
risk considerations in the case of the agreed assistance as well as through adequate
risk provisioning.
In the context of subsidising residential housing, Investitionsbank financed residential
property on the basis of the guideline on promoting rental and cooperative
housing construction in Berlin dated April 3, 1992 (second development subsidy
Berlin). The inherent risks of default were examined separately and provisioning
made accordingly. There are additional risks in subsidising residential property
ownership, which are also covered through corresponding value adjustments.
When evaluating the risks in Investitionsbank’s lending business, particular attention
is to be paid to the fact that Investitionsbank still does not carry any risk for
the major share of the mortgage portfolio with regard to potential interest loss
risks and loan loss risks due to the basic contract as well as an approved framework
guarantee from the State of Berlin.
To provide assistance to the Berlin region and in the context of turning IBB into a
Landesstrukturbank, IBB has founded an industrial holding company and a real
estate holding company, in which the respective holding activities of IBB are set
to be combined. In the 2001 financial year, Gewerbesiedlungsgesellschaft mbH
was acquired from the State of Berlin as a holding of Immobilienbeteiligungsgesellschaft
mbH. The cost of acquisition is based on a corporate plan and, where
necessary, also on the disposal of non-essential assets at their intrinsic value. In
addition, Landesstrukturbank manages KPM-Betriebsgesellschaft within Industriebeteiligungsgesellschaft
mbH. A management unit for the holding risks is in
the process of being created.
MANAGEMENT REPORT 91

5.6.6 Legal risks
EU approval of the restructuring aid • The injection of capital by the State of
Berlin, in accordance with the capital increase adopted in the Annual General
Meeting of Bankgesellschaft Berlin AG on August 29, 2001, relates to its approval
by the European Commission as financial aid for a limited period from July 25,
2001. In order that this aid is available for Bankgesellschaft Berlin AG in the long
term, additional approval as restructuring aid is required.
Furthermore, in December 2001, the State of Berlin concluded an agreement in
principle with Bankgesellschaft Berlin AG and individual Bankgesellschaft Berlin
Group companies, namely Landesbank Berlin –Girozentrale–, Berlin-Hannoversche
Hypothekenbank AG, LPFV Finanzbeteiligungs- und Verwaltungs- GmbH,
IBAG Immobilien und Beteiligungen AG and Immobilien- und Baumanagement
der Bankgesellschaft Berlin GmbH, relating to protection from the State of Berlin
from certain calculated risks up to December 31, 2001 from Real Estate Services
of Bankgesellschaft Berlin AG and individual Bankgesellschaft Berlin Group companies.
For the purpose of implementing the agreement in principle, a detailed
agreement was concluded with the State of Berlin, which should replace the
agreement in principle. This agreement relating to risk protection was conditional
on approval by the Berlin House of Representatives, which was granted on April
9, 2002 and is also conditional on European Commission approval as financial aid.
They can only become effective once the European Commission has granted
approval as financial aid. In terms of banking supervisory law, Bankgesellschaft
is already fully protected from risks in terms of its ongoing business activity. The
detailed agreement is set to be supplemented by a clarification and interpretation
accord.
On January 28, 2002, the Federal government submitted an application to the
European Commission for approval of the two aforementioned measures – the
injection of capital and the risk protection – as restructuring aid. Part of this application
is a comprehensive restructuring plan for the Bankgesellschaft Berlin
Group. With a resolution dated April 9, 2002, the European Commission began
formal proceedings. For the duration of the proceedings, the injection of capital is
approved as financial aid.
The Board of Management of Bankgesellschaft Berlin is very confident that the
European Commission will approve the application for approval of the restructuring
aid submitted by the Federal government.
92 MANAGEMENT REPORT

On the basis of the decision by the European Commission from April 9, 2002 on
the initiation of formal proceedings, the Commission will attach approval of the
restructuring aid to additional, in part radical, structural measures relating to
Bankgesellschaft not yet provided for in the restructuring plan, with particular
emphasis on:
• the dismantling of further business areas including the disposal of further
Group companies
• the separation of the Real Estate division
• measures to boost income
It is also possible that the European Commission will demand additional reductions
in the amount of aid applied for. On the basis of the opening resolution by the
European Commission dated April 9, 2002, it is also highly likely that the Commission
will tie approval of the restructuring aid in with a solution to the legal
problem of financial aid associated with the transfer of Wohnungsbau-Kredit-
Anstalt (now: IBB) to LBB. Against this background, it is to be expected that the
European Commission will combine approval of the restructuring aid with the
obligation to privatise Bankgesellschaft in the near future.
When preparing the annual financial statements in question, Bankgesellschaft
Berlin AG assumed that the restructuring aid would be approved. Accordingly, no
repayment obligation for the funds received from the capital increase and no value
adjustments or provisions were set up for the risks from real estate services transactions,
which are the subject of the risk protection. In terms of the valuation in
the annual financial statements pursuant to section 252 subsection 1 no. 2 HGB, it
was assumed that the company would continue to operate.
Bankgesellschaft is fundamentally prepared to meet extensive demands for structural
measures previously not envisaged, which the European Commission could
make over the course of the proceedings as a contingent condition for approving
the restructuring aid, and expects that the State of Berlin and the Federal government
are also prepared to participate in these measures. In this case, Bankgesellschaft
is assuming that the European Commission will approve the restructuring
aid.
An amount including interest would have to be posted for the repayment of the
funds from the capital increase for the event that the injection of capital is only
partially approved or is completely dismissed, an eventuality that cannot be ruled
out. It is also possible that the European Commission will not approve, or will only
partially approve, the protection of the risks from Real Estate Services of Bankge-
MANAGEMENT REPORT 93

sellschaft Berlin AG and individual companies of the Bankgesellschaft Berlin
Group. Should this occur, the risk protection would be ineffective, either in whole
or possibly only with regard to one of the components not approved by the European
Commission. In this event, value adjustments and provisions would have to
be posted for the risks from the former real estate services business. This would
result in the Federal Banking Supervisory Office immediately adopting measures
in accordance with the conditions of sections 45 ff of the German Banking Act and
suspension of business at Bankgesellschaft and the majority of its Group companies.
The balance sheet and value approaches would have to be applied in newly
prepared annual financial statements in accordance with the principles of a liquidation
balance sheet. The rules would be somewhat different if a new investor
provided the necessary amount of new equity.
Even in the event of less serious consequences, namely an evaluation by the European
Commission that partially rejects the financial aid, which would not lead to
the suspension of business in terms of supervisory regulations, a lowering of the
equity and/or limiting the protection from risks from Real Estate Services could be
very disadvantageous to the income, financial and/or net asset position of Bankgesellschaft
Berlin AG and other Bankgesellschaft Berlin Group companies and
jeopardise the success of the reconstruction of Bankgesellschaft Berlin AG and
other Bankgesellschaft Berlin Group companies.
Relevance to financial aid 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 injection of capital for Bankgesellschaft
Berlin AG to the tune of approx. €166 million in accordance with the capital
increase adopted in the Annual General Meeting on August 29, 2001. In the resolution
to start formal proceedings dated April 9, 2002, the European Commission
stipulates that this injection of capital could also potentially represent financial aid
from the State, which would require approval.
Bankgesellschaft expects that this provisional evaluation by the European Commission
will not be borne out over the course of the proceedings. Should the European
Commission nonetheless reach the conclusion that the injection of capital by
Norddeutsche Landesbank – Girozentrale – represents financial aid, either in full
or in part, Bankgesellschaft assumes that the European Commission will take an
aid element into account within the framework of the pending proceedings and
come to a unanimous decision (see above).
94 MANAGEMENT REPORT

Landesbank Berlin/Investitionsbank Berlin EU financial aid proceedings • In
July 1999, the European Commission declared the transfer of capital from a Federal
State to a State Clearing Bank to be inadmissible in terms of financial aid legislation,
ordered alignment measures for the future and passed a corresponding
directive for recovery. Legal proceedings were instigated against this decision, in
particular by the Federal government with the European Court of Justice. The proceedings
are not yet concluded. The focus is on the size of the payment that Landesbank
would have had to make for the indicated transfer of capital and must
make in the future. The European Commission is assuming a rate of 12% after
taxes. It has expressly reserved the right to take action against comparable injections
of capital in favour of other State Clearing Banks. In conjunction with this,
the European Commission sent a request for information to the Federal Republic
of Germany in September 1999. The subject of this request was the transfer of
capital to various State Clearing Banks. For the State of Berlin this relates to the
transfer of the former Wohnungsbaukreditanstalt Berlin (now: Investitionsbank
Berlin or ”IBB”) to Landesbank Berlin – Girozentrale – in 1992. In October 2000,
the European Commission sent a supplementary request for information to the
Federal Republic of Germany, which also relates to IBB.
On the basis of the opening resolution by the European Commission dated April 9,
2002, it is assumed that the European Commission will instigate separate formal
proceedings with regard to this matter and take the findings of these proceedings
into account in the context of the proceedings to examine the restructuring aid
(see above). Following the opening of the formal proceedings relating to the
restructuring aid from April 9, 2002, the European Commission has asked the Federal
Republic of Germany to find a solution with regard to IBB, which will not
endanger the restructuring plan and which is in line with the European regulations
on financial aid. Bankgesellschaft anticipates that a proposed solution of
this nature, which meets the Commission’s requirements, will be submitted to the
European Commission. Irrespective of which solution the European Commission
prefers in the end, it is highly likely that the Commission will combine the solution
of the IBB problem and approval of the restructuring aid with privatisation of
Bankgesellschaft.
EU financial aid proceedings relating to guarantor’s liability and liability
assumed at State Clearing Banks • Guarantor’s liability and the liability assumed
by the State of Berlin for Landesbank Berlin are still in force despite the Bankgesellschaft
Berlin AG’s dormant holding in Landesbank Berlin – Girozentrale –. In
May of 2001, the European Commission submitted a proposal of appropriate mea-
MANAGEMENT REPORT 95

sures to the Federal Republic of Germany, in which it classes the liability covered
by the guarantor’s liability and the liability assumed as existing financial aid and
asks the Federal government to revoke this after a period of transition.
In July 2001, the Federal government fundamentally reached an agreement with
the European Commission to revoke the liability assumed with effect from July
2005 at the latest and to change the conditions of the guarantor’s liability in such
a way that the liabilities arising after July 18, 2005 do not come under the guarantor’s
liability and liabilities that arise in the period between July 18, 2001 and July
18, 2005, only come under the guarantor’s liability if the date on which they are
due does not exceed December 31, 2015. At the end of February 2002, the Federal
government and the European Commission agreed on measures that must be fundamentally
adopted to put the agreement into practice from July 2001.
For future business activities of Landesbank Berlin – Girozentrale – the Bankgesellschaft
Berlin Group is assuming that it is sufficiently prepared for the abolition
of guarantor’s liability and liability assumed. However, no guarantee can be given
that it will be possible to fully implement the scheduled measures and that the
changes to the refinancing possibilities will not have a negative impact on the
earnings, financial and net assets situation of the individual Bankgesellschaft
Berlin Group companies due to the abolition of the aforementioned liability.
6. Outlook
The successful stabilisation of earnings and repositioning of Bankgesellschaft
Berlin AG and the Group decisively depend on whether we succeed in implementing
the key parts of the reworked and adopted restructuring concept in a progressive
way. To this end, important preliminary work has already been carried
out. The application to the EU authorities for approval of restructuring aid was
made on time and a framework agreement was concluded with the employee representatives
concerning employee contributions to the reconstruction. In addition,
by means of corresponding agreements, the State of Berlin, as majority shareholder,
also protected the Bank from the risks that result from the fact that real
estate funds were launched before January 1, 2001 and from the risks that result
from other new transactions executed in Real Estate Services before January 1,
2002.
96 MANAGEMENT REPORT

The foundations have been laid for a successful repositioning as a strong regional
bank. These measures create the conditions to regain the confidence of business
partners in the Bank’s future and to regenerate acceptance in the capital markets.
The Group is convinced that it will succeed in returning the Bank to profitability
within a period of two years thanks to the comprehensive reconstruction concept
already underway and the accompanying measures. Should the submitted reconstruction
concept not be approved by the EU authorities, this would have serious
consequences for the Bank and also for the planned redimensioned structure.
In the 2002 financial year, scaling back portfolios and ceding areas of business will
lead to declining income. It is therefore essential that the drop in income is compensated
by reduced administration costs and by relinquishing services and
equipment.
In 2002, the uncertainties on the financial markets and the economic weaknesses
not yet surmounted, in particular in the region where most business is conducted,
will contribute to reserved estimates concerning the Bank’s business and income
development. It is not expected that a positive business result will be generated for
the 2002 financial year.
Negotiations have been concluded between the employee and employer side and
the Unified Service Sector Union (ver.di) concerning the concrete contribution by
employees to reconstruction. On March 27, 2002, the contractual parties ratified a
corresponding agreement. On April 9, 2002, following the decision by the House
of Representatives to take up risks through the State of Berlin, the agreement came
into force bearing the signatures of the contractual parties. The State of Berlin has
protected the Bank from substantial risks arising from Real Estate Services as a
result of concluding the detailed agreement on April 16, 2002.
MANAGEMENT REPORT 97

Balance sheet of Bankgesellschaft Berlin AG
as of December 31, 2001
Assets
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Cash reserves
a) cash in hand 46,472 84,775
b) balance with central banks
of which:
457,947 102,338
with the Federal Bank of Germany 454,122 (96,465)
504,419 187,113
Debt issues of public institutions and bills
rediscountable at central banks 10
a) treasury bills and treasury discount notes
and similar public institution debt instruments 0 0
of which:
rediscountable at the Federal Bank of Germany 0 (0)
b) bills of exchange 3,477 5,741
3,477 5,741
of which:
rediscountable at the Federal Bank of Germany 3,477 (5,741)
Loans and advances to banks 1,3,4,5
a) due on demand 4,841,787 10,500,722
b) other loans and advances 16,181,252 12,651,882
21,023,039 23,152,604
Loans and advances to customers 1,3,4,5,10 19,261,373 18,795,025
of which:
secured by mortgages 778,995 (775,310)
public-sector loans 1,373,136 (1,472,753)
Bonds and other 2,3,4,5,
fixed-income securities 6.1,8.1,10
a) money market securities
aa) issued by public institutions 0 0
of which:
eligible as security at the Federal Bank of Germany 0 (0)
ab) issued by other borrowers 0 0 50,202
of which:
eligible as security at the Federal Bank of Germany 0 (50,202)
b) bonds and debt securities
ba) issued by public institutions 1,921,923 2,966,355
of which:
eligible as security at the Federal Bank of Germany 1,084,726 (1,374,794)
bb) issued by other borrowers 27,477,219 29,399,142 25,236,260
of which:
eligible as security at the Federal Bank of Germany 13,978,808 (9,371,159)
c) own debt securities 343,112 99,293
nominal value 426,847 (102,774)
29,742,254 28,352,110
Stocks and other 3,4,5,
non-fixed-income securities 6.1,8.1 3,496,421 6,910,024
Amount carried forward 74,030,983 77,402,617
98
ANNUAL ACCOUNTS

Liabilities
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000
Deposits by banks 1,3,4
a) due on demand 7,731,809 7,060,558
b) with agreed term or notice period 40,358,691 38,856,943
48,090,500 45,917,501
Customer deposits 1,3,4
a) savings deposits
aa) with agreed notice period of three months 1,274,909 1,320,724
ab) with agreed notice period of more than three months 76,284 94,002
b) other liabilities 1,351,193
ba) due on demand 7,495,167 5,620,849
bb) with agreed term or notice period 4,626,139 6,417,536
12,121,306 13,472,499 13,453,111
Securitised liabilities 1,2,3,4
a) debt securities in issue 10,045,772 16.445,000
b) other securitised liabilities 86,516 764,294
10,132,288 17,209,294
of which:
money market securities 0 (0)
own acceptances and promissory notes outstanding 0 (18,598)
Trust liabilities 7 16,258 14,427
of which:
trustee loans 16,258 (14,427)
Other liabilities 15 2,569,362 3,077,295
Accruals and deferred income 16 65,231 62,675
a) from issues and loans 31,701 (35,621)
b) others 33,530 (27,054)
Provisions for liabilities and charges 17,18
a) provisions for pensions and similar obligations 219,489 193,927
b) tax provisions 149,642 148,593
c) other provisions 989,620 1,043,880
1,358,751 1,386,400
Special items subject to partial reserves 0 0
Subordinated liabilities 3,4,19.1 2,576,932 2,588,498
Profit participation capital 20 0 0
of which:
due within two years 0 (0)
Funds for general banking risks 0 0
Amount carried forward 78,281,821 83,709,201
ANNUAL ACCOUNTS 99

Balance sheet of Bankgesellschaft Berlin AG
as of December 31, 2001
Assets
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Amount carried forward 74,030,983 77,402,617
Participations 6.1,8.1 140,199 139,920
of which:
banks 3,689 (4,005)
financial service providers 257 (257)
Shares in affiliated companies 6.1,8.1 2,659,008 2,091,576
of which:
banks 2,487,328 (2,057,511)
financial service providers 0 (0)
Assets held in trust 7 16,258 14,427
of which:
trustee loans 16,258 (14,427)
Equalisation claims against public
institutions including bonds arising
from their exchange 10,11 334,072 121,522
Intangible assets 0 0
Tangible assets 6.1,12 96,984 91,792
Own shares or shareholdings 21 70,940 53,273
accounting value 70,390 (8,960)
Other assets 13 4,192,111 5,449,178
Prepayments and accrued income 14 160,491 130,522
a) from issues and loans 140,980 (101,681)
b) others 19,510 (28,841)
Total assets 81,701,046 85,494,827
100
ANNUAL ACCOUNTS

Liabilities
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000
Amount carried forward 78,281,821 83,709,201
Equity 21
a) subscribed capital 2,554,741 557,507
b) capital reserve 1,956,044 1,953,278
c) retained earnings
ca) legal reserve 1,534 1,534
cb) reserves for own shareholdings 70,940 53,273
cc) statutory reserves 0 0
cd) other retained earnings 177,437 195,104
249,911 2,760,696
d) Net loss – 1,341,471 – 975,070
3,419,225 1,785,626
Total liabilities 81,701,046 85,494,827
Contingent liabilities
a) contingent liabilities from the endorsement of bills of exchange 0 0
b) liabilities from guarantees and warranties
(see also Notes) 4,202,825 4,843,761
4,202,825 4,843,761
Other obligations
c) irrevocable loan commitments 8,947,613 7,312,341
8,947,613 7,312,341
ANNUAL ACCOUNTS 101

Profit and Loss Account
of Bankgesellschaft Berlin AG
for the period January 1 to December 31, 2001
Expenditure
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Interest payable 22 3,422,304 3,455,848
Fees and commissions payable 23 42,530 65,277
Net expenditure from financial transactions 105,115 0
Administrative expenditure 27.2
a) staff costs
aa) wages and salaries 242,357 239,160
ab) social security costs and costs relating
to pensions and benefits 71,374 68,305
of which:
for pensions 34,559 (30,320)
313,731 307,465
b) other administrative expenditure 451,128 385,670
764,859 693,135
Depreciation and revaluation of
tangible and intangible assets 6.1 11,717 12,715
Other operating expenses 61,130 11,335
Provisions and depreciation for bad and
doubtful debt and specific securities 271,233 67,800
Depreciation and revaluation of participations,
holdings in affiliated companies and
securities held as fixed assets 383,365 381,040
Losses arising from profit and loss transfer agreements 263,861 26,911
Expenses arising from allocation to special items
subject to partial reserves 0 0
Extraordinary expenditure 213,861 465,169
Taxes on earnings 33,628 83,084
Other taxes not shown under
“other operating expenses” 2,297 21
Net profit for the year 0 0
Total expenditure 5,575,900 5,262,335
Net loss for the year – 366,401 – 998,044
Profit/loss carried forward from previous year – 975,070 20,000
– 1,341,471 – 978,044
Withdrawals from retained earnings
b) from the reserve for own shareholdings 0 2,974
d) from other retained earnings 17,667 53,273
17,667 56,247
Allocations to retained earnings
b) to reserves for own shareholdings 17,667 53,273
Net loss – 1,341,471 – 975,070
102
ANNUAL ACCOUNTS

Income
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000
Interest income from 22,26.1
a) lending and money market business 2,420,681 2,179,583
b) fixed-income securities and debt register claims 1,344,210 1,320,114
3,764,891 3,499,697
Current income from 22,26.1
a) stocks and other non-fixed-income securities 143,426 236,804
b) participations 13,777 11,766
c) shares in affiliated companies 36,436 46,068
193,639 294,638
Income from profit-pooling, profit transfer and
partial profit transfer agreements 22 45,674 3,800
Commission income 23,26.1 184,897 234,540
Net profit from financial transactions 24,26.1 0 158,364
Income from revaluations relating to bad and
doubtful debt, specific securities and writing back
provisions in the lending business 0 0
Income from revaluations relating to participations,
shares in affiliated companies and securities
held as fixed assets 0 0
Other operating income 26.1 105,361 73,252
Extraordinary income 915,037 0
Net loss for the year 366,401 998,044
Total income 5,575,900 5,262,335
ANNUAL ACCOUNTS 103

Balance sheet of the Bankgesellschaft Berlin Group
as of December 31, 2001
Assets
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Cash reserves
a) cash in hand 235,545 386,969
b) balance with central banks 1,125,277 408,807
of which: with the Federal Bank of Germany 1,026,412 (273,214)
c) balance with national giro banks 24 22
1,360,846 795,798
Debt issues of public institutions and bills
rediscountable at central banks 10
a) treasury bills and Treasury discount notes
and similar public institution debt instruments 88,325 37,654
of which:
rediscountable at the Federal Bank of Germany 0 (0)
b) bills of exchange 3,575 6,154
of which:
rediscountable at the Federal Bank of Germany 3,575 (6,154)
91,900 43,808
Loans and advances to banks 1,3,4,5
a) due on demand 4,152,147 6,415,140
b) other loans and advances 29,451,691 31,845,991
of which:
mortgage loans from the mortgage bank 10,012 (24,815)
public-sector loans from the mortgage bank 3,623,421 (4,148,425)
33.603.838 38,261,131
Loans and advances to customers 1,3,4,5,10 99,305,486 103,268,228
of which:
mortgage loans from the mortgage bank 19,039,171 (19,076,915)
other loans secured by mortgages 15,540,769 (15,575,427)
public-sector loans 28,140,844 (30,885,611)
building loans from the Bausparkasse 0 (312,841)
Bonds and other 2,3,4,5,
fixed-income securities 6.2,8.2,10
a) money market securities
aa) issued by public institutions 22,159 626,855
of which:
eligible as security at the Federal Bank of Germany 0 (0)
ab) issued by other borrowers 0 3.609,230
of which:
eligible as security at the Federal Bank of Germany 0 (550,052)
22,159 4,236,085
b) bonds and debt securities
ba) issued by public institutions 5,133,986 5,851,277
of which:
eligible as security at the Federal Bank of Germany 2,994,470 (3,456,333)
bb) issued by other borrowers 33,894,456 28,772,380
of which:
eligible as security at the Federal Bank of Germany 15,372,615 (10,981,351)
39,028,442 34,623,657
c) own debt securities 1,133,097 517,084
nominal value 1,184,420 (509,244)
40,183,698 39,376,826
Amount carried forward 174,545,768 181,745,791
104
ANNUAL ACCOUNTS

Liabilities
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Deposits by banks 1,3,4
a) due on demand 4,447,513 6,708,009
b) with agreed term or notice period
of which:
registered Pfandbriefe issued
59,420,293 62,082,189
by the mortgage bank 448,003 (567,469)
other registered mortgage Pfandbriefe
registered public Pfandbriefe issued
1,816,571 (1,791,777)
by the mortgage bank 389,964 (529,358)
other registered public Pfandbriefe 2,656,419 (2,645,030)
63,867,806 68,790,198
Customer deposits 1,3,4
a) savings deposits with
agreed notice period of
aa) three months 9,340,339 9,216,443
ab) more than three months 343,465 432,682
9,683,804 9,649,125
b) home loan savings deposits (Bausparkasse) 0 438,472
c) other amounts due to customers
ca) due on demand 14,138,865 11,427,915
cb) with an agreed term or notice period 38,453,714 41,212,432
of which:
registered Pfandbriefe issued
by the mortgage bank 2,210,673 (2,564,353)
other registered mortgage Pfandbriefe 1,903,117 (1,968,899)
registered public Pfandbriefe issued
by the mortgage bank 1,819,443 (1,948,497)
other registered public Pfandbriefe 2,680,269 (2,584,265)
52,592,579 52,640,347
62,276,383 62,727,944
Securitised liabilities 1,2,3,4
a) debt securities in issue
aa) mortgage Pfandbriefe
issued by the mortgage bank 6,089,577 7,067,417
ab) other mortgage Pfandbriefe 1,859,174 1,969,908
ac) public Pfandbriefe
issued by the mortgage bank 16,036,181 15,681,481
ad) other public Pfandbriefe 10,681,964 13,024,413
ae) other bonds 12,052,699 19,814,557
46,719,595 57,557,776
b) other securitised liabilities 365,990 426,834
of which:
money market securities 100,196 (0)
own acceptances and promissory notes outstanding 201,916 (367,485)
47,085,585 57,984,610
Trust liabilities 7 273,572 335,942
of which: trustee loans 232,040 (335,942)
Other liabilities 15 3,927,626 4,460,872
Accruals and deferred income 16
a) from issues and loans 1.145,169 1,346,873
b) others 114,923 107,463
1,260,092 1,454,336
Amount carried forward 178,691,064 195,753,902
ANNUAL ACCOUNTS 105

Balance sheet of the Bankgesellschaft Berlin Group
as of December 31, 2001
Assets
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Amount carried forward 174,545,768 181,745,791
Stocks and other 3,4,5,
non-fixed-income securities 6.2,8.2 4,938,279 9,436,528
Participations 6.2,8.2 425,203 239,943
of which:
banks 121,565 (47,615)
financial service providers 2,223 (12,888)
Shares in associated companies 6.2,8.2 47,518 44,108
of which: banks 5,816 (5,652)
Shares in affiliated companies 6.2,8.2 381,587 140,891
of which:
banks 0 (0)
financial service providers 500 (470)
Assets held in trust 7 273,572 335,942
of which: trustee loans 235,318 (324,073)
Equalisation claims against
public institutions including bonds
arising from their exchange 10,11 744,026 1,213,592
Intangible assets 6.2, 12 26,782 79,677
Tangible assets 6.2, 12 624,207 533,661
Own shares or shareholdings 70,940 53,273
accounting value (PY: nominal value) 70,390 (8,960)
Other assets 13 6,382,920 10,195,937
Prepayments and accrued income 14
a) from issues and loans 632,394 712,159
b) others 69,305 76,460
701,699 788,619
Total assets 189,162,501 204,807,962
106
ANNUAL ACCOUNTS

Liabilities
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Amount carried forward 178,691,064 195,753,902
Provisions for liabilities and charges
a) provisions for pensions and
similar obligations 17,18 634,873 570,959
b) tax provisions 261,073 264,276
c) other provisions 19 2,034,337 2,544,969
2,930,283 3,380,204
Special-purpose fund for home loan savings 0 4,930
Special items subject to partial reserves 89 4,293
Subordinated liabilities 3,4,19.2 3,013,285 3,023,208
Profit participation capital 20 3,221 30,678
of which: due within two years 3,221 (30,678)
Equity 21
a) subscribed capital 2,554,741 557,507
b) capital reserve 1,956,044 1,953,278
c) retained earnings
ca) legal reserve 3,272 3,272
cb) reserves for own shareholdings 70,940 53,273
cc) special-purpose reserve of Investitionsbank Berlin 1,341,503 1,329,081
cd) other retained earnings 69,875 155,873
1,485,590 1,541,499
d) adjustments for minority interests 81,087 29,403
e) Group net loss – 1,552,903 – 1,470,940
4,524,559 2,610,747
Total liabilities 189,162,501 204,807,962
Contingent liabilities
b) liabilities from guarantees and warranties
(see notes to consolidated accounts) 5,138,837 6,110,828
c) guarantees and assets
pledged as collateral security 183,494 75,990
5,322,331 6,186,818
Other obligations
c) irrevocable loan commitments 14,874,139 14,715,160
ANNUAL ACCOUNTS 107

Profit and Loss Account of the
Bankgesellschaft Berlin Group
for the period from January 1 to December 31, 2001
Expenditure
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000 € ’000
Interest payable 22 8,638,638 9,266,079
Fees and commissions payable 23 71,412 92,860
Net expenditure from financial transactions 24, 26.2 105,623 –
Administrative expenditure 27
a) staff costs
aa) wages and salaries 765,094 763,419
ab) social security costs and costs relating
to pensions and benefits 219,380 209,213
of which: for pensions 91,420 (77,546)
984,474 972,632
b) other administrative expenditure 695,936 571,905
1,680,410 1,544,537
Depreciation and revaluation of tangible
and intangible assets 6.2 153,452 137,400
Other operating expenses 28 746,154 1,536,407
Provisions and depreciation for
bad and doubtful debt
and specific securities 25 764,638 1,198,088
Losses arising from profit
and loss transfer agreements 49,125 70,995
Result of holdings in associated companies 22 13,892 7,297
Extraordinary expenditure 464,805 388,742
Taxes on earnings 29 53,071 79,607
Other taxes not shown under
“other operating expenses” 10,748 9,605
Total expenditure 12,751,968 14,331,617
Net loss for the year – 111,942 – 1,648,350
Profit/loss carried forward from previous year – 1,429,059 18,405
– 1,541,001 – 1,629,945
Withdrawals from retained earnings
e) from other retained earnings 17,667 207,629
17,667 207,629
Allocations to retained earnings
b) to reserves for own shareholdings 17,667 50,299
d) to the special-purpose reserve of Investitionsbank Berlin 12,422 73,081
e) to other retained earnings 0 568
30,089 123,948
Income attributable
to minority interests – 520 – 75,324
Group net loss – 1,552,903 – 1,470,940
108
ANNUAL ACCOUNTS

Income
See explanatory Previous
notes number(s) year
€ ’000 € ’000 € ’000 € ’000
Interest income from 22,26.2
a) lending and money market business
b) fixed-income securities and debt
8,128,871 8,224,699
register claims 2,098,592 2,314,125
10,227,463 10,538,824
Current income from
a) stocks and other non-fixed-income securities 22,26.2 274,907 352,869
b) participations 16,966 14,239
c) shares in affiliated companies 2,345 2,096
294,218 369,204
Income from profit-pooling, profit transfer
and partial profit transfer agreements 22 6,935 7,264
Commission income 23,26.2 456,964 554,471
Net profit from financial transactions 24,26.2 – 139,400
Income from revaluations relating to
participations, shares in affiliated companies
and securities held as fixed assets 1,383 15,525
Other operating income 26.2,28 560,023 781,628
Income arising from release of special items
subject to partial reserves 167 951
Income from the write-back of funds
for general banking risks 0 276,000
Extraordinary income 1,092,873 0
Net loss for the year 111,942 1,648,350
Total income 12,751,968 14,331,617
ANNUAL ACCOUNTS 109

Notes to the AG and
consolidated financial statements 2001
Preface
Bankgesellschaft Berlin AG is the Bankgesellschaft 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 discharging effect. The consolidated financial
statements drawn up by IBAG Immobilien und Beteiligungen AG, Berlin, is
included as a sub-group in the consolidation.
Apart from Bankgesellschaft Berlin AG, the consolidated companies
Consolidated companies
comprise 21 (2000: 11) domestic and 7 (2000: 7) foreign subsidiary
companies.
110
As of December 31, 2001, the consolidated financial statements of Bankgesellschaft
Berlin again included the following companies as in 2000:
Allgemeine Privatkundenbank AG, Hanover
BANKENSERVICE GmbH, Berlin
Bankgesellschaft Berlin (Ireland) plc, Dublin
Bankgesellschaft Berlin (Polska) S.A., Warsaw
Bankgesellschaft Berlin (UK) plc, London
Bankgesellschaft Berlin AG, Berlin
Bankgesellschaft Berlin International S.A., Luxembourg
Bauprojekt- und Facilitymanagement GmbH der Unternehmensgruppe
Bankgesellschaft Berlin, Berlin
BB-DATA Gesellschaft für Informations- und Kommunikationssysteme mbH,
Berlin
Berlin-Hannoversche Hypothekenbank AG, Berlin and Hanover
BGB Finance (Ireland) plc, Dublin
BG-SYS Bankgesellschaft Berlin AG & Co. Systementwicklungsgesellschaft
beschränkt haftende oHG, Berlin
Direktbank Service GmbH, Berlin
(formerly: BCS BankCard Service GmbH, Berlin)
Immobilien- und Baumanagement der Bankgesellschaft Berlin GmbH, Berlin
Landesbank Berlin - Girozentrale -, Berlin
LBB Landesbank Berlin Finance Curaçao N.V., Curaçao
LPFV Finanzbeteiligungs- und Verwaltungs GmbH, Berlin
Weberbank Privatbankiers KGaA, Berlin
(formerly: Weberbank Berliner Industriebank KGaA, Berlin)
Zivnostenska banka a.s., Prague
NOTES AND EXPLANATORY NOTES

The following companies of the IBAG Group were included for the first time
or once again in the consolidated companies of Bankgesellschaft Berlin
from May 2001 with effect from January 1, 2001:
IBAG Immobilien und Beteiligungen AG, Berlin
ARWOBAU Apartment- und Wohnungsbaugesellschaft mbH, Berlin
BAUTRAKO Bauträger- und Koordinierungsgesellschaft mbH, Lohfelden
Bavaria Objekt- und Baubetreuung GmbH, Nuremberg
Bavaria Projektentwicklung GmbH - Bau-, Sanierungs- und
Stadtentwicklungsprojekte, Nuremberg
DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft mbH,
Frankfurt am Main
GEWOS Institut für Stadt-, Regional- und Wohnforschung GmbH, Hamburg
Immobilien Beteiligungs- und Vertriebsgesellschaft der IBAG-Gruppe mbH,
Berlin (formerly: Immobilien Beteiligungs- und Vertriebsgesellschaft
der Bankgesellschaft Berlin mbH, Berlin)
LBB Grundstücksentwicklungsgesellschaft mbH, Bau- und
Projektentwicklungen, Berlin
S.T.E.R.N. Gesellschaft der behutsamen Stadterneuerung mbH, Berlin
The IBAG Group, which is active in real estate services, reported sales of €312 million
for the 2001 financial year. The result of ordinary business activity amounted
to € –68 million and the net loss of the year € –2 million. IBAG was acquired for a
purchase price of €491 million.
In 2001, no company left the group of consolidation. The following companies
from the former IBG sub-group were no longer incorporated due to their secondary
importance (pursuant to section 296 subsection 2 of the German Commercial
Code):
Bavaria Immobilienconsult und Baurevision GmbH, Berlin
LBB Bauprojektgesellschaft mbH, Berlin.
The investment holdings are itemised pursuant to sections 285 num-
List of investment holdings
ber 11 and 11a, 313 subsection 2 and 340a subsection 4 number 2 of
the German Commercial Code in a list which is attached to these notes as Appendix
1. The investment holdings of the IBAG subgroup are reported in Appendix 1a,
the share rates stated there refer to the IBAG subgroup. These data are
supplemented by a list of companies with profit and loss transfer agreements
(Appendix 2).
NOTES AND EXPLANATORY NOTES 111

Accounting • The annual financial statements and the consolidated
Accounting and valuation
financial statements of Bankgesellschaft Berlin were drawn up in
methods
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 real estate credit institutions.
As a result of the sale of Landesbausparkasse with effect from January 2,
2001, only the figures of the previous year for the items building society deposits
and insurance funds for building society protection were shown; the “thereof”
items were no longer shown.
112
In accordance with the options allowed under section 298 subsection 3 of the German
Commercial Code, the notes to the financial statements of Bankgesellschaft
Berlin AG and the notes to the consolidated financial statements were combined
in a single report.
The accounting and valuation methods were retained. The annual accounts were
drawn up on the basis of the going concern principle (pursuant to section 252 subsection
1 no. 2 of the German Commercial Code). It was thus supposed that an
application by the Federal Republic of Germany for a guarantee of a restructuring
aid will be approved by the European Commission. The restructuring aid, which
was applied for by means of a notification, covers firstly the capital increase of
€1,754,949,340.16 assumed by the State of Berlin, and secondly the protection of
Bankgesellschaft against risks arising from real estate, assumed by the State of
Berlin following a basic agreement of December 20, 2001 and a detailed agreement
of April 16, 2002. If, contrary to expectations, the restructuring aid is not
approved by the European Commission, Bankgesellschaft Berlin will have to take
appropriate measures to repay the amount in question to the State of Berlin. The
same applies to the share with which Norddeutsche Landesbank –Girozentrale–
participated in the capital increase of Bankgesellschaft Berlin AG. Moreover, all
risks arising from property business must be taken into account by means of provisions
and value adjustments in the annual accounts. In addition, the amount of
the capital increase, together with interest since the date of the payment of capital,
which the State of Berlin would be obliged to demand as repayment, would have
to be posted as repayment obligation. This could lead to the equity of the Bank no
longer being of the amount required for continuing the transaction in the given
scope. The Bank would have to take appropriate measures, for example by immediately
aligning its scope of business and discontinuing certain areas of business
or providing new guarantee capital from a new equity provider. If these measures
are not possible or are insufficient, and if the necessary amount of equity cannot
be reported, the balance sheet cannot be prepared on the basis of continuing business
activity.
NOTES AND EXPLANATORY NOTES

A special item subject to partial reserve exists for the profit carried forward to the
new office building in Luxembourg.
Consolidation • The financial statements of the companies included in the consolidated
financial statements were prepared as at December 31, 2001. We converted
the financial statements of the company that prepares its balance sheet in
foreign currency at the exchange rate prevailing on the reporting date and offset
changes in the equity value due to exchange rate fluctuations against the retained
earnings of the Group.
Consolidation of subsidiaries included again in the financial year took place
according to the book value method. No goodwill arose from this (2000: €11 million).
Bankgesellschaft Berlin AG’s dormant equity holding in Landesbank Berlin,
which has a nominal value of €844 million, represents 100% of Landesbank
Berlin’s share 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 holding contract 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 Privatbankiers
KGaA, Berlin, as well as Immobilien- und Baumanagement der Bankgesellschaft
Berlin GmbH.
Intercompany receivables and liabilities were eliminated, as was the corresponding
expenditure and income. Interim earnings from intra-Group sales transactions
during the financial year were eliminated with an impact on net income.
The eliminated amount carried over from the previous year – insofar as it was still
relevant – was offset against retained earnings. Income from consolidated subsidiary
companies paid to the Group for the year under review was offset.
Major foreign Group companies are included in the consolidation with financial
statements according to the German Commercial Code. The financial statements
of other foreign companies were aligned with the Group balance sheet by means
of HBII-measures.
NOTES AND EXPLANATORY NOTES 113

114
Associated companies (pursuant to section 311 of the German Commercial
Code) • Out of a total of 11 (2000: 8) associated companies, we reported 6 (2000: 6)
companies in accordance with the equity method. We report the other associated
companies at cost of acquisition.
The valuation of the associated company Certa Immobilienverwaltung und Handelsgesellschaft
mbH & Co. Liegenschaften OHG as at December 31, 2001 using
equity accounting resulted in a negative participation book value of € –14.8 million
following a book value depreciation in Landesbank Berlin. An appropriate obligation
was recorded under liabilities.
Until now, Alkmene Beteiligungsgesellschaft mbH was not a consolidated subsidiary
of Bankgesellschaft Berlin AG (100% participation). The purpose of the
company is to manage and represent the limited commercial partnership (without
deposits) with the business name „BerlinOnline Stadtportal GmbH & Co. KG“
(formerly: Alkmene GmbH & Co. KG) as a personally liable partner. Bankgesellschaft
Berlin AG and Gruner + Jahr AG & Co. KG are partners in Alkmene
Beteiligungsgesellschaft mbH, each holding 50%. The company was included in
the scope of associated companies pursuant to Section 311 subsection 1 of the German
Commercial Code; due to the minor importance of this participation for the
Group, it was not included in the equity valuation.
With the merger contract of February 21, 2001, G+J BerlinOnline GmbH (100%
partner: Gruner + Jahr AG & Co. KG, Itzehoe) was merged against the guarantee
of equity interests with Alkmene GmbH & Co. KG (100% partner: BGB – previously
not a consolidated subsidiary of BGB). Bankgesellschaft now still holds 50% in the
new company. The business name of the adopted company has been retained. On
November 12, 2001, “G+J BerlinOnline GmbH & Co. KG” changed its name of
business to “BerlinOnline Stadtportal GmbH & Co. KG“. The company was
included in the scope of associated companies pursuant to Section 311 subsection
1 of the German Commercial Code and valued at equity.
In January 2001 the participation of Bankgesellschaft Berlin AG in Inteligo Financial
Services S.A. increased from 23.1% to 48.95%. The company was included in
the scope of associated companies pursuant to Section 311 subsection 1 of the German
Commercial Code. Since the participation is of minor importance for the
Group, it was not included in the equity valuation. As at March 8, 2002, Bankgesellschaft
Berlin AG increased its share to 100%.
NOTES AND EXPLANATORY NOTES

Until now, CidS! Computer in die Schulen gemeinnützige Gesellschaft mbH was
not a consolidated subsidiary of Bankgesellschaft Berlin AG (100% participation).
With effect from January 18, 2001 Bankgesellschaft Berlin AG transferred a share
with a nominal value of €25,600 (50%) in CidS! to IHK Berlin. The company was
included in the scope of associated companies pursuant to Section 311 subsection
1 of the German Commercial Code. Due to the minor importance of the participation
for the Group, it was not included in the equity valuation.
Beteiligungsverwaltung für Immobilienwerte GbR, in which Bankgesellschaft
Berlin AG held a 1% participation, was liquidated in the financial year and thus
withdrew from the scope of associated companies.
The associated companies are shown individually in the list of investment holdings
(Appendix 1 to the Notes).
The investment earnings recovered in the Group were adjusted for participation
book value changes, which were effected for alignment with the pro-rata equities
(book value method). Income of € –13.9 million (2000: € –7.3 million) on balance
resulted from this, which was shown under “Result of holdings in associated companies”
in the Group’s profit and loss account. Alignment with deviating valuation
methods was avoided due to immateriality.
Valuation • Assets, liabilities and pending transactions are valued in accordance
with the stipulations of sections 252 ff. of the German Commercial Code in connection
with sections 340 ff. of the German Commercial Code. The Ordinance
Regulating Reporting by Banks (RechKredV) is observed.
Loans and advances to banks and customers are reported at the nominal amount.
Premium and discount amounts appear under prepayments and accrued income
or accruals and deferred income and written back as scheduled. Discounted liabilities
are reported at market value, other liabilities at the repayment amount.
Financial assets are valued at cost of acquisition. With prospective lengthy
declines in value, write-downs are performed pursuant to the strict lower of cost
or market principle. If declines in value are only temporary, the value is kept pursuant
to section 253 subsection 2 of the German Commercial Code in connection
with section 340e subsection 1 of the German Commercial Code. This procedure
is in line with section 6 subsection 1 no. 2 of the Income Tax Law (EStG). Thus
deviations between accounts prepared for financial reporting purposes and tax
purposes are largely avoided. The Group’s financial assets include assets not val-
NOTES AND EXPLANATORY NOTES 115

116
ued according to the lower of cost or market of € 1,601 million (2000: € 1,648 million),
thereof € 1,070 million (2000: € 1,613 million) in the AG.
Securities from the trading portfolio and the liquidity reserve are valued strictly at
the 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.
Recognised lending risks are adequately treated through the creation of individual
charges for bad and doubtful debts and provisions. There are general charges
for bad and doubtful debts for latent risks in the receivables portfolio and reserves
in accordance with section 340f of the German Commercial Code for general bank
risks for smaller banks and the Investitionsbank Berlin (IBB).
As in the 2000 financial year, a valuation of collaterals including a market value
amount of the guaranteed subsidies was taken as the basis for government-assistance
loans within the Group. Adequate loan loss provisions were set up for risk
potential identified as a result.
Assets with a limited useful life are depreciated according to a fixed schedule.
The full amount of provisions for pensions required by actuarial expert opinions
is reported using an assumed interest rate of 6%. The biometric accounting principles
(Prof. Heubeck tables, 1998) are used for calculations.
In the context of the basic agreement with the State of Berlin of December 20, 2001
regarding the assumption of the existing material risks arising from real estate
services in the Bankgesellschaft Berlin AG Group, no value adjustments were
made for the assets under the book value guarantee as at December 31, 2001. For
these assets the book value as at December 31, 2000 and the acquisition and manufacturing
costs valid until December 31, 2001 continued to be used. Further, the
State of Berlin guarantees that the other provisions shown within the meaning of
section 266 subsection 3B no. 3 of the German Commercial Code, including the
provisions for pending transactions in the financial statements as at December 31,
2000 are sufficiently endowed. Therefore, only specific risks arising from real
estate services are reported. The specific loans and loan commitments of Bankgesellschaft
Berlin AG, Landesbank Berlin and Berlin Hyp up until December 31,
2001 to the IBG/IBAG Group including the loans and loan commitments to property
companies are guaranteed by the State of Berlin. As a result of the loan guarantee,
the Bankgesellschaft Berlin Group is protected against loan loss risk of
NOTES AND EXPLANATORY NOTES

companies of the IBAG Group/IBG Group. In as far as contingent liabilities and
contingencies as well as so-called hard letters of comfort and the secondary liability
as partners are the result of real estate transactions and not part of the
accepted obligation with regard to the LPFV, but nevertheless are shown in the
financial statements as at December 31, 2001, the State of Berlin releases the
Group companies from actual liability.
Valuation of trading portfolio • For the predominant share of our financial transactions,
transactions are separately structured and valued in the form of interest
rate and share portfolios or special valuation units both for risk management and
for the purposes of commercial law accounting.
In the case of interest rate products, all products in the same currency are
regarded as a valuation unit. Equity products are grouped by type. Normal market
indices based on share baskets are also treated as a product type.
First, the results from the valuation of individual products (trading portfolio securities
including derivative financial instruments) are offset against each other at
market prices. Positive valuation surpluses are taken up to the maximum of the
realised loss in the respective category or currency in a portfolio by offsetting. Any
subsequently remaining positive valuation surplus is not taken pursuant to the
imparity principle. If the result of the valuation is negative, a provision is set up for
this.
The risks of the portfolios are subject to a risk management and limit system that
is tailored to each portfolio. The portfolios are kept strictly separate from other
transactions in accounting and risk monitoring.
If trading transactions are not allocated to an interest rate or share portfolio, provisions
are set up for valuation losses. Valuation profit is not taken.
Currency translation • The financial statements and consolidated financial statements
were prepared in euros.
Assets, debts and pending transactions denominated in foreign currencies are
translated at the exchange rates published by the European Central Bank at yearend
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.
NOTES AND EXPLANATORY NOTES 117

118
Exceptions include assets denominated in foreign currencies that are allocated to
fixed assets and are not covered in the same currency. They are reported on the
balance sheet at their translated historical acquisition cost (section 340h subsection
1 of the German Commercial Code).
Foreign currency positions that are allocated to the central management of currency
risk are by definition subject to special treatment; section 340h subsection
2 of the German Commercial Code applies accordingly. Provisions are set up for
negative valuation results in the case of all other foreign currency positions
(mostly currency option transactions). Positive results and unrealised profits from
open positions are not booked.
NOTES AND EXPLANATORY NOTES

Explanatory notes to the balance sheet and the profit and loss account
of the AG and the Groups
Balance sheet
(1) Classification of deadlines
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Loans and advances to banks
Other loans and advances
– less than three months 12,615 7,772 8,352 7,739
– between three months and one year 1,604 2,567 3,165 3,381
– between one and five years 1,504 1,735 9,099 9,479
– more than five years 458 578 8,836 11,247
Total 16,181 12,652 29,452 31,846
Loans and advances to customers
– less than three months 8,143 7,195 16,424 16,415
– between three months and one year 973 1,595 4,720 5,994
– between one and five years 2,871 3,347 22,308 21,297
– more than five years 7,274 6,658 55,853 59,562
of which with indefinite term or notice period (1,736) (1,750) (4,203) (4,066)
Total
Deposits by banks
with agreed term or notice period
19,261 18,795 99,305 103,268
– less than three months 32,357 33,903 36,265 40,950
– between three months and one year 7,596 4,106 9,541 6,325
– between one and five years 115 262 5,797 5,105
– more than five years 291 586 7,817 9,702
Total
Customer deposits
Savings deposits with agreed notice period
of more than three months
40,359 38,857 59,420 62,082
– less than three months 9 12 49 104
– between three months and one year 1 1 50 56
– between one and five years 60 74 226 255
– more than five years 6 7 18 18
Total
Customer deposits
Other liabilities with
agreed term or notice period
76 94 343 433
– less than three months 2,743 4,814 9,328 11,214
– between three months and one year 119 508 1,451 1,859
– between one and five years 842 851 9,667 8,755
– more than five years 922 244 18,007 19,384
Total
Securitised liabilities
Other securitised liabilities
4,626 6,417 38,453 41,212
– less than three months – 475 167 317
– between three months and one year – 230 135 51
– between one and five years 42 38 40 38
– more than five years 45 21 24 21
Total 87 764 366 427
NOTES AND EXPLANATORY NOTES 119

(2) Amounts due in the following year
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Included in the item:
– Bonds and other
fixed-income securities
– Securitised liabilities
3,553 3,004 3,871 4,413
Debt securities in issue 5,447 10,270 11,655 21,906
(3) Business with affiliated companies
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Loans and advances to banks 8,599 10,133 – –
Loans and advances to customers 1,901 484 1,082 921
Bonds and other fixed-income securities 6,013 5,718 – –
Shares and other non-fixed-income securities 355 158 – –
Deposits by banks 19,173 1) 20,941 1) – –
Customer deposits 1,287 195 361 344
Securitised liabilities 7,094 9,241 – 21
Subordinated liabilities 2,506 2,517 – –
1) of which Landesbank Berlin – AG 2001: 16,864, 2000: 19,356
(4) Business with companies in which investments are held
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Loans and advances to banks 1 187 1,202 1,479
Loans and advances to customers 110 96 358 344
Bonds and other fixed-income securities 538 498 551 498
Shares and other non-fixed-income securities – – 2 4
Deposits by banks 121 123 888 853
Customer deposits 39 32 61 55
Securitised liabilities – – 46 64
(5) Subordinated assets
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Loans and advances to banks 128 105 144 116
Loans and advances to customers 8 1 11 3
Bonds and other fixed-income securities 360 92 360 92
Shares and other non-fixed-income securities 231 12 203 184
120
NOTES AND EXPLANATORY NOTES

(6) Development of fixed assets
(6.1) AG
in € million Financial assets Tangible
assets
Loans and Bonds Shares Partici- Shares in
advances1) and other and other pations affiliated
fixed- non-fixed- companies
income income
securities securities
Book value as at Dec. 31, 2000
Cost of acquisition/manufacturing
4 711 997 140 2,092 92
as at Dec. 31, 2000 7 711 1,002 149 2,489 213
Additions 2001 – – 14 31 1,392 18
Disposals 2001 – 154 4 28 351 53
Account transfers 2001 – – – 1 – 1 –
Effects from exchange rate movement
Cost of acquisition/manufacturing
– 1 – – – –
as at Dec. 31, 2001 7 558 1,012 153 3,529 178
Value appreciation – – – 10 – –
Cumulative depreciation as at Dec. 31, 2000 3 – 5 19 5122) 121
Additions 2001 4 12 24 4 358 11
Disposals 2001 – – – – – 51
Account transfers 2001 – – – – – –
Effects from exchange rate movement – – – – – –
Cumulative depreciation as at Dec. 31, 2001 7 12 29 23 870 81
Book value as at Dec. 31, 2001 – 546 983 140 2,659 97
1) Convertible profit-sharing rights from restructuring measures
2) Cumulative depreciation includes provision of €100 million created in the previous year
The participation in the capital increases at Berlin-Hannoversche Hypothekenbank AG and Bankgesellschaft
Berlin (Ireland) plc, Dublin, impacted significantly on the additions of shares in associated companies. Moreover,
IBAG Immobilien und Beteiligungen AG was bought back. In connection with the expansion of our internet
presence we have acquired a participation in BerlinOnline Stadtportal GmbH & Co. KG.
NOTES AND EXPLANATORY NOTES 121

(6.2) Group
in € million Financial assets Tangible Intangible
assets assets
Loans and Bonds Shares Partici- Shares in Shares in
advances1) and other and other pations associated affiliated
fixed- non-fixed- companies companies
income income
securities securities
Book value
as at Dec. 31, 2000
Cost of acquisition/
manufacturing
4 4,931 1,107 240 44 141 534 80
as at Dec. 31, 2000 7 4,939 1,119 256 56 149 1,261 253
Additions 2001 – 2,355 22 238 28 310 281 51
Disposals 2001
Account
– 2,141 79 34 18 2 163 41
transfers 2001
Effects from exchange
– – – – – – 151 – 151
rate movement
Cost of acquisition/
manufacturing
– 9 – – – – – –
as at Dec. 31, 2001 7 5,162 1,062 460 66 457 1,530 112
Value appreciation
Cumulative depreciation
– 9 – 10 21 – – –
as at Dec. 31, 2000 3 9 12 26 30 8 727 173
Additions 2001 4 15 27 19 9 67 216 14
Disposals 2001
Account
– 6 – – – – 136 3
transfers 2001
Effects from exchange
– – – 99 – 99
rate movement
Cumulative depreciation
– – – – – – – –
as at Dec. 31, 2001
Book value
7 18 39 45 39 75 906 85
as at Dec. 31, 2001 0 5,153 1,023 425 48 382 624 27
1) Convertible profit-sharing rights from restructuring measures
122
NOTES AND EXPLANATORY NOTES

(7) Trust transactions
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Loans and advances to banks – – 4 –
Loans and advances to customers 16 14 232 324
Tangible assets – – – –
Other assets – – 38 12
16 14 274 336
Deposits by banks 16 14 34 36
Customer deposits – – 198 300
Other liabilities – – 42 –
(8) Qualification for stock exchange listing
(8.1) AG
16 14 274 336
in € million Qualified for trading Listed Non-listed
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2001 2000 20 01 2000 2001 2000
Bonds and other fixed-income securities 29,742 28,352 26,648 23,391 3,094 4,961
Shares and other non-fixed-income securities 2,431 5,897 2,383 5,891 48 6
Participations 64 70 22 27 42 43
Shares in affiliated companies
of which:
1,597 1,167 986 569 611 598
Berlin Hyp 730 313 730 313 – –
BG Intern. S.A. Lux. 246 246 – – 246 246
BG Berlin (UK) plc 205 205 – – 205 205
ALLBANK 175 175 175 175 – –
Zivnostenska banka 81 81 81 81 – –
Others 160 147 – – 160 147
(8.2) Group
in € million Qualified for trading Listed Non-listed
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2001 2000 20 01 2000 2001 2000
Bonds and other fixed-income securities 40,184 39,377 35,654 32,292 4,530 7,085
Shares and other non-fixed-income securities 3,672 7,332 2,087 5,796 1,585 1,536
Participations 64 81 22 37 42 44
Shares in associated companies – – – – – –
NOTES AND EXPLANATORY NOTES 123

124
(9) Foreign currency positions
in € billion AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Assets 20.9 22.0 32.6 34.3
Liabilities 20.3 23.7 30.5 36.3
(10) Assets pledged as collateral to the responsible Central Bank for monetary
policy instruments within the framework of the European System of Central
Banks (ESCB)
Assets pledged as collateral to the Regional Bundesbank Office for monetary policy
instruments in the framework of the ESCB break down as follows:
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Securities 10,620 9,039 16,520 18,100
of which: equalisation claims 324 2,063 415 5,627
Industrial loans 121 266 513 886
of which: bills of exchange 3 32 4 32
loan receivables 118 234 509 854
Total 10,741 9,305 17,033 18,986
At the balance sheet date, there were the following pledges as additional collateral
at Bankgesellschaft Berlin AG: loans and bonds amounting to a nominal €133 million
(2000: €13 million as well as shares and other non-fixed-income securities
with a market value of €725 million) were deposited as collateral at EUREX
Deutschland. In addition, loans and bonds of a nominal €568 million (2000: €86
million) as well as shares and other non-fixed-income securities with a market
value of €378 million (2000: €35 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 €14,838 million (2000: €4,901 million)
in the Group and in the AG with a nominal value of €12,445 million (2000: €2,701
million), as well as shares and other non-fixed-income securities with a market
value of €350 million (2000: €– million) in the Group and of €350 million (2000:
€– million) in the AG were sold under agreements to repurchase.
NOTES AND EXPLANATORY NOTES

Notes on individual
balance sheet items
(11) Equalisation claims against public institutions including bonds
from their exchange • This item consists of equalisation claims purchased
by both the AG and the Group in the form of bearer bonds. Furthermore,
the AG’s portfolio contains borrowed securities worth €20 million
(2000: €25 million). No securities were lent out.
€324 million (2000: €2,063 million) (AG) and €415 million (2000: €5,627 million)
(Group) of the equalisation claims were pledged as collateral to the responsible
central banks for monetary policy instruments in the framework of the ESCB
(cf. (10)).
(12) Tangible and intangible fixed assets • Of the land and buildings owned by the
Group, property with a book value of €199 million (2000: €235 million) is used in
the course of our business operations.
Factory and office equipment are valued at €313 million (2000: €243 million) - AG:
€97 million (2000: €92 million).
Tangible assets are valued at cost of acquisition or manufacture. In the case of
depreciable assets, we write off the highest values permissible 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 expense is charged on
additions in the first half year, the semi-annual depreciation expense on additions
in the second half of the year.
Tangible assets Service life
Land and buildings 33 years
Tenant installations 33 years
Furnishings 8–13 years
Fixtures and fittings 5–25 years
Office machines/computer systems 3–8 years
Telephone systems 10 years
Motor vehicles 6 years
Software 3 years
Low-value assets are written down in full in the year of acquisition and shown in
the schedule of fixed assets as disposals.
The Group’s intangible assets contain credit balances from the capital consolidation
of €14 million (2000: €16 million). Capitalised goodwill was written down in
line with legal provisions.
NOTES AND EXPLANATORY NOTES 125

(13) Other assets
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Asset items from portfolios 2,108 1,855 2,108 1,855
Profit claims LBB 767 767 767 767
Due from tax authorities
Receivables from futures transactions and swaps,
215 225 401 431
accrued interest from futures transactions 309 198 828 765
Collection of documents 105 2,073 132 4,731
Others 688 331 2,147 1,647
Total 4,192 5,449 6,383 10,196
126
The asset items from portfolios include options for premiums paid in the context
of capital market transactions and variation margins as well as capitalised profitsharing
claims.
The profit-sharing claims made to LBB are claims to the remaining 24.99% of the
income and any liquidation proceeds of Landesbank Berlin acquired by Bankgesellschaft
Berlin AG from the State of Berlin in 1998.
A partially integrated inter-company relationship between Berliner Bank AG and
Berlin-Hannoversche Hypothekenbank AG was recognised by a final judgement
by the Berlin fiscal court dated May 13, 1998 for the years 1981 to 1985. The provisions
for trade tax created in 1998 and 1999 were released by Bankgesellschaft
as a result of the concluded legal proceedings after setting off against the existing
trade tax obligations of €65 million and affected the current-period result.
(14) Prepayments and accrued income • The Group reported €364 million (2000:
€448 million) in differences between the nominal values of receivables and the
amounts actually paid.
In the AG, this item mainly contains premiums for loans acquired and advances
to customers (shares acquired in syndicates from the joint private financing of
building projects within the framework of the so-called Berlin model), up-front
payments made for derivatives, discounts from bearer bonds and advance rent
payments.
NOTES AND EXPLANATORY NOTES

(15) Other liabilities
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Liability items from portfolios 1,655 1,878 1,655 1,878
Due to tax authorities 19 14 52 55
Accrued interest on subordinated liabilities 48 80 79 82
Accounts payable for goods and other services
Liabilities from futures transactions and swaps,
16 17 141 46
accrued interest from futures transactions 343 171 812 446
Others 488 917 1,189 1,954
Total 2,569 3,077 3,928 4,461
The liability items from portfolios mainly contain options premiums and variation margins received in the
context of capital market transactions.
(16) Accruals and deferred income • The Group reported €912 million (2000: €1,023 million) in differences
between the face values of receivables and the amounts actually paid.
In the AG, this item mainly contains differences between the face values of receivables and the amounts actually
paid, prepayments of rent and accrued interest and fees.
(17) Provisions for pensions and similar obligations in the Group • Provisions for pensions and similar obligations
in the Group rose by €64 million (2000: €7 million) to €635 million (2000: €571 million).
(18) Other provisions
in € million AG Group
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
Provisions for portfolios, securities and foreign
exchange transactions 408 258 409 262
Provisions for risks from lending business including country risks 161 154 229 202
Provisions for IBG capital measures 30 146 – –
Provisions for the real estate fund business – 116 – 249
Provisions for IBAG capital measures – 100 – –
Reserves for staff costs 58 77 136 169
Restructuring provisions 232 150 506 206
IBG 1) – – 75 10
LPFV1) – – 182 996
Others 101 43 497 451
Total 990 1,044 2,034 2,545
1) The provisions for staff costs of the IBG Group are contained in the relevant subposition
NOTES AND EXPLANATORY NOTES 127

128
The provisions created in the previous year for IBG’s capital measures did not
affect the company’s loss which was not covered by equity which was compensated
pro rata by the partners in the 2001 financial year (BGB: 40%, LBB: 30%,
Berlin Hyp: 30%). In addition, BGB and LBB made provisions of €50 million
against further capital measures in 2000. In the 2001 financial year, €25.9 million
of this was allocated to IBG. According to its share in IBG, Berlin Hyp provided
€11.1 million. IBAG capital measure provisions of €100 million affected the
deposits to be rendered by Bankgesellschaft and were utilised with the repurchase
of the company in 2001. The judicial release facilitated the transference of the provision
for the property fund.
The restructuring provisions in the Group developed in 2001 as follows:
in € million Situation on Used Trans- Cancelled Allocated Situation on
Jan. 1, 2001 fers Dec. 31, 001
Staff
Premises
176 25 16 126 232 273
management
Operating
30 9 – 2 176 195
expenditure 0 – 0 38 38
Total 206 34 16 128 446 506
The provisions created in the previous year for a decrease of 1,600 employee
capacities were transferred, taking account of the utilisation. This took place in
light of an extensive restructuring project being developed for the Group. The project
relates to staff, premises management and operating expenditure. Of the
expenditure of €318 million, which impacts negatively on the result, €250 million
was allocated to Bankgesellschaft, LBB and Berlin Hyp €59 million to IBAG and €9
million to other Group companies.
NOTES AND EXPLANATORY NOTES

(19) Subordinated liabilities
(19.1) AG
Currency Nominal value in million
€
Interest rate Maturity
(1) DM 40 20 8.25% 2002
(2) DM 200* 102 7.40% 2003
(3) DM 100 51 7.00% 2005
(4) DM 300* 153 6.71% 2006
(5) JPY 10,000* 87 3.36% 2007
(6) DM 50* 26 6.06% 2007
(7) JPY 10,000* 87 3.32% 2007
(8) EUR 14* 14 zero bond 2007
(9) JPY 4,000* 35 2.80% 2008
(10) JPY 5,000* 43 2.30% 2008
(11) DM 10* 5 5.03% 2008
(12) DM 30* 15 5.33% 2008
(13) EUR 150* 150 3-month-Euribor + 35 BP 2009
(14) EUR 10* 10 3-month-Euribor + 32 BP 2009
(15) FRF 1,500* 229 5.75% 2009
(16) FRF 750* 114 5.75% 2009
(17) EUR 375* 375 4.75% 2009
(18) EUR 7* 7 zero bond 2009
(19) JPY 5,000* 43 3-month-JPY-Libor + 8 BP 2009
(20) FRF 1,000* 152 5.375% 2010
(21) DM 250* 128 5.375% 2010
(22) USD 250* 284 7.125% 2012
(23) GBP 150* 247 8.000% 2012
(24) EUR 75* 75 at least 4.75% 2019
(25) JPY 15,000* 130 5.15% 2027
Subordinated liabilities marked with (*) were taken up from affiliated companies.
The subordinated liabilities (3), (4), (12) and (21) stem from the former Berliner
Bank AG. From the subordinated liability (3), €0.5 million (2000: €0.5 million) as
at the balance sheet date are held in the company’s own portfolio. Borrowing (both
(15) and (16)) and subordinated liabilities ((17) and (22)) currently exceed 10 % of
the total subordinated capital. The subordinated liabilities (20) and (21) were
redenominated in 1999 (€152 million and €128 million respectively). The interest
rate for subordinated liability (24) was agreed upon 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 minus 4.75%, but at least 4.75%.
NOTES AND EXPLANATORY NOTES 129

130
The interest paid for subordinated liabilities in 2001 in the AG amounts to €127
million (2000: €136 million). This interest paid is made up of current interest
expense amounting to €146 million (2000: €146 million) and income from swap
transactions amounting to €19 million (2000: €10 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 satisfied.
(19.2) Group
Nominal value Issuer Interest rate
in € million
(1) 71 Bankgesellschaft Berlin AG 7.00 – 8.25%
(2) 90 Landesbank Berlin – Girozentrale – 4.74 – 5.43%
(3) 174 Berlin-Hannoversche Hypothekenbank AG 4.04 – 2.75%
(4) 26 Allgemeine Privatkundenbank AG 4.34 – 8.70%
(5) 2,652 BGB Finance (Ireland) plc zero bond – 8.00%
Of the subordinated liabilities (5), €1,016 million (2000: €1,031 million) were in
foreign currencies.
Total subordinated liabilities come to €3,013 million (2000: €3,023 million) – AG:
€2,577 million (2000: €2,588 million). Of this €2,984 million (2000: €3,000 million)
– AG: €2,495 million (2000: €2,568 million) – meets the requirements of the German
Banking Act for recognition as liable capital.
Total interest paid in the Group for subordinated liabilities amounts to €141 million
(2000: €150 million).
(20) Profit participation capital • Profit participation rights of €3 million (2000: €31
million) have been distributed in the companies included in the Group accounts.
These profit participation rights exclusively embody creditor claims and, as in the
previous year, do not meet the requirements for recognition as liable capital in line
with the legal provisions of the German Banking Act, since the remaining period
was less than two years.
(21) Equity • The capital increase of Bankgesellschaft Berlin AG, agreed at the
Annual General Meeting of August 29, 2001, was entered in the Trade Register on
October 4, 2001.
Subscribed capital of Bankgesellschaft Berlin AG amounted to €2,555 million after
the distribution of new shares and is made up of 999,327,870 ordinary shares. €3
million was allocated to the capital reserve.
NOTES AND EXPLANATORY NOTES

The Annual General Meeting of August 29, 2001 authorised Bankgesellschaft
Berlin AG to acquire own shares for the purpose of securities trading to September
30, 2002 pursuant to section 71 subsection 1 no. 7 of the German Stock Corporation
Act. The acquisition prices may not fall short of or exceed the average unit
price of the shares for the ten preceding trading days by more than 10%. The trading
portfolio of the shares acquired for this purpose may not exceed the share capital
of Bankgesellschaft Berlin AG by more 5% at the end of each day.
At year-end, there were 27,090,540 (2000: 3,504,832) ordinary shares with a book
value of €7 million (2000: €53 million) in the bank’s trading portfolio. The ratio to
the share capital is 2.711% (2000: 1.607%). The highest daily portfolio was
27,090,540 shares, equating to 2.711% of the subscribed capital.
For the year as a whole, 23,640,778 shares were purchased at an average price of
€3.93 each and 55,070 were bought at an average price of €10.92 each.
In addition, there are 405,695 ordinary shares with a book value of €1 million in
the bank’s portfolio. These were acquired between the end of May and the end of
June 2001 in line with Section 71 subsection 1 no.1 of the German Stock Corporation
Act at an average price of €9.63 on the stock exchange. This conformed to the
law, in order to avert serious damage from the bank. The share in subscribed capital
amounts to 0.041%.
In accordance with a resolution of the Annual General Meeting passed on August
29, 2001, we have the opportunity 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. No use was made of this opportunity in the 2001
reporting year.
In the lending business, 2,337,585 (2000:1,775,448) of our own ordinary shares
were accepted as pledge at year-end 2001 pursuant to section 71e German Stock
Corporation Act. This equated to 0.23% (2000: 0.81%) of the subscribed capital.
The balance sheet loss for the 2001 financial year at Bankgesellschaft Berlin AG
comes to €1,341 million taking into account loss carried forward from the previous
year of €975 million.
NOTES AND EXPLANATORY NOTES 131

132
With reference to Group equity, the following table explains the development of
other retained earnings:
in € million 2001 2000
Situation at Jan. 1 156 330
Allocation from profit for the financial year
Withdrawals from other retained earnings
9 34
for allocation to the reserve for own shares – 18 – 53
Withdrawals from other retained earnings for loss-offsetting (LBB) 0 – 154
Withdrawals from the valuation of associated companies 2 6
Allocations/withdrawals from currency translation
Allocations/withdrawals from elimination of unrealised
10 6
results of intra-group transactions and consolidated debts 959 6
Effects of capital consolidation – 1,048 – 15
Elimination of profit from the BG/BB merger 0 – 4
Situation at Dec. 31 70 156
NOTES AND EXPLANATORY NOTES

Notes on individual profit
and loss account items
(22) Net interest income
in € million AG Group
2001 2000 2001 2000
Interest income from 3,765 3,499 10,228 10,539
Lending and money market business 2,421 2,179 8,129 8,225
Fixed-income securities and debt register claims 1,344 1,320 2,099 2,314
Current income from 194 295 280 362
Stocks and other non-fixed-income securities 144 237 275 353
Participations 1) 14 12 3 7
Affiliated companies 36 46 2 2
Income from profit-pooling 45 4 7 7
Interest payable for 3,422 3,456 8,639 9,266
Deposits 2,608 2,656 6,073 6,115
Securitised liabilities 687 664 2,425 3,001
Subordinated liabilities 127 136 141 150
Total 582 342 1,876 1,642
1) In the consolidated financial statements including associated companies
(23) Net commission income
in € million AG Group
2001 2000 2001 2000
Securities and debt issues 62 83 130 184
Securities/investment 57 70 122 167
Debt issues/syndication business 5 13 8 17
Payment transactions/account management 26 27 125 127
Lending business 22 24 58 76
Lending business 3 2 24 36
Commission on guarantees 11 14 22 28
Foreign business 8 8 12 12
Card business 34 32 47 44
Other service business – 2 3 26 31
Business in foreign notes and coins/currency 2 2 5 5
Other services – 4 1 21 26
Total 142 169 386 462
The report was aligned to the interim reporting and subdivided again. The figures for the previous year were
aligned.
NOTES AND EXPLANATORY NOTES 133

(24) Net result from financial transactions • The profit from financial transactions in the Group according to
companies and business types is made up as follows:
in € million 2001 2000
Profit – 106 139
of which:
Bankgesellschaft Berlin – 105 158
Landesbank Berlin –5 1
Other banks 1 – 14
Consolidation 3 – 6
in € million 2001 2000
Result from interest-related business –42 –54
Result from share-related business 58 147
Result from other trading business 21 47
Trading result 37 140
Valuation from own shares – 143 – 1
Net result pursuant to profit and loss account – 106 139
(25) Risk provisioning • The risk provisioning is made up as follows:
in € million AG Group
2001 2000 2001 2000
Risk provisioning in the lending business 227 284 738 1,537
Results from securities in the liquidity reserve 44 26 25 27
Reserve pursuant to section 340f of HGB – – 242 2 – 366
Total 271 68 765 1,198
134
NOTES AND EXPLANATORY NOTES

The risk provisioning in the lending business in the AG developed as follows:
in € million Counterparty default risks Country Total of which
risk with effect
lending
business
on P&L
Direct Individual General Provisions
depre- value bad-debt lending
ciation adjustments1) provision2) business
2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
Status as of Jan. 1 1,804 1,700 70 58 148 90 12 12 2,034 1,860
Allocations – – 225 277 1 12 61 79 4 0 291 368 291 368
Use – – 247 126 0 247 126
Write-backs – – 76 85 10 8 0 0 86 93 86 93
Direct depreciation
Receipts related to
26 14 26 14
written-off receivables 4 5 4 5
Book transfers – – 5 24 – 5 – 13 0 11
Exchange rate changes – – 10 14 10 14
Status as of Dec. 31 – – 1,721 1,804 71 70 194 148 16 12 2,002 3) 2,034 3) 227 284
1) Specific charge for bad and doubtful debts
2) General charge for bad and doubtful debts
3) without old loans
Risk provisioning in the lending business in the Group developed as follows:
in € million Counterparty default risks Country Total of which
risk with effect
lending
business
on P&L
Direct IVA1) GBP2) Provisions
depre- lending
ciation business
2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
Status as of Jan. 1 – – 4,366 3,125 245 179 199 157 22 33 4,832 3,494
Allocations – – 912 1,612 12 70 92 104 4 1 1,020 1,787 1,020 1,787
Use – – 389 236 3 9 13 392 258
Write-backs – – 273 226 12 5 23 22 3 1 311 254 311 254
Direct depreciation
Receipts related to
38 29 38 29
written-off receivables 9 25 9 25
Book transfers 3) – – 28 77 – 1 1 – 7 – 31 0 2 20 49
Exchange rate changes – – 10 14 2 12 14
Status as of Dec. 31 – – 4,654 4,366 246 245 258 199 23 22 5,181 4,832 738 1,537
1) Specific charge for bad and doubtful debts
2) General charge for bad and doubtful debts
3) Incl. portfolio increase through expansion of scope of consolidation
The scale of risk provisioning is primarily determined by expectations on future loan losses, the structure and
the quality of the loan portfolios as well as general economic factors.
NOTES AND EXPLANATORY NOTES 135

136
Throughout the Group we have made individual value adjustments and provisions
in the amount of the expected losses for all recognisable risks in domestic
and foreign lending. Individual value adjustments are written back as soon as the
value of the receivable has increased, and the security valuation or credit worthiness
of the borrower has shown a fundamental and sustained improvement.
The calculation of the general charge for bad and doubtful debts followed the recommendation
of the Banking Committee of the IDW “On the formation of general
bad-debt provisions for latent credit risk in the financial statement of lending institutions
“ (BFA 1/1990).
We make provisions for transnational lendings that involve an acute transfer risk
according to uniform Group guidelines by individual value adjustments and provisions
for guarantees. In the case of country value adjustments, we take into consideration
the risk exposure, which is 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 we are entitled to and which is not affected by the transfer
risk of the corresponding country, also reduces our risk exposure. The list of
the countries with acute transfer risk and the amount of the corresponding value
adjustment are adapted to the respective current risk situation.
Over and above the provision for country risks formed for the lending business, no
further provisions (amounting to €0 in 2000) exist to cover country risks to securities.
Total credit risk provisioning are distributed as follows:
in € million AG Group
2001 2000 2001 2000
Loans and advances to banks 90 103 114 132
Loans and advances to customers 1,717 1,783 4,801 4,492
Provisions for liabilities and charges 195 148 258 199
Other items 0 0 8 9
Total 2,002 2,034 5,181 4,832
NOTES AND EXPLANATORY NOTES

(26) Geographic distribution of earnings • The following geographic breakdown of earnings is carried out
according to the location of the unit earning the income (subsidiary, branch, affiliate).
(26.1) AG
in € million Domestic International Total
earnings earnings earnings
2001 2000 2001 2000 2001 2000
Interest income
Current income from shares and other
non-fixed-income securities, participations and
2,197 1,958 1,568 1,542 3,765 3,500
shares in affiliated companies 158 295 36 – 194 295
Commission income 179 224 6 10 185 234
Net profit from financial transactions – 158 – – – 158
Other operating income 95 64 10 9 105 73
(26.2) Group
in € million Domestic International Total
earnings earnings earnings
2001 2000 2001 2000 2001 2000
Interest income
Current income from shares and other
non-fixed-income securities, participations and
7,742 8,059 2,486 2,480 10,228 10,539
shares in affiliated companies 255 357 40 12 295 369
Commission income 424 516 33 38 457 554
Net profit from financial transactions – 153 – – 14 – 139
Other operating income 556 770 4 12 560 782
(27) Other administrative expenditure in the Group
in € million 2001 2000
Cost of office space 150 138
Computing costs 244 188
Advertising and promotion 47 45
Consultations, audits, contributions 113 66
Business operating costs 84 74
Fixtures and fittings 13 12
Staff-related operating costs 34 34
Value added tax on consolidated performance 11 15
Total 696 572
To increase the transparency and standardisation of the internal and external reporting systems, the cost type
catalogue was restructured and better classified within the framework of introducing SAP. The structure of the
above table follows the new cost type catalogue; the figures for the previous year were aligned accordingly.
NOTES AND EXPLANATORY NOTES 137

138
(28) Other operating expenses and income in the Group
in € million 2001 2000
Other Other Other Other
operating operating operating operating
expenses income expenses income
Banks 240 251 78 214
IBG/IBAG/LPFV 609 495 585 601
Raw materials and consumables 244 – 301 –
Depreciation 26 – 123 –
Other operating expenses 237 – 161 –
Risk expenses 102 – – –
Sales revenues
Increases/decreases
– 378 – 515
in portfolios – 38 – 46
Other operating income – 79 – 40
Other companies 3 572 1.002 1) 498
Consolidations – 106 – 758 2) – 128 – 5312) Total 746 560 1.537 782
1) of which € 996 million LPFV
2) Services provided by service companies; represents turnover of service companies
(29) Extraordinary expenses and income • Provisions of €214 million chargeable
to extraordinary expenses were created in the AG based on the new restructuring
concept. The provisions created from the former restructuring concept of €128
million were written back and affected the current-period result in consideration
of the use. According to the protection by the State of Berlin, an extra distribution
of LPFV was received. Provisions created for real estate services in the previous
year were similarly released.
The AG granted IBG a one-off subsidy of €10 million on the basis of the 1997 letter
of comfort for the expected expenditure from a tax audit concerning the 1997
financial year. The appropriate activities were eliminated in the Group.
NOTES AND EXPLANATORY NOTES

Extraordinary expenses and income in the Group are as follows:
in € million 2001 2000
Extra- Extra- Extra- Extraordinary
ordinary ordinary ordinary
expenses income expenses income
Provisions for
real estate business
Write-backs of provisions
– 249
for real estate business 249 – –
Restructuring provisions 4631) Foundation initiative
128 135 –
of the German economy
Write-backs of provisions
– 5 –
for real estate funds (LPFV) 716 –
Other 2 –
Total 4651) 1,093 389 –
1) of which: € 17 million already recorded in the financial year as current expenditure
(30) Taxes on income in the Group • For tax purposes, the Bankgesellschaft Berlin
Group fundamentally consists of two groups of integrated companies as well as
companies that do not belong to either of these groups. The dominant companies,
Bankgesellschaft Berlin AG and Landesbank Berlin, are connected to 75.01% by
Bankgesellschaft’s atypical dormant participation in Landesbank.
75.01% of Landesbank Berlin’s taxable income is allocated to Bankgesellschaft
Berlin and the tax on it is paid by the latter, whereas the trade earnings are liable
to trade tax at Landesbank Berlin. Our foreign subsidiaries and branches are taxed
in the respective country of their corporate location; dividends flowing to Bankgesellschaft
Berlin AG are essentially tax-free in Germany.
The taxes on income in the Group developed as follows:
in € million 2001 2000
Actual taxes 55 76
Deferred taxes – 2 4
Total 53 80
The deferred taxes result from the balance of allocations to and write-backs from
tax accruals and deferrals, which must be made in the consolidated financial
statements due to time differences between the commercial profit and the tax
profit. There are no accruals and deferrals for deferred taxes in the individual
financial statements.
NOTES AND EXPLANATORY NOTES 139

140
The transition from the calculated to the reported tax expenditure in the Group is
as follows:
in € million 2001 2000
Pre-tax profit – 59 – 1,569
Tax rate to be applied 1) 39% 52%
Calculated taxes on income payable 0 0
Tax effects
Time differences between commercial and tax balance sheets 11 56
Income from abroad 47 27
Different legal norms 0 0
Non-deductible expenditures 0 0
Other differences – 5 – 3
Reported taxes on income 53 80
1) The taxes on income used as basis for the transition calculation is made up of 17% trade tax and the corporate
tax rate applicable for Germany on retained profit of 25% plus 5.5% solidarity surcharge related to the
result after trade tax.
All of the tax effects resulting from the time difference between the commercial
and tax balance sheets come from tax expenditure in different periods. The effects
of income from abroad result from the fact that domestic losses cannot be offset
with the positive earnings of foreign Group companies or foreign branches. Other
differences result from tax expenditure of the consolidation-bound domestic and
foreign subsidiary companies less the tax expenditure to be consolidated.
(31) Tax accruals and deferrals in the Group • Tax deferrals of €5 million (2000:
€9 million) made pursuant to section 306 of the German Commercial Code in the
previous year were used up according to the degree of realisation of profits in the
consolidated financial statements. Furthermore, in the 2001 financial year, taxes
of €7 million were deferred to cover another temporary difference in earnings
caused by the elimination of interim earnings. The total amount of €22 million
(2000: €20 million) is reported in the Group balance sheet under other assets.
NOTES AND EXPLANATORY NOTES

Cash flow statement
(32) Information on the cash flow statement • 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 is 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 is allocated to the operating activities depending on the demarcation
of the operating result. The cash flow from investing activities mainly result
from inflows and outflows of funds in connection with the disposal or the acquisition
of financial investments or tangible assets. The change in funds from financing
activities only takes into consideration relationships to equity providers.
The reported total cash includes the balance sheet item cash reserve (€1,361 million)
and public debt issues which are registered with central banks for refinancing
(€92 million). There are no restrictions on disposal.
The change in other non-cash items includes valuation earnings from trading
transactions, changes to deferred taxes, write-downs and disposal earnings
realised on intangible assets as well as the valuation earnings from associated
companies.
€35 million was spent on acquiring shares in companies fully consolidated in the
2001 financial year. In the course of this, cash funds amounting to €51 million
were taken on so that in the balance, the resulting inflow of funds amounted to €16
million. In the Group this has only a slight impact due to the updating of the elimination
of the capital gain practised in the previous year.
NOTES AND EXPLANATORY NOTES 141

142
As a result of these consolidation measures, assets and liabilities in the consolidated
financial statements changed as follows:
Assets
Additions Disposals
€ million € million
Total cash 51 –
Loans and advances to banks 260 –
Loans and advances to customers – 382
Securities 16 –
Other operating assets 867 –
Liabilities
Deposits by banks 326 –
Customer deposits – 222
Securitised liabilities – –
Other operating liabilities 660 –
There were no investing and financing activities that did not impact liquidity.
NOTES AND EXPLANATORY NOTES

Cash flow statement of Bankgesellschaft Berlin – Group
in € million Dec. 31, 2001 Dec. 31, 2000
Net income for the year
Non-cash items contained in the profit for the financial year
and transition to cash flow from operating activities
– 112 – 1,648
Depreciation, value adjustments, appreciation 1,070 1,081
Changes in provisions – 635 94
Changes in other non-cash items 74 – 365
Result of the disposal of fixed assets 0 – 5
Other adjustments (on balance) – 2,724 – 1,931
Subtotal
Changes in assets and liabilities from operating activities
after adjustment for non-cash components
“+” = inflow / “–” = outflow
– 2,327 – 2,774
Loans and advances to banks 4,585 – 742
to customers 3,195 – 2,102
Securities of the trading and liquidity portfolio 3,615 – 8,188
Other assets from operating activities 5,247 – 1,096
Liabilities: deposits by banks – 5,081 9,888
customer deposits – 208 – 809
Securitised liabilities – 10,696 984
Other liabilities from operating activities – 1,028 3,863
Interest and dividends received 11,130 10,393
Interest paid – 9,007 – 8,037
Extraordinary amounts paid out –34 – 43
Payment of taxes on income 136 13
Cash flow from operating activities – 473 1,350
Amounts received from the sale of financial assets 2,429 3,345
tangible assets 79 118
Amounts paid out from the disposal of financial assets – 2,958 – 4,514
Effects of the change in scope of consolidation
tangible assets – 433 – 198
Amounts received from the sale of consolidated companies 0 35
Amounts paid out for the acquisition of consolidated companies – 35 – 15
Change in funds from other investing activities 17 – 22
Cash flow from investing activities – 901 – 1,251
Amounts received from capital increases 1) 2,047 0
Dividend payments 0 – 131
Change in funds from other financing activities – 59 – 19
Cash flow from financing activities 1,988 – 150
Total cash at the end of the previous period 840 889
Cash flow from operating activities – 473 1,350
Cash flow from investing activities – 901 – 1,251
Cash flow from financing activities 1,988 – 150
Changes in financial resources caused by exchange rate movements – 1 2
Total cash at the end of the period 1,453 840
1) includes shares of third party Berlin Hyp (€ 47 million)
NOTES AND EXPLANATORY NOTES 143

Divisional reporting
144
(33) Breakdown of Group results by division • The breakdown and
content of the presentation of division results follows the draft of the
German Accounting Standard no. (DRS 3) on divisional reporting as well as no. 3-
10 (DRS 3-10) on divisional reporting for banks.
Division assets are defined as the balance sheet assets relating to the respective
division (net). In the case of the business areas reported under total banking activities,
these are essentially loans and advances to customers. Accordingly, the division
liabilities are defined as the balance sheet liabilities. In the case of the divisions
reported under total banking operations, these are essentially customer
deposits and securitised liabilities.
Net interest income is determined for each business area on the basis of the current
interest rate method. A margin result, defined as the difference between the
customer interest rate and an internal clearing rate, is determined for each product
on an individual transaction basis. All other income and the credit risk provisioning
are allocated to the business areas on a counterparty basis. The fundamental
principle in the allocation of administrative expenditure to the business
areas and divisions is the principle of causation. In the local context, this allocation
is carried out according to the sales assignment to the organisational units.
Centrally, the allocation is oriented to the functions or activities performed by an
organisational unit for a division or business area.
The risk positions are the risk assets and the market risks pursuant to Principle I
at the level of the respective division or business area. The allocated capital is an
amount of economic capital defined internally by management. The reference
variables for determining allocated capital are the business area’s risk positions
and administration expenditure. After 2001, average values are used as risk positions
to determine the allocated capital, reporting date values are posted in the
segment table. The values for the previous year for allocated capital were adjusted
accordingly. The profitability of the allocated capital is calculated by dividing pretax
profit per business and the allocated economic capital. The cost/income ratio
is determined by dividing administrative expenditure by the total income pursuant
to the above P&L breakdown.
The number of employees (not including apprentices) is shown at the balance
sheet date as employee capacities.
NOTES AND EXPLANATORY NOTES

The Group’s capital market business reflects the Group’s primary (proprietary)
trading business. In the interest rate management we have separated the income
from directional measures and the realisation of reserves. This is also where the
Group’s asset/liability management results, the contributions of interest accruing
in the Corporate Centres (in particular from the investment of equity) as well as
valuation results of securities (incl. own shares) are reported.
Real estate services, government assistance programmes and consolidation are
presented separately for the purpose of the transition from total banking activities
to the Group result.
The sum of the client-oriented business areas is reported separately for better
transparency. The content of the business segment Retail Banking corresponds to
the total of both the Retail Banking Division and the Private Banking Division,
shown separately last year.
We have not depicted a secondary divisional structure due to the regional concentration
on Berlin-Brandenburg.
NOTES AND EXPLANATORY NOTES 145

Pro rata earnings of the Group’s strategic business areas
Actual/ Actual
in € million Retail Regional Public Corporate/ Capital
Banking1) Corporate Sector International Markets
Banking Banking
Net interest income 2001 678 208 19 134 215
2000 733 224 18 135 231
Net commission income 2001 264 44 1 17 21
2000 311 44 1 16 32
Net result from financial transactions 2001 5 – 2 3 30
2000 10 – 1 1 133
Balance of other operating income and expenditure 2001 2 2 17
2000 13 1 1 11
Total income 2001 949 250 20 156 283
2000 1,067 267 20 153 407
Staff costs 2001 336 88 5 33 80
2000 316 86 5 24 77
Other administrative expenditure 2001 573 78 6 38 112
2000 508 82 5 51 91
Normal depreciation 2001 17 1 3
2000 11 1
Administrative expenditure 2001 926 166 11 72 195
2000 835 168 10 76 168
Operating result 2001 23 84 9 84 88
before risk provisioning 2000 232 99 10 77 239
Risk provisioning in lending business 2001 79 70 – 3 78 2
2000 118 199 4 40 10
Income from liquidity reserve securities 2001 – 12 1 41
2000 – 1 2 36
Changes to the reserve according to 2001
section 340f of the German Commercial Code 2000
Risk provisioning 2001 67 70 – 3 79 43
2000 117 199 4 42 46
Operating result 2001 – 44 14 12 5 45
after risk provisioning 2000 115 – 100 6 35 193
Earnings from financial investments 2001 40 – 3 3
2000 8 4 – 7 1
Balance of other items 2001 – 15 – 12
2000 – 17 – 1 – 1
Result before taxes 2001 – 19 14 12 – 10 48
2000 106 – 97 5 28 194
Division assets 2001 12,181 7,795 10,969 10,811 109,721
2000 13,886 8,165 11,555 11,015 125,554
Division liabilities 2001 22,257 3,340 1,073 2,244 135,363
2000 22,062 3,363 1,119 2,162 153,692
Risk items 2001 9,293 6,385 1,465 9,997 27,646
2000 9,732 7,154 1,434 10,993 29,145
Allocated capital 4) 2001 1,541 598 110 742 2,164
2000 1,445 623 100 622 1,764
Employee capacity (reporting date) 2001 6,258 1,297 63 314 510
2000 6,104 1,366 74 302 558
Return to allocated capital 2001 – 1.2% 2.3% 10.9% – 1.3% 2.2%
(related to result before taxes) 2000 7.3% – 15.6% 5.0% 4.5% 11.0%
Cost/income ratio 2001 97.6% 66.4% 55.0% 46.2% 68.9%
2000 78.3% 62.9% 50.0% 49.7% 41.3%
1) 2001 incl. employee capacity of DirektBankService (322), a share of BG Polska (46) and excl. LBS (2000: 122)
2) 2001 excl. employee capacity of DirektBankService (322), shown in the Retail Banking segment
3) IBAG, IBG and LPFV: other administrative expenditure and normal depreciation are shown in the item Other expenditure
or in the balance of other operating income and expenditure
4) Group: average balance sheet shareholders’ equity
146
NOTES AND EXPLANATORY NOTES

Real Total client- Interest Corporate Total Real Estate Government Consoli- Group
Estate oriented rate centre2) banking Services3) Assistance dation
Financing SBAs management activities Programmes
357 1,611 221 1,832 12 156 – 124 1,876
374 1,715 – 62 1,653 1 157 – 169 1,642
17 364 – 11 353 33 386
33 437 – 10 427 35 462
36 – 146 – 110 4 – 106
143 2 145 – 6 139
11 32 – 27 562 567 – 124 – 51 – 589 – 197
4 30 598 628 16 2 – 1,401 – 755
385 2,043 37 562 2,642 – 112 138 – 709 1,959
411 2,325 – 70 598 2,853 17 194 – 1,576 1,488
60 602 244 846 89 52 – 3 984
58 566 269 835 86 54 – 2 973
52 859 362 1,221 37 – 562 696
46 783 305 1,088 31 – 547 572
3 24 117 141 14 – 7 148
2 14 104 118 10 1 129
115 1,485 723 2,208 89 103 – 572 1,828
106 1,363 678 2,041 86 95 – 548 1,674
270 558 37 – 161 434 – 201 35 – 137 131
305 962 – 70 – 80 812 – 69 99 – 1,028 – 186
473 699 9 708 28 2 738
1,106 1,477 – 8 1,469 68 1,537
– 9 21 22 43 – 5 – 13 25
–13 24 24 3 27
2 2 2
– 82 – 82 – 241 – 323 – 43 – 366
464 720 33 753 23 – 11 765
1,011 1,419 – 249 1,170 25 3 1,198
– 194 – 162 4 – 161 – 319 – 201 12 – 126 – 634
– 706 – 457 179 – 80 – 358 – 69 74 – 1,031 – 1,384
– 2 38 – 38 – 356 357 1
10 16 – 262 – 246 – 319 580 15
235 208 – 273 – 250 – 315 656 233 574
– 279 – 298 – 142 – 440 – 583 – 1 834 – 190
39 84 – 307 – 411 – 634 99 12 464 – 59
– 975 – 739 – 225 – 80 – 1,044 – 971 73 383 – 1,559
54,712 206,189 23,403 229,592 3,181 20,056 – 63,666 189,163
55,594 225,769 15,618 241,387 1,958 20,742 – 59,279 204,808
44,899 209,176 20,416 229,592 3,181 20,056 – 63,666 189,163
46,354 228,752 12,635 241,387 1,958 20,742 – 59,279 204,808
23,003 77,789 7,236 85,025 4,508 89,533
22,649 81,107 6,243 87,350 3,957 91,307
1,588 6,743 418 151 7,312 89 370 – 3,574 4,197
1,452 6,006 469 130 6,605 86 350 – 2,779 4,262
728 9,170 3,467 12,637 1,559 780 14,976
745 9,149 3,948 13,097 1,700 767 15,564
2.5% 1.2% – 8.5% 3.2% – 1.4%
– 67.1% – 12.3% – 15.8% 20.9% – 36.6%
29.9% 72.7% 83.6% – 79.5% 74.6% 93.3%
25.8% 58.6% 71.5% 505.9% 49.0% 112.5%
NOTES AND EXPLANATORY NOTES 147

Other Information
148
(34) Contingencies and other financial commitments • With the
exception of political risks, Bankgesellschaft Berlin AG ensures that
its subsidiary companies within the meaning of section 290 subsections 1 and 2 of
the German Commercial Code which are marked accordingly in the List of Investment
Holdings pursuant to section 313 subsection 2 of the German Commercial
Code are in a position to meet commitments.
Under the detailed agreement with the State of Berlin (for details see Management
Report), in some cases a joint liability of different companies was determined for
the obligations of the Bankgesellschaft Berlin’s Group companies concerned. The
liability within the internal relationship of the Group has yet to be distributed. The
detailed agreement contains further regulations for debtor warrant bond, which is
organised as a partial profit transfer agreement with a term of 15 years, and which
is oriented towards defined equity quotas. Starting with the 2002 financial year and
presently continuing up to 2011 inclusive, there is a fixed amount of €15 million
to be paid annually to the State of Berlin. A final ruling on distribution of these
costs within the Group is still to be made. In addition, Bankgesellschaft Berlin or,
in as far as IBG is affected, Bankgesellschaft Berlin, Landesbank Berlin and Berlin
Hyp together are offering the State of Berlin irrevocably 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 established.
Between 1994 and 2000, personally liable partners at various real estate funds
received exemption certificates from Landesbank Berlin. The content and scope of
these exemption certificates, from a regulatory point of view categorised as guarantee
bonds, and the impact on the 2001 financial statements are detailed in the
Management Report.
In addition, Landesbank Berlin and the personally liable partners of Weberbank
Privatbankiers KGaA internally agreed a ceiling for their personal liability in 1994.
According to this agreement, Landesbank Berlin shall internally assume liability
above this ceiling. This is described in detail in the Management Report.
Pursuant to section 5 subsection 10 of the bylaws of the Deposit Guarantee Fund,
Bankgesellschaft Berlin AG is obliged to indemnify the Federal Association of German
Banks in the event of losses that may occur as a result of measures taken in
favour of banks that are majority-owned 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 is a guarantor of DGZ•DekaBank Deutsche Kommunalbank.
NOTES AND EXPLANATORY NOTES

As a result of the participation in Weberbank Privatbankiers KGaA, an exemption
certificate was issued vis-à-vis 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 €33 million (2000: €32 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
Bankgesellschaft Berlin AG and other Group subsidiary companies, the use of
these facilities entails annual rent obligations of €64 million.
As at December 31, 2001 the Group had financial obligations from rental guarantees
of €12,1 million (2000: €13,3 million), of which €0.5 million (2000: €0.5 million)
due within one year. The Group is predominantly indemnified of this by the
State of Berlin on the basis of the detailed agreement.
Payment obligations amounting to €3.5 million (2000: €5 million) exist because
shares in some companies have not yet been fully paid up. There are additional
funding obligations from participations of €47 million (2000: €54 million), of
which €14 million (2000: €13 million) from the participation in Liquiditätskonsortialbank.
In the case of 22 (2000: 22) closed-end real estate funds, Group companies undertook
to acquire the limited partners’ shares on request. The obligation is broken
down as follows:
Company as of Volume 2001 Volume 2000
€ million € million
Bankgesellschaft Berlin AG 2019 83 83
Landesbank Berlin – Girozentrale –
Immobilien- und Baumanagement
2019 101 101
der Bankgesellschaft Berlin GmbH
Immobilien- und Baumanagement
2008 88 15
der Bankgesellschaft Berlin GmbH 2019 3,100 2,701
3,372 2,900
NOTES AND EXPLANATORY NOTES 149

150
(35) Average number of employees for the year • On average for the year as a
whole, the following staff was employed by the Bankgesellschaft Berlin Group:
AG Group
2001 2000 2001 2000
In banking
Full-time employees 3,496 3,624 12,367 12,874
Part-time employees 537 553 2,104 1,994
Apprentices 140 156 474 620
In real estate services
4,173 4,333 14,945 15,488
1)
Full-time employees – – 1,598 1,519
Part-time employees – – 179 102
Apprentices – – 54 55
– – 1,831 1,676
Total 4,173 4,333 16,776 17,164
1) IBG, LPFV, IBAG (2000: only IBG)
(36) Remuneration of the Board of Management and the Supervisory Board and
loans granted • The following remuneration was paid to members of the Board of
Management and Supervisory Bodies:
in € ’000 2001 2000
Total remuneration of the Board of Management 4,536 4,261
Total remuneration of the Supervisory Board
Amounts paid to former members of the
186 186
Board of Management or their surviving dependents
Amounts set aside for pension
3,259 3,175
commitments towards these persons 37,405 36,885
As at the balance sheet date, the total amount of advances and loans as well as contingencies
entered into was as follows:
in € ’000 2001 2000
To members of the Board of Management 156 223
To members of the Supervisory Board 195 803
(37) Positions occupied in Supervisory Boards and other Control Bodies • Positions
held by members of the Board of Management and the Supervisory Board of
Bankgesellschaft Berlin AG in Supervisory Boards and other Control Bodies (sections
285 no.10, 340a subsection 4 no. 1 of the German Commercial Code) and by
Bankgesellschaft Berlin AG employees in Supervisory Bodies of major corporations
prescribed by law (section 340a subsection 4 no.1 of the German Commercial
Code) are illustrated in appendices 3 and 4 of the notes.
NOTES AND EXPLANATORY NOTES

(38) Information on derivative transactions
(38.1) AG
Derivative transactions product areas as at Dec. 31, 2001
in € million Remaining term Nominal Replaceup
to amount ment
5 years Total cost1) Interest rate-related transactions 299,590 273,414 217,394 790,398 9,697
Stock exchange-traded products 4,499 0 171 4,670 0
Futures
Options
4,499 171 4,670
OTC products 295,091 273,414 217,223 785,728 9,697
Interest rate swaps 242,317 195,859 130,318 568,494 8,129
FRAs 31,345 1,146 32,491 45
Swaptions
Option purchases
Option sales
33,097 65,447 98,544 1,177
Other interest rate futures 21,429 43,312 21,458 86,199 346
Currency-related transactions 39,476 3,714 2,484 45,674 856
Stock exchange-traded products
Futures
Options
0 0 0 0 0
OTC products 39,476 3,714 2,484 45,674 856
Forward exchange deals 33,753 806 34,559 602
Cross currency swaps 5,525 2,857 2,484 10,866 254
Option purchases 102 25 127
Option sales
Other interest rate futures
96 26 122
Share/Index-related transactions 4,823 614 118 5,555 72
Stock exchange-related products 3,084 230 0 3,314
Equity/Index futures 1,814 1,814
Equity/Index options 1,270 230 1,500
OTC products
Equity/Index swaps
1,739 384 118 2,241 72
Equity/Index purchases 371 181 108 660 72
Equity/Index sales 220 203 10 433
Other transactions with market risks 1,148 1,148
Credit derivatives 518 5,473 2,739 8,730 63
Total 344,407 283,215 222,735 850,357 10,688
1) Synonym for counterparty default risk
The stated counterparty default risk is given as the replacement cost in the event of default by the counterparty.
The replacement cost is the sum of all positive market values of the derivative transactions. Negative market
values are not offset.
NOTES AND EXPLANATORY NOTES 151

152
Counterparty structure in derivatives business by credit risk equivalents
in € million
OECD banks; other banks
Dec. 31, 2001 Dec. 31, 2000
(only original maturity up to 1 year) 916 1,315
Other companies, private individuals 403 378
Total 1,319 1,693
The reported credit risk equivalents were determined according to the market
exposure method in line with Principle I of the Federal Banking Supervisory
Office. The credit risk equivalents are listed in weighted form according to counterparty
risk. In this connection the counterparty payments netting is taken into
account.
NOTES AND EXPLANATORY NOTES

(38.2) Group
Derivative transactions product areas on Dec 31, 2001
in € million Remaining term Nominal Replaceup
to amount ment
5 years Total cost1) Interest rate-related business 308,566 286,380 228,662 823,608 9,854
Stock exchange-related products 4,499 0 171 4,670 0
Futures
Options
4,499 171 4,670
OTC products 304,067 286,380 228,491 818,938 9,854
Interest rate swaps 250,870 207,623 140,942 599,435 8,284
FRAs 31,459 1,146 0 32,605 45
Swaptions
Option purchases
Option sales
77 33,813 65,542 99,432 1,177
Other interest rate futures 21,661 43,798 22,007 87,466 348
Currency-related business 42,071 4,342 3,960 50,373 992
Stock exchange-related products
Currency swaps
Currency options
0 0 0 0 0
OTC products 42,071 4,342 3,960 50,373 992
Forward exchange deal 35,150 806 35,956 614
Cross currency swaps 6,722 3,485 3,960 14,167 378
Currency option purchases 102 25 127
Currency option sales
Other currency futures
97 26 123
Share/Index-related transactions 4,856 615 118 5,589 74
Stock exchange-traded products 3,117 230 0 3,347 2
Equity/Index futures 1,814 1,814
Equity/Index purchases 1,302 230 1,532 2
OTC products
Equity/Index swaps
1,739 385 118 2,242 72
Equity/Index purchases 371 181 108 660 72
Equity/Index sales 220 204 10 434
Other transactions with market risk 1,148 1,148
Credit derivatives 518 5,473 2,739 8,730 63
Total 356,011 296,810 235,479 888,300 10,983
1) Synonym for counterparty default risk
Counterparty structure in derivatives business by credit risk equivalents
in € million Dec. 31, 2001 Dec. 31, 2000
OECD banks; other banks (only original maturity up to 1 year) 1,089 1,548
Other companies, private individuals 403 364
Total 1,492 1,912
NOTES AND EXPLANATORY NOTES 153

154
Derivative transactions – in particular currency and share/index-related transactions
– are essentially allocated to the trading portfolio. Both own account trading
strategies and the still unchanged large demand by our customers for structured
financing influence trade with derivative transactions. A large share thus falls on
the cover of resulting interest rate, currency and market price fluctuations. In
addition, derivative transactions are also included in asset and liability management
for managing interest rate risks in fixed assets.
(39) Group statement of collateral • Separate mortgage registers are kept for current
issues of Landesbank Berlin and Berlin-Hannoversche Hypothekenbank AG.
The statement of collateral is broken down as follows:
Register of mortgages
in € million 2001 2000
Pfandbriefe outstanding 16,287 17,160
Cover assets
Mortgage loans and other loans 17,801 18,302
Cover surplus 1,514 1,142
Public-sector debt securities
Public Pfandbriefe outstanding 35,838 37,924
Covered bearer bonds outstanding – –
Cover assets
Securities from public-sector banks 1,334 887
Public-sector loans and other loans 36,516 39,912
Cover surplus 2,012 2,875
NOTES AND EXPLANATORY NOTES

(40) Introduction of euro notes and coins • Bankgesellschaft received euro notes
and coins as part of the Deutsche Bundesbank’s preliminary release and initially
passed these on to third parties:
in € million AG Group
Total amount of
– Euro notes and coins received previously 284 1,056
– Euro notes and coins given to third parties previously 20 52
Situation at Dec. 31, 2001 264 1,004
Berlin, April 26, 2002
Board of Management
Vetter Demolière Dr. Evers
Pawlowski Piel
NOTES AND EXPLANATORY NOTES 155

List of investment holdings
(Sections 285 No. 11 and 11a, 313 para. 2, 340a para. 4 No. 2 HGB)
Appendix 1 to the Notes
Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
Bankgesellschaft Berlin Aktiengesellschaft, Berlin
Consolidated Subsidiaries
Allgemeine Privatkundenbank Aktiengesellschaft,
in € ’000 in € ’000 Dec. 31, 2001
Hanover
ARWOBAU Apartment- und Wohnungsbaugesellschaft
(P) 99.8 155,900 22
mit beschränkter Haftung, Berlin 1) 12) BANKENSERVICE GmbH Ein Unternehmen der
99.9 91,811 1,093
Bankgesellschaft Berlin, Berlin (P) 100.0 2,045 04) Bankgesellschaft Berlin (Ireland) plc, Dublin 2) (P) 100.0 154,015 19,893
Bankgesellschaft Berlin (Polska) S.A., Warsaw (P) 100.0 67,295 3,532
Bankgesellschaft Berlin (UK) plc, London (P) 100.0 211,307 6,284
Bankgesellschaft Berlin International S.A., Luxembourg
Bauprojekt- und Facilitymanagement GmbH der
(P) 100.0 202,455 13,102
Unternehmensgruppe Bankgesellschaft Berlin, Berlin
BAUTRAKO Bauträger- und Koordinierungsgesellschaft
(P) 100.0 28 1
mbH, Lohfelden 1) 12) 100.0 1,300 04) Bavaria Objekt- und Baubetreuung GmbH,
Nuremberg 1) 12) 100.0 18,603 – 1,4744) Bavaria Projektentwicklung GmbH -Bau-, Sanierungs-,
Stadtentwicklungsprojekte, Nuremberg 1) 12) BB-DATA Gesellschaft für Informations- und
100.0 – 1,747 – 2,798
Kommunikationssysteme mbH, Berlin (P) 100.0 3,068 04) Berlin-Hannoversche Hypothekenbank
Aktiengesellschaft, Berlin/Hanover (P) 89.7 575,537 – 92,184
BGB Finance (Ireland) plc, Dublin 2) BG-SYS Bankgesellschaft Berlin AG & Co.
Systementwicklungsgesellschaft beschränkt
(P) 100.0 5,001 1,208
haftende oHG, Berlin
DirektBankService GmbH Unternehmensgruppe
Bankgesellschaft Berlin
90.0 151 12
(formerly BCS BankCard Service GmbH), Berlin 2) (P) 100.0 103 04) DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft
mbH, Frankfurt am Main 1) 12) 99.0 10,736 04) GEWOS Institut für Stadt-, Regional- und
Wohnforschung GmbH, Hamburg 1) 12) 95.1 1,012 – 29
IBAG Immobilien und Beteiligungen AG, Berlin 12) 100.0 135,018 04) Immobilien Beteiligungs- und Vertriebsgesellschaft der
IBAG-Gruppe mbH, Berlin 1) 12) 100.0 511 04) Immobilien- und Baumanagement der
Bankgesellschaft Berlin GmbH, Berlin 2) 100.0 5,138 246,158
Landesbank Berlin – Girozentrale –, Berlin
LBB Grundstücksentwicklungsgesellschaft mbH
(P) atyp. dormant
participations
2,281,820 25,095
Bau- und Projektentwicklungen, Berlin 1) 12) 100.0 5,113 04) LBB Landesbank Berlin Finance Curaçao N.V.,
Curaçao 1) (P) 100.0 3,442 2,892
LPFV Finanzbeteiligungs- und Verwaltungs GmbH, Berlin 100.0 693,284 693,270
156
NOTES AND EXPLANATORY NOTES

Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
in € ’000 in € ’000 Dec. 31, 2001
S.T.E.R.N. Gesellschaft der behutsamen Stadterneuerung
mbH, Berlin 1) 12) 100.0 1,120 04) Weberbank Privatbankiers KGaA (formerly Weberbank
Berliner Industriebank KGaA), Berlin 1) (P) 95.0 191,000 13,000
Zivnostenská banka a.s., Prague (P) 85.2 82,506 4,879
Non-consolidated subsidiaries
ABIS Altkreditberatungs- und Inkasso Service GmbH,
Berlin 1) (P) 100.0 51 0 12/31/2000
ABT No. 2 Ltd., London 1) (P) 100.0 74 28 12/31/2000
ABT No. 3 Ltd., London 1) (P) 100.0 416 30 12/31/2000
ACEMEWS SERVICES Ltd., London 1) 7) ARWOBAU Immobilien- und Beteiligungsgesellschaft
100.0 0 0 12/31/2000
mbH, Berlin 1) 100.0 254 04) 12/31/2000
Babefi-Holding GmbH, Berlin
Bankenservice Gesellschaft für elektronische
100.0 73 48 12/31/2000
Dienstleistungen für Banken mbH, Frankfurt am Main 1) Bau- und Projektentwicklungsgesellschaft mbH der
100.0 118 1 12/31/2000
Unternehmensgruppe Bankgesellschaft Berlin, Berlin 1) 100.0 – 146 – 336 12/31/2000
Bavaria Emden GmbH & Co. KG, Nuremberg 1) 100.0 – 21 – 4 12/31/2000
Bavaria Emden Verwaltungs GmbH, Nuremberg 1) 100.0 33 0 12/31/2000
Bavaria Immobilienconsult und Baurevision GmbH, Berlin 1) 100.0 256 04) Bavaria KLS Wohnbauten GmbH (formerly Thesaurus XV
12/31/2000
Vermögensverwaltungsgesellschaft mbH), Berlin 1) 65.0 – 647 – 668 12/31/2000
Bavaria Liegenschaftsmanagement GmbH, Berlin 1) BB Aval Gesellschaft für Außenhandelsfinanzierungen
100.0 34 9 12/31/2000
mbH, Berlin (P) 100.0 – 8,281 – 1,552 12/31/2000
BB Privat Immobilien GmbH, Berlin 100.0 1,956 0 12/31/2000
BB-DATA Multimedia GmbH, Berlin 1) BB-Grundstücksgesellschaft mit beschränkter Haftung,
100.0 289 114 12/31/2000
Berlin (P) 100.0 51 04) 12/31/2000
BB-Hausverwaltung GmbH, Berlin 1) 100.0 26 04) BB-Immobilien-Service GmbH, Berlin 100.0 300 04) 12/31/2000
BB-Leasing GmbH, Berlin 2) (P) 100.0 1,534 04) 9) 12/31/2000
BB-Lincoln Inc., Wilmington, Delaware 1) 90.0 1 – 2 12/31/1997
BB-Miete GmbH, Berlin 1) 100.0 51 04) BCA Hotels GmbH, Berlin 1) BEGOHA-Verwaltungsgemeinschaft GbR der
Bankgesellschaft Berlin AG, der Metro
Vermögensverwaltung GmbH & Co. KG und der
100.0 1,255 358 12/31/2000
Gothaer Lebensversicherung a.G., Berlin 65.3 366 – 76
Berlin Capital Fund GmbH, Berlin 2) (P) 100.0 52,120 0 4) 9) 12/31/2000
Berlin Hyp Grundstücksverwaltung GbR, Berlin 1) (P) 100.0 27,848 – 15,812 12/31/2000
Berlin Hyp Immobilien GmbH, Berlin 1) (P) 100.0 26 0 4) 12/31/2000
Berlin Hyp Projekt GmbH, Berlin 1) (P) 100.0 250 0 4) 12/31/2000
Berlin Seed Capital Fund GmbH, Berlin 1) (P) 100.0 5,113 0 4) 12/31/2000
NOTES AND EXPLANATORY NOTES 157

Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
in € ’000 in € ’000 Dec. 31, 2001
BG Property (Dublin) Limited, Dublin 1) 100.0 – 133 – 51 12/31/2000
BGB Reinsurance Ltd., Dublin 100.0 3,147 927 12/31/2000
BGB US Real Estate, Inc., Wilmington 1) BILDUNGSAKADEMIE DER BANKGESELLSCHAFT
100.0 101 125 12/31/2000
Gesellschaft mit beschränkter Haftung, Berlin 100.0 1,252 04) BSI Immobilien-Beteiligung GmbH & Co.
12/31/2000
Objekt Wilmersdorf oHG, Pöcking 1) BUVI Besitz- und Verwaltungsgesellschaft für
(P) 100.0 – 13,150 947
Immobilien mbH, Berlin (P) 100.0 26 04) Certa Immobilienverwaltung und Handelsgesellschaft
mbH, Berlin 1) con Finanz GmbH Gesellschaft für Beratung und
62.6 14 – 2 12/31/2000
Vermittlung von Finanzdienstleistungen, Hanover 1) 100.0 25 0 12/31/2000
Crown Court Furniture London Ltd., London 1) 7) (P) 100.0 13 157
Crown Court Property London Ltd., London 1) 7) DEFAS Beteiligungs GmbH & Co. Vermietungs-KG,
(P) 100.0 18,505 272
Munich 1) (P) 100.0 – 2,992 42
DELTAG Aktiengesellschaft für Investitionen, Berlin 1) 61.0 – 12,626 – 1,187 01/31/1999
Erste IBV Universal Immobilien AG, Ludwigsfelde 1) 10) 100.0 8 – 37 08/31/2000
EuroSpeedway Lausitz Beteiligungs-GmbH, Klettwitz 1) FdA Finanzberatungs-Service GmbH der ALLBANK,
100.0 13) 13)
Hanover 1) 100.0 51 04) Fördergesellschaft der Weberbank gemeinnützige
GmbH, Berlin 1) GbR LandesBank Berlin Grundstücks-Gesellschaft
100.0 2,661 80 12/31/2000
mbH/Berlin Hyp Immobilien GmbH Leipzig, Berlin 1) Gesellschaft für Immobilien und Beteiligungen der
(P) 100.0 1,023 0 12/31/2000
IBAG-Gruppe mbH, Potsdam 1) 100.0 25 0 12/31/2000
Gesellschaft für Wohnungsbau Lübeck mbH, Lübeck 1) 55.4 1,190 226 12/31/2000
Gewerbesiedlungs-Gesellschaft mbH, Berlin 1) Grundstücksgesellschaft „Berlin“ mit beschränkter
94.9 112,725 – 23,993 12/31/2000
Haftung, Berlin (P) 100.0 5,624 04) Grundstücksgesellschaft „URSUS“ mit
12/31/2000
beschränkter Haftung, Frankfurt am Main 2) (P) 100.0 722 04) GWL Wohnungsbetreuungsgesellschaft mbH, Lübeck 1) 100.0 26 04) 12/31/2000
HaWe Immobilien GmbH, Berlin 1) 100.0 32 8 12/31/2000
HaWe Immobilien GmbH & Co. Berlin Süd KG, Berlin 1) HaWe Immobilien GmbH & Co. Holzhauser Straße KG,
100.0 6,428 – 305 12/31/2000
Berlin 1) HaWe Immobilien GmbH & Co. Spreeschanze KG,
100.0 3,362 369 12/31/2000
Berlin 1) 10) HaWe Immobilien GmbH & Co. Zitadellenweg KG,
100.0 3,643 – 99 12/31/2000
Berlin 1) 10) 100.0 1,698 – 52 12/31/2000
HaWe Verwaltungsgesellschaft mbH, Berlin 1) (P) 100.0 6,160 54) 12/31/2000
IBB Beteiligungsgesellschaft mbH, Berlin 1) IBB-Holding für Immobilienbeteiligungen GmbH
(formerly KNAPA Siebzigste Vermögensverwaltungs
100.0 12,539 2,166 12/31/2000
und -beteiligungs GmbH), Berlin 1) 10) 11) 100.0 15 – 10 31/12/2000
158
NOTES AND EXPLANATORY NOTES

Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
IBB-Holding für Industriebeteiligungen GmbH
(formerly KNAPA Vierundsechzigste
Vermögensverwaltungs und -beteiligungs GmbH),
in € ’000 in € ’000 Dec. 31, 2001
Berlin 1) 10) 11) IBI Real Estate – Immobilien und Beteiligungen
100.0 6,669 – 3 12/31/2000
International GmbH, Berlin 1) IDBG-Immobilien Dienstleistungs- und
100.0 25 3)
Beteiligungsgesellschaft mbH, Berlin 1) 100.0 486 – 11,618 12/31/2000
IDLG Immobiliendienstleistungen GmbH, Berlin 1) 100.0 1,816 04) 12/31/2000
Immobiliengesellschaft Spreestadt-Wegelystrasse mbH,
Berlin 1) INKUR Verwaltung GmbH & Co. Vermietungs-oHG,
100.0 – 37,532 -3,737 12/31/2000
Munich 1) ipal Gesellschaft für Patentverwertung Berlin mbH,
(P) 100.0 – 3,025 103
Berlin 1) 11) 52.5 50 3)
"KB Kyritz" Grundbesitz GmbH, Berlin 1) KPM Königliche Porzellan-Manufaktur GmbH
(formerly KNAPA Fünfundsechzigste
Vermögensverwaltungs und -beteiligungs GmbH),
100.0 – 11 – 1 12/31/2000
Berlin 1) 10) Lausitzring Betriebs- und Managementgesellschaft mbH,
100.0 4,041 – 2,631 12/31/2000
Klettwitz 1) 66.7 58 – 334 12/31/2000
Lausitzring Eurodrom Verwaltungs-GmbH, Klettwitz 1) 60.0 19 – 2 12/31/2000
Lausitzring GmbH & Co. KG, Klettwitz 1) 70.0 – 13,774 – 11,246 12/31/2000
LBB Bauprojektgesellschaft mbH, Berlin 1) 100.0 511 04) LBB Grundstücks-Gesellschaft mbH der Landesbank
12/31/2000
Berlin – Girozentrale –, Berlin 1) (P) 100.0 256 04) 12/31/2000
LBB Immobilien Handelsgesellschaft mbH, Berlin 1) 62.5 – 468 – 227 12/31/2000
LBB Kommunalbaugesellschaft mbH, Potsdam 1) 100.0 511 04) LBB Kommunal-Betriebsführungsgesellschaft mbH,
Potsdam 1) 100.0 – 376 – 7 12/31/2000
LdA LEASING GMBH DER ALLBANK, Hanover 1) (P) 100.0 51 04) LfA Leasing für Automobile GmbH, Hanover 100.0 26 04) LHGS Grundstücksentwicklungs Beteiligungs GmbH,
Berlin 1) LHGS Grundstücksentwicklungs GmbH & Co. KG
100.0 – 52 – 3 12/31/2000
Nennhauser Damm, Berlin 1) MARON Beteiligungs GmbH & Co. Vermietungs-KG,
100.0 1,767 – 41 12/31/2000
Pöcking 1) Nordversicherungsdienst Versicherungs-
(P) 99.0 – 84 11 12/31/2000
Vermittlungsgesellschaft mbH, Hanover 1) 100.0 26 04) public consult Gesellschaft für die Beratung der
Öffentlichen Hand mbH, Berlin 1) REBA Beteiligungs GmbH & Co.
100.0 – 39 – 286 12/31/2000
Projektentwicklungs KG, Berlin 1) REBA Beteiligungs- und Projektentwicklungs GmbH,
100.0 – 76 – 384 12/31/2000
Berlin 1) SOMAG Soziale Wohnheimmanagement und
100.0 48 31 12/31/2000
Betreuungsgesellschaft mbH, Berlin 1) 100.0 224 839 12/31/2000
NOTES AND EXPLANATORY NOTES 159

Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
in € ’000 in € ’000 Dec. 31, 2001
Thesaurus I Immobilien Development GmbH, Berlin 1) Thesaurus VI Vermögensverwaltungsgesellschaft mbH,
100.0 755 4 12/31/2000
Nuremberg 1) Thesaurus X Vermögensverwaltungsgesellschaft mbH,
100.0 20 – 2 12/31/2000
Nuremberg 1) Theseus Immobilien Management GmbH & Co.
100.0 32 – 1 12/31/2000
Objekt Berlin Adlershof KG, Berlin 1) Versicherungsservice GmbH Unternehmensgruppe
99.9 – 567 – 325 12/31/2000
Bankgesellschaft Berlin, Berlin 2) 100.0 1,761 547 12/31/2000
VOVI-Beteiligungs AG, Berlin
Wilkendorf Bau- und Projektentwicklungsgesellschaft
57.0 7,013 187 12/31/2000
mbH, Gielsdorf 1) 100.0 84 – 84 12/31/2000
Wilkendorf Golf Betriebsgesellschaft mbH, Gielsdorf 1) 100.0 212 – 988 12/31/2000
Wohnbau Tafelgelände Beteiligungs GmbH, Nuremberg 1) 75.0 31 – 2 09/30/2000
Wohnbau Tafelgelände GmbH & Co. KG, Nuremberg 1) Wotan Vermögensverwaltungsgesellschaft mbH,
75.0 – 7,218 1,208 09/30/2000
Nuremberg 1) ZAS Zentrum Alter Schlachthof Berlin Verwaltungs-GmbH,
100.0 697 378 12/31/2000
Berlin 1) 100.0 27 2 12/31/2000
ZB-Asset Management, a.s., Prague 1) 6) 100.0 600 58 12/31/2000
ZB-Trust, investicni spolecnost, a.s., Prague 1) 6) 100.0 3,720 410 12/31/2000
Zivnostenská Finance B.V., Hoofddorp 1) 100.0 5 – 6 12/31/2000
Associated companies (pursuant to sections 311/312 of HGB)
– valued –
Bankgesellschaft Berlin INVESTMENT GmbH, Berlin 2) BB-ASSET MANAGEMENT Vermögensverwaltung
50.0 14,577 4,197 12/31/2000
GmbH, Berlin
BerlinOnline Stadtportal GmbH & Co. KG
50.0 873 98 12/31/2000
(formerly Alkmene GmbH & Co. KG), Berlin 10) Certa Immobilienverwaltung und Handelsgesellschaft
50.0 18,277 – 1,736 06/30/2001
mbH & Co. Liegenschaften oHG, Berlin 1) 62.5 – 31,402 – 1,243 12/31/2000
LHI Leasing GmbH, Munich 2) 50.0 45,493 13,470 12/31/2000
LHI Leasing GmbH & Co. Immobilien KG, Munich 2) 45.0 982 32 12/31/2000
Associated companies
(pursuant to sections 311/ 312 of HGB) – not valued –
Alkmene Beteiligungsgesellschaft mbH, Berlin 10) 50.0 22 – 3 06/30/2001
BHS Berliner Hannoversche Software GmbH, Hanover
CidS! Computer in die Schulen gemeinnützige
Gesellschaft mbH (formerly BB-Jugend und Computer
gemeinnützige Gesellschaft mbH im Konzern der
50.0 493 78 12/31/2000
Bankgesellschaft Berlin), Berlin 50.0 307 15 12/31/2000
Inteligo Financial Services S.A., Warsaw 5) 49.0 – 358 – 1,829 12/31/2000
Wirtschaftsförderung Berlin GmbH, Berlin 1) 11) 37.5 511 0 12/31/2000
160
NOTES AND EXPLANATORY NOTES

Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
in € ’000 in € ’000 Dec. 31, 2001
Other Companies (minimum holding of 20%)
Apollon Immobilien Verwaltungsgesellschaft mbH, Berlin 1) 30.0 25 3)
Atos Origin Processing Services GmbH,
Frankfurt am Main 2) 10) Aufbau- und Dienstleistungsgesellschaft mbH
Objekt- und Baubetreuung Mecklenburg-Vorpommern,
25.1 6,625 485 12/31/2000
Stralsund 1) 50.0 36 445 12/31/2000
B + S Card Service GmbH, Frankfurt am Main 2) BBB Bürgschaftsbank zu Berlin-Brandenburg GmbH,
25.1 9,023 2,593 09/30/2001
Berlin 2) 24.4 7,653 – 185 12/31/2000
BB-Rentaco-Immobilien GmbH i. L., Berlin 1) „Billwerder Deich“ Grundstücks Verwaltungs GmbH,
50.0 520 3 07/01/1999
Berlin 1) BLEG Berliner Landesentwicklungsgesellschaft mbH,
50.0 28 1 12/31/1999
Berlin 1) 49.0 888 – 4,147 12/31/2000
Cesky Leasing s.r.o., Prague 1) 6) 25.0 5,105 689 12/31/2000
CML Wohnbauten GmbH, Berlin 1) ConCom Beteiligungs- und Management GmbH &
49.0 1,266 – 1,854 12/31/2000
Co. KG, Berlin 1) 50.0 1,051 3)
DEKAGRUND Grundstücksentwicklungs GmbH, Berlin 1) dvg Hannover Datenverarbeitungsgesellschaft mit
45.0 – 6,064 – 20 12/31/1999
beschränkter Haftung, Hanover 2) 20.0 21,944 7,517 12/31/2000
Eurospeedway Lausitz Entwicklungs GmbH, Berlin 1) 49.0 – 678 235 12/31/2000
FILMBOARD Berlin-Brandenburg GmbH, Potsdam 1) 11) Filmkredittreuhand Gesellschaft mit beschränkter
50.0 51 0 12/31/2000
Haftung i. L., Berlin 2) 40.0 198 – 2 12/31/2000
Friedrichsfelder Viertel Bauprojekt GmbH, Berlin 1) Gartenstadt Stahnsdorf GmbH & Co.
47.6 4 1,983 12/31/1999
Projektentwicklungs KG, Stahnsdorf 1) 48.0 – 43,190 – 25,846 12/31/1999
Gartenstadt Stahnsdorf GmbH, Stahnsdorf 1) GBG-Consulting für betriebliche Altersversorgung
49.0 28 0 12/31/1998
GmbH, Hamburg
GEG Grundstücksentwicklungsgesellschaft
25.0 – 201 0 06/30/2001
Wasserstadt Berlin-Oberhavel mbH, Berlin 1) 49.0 – 147 68 12/31/1999
Gegenbauer Gebäudemanagement GmbH, Birkenwerder 1) 49.0 863 713
Green Line Hotels GmbH, Berlin 1) 40.0 50 3)
Immobilien Beratungs- und Anlagen GmbH, Potsdam 1) 49.2 87 80 12/31/2000
Immobilien Management s.r.o., Pilsen 1) 49.0 13) 13)
insel urlaub rügen Appartement-Vermietung GmbH, Binz 1) 50.0 – 334 384 12/31/2000
InvestitionsBank des Landes Brandenburg, Potsdam 1) JFVVG Sechsunddreißigste
25.0 151,060 9,692 12/31/2000
Vermögensverwaltungsgesellschaft mbH, Berlin 40.0 25 3)
KMB Bauträger GmbH, Hanau 1) Kommunalconsult Gesellschaft für die Beratung der
50.0 26 0 12/31/2000
Öffentlichen Hand mbH, Berlin 1) New Europe Insurance Ventures Limited Partnership,
50.0 1,023 0 12/31/1999
Edinburgh 1) 8) 21.9 5,687 – 600 12/31/2000
NOTES AND EXPLANATORY NOTES 161

Company, registered office Letter % Group- Equity Profits Date of annual
of owned financial statecomfort
total ments if not
in € ’000 in € ’000 Dec. 31, 2001
Nockher Bauträger GmbH, Munich 1) NORD EK Norddeutsche Einkaufskoordination der
Bankgesellschaft Berlin Aktiengesellschaft und der
Norddeutsche Landesbank Girozentrale GbR,
50.0 11 – 2 12/31/1999
Berlin/Hanover 0.0 0 0 12/31/2000
PEB Capital B. V., Utrecht 42.4 28,133 – 495 12/31/2000
Planungsbüro Schmitz-Aachen GmbH, Aachen 1) Projektentwicklungsgesellschaft Kassel Unterneustadt
50.0 508 439 12/31/2000
und Konversion in Kassel mbH, Kassel 1) 33.3 – 1,813 – 1,850 12/31/2000
Spree-Kliniken GmbH, Berlin 1) 25.0 30 – 22
TCC Technologie-Coaching-Center GmbH, Berlin 1) 11) 50.0 511 0 12/31/2000
Trigoba Immobilien Verwaltungs GmbH, Berlin 1) Wasserstadt GmbH Treuhänderischer
48.0 24 – 1 12/31/2000
Entwicklungsträger des Landes Berlin, Berlin 1) 49.5 141 2 12/31/2000
WEBA Beteiligungsgesellschaft mbH, Limburg
Wohn- und Bürohaus an der Elbe Verwaltungs GmbH,
40.0 255 32 12/31/2000
Berlin 1) Wohnbau- und Planungsgesellschaft Mahlow mbH,
50.0 28 – 11 12/31/1999
Mahlow 1) 45.0 – 4,257 – 1,427 12/31/2000
Wohnpark Klosterhof GmbH, Cologne 1) ZAS Zentrum Alter Schlachthof Berlin GmbH & Co. KG,
49.0 – 5,387 – 1,024 12/31/2000
Berlin 1) 49.0 199.0 – 10.0 12/31/2000
Participations in Major Corporations
(section 285 no. 11, 4. subsection HGB compared
to section § 340a para. 4 no. 2 HGB)
CBB Holding AG, Cologne 10.9
1) Remained indirect.
2) Including directly-held shares.
3) Company established in 2001.
4) Profit and loss transfer agreed with the company.
5) ECB rate on December 28, 2001: 100 PLN = 28.60985 EUR
6) ECB rate on December 28, 2001: 100 CZK = 3.12872 EUR
7) ECB rate on December 28, 2001: 1 GBP = 1.64339 EUR
8) ECB rate on December 28, 2001: 1 USD = 1.13469 EUR
9) Profit and loss transfer agreement ended on December 31, 2000.
10) Short financial year
11) Participation of the Investitionsbank Berlin – Anstalt der Landesbank Berlin – Girozentrale –
12) Company recently included in scope of consolidation.
13) Value not available when the report was prepared.
(P) Bankgesellschaft Berlin AG’s letter of comfort applies to this company.
162
NOTES AND EXPLANATORY NOTES

Investment holdings of the IBAG subgroup
Appendix 1a to the Notes
Company Registered Capital Equity Result pursuant
office share to present
annual account*
Associated companies (included in the
consolidated Group accounts)
ARWOBAU Apartment- und
% in € ’000 in € ’000
Wohnungsbaugesellschaft mbH Berlin 89.7 91,811.3 1,092.51) Bautrako Bauträger- und Koordinierungsgesellschaft mbH Lohfelden 89.8 1,300.2 – 9,415.51)3) Bavaria Objekt- und Baubetreuung GmbH Nuremberg 89.8 18,603.0 – 103,881.23) Bavaria Projektentwicklung GmbH -Bau-,
Sanierungs-, Stadtentwicklungsprojekte Nuremberg 89.8 – 1,747.4 – 2,797.81) DSK Deutsche Stadt- und
Grundstücksentwicklungsgesellschaft mbH Frankfurt 89.8 10,735.9 908.93) GEWOS Institut für Stadt-,
Regional- und Wohnforschung GmbH Hamburg 85,4 1,011.9 – 28.51) Immobilien Beteiiligungs- und
Vertriebsgesellschaft der IBAG-Gruppe mbH Berlin 89.8 511.3 – 28,842.53) LBB Grundstücksentwicklungsgesellschaft mbH
Bau- und Projektentwicklungen Berlin 89.8 5,112.9 176.63) S.T.E.R.N. Gesellschaft der behutsamen
Stadterneuerung mbH Berlin 89.8 1,120.0 26.21)3) Walver of inclusion pursuant to Section 296 II HGB
Erste IBV Universal Immobilien AG Ludwigsfelde 91.1 8.1 – 36.9
Bavaria Emden GmbH & Co. KG Nuremberg 89.8 0.0 3.61) Bavaria Emden Verwaltungs-GmbH
(personally liable partner) Nuremberg 89.8 32.8 0.11) Bavaria KLS Wohnbauten GmbH Berlin 58.4 – 646.7 – 668.51) Bavaria Liegenschaftsmanagement GmbH Berlin 89.8 33.8 8.61)4) BGB US Real Estate Inc. Wilmington 89.8 101.3 125.51) FinTech Sechste Beteiligungs- und Management GmbH
(in future trading as IBI Real Estate – Immobilien
und Beteiligungen International GmbH)
Gesellschaft für Immobilien und Beteiligungen
Berlin 100.0 1)2)
der IBAG-Gruppe mbH (GIB) Berlin 100.0 25.0 0.02) KB Kyritz Grundbesitz GmbH Berlin 89.8 25.6 – 0.51) LHGS Grundstücksentwicklungs Beteiligungs GmbH
(personally liable partner) Berlin 89.8 0.0 – 2.81) LHGS Grundstücksentwicklungs GmbH & Co.
Nennhauser Damm Berlin 89.8 1,766.7 40.91) public consult Gesellschaft für die Beratung
der Öffentlichen Hand mbH Berlin 89.8 – 38.6 – 286.21) REBA Beteiligungs GmbH & Co. Projektentwicklungs KG Berlin 89.8 – 76.1 – 384.51) REBA Beteiligungs- und Projektentwicklungs GmbH
(personally liable partner) Berlin 89.8 48.0 30.71) Thesaurus I Immobilien Development GmbH Berlin 89.8 755.4 4.21) Thesaurus VI Vermögensverwaltungs GmbH Nuremberg 89.8 20.0 – 1.71) Thesaurus X Vermögensverwaltungs GmbH Nuremberg 89.8 32.4 – 0.91) Theseus Immobilien Management GmbH & Co.
Objekt Berlin Adlershof KG Berlin 89.7 – 567.3 – 324.91) NOTES AND EXPLANATORY NOTES 163

Company Registered Capital Equity Result pursuant
office share to present
annual account*
Wohnbau Tafelgelände Beteiligungs GmbH
% in € ’000 in € ’000
(personally liable partner) Nuremberg 67.4 1)
Wohnbau Tafelgelände GmbH & Co. KG Nuremberg 67.4 1)
Wotan Vermögensverwaltungsgesellschaft mbH Nuremberg 89.8 696.6 377.71) ZAS Zentrum Alter Schlachthof Berlin Verwaltungs GmbH
(personally liable partner) Berlin 89.8 27.1 1.61) Companies, in which there are participations
Aufbau- und Dienstleistungsgesellschaft mbH Objektund
Baubetreuung Mecklenburg-Vorpommern Stralsund 44.90 35.9 444.71) CML Wohnbauten GmbH Berlin 44.00 1,882.2 – 406.71) DEKAGRUND Grundstücksentwicklungs GmbH Berlin 40.41 – 6,049.9 249.41) Grundstücksgesellschaft Lunik-Berlin/ Pankow Berlin 49.48 0.0 – 1,030.91) Friedrichsfelder Viertel Bauprojekt GmbH
Theseus Immobilien Beteiligungs GmbH & Co. KG
Berlin 42.74 1)
Friedrichsfelder Viertel KG Berlin 42.70 50.4 399.61) Gesellschaft für Wohnungsbau Lübeck mbH Lübeck 49.72 1,189.8 226.01)2) GWL Wohnungsbetreuungsgesellschaft mbH Lübeck 49.72 25.6 – 89.01)2) KMB Bauträger GmbH (personally liable partner) Hanau/ Main 44.90 25.9 0.31) KMB Bauträger GmbH & Co. Francoisgärten KG Hanau/ Main 44.90 430.3 1,574.41) Nockher Bauträger GmbH & Co. Betriebs KG Munich 44.90 – 27.0 – 7.41)4) Planungsbüro Schmitz Aachen GmbH Aachen 44.90 508.4 438.91) Projektentwicklungsgesellschaft Kassel Unterneustadt
und Konversion in Kassel mbH Kassel 29.93 0.0 – 1,850.51) Trigoba Immobilien Verwaltungs GmbH
(personally liable partner) Berlin 43.10 23.9 – 1.11) Trigoba Immobilien Verwaltungs GmbH & Co. Objekt
Rathauspassagen Berlin-Steglitz KG Berlin 44.45 661.6 – 192.41)4) Wasserstadt GmbH Treuhänderischer Entwicklungsträger
des Landes Berlin Berlin 44.45 140.6 89.51) Wohnpark Klosterhof GmbH Cologne 44.00 – 5,387.4 – 1,023.81) ARGE Birkenstrasse Schönwalde GmbH & Co.
Entwicklungs- und Bauträger KG Berlin 44.00 – 75.5 – 27.71) Immobilien Management s.r.o. Pilsen 44.00 1)4)
Nantes s.r.o. Pilsen 44.90 1)4)
Kista Galleria AB (personally liable partner) Stockholm 44.90 1)
Kista Galleria KB Stockholm 22.03 1)
Grand Marc Riverside LP Wilmington 44.90 0.0 0.01) Platte Street LP Wilmington 44.90 0.0 0.01) Firestone LP Wilmington 44.90 – 858.1 – 477.71) IBV immobilienfonds International 1 USA, LLC
(personally liable partner) Wilmington 89.80 1)
IBV-Immobilienfonds International 1 USA LP Wilmington

Company Registered Capital Equity Result pursuant
office share to present
annual account*
IBV Immobilienfonds International 2 USA, LLC
% in € ’000 in € ’000
(personally liable partner) Wilmington 89.80 1)
IBV-Immobilienfonds International 2 USA LP Wilmington

Company Registered Capital Equity Result pursuant
office share to present
annual account*
Athena Immobilien Verwaltungs GmbH & Co. KG
% in € ’000 in € ’000
Beteiligungsgesellschaft UK Eins Berlin 44.00 47.0 – 2.01) Bavaria Immobilien Verwaltungs GmbH & Co. KG –
LBB Fonds International I Holland – Berlin 0.13 12,935.7 689.41)5) Bavaria Immobilien Management GmbH & Co. KG –
BB Fonds International Zwei Holland – Berlin < 0.1 23,270.3 1,542.31)5) Bavaria Immobilien Projektsteuerungs GmbH & Co. KG –
BB Fonds International Drei Holland –
Odin Immobilien Verwaltungs GmbH & Co. KG –
Berlin 89.69 1)
BB Fonds International Vier Holland – Berlin 91.12 – 51.9 – 51.91) Bavaria Immobilien Trading GmbH & Co. KG –
BB Fonds International I – United Kingdom Berlin 5.41 65,726.8 – 9,764.31)5) Athena GmbH & Co. Objekt Bietigheim-Bissingen KG Berlin 44.00 25.4 – 0.21) Athena GmbH & Co. Objekt Henstedt-Ulzburg KG Berlin 44.00 23,604.9 – 1,010.81) Athena Immobilien Verwaltungs GmbH & Co. KG
Objekt Lörrach Baseler Strasse KG Berlin 44.00 19.0 6.51) Athena Immobilien Verwaltungs GmbH & Co. KG
Objekt München-Dornach KG Berlin 5.43 8,268.9 1,231.11) Athena Immobilien Verwaltungs GmbH & Co. KG
Objekt Gießen, Flutgraben KG Berlin 44.00 – 87.0 138.21) Athena Immobilien Verwaltungs GmbH & Co.
Objekt EKZ Bochum, Alleestrasse KG
Bavaria Immobilien Management GmbH & Co. KG –
Berlin 41.36 1)
Immobilienfonds Zwei –
Bavaria Immobilien Management GmbH & Co.
Berlin 42.21 1)
Objekt Berlin-Nikolassee Schopenhauerstrasse 53/55 KG Berlin 44.00 40.9 – 10.21) Bavaria Immobilien Management GmbH & Co.
Objekt Jahrhunderthalle Frankfurt/Main KG Berlin 44.90 50.0 0.0 1)
Bavaria Immobilien Management GmbH & Co.
Objekt Basel, Dorint-Hotel KG Berlin 44.00 13.0 – 29.5 1)
Bavaria Immobilien Management GmbH & Co.
Objekt Wien, Lassallestrasse KG Berlin

Company Registered Capital Equity Result pursuant
office share to present
annual account*
Odin Immobilien Verwaltungs GmbH & Co.
% in € ’000 in € ’000
Objekt Frankfurt, Niddastrasse KG Berlin 51.18 50.0 0.01) Odysseus Immobilien Verwaltungs GmbH & Co. KG –
Immobilienfonds gamma – Berlin 43.10 23.0 – 1.51) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Berlin-Friedrichshain Pufendorfstrasse KG Berlin 42.21 25.0 – 1.01) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Kassel Erste Immobilien KG Berlin 44.00 32.6 – 18.51) Okeanos GmbH & Co. Objekt Dietzenbach KG
Okeanos Immobilien Verwaltungs GmbH & Co.
Berlin 42.21 1)
Objekt Fürth "Am Klavierlein" KG Berlin 22.45 51.0 – 0.21) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Autohof Thiendorf KG Berlin 44.00 25.5 – 0.11) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Erfurt, Martinsgasse KG Berlin 42,21 25.4 – 0.21) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Berlin, Eldenaer Strasse KG Berlin 42.21 13.0 – 173.61) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Mainz-Pflegeheim KG Berlin 43.64 24.8 – 0.21) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Schweinfurt-Pflegeheim KG Berlin 43.64 25.0 0.01) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Lübeck-Kino KG Berlin 43.64 25.0 0.01) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt München, Bayerstrasse KG Berlin 43.10 50.0 – 0.11) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Mannheim-Neckarau, Rhenaniastrasse KG Berlin 43.10 50.0 – 0.11) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Quartier McNair, Nahversorgungszentrum KG Berlin 43.10 49.8 – 0.21) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Bürogebäude Berlin-Steglitz,
Quartier McNair KG
Okeanos Immobilien Verwaltungs GmbH & Co.
Berlin 44.00 1)
Objekt Hannover, Spielhagenstrasse KG Berlin 43.10 50.0 0.01) Okeanos Immobilien Verwaltungs GmbH & Co.
Objekt Lüneburg-Kaltenmoor KG Berlin 42.21 – 420.0 – 470.01) Pluton Immobilien Verwaltungs GmbH & Co.
Objekt Berlin Prenzlauer Berg KG
Pluton Immobilien Verwaltungs GmbH & Co.
Berlin 43.10 1)
Objekt Erlangen, Werner-von-Siemens-Str. KG Berlin 43.10 0.0 – 742.91) Pluton Immobilien Verwaltungs GmbH & Co.
Objekte Freising, Leipzig-Gohlis und Schönau KG Berlin 43.10 – 695.6 – 94.21) Pluton Immobilien Verwaltungs GmbH & Co.
Objekte Gross-Zimmern und Wiesbaden,
Narzissenweg KG Berlin 43.10 487.3 1,218.41) Pluton Immobilien Verwaltungs GmbH & Co.
Objekt Lörrach Baseler Strasse KG Berlin 44.00 70.6 19.51)4) Prometheus Immobilien Verwaltungs GmbH & Co.
Objekt Paris-Roissy, Dorint-Hotel KG Berlin 45.80 50.0 0.01)4) NOTES AND EXPLANATORY NOTES 167

Company Registered Capital Equity Result pursuant
office share to present
annual account*
Prometheus Immobilien Verwaltungs GmbH & Co.
% in € ’000 in € ’000
Objekt Berlin-Steglitz McNair KG Berlin 44.00 – 16,305.9 – 13,497.01) Prometheus Immobilien Verwaltungs GmbH & Co.
Objekt Cottbus, Töpferstrasse 2 KG Berlin 44.00 – 54.8 – 78.21) Prometheus Immobilien Verwaltungs GmbH & Co.
Objekt Kassel-Wilhelmshöhe, Baunsbergstrasse KG Berlin 43.10 – 196.0 – 147.91) Prometheus Immobilien Verwaltungs GmbH & Co.
Objekt Leonberg, Neue Ramtelstrasse KG Berlin 44.00 1,298.5 313.81) Prometheus Immobilien Verwaltungs GmbH & Co.
Objekt Berlin Landsberger Tor KG Berlin 43.10 – 21.0 6.31) Prometheus Immobilien Verwaltungs GmbH & Co.
Objekt Wolfsburg KG Berlin 46.75 22,262.8 330.01) Prometheus Immobilien Verwaltungs GmbH & Co.
Zweite Landsberger Tor KG Berlin 43.10 – 246.0 – 17.61) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Kaiserslautern Mercado Einkaufszentrum KG
Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Berlin 4.29 1)
Objekt Mannheim-Neckarau KG Berlin 46.75 16,163.4 – 33.41) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Nürnberg, Bamberger Strasse KG Berlin 5.41 4,213.8 – 833.81) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Röthenbach Speckschlag KG Berlin 44.00 22.7 – 1.61) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Neustadt (Hessen), Marburger Str. KG Berlin 44.00 33.9 – 17.21)4) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Barsinghausen KG Berlin 43.10 – 61.8 – 68.51) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Alte Messe Leipzig Halle Elf KG Berlin 58.37 46.4 – 3.91) Theseus Immobilien Beteiligungsgesellschaft mbH & Co.
Objekt Alte Messe Leipzig Halle Zwölf KG Berlin 58.37 49.0 – 1.51) Theseus Immobilien Management GmbH & Co.
Objekt Französisch-Buchholz KG Berlin 43.96 – 967.6 – 585.01) Theseus Immobilien Management GmbH & Co.
Objekt Leipziger Strasse KG
Theseus Immobilien Management GmbH & Co.
Berlin 43.06 1)
Objekt Duisburg-Hamborn KG Berlin 43.10 3.7 0.51) GbR KPM-Gelände Berlin-Tiergarten Berlin 38.64 0.0 0.01) Theseus Immobilien Management GmbH & Co.
KPM-Gelände Berlin Bauteil Eins KG Berlin 44.00 – 213.4 – 125.21) Theseus Immobilien Management GmbH & Co.
KPM-Gelände Berlin Bauteil Zwei KG Berlin 44.00 – 136.0 – 88.41) Theseus Immobilien Management GmbH & Co.
KPM-Gelände Berlin Bauteil Drei KG Berlin 44.00 – 284.8 – 159.41) Theseus Immobilien Management GmbH & Co.
KPM-Gelände Berlin Bauteil Vier KG Berlin 44.00 – 205.6 – 121.41) Theseus Immobilien Management GmbH & Co.
KPM-Gelände Berlin Bauteil Fünf KG Berlin 44.00 – 165.6 – 102.71) Theseus Immobilien Management GmbH & Co.
KPM-Gelände Berlin Bauteil Sechs KG Berlin 44.00 – 33.1 – 39.61) 168
NOTES AND EXPLANATORY NOTES

Company Registered Capital Equity Result pursuant
office share to present
annual account*
Theseus Immobilien Management GmbH & Co.
% in € ’000 in € ’000
KPM-Gelände Berlin Bauteil Sieben KG Berlin 44.00 – 188.9 – 113.61) Theseus Immobilien Management GmbH & Co.
Objekt Kohlrabizirkus Leipzig Mitte KG Berlin 88.00 23.9 – 0.81) Theseus Immobilien Management GmbH & Co.
Objekt Zentrum Schöneweide KG Berlin 43.10 46.4 20.71) Theseus Immobilien Management GmbH & Co.
Objekt Schenefeld KG Berlin 5.07 1)
Thesaurus GmbH & Co. Erste Immobilien KG Berlin 44.00 12.5 – 19.91) Thesaurus GmbH & Co. Zweite Immobilien KG Berlin 5.39 204.7 – 17,385.01) Thesaurus GmbH & Co. Dritte Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Vierte Immobilien KG Berlin 4.56 16,183.6 – 27,032.61) Thesaurus GmbH & Co. Fünfte Immobilien KG Berlin 10.46 49,905.4 – 257.41) Thesaurus GmbH & Co. Sechste Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Siebte Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Zehnte Immobilien KG Berlin 44.00 44.7 – 6.51) Thesaurus GmbH & Co. Elfte Immobilien KG Berlin 44.00 34.7 – 4.01) Thesaurus GmbH & Co. Sechzehnte Immobilien KG Berlin 44.00 8.8 – 41.21) Thesaurus GmbH & Co. Siebzehnte Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Achtzehnte Immobilien KG Berlin 44.00 – 460.2 – 510.21) Thesaurus GmbH & Co. Neunzehnte Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Zwanzigste Immobilien KG Berlin 44.00 – 176.6 – 226.61) Thesaurus GmbH & Co. Einundzwanzigste Immobilien KG Berlin 44.00 49.9 – 0.11) Thesaurus GmbH & Co. Zweiundzwanzigste Immobilien KG Berlin 44.00 45.4 – 4.61) Thesaurus GmbH & Co. Dreiundzwanzigste Immobilien KG Berlin 44.00 45.4 – 4.6 1)
Thesaurus GmbH & Co. Vierundzwanzigste Immobilien KG Berlin 44.00 49.9 – 0.1 1)
Thesaurus GmbH & Co. Fünfundzwanzigste
Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Sechsundzwanzigste
Immobilien KG Berlin 43.10 483.5 – 25.9 1)4)
Thesaurus GmbH & Co. Siebenundzwanzigste
Immobilien KG Berlin 43.10 7.1 – 42.9 1)
Thesaurus GmbH & Co. Achtundzwanzigste
Immobilien KG Berlin 43.10 49.7 – 0.3 1)
Thesaurus GmbH & Co. Neunundzwanzigste
Immobilien KG Berlin 43.10 41.4 – 8.6 1)
Thesaurus GmbH & Co. Dreissigste Immobilien KG Berlin 43.10 47.5 – 2.5 1)
Thesaurus GmbH & Co. Einunddreissigste Immobilien KG Berlin 43.10 – 476.1 – 526.1 1)
Thesaurus GmbH & Co. Zweiunddreissigste Immobilien KG Berlin 43.10 49.8 – 0.2 1)4)
Thesaurus GmbH & Co. Dreiunddreissigste Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Vierunddreissigste Immobilien KG Berlin 43.10 – 1,638.3 – 1,688.3 1)
Thesaurus GmbH & Co. Fünfunddreissigste Immobilien KG Berlin 43.10 49.9 0.0 1)
Thesaurus GmbH & Co. Sechsunddreissigste
Immobilien KG Berlin 89.70 – 169.6 – 219.6 1)
Thesaurus GmbH & Co. Siebenunddreissigste
Immobilien KG Berlin 10.46 63.0 – 113.0 1)
NOTES AND EXPLANATORY NOTES 169

Company Registered Capital Equity Result pursuant
office share to present
annual account*
% in € ’000 in € ’000
Thesaurus GmbH & Co. Achtunddreissigste Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Neununddreissigste Immobilien KG Berlin 44.00 49.9 – 0.1 1)
Thesaurus GmbH & Co. Vierzigste Immobilien KG Berlin 44.00 – 395.8 – 478.9 1)
Thesaurus GmbH & Co. Einundvierzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Zweiundvierzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Dreiundvierzigste Immobilien KG Berlin 44.00 1)
Thesaurus GmbH & Co. Vierundvierzigste Immobilien KG Berlin 44.00 46.1 – 3.9 1)
Thesaurus GmbH & Co. Fünfundvierzigste Immobilien KG Berlin 44.00 49.8 – 0.2 1)
Thesaurus GmbH & Co. Sechsundvierzigste
Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Siebenundvierzigste
Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Achtundvierzigste Immobilien KG Berlin 44.00 46.8 – 3.2 1)
Thesaurus GmbH & Co. Neunundvierzigste Immobilien KG Berlin 44.00 48.0 – 2.0 1)
Thesaurus GmbH & Co. Fünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Einundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Zweiundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Dreiundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Vierundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Fünfundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Sechsundfünfzigste
Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Siebenundfünfzigste
Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Achtundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Neunundfünfzigste Immobilien KG Berlin 44.00 50.0 0.0 1)
Thesaurus GmbH & Co. Sechzigste Immobilien KG Berlin 44.00 49.5 – 0.5 1)
Thesaurus GmbH & Co. Sechsundsechzigste
Immobilien KG Berlin 44.00 1)2)
Thesaurus GmbH & Co. Siebenundsechzigste
Immobilien KG Berlin 44.00 1)2)
Thesaurus GmbH & Co. Achtundsechzigste
Immobilien KG Berlin 44.00 1)2)
Thesaurus GmbH & Co. Neunundsechzigste
Immobilien KG Berlin 44.00 1)2)
Thesaurus GmbH & Co. Siebzigste Immobilien KG Berlin 44.00 1)2)
ConCom Beteiligungs- und Management GmbH & Co. KG Berlin 44.90 1)2)
FinTech Vierte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Fünfte Beteiligungs- und Management GmbH
(in future trading as Apollon Immobilien
Verwaltungs GmbH)
FinTech Siebte Beteiligungs- und Management GmbH
(in future trading as Morpheus Immobilien
Berlin 61.12 1)2)
Verwaltungs GmbH) Berlin 4.56 1)2)
FinTech Achte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Neunte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Zehnte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
170
NOTES AND EXPLANATORY NOTES

Company Registered Capital Equity Result pursuant
office share to present
annual account*
% in € ’000 in € ’000
FinTech Elfte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Zwölfte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Dreizehnte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Vierzehnte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Fünfzehnte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Sechzehnte Beteiligungs- und
Management GmbH Berlin 44.90 1)2)
FinTech Siebzehnte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Achtzehnte Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Neunzehnte Beteiligungs- und
Management GmbH Berlin 44.90 1)2)
FinTech Zwanzigste Beteiligungs- und Management GmbH Berlin 44.90 1)2)
FinTech Einundzwanzigste Beteiligungs- und
Management GmbH Berlin 44.90 1)2)
FinTech Zweiundzwanzigste Beteiligungs- und
Management GmbH Berlin 44.90 1)2)
FinTech Dreiundundzwanzigste Beteiligungs- und
Management GmbH Berlin 44.90 1)2)
1) direct holding
2) Established/joined 2001
3) Profit takeover agreement with the company
4) Sale planned/being liquidated
5) According to annual accounts 2000.
All other notes according to Trade register or IBV accounting.
* Result before profit transfer
NOTES AND EXPLANATORY NOTES 171

List of companies with profit and loss transfer agreements
within the Bankgesellschaft Berlin Group
Appendix 2 to the Notes
Company Dominant company Profit before Date of annual
profit/loss financial
transfer statements if not
in € ’0002) Dec. 31, 2001
ARWOBAU Immobilien- und Beteiligungs- ARWOBAU Apartment- und Wohnungsgesellschaft
mbH, Berlin baugesellschaft mit beschränkter
Haftung 0 12/31/2000
BANKENSERVICE GmbH Ein Unternehmen Bankgesellschaft Berlin AG
der Bankgesellschaft Berlin, Berlin1) 30
BAUTRAKO Bauträger- und Bavaria Objekt- und
Koordinierungsgesellschaft mbH, Lohfelden Baubetreuung GmbH – 9,415
Bavaria Immobilienconsult und Baurevision Immobilien- und Baumanagement der
GmbH, Berlin
Bavaria Objekt- und Baubetreuung GmbH,
Bankgesellschaft Berlin GmbH – 602
Nuremberg
BB-DATA Gesellschaft für Informations- und
IBAG Immobilien und Beteiligungen AG – 113,297
Kommunikationssysteme mbH, Berlin
BB-Grundstücksgesellschaft mit beschränkter
Bankgesellschaft Berlin AG 3,955
Haftung, Berlin Bankgesellschaft Berlin AG – 5,056 12/31/2000
BB-Hausverwaltung GmbH i. L., Berlin Grundstücksgesellschaft „Berlin“ mit
beschränkter Haftung 1,073
BB-Immobilien-Service GmbH, Berlin Bankgesellschaft Berlin AG – 14,221 12/31/2000
BB-Miete GmbH, Berlin BB-Leasing GmbH 4,198
Berlin Hyp Immobilien GmbH, Berlin Berlin-Hannoversche Hypothekenbank
Aktiengesellschaft – 7,758 12/31/2000
Berlin Hyp Projekt GmbH, Berlin Berlin-Hannoversche Hypothekenbank
Aktiengesellschaft – 92 12/31/2000
Berlin Seed Capital Fund GmbH, Berlin
BILDUNGSAKADEMIE DER
BANKGESELLSCHAFT
Berlin Capital Fund GmbH 9,407 12/31/2000
Gesellschaft mit beschränkter Haftung, Berlin
BUVI Besitz- und Verwaltungsgesellschaft
Bankgesellschaft Berlin AG 9 12/31/2000
für Immobilien mbH, Berlin
DirektBankService GmbH Unternehmensgruppe
Bankgesellschaft Berlin AG – 735
Bankgesellschaft Berlin, Berlin
DSK Deutsche Stadt- und Grundstücksent-
Bankgesellschaft Berlin AG 0
wicklungsgesellschaft mbH, Frankfurt am Main IBAG Immobilien und Beteiligungen AG 909
FdA Finanzberatungs-Service GmbH der Allbank, Allgemeine Privatkundenbank
Hanover
Grundstücksgesellschaft „Berlin“ mit
Aktiengesellschaft – 1,061
beschränkter Haftung, Berlin Bankgesellschaft Berlin AG 2,725 12/31/2000
Grundstücksgesellschaft "URSUS" mit Grundstücksgesellschaft „Berlin“ mit
beschränkter Haftung, Frankfurt am Main beschränkter Haftung 355
GWL Wohnungsbetreuungsgesellschaft mbH, Gesellschaft für Wohnungsbau
Lübeck Lübeck mbH – 176 12/31/2000
HaWe Verwaltungsgesellschaft mbH, Berlin Weberbank Privatbankiers KGaA
(formerly Weberbank Berliner
Industriebank KGaA) – 371
IBAG Immobilien und Beteiligungen AG, Berlin Bankgesellschaft Berlin AG – 217,377
172
NOTES AND EXPLANATORY NOTES

Company Dominant company Profit before Date of annual
profit/loss financial
transfer statements if not
in € ’000 2) Dec. 31, 2001
IDLG Immobiliendienstleistungen GmbH, Berlin
Immobilien Beteiligungs- und Vertriebsgesell-
Landesbank Berlin – Girozentrale – – 38,591 12/31/2000
schaft der IBAG-Gruppe mbH, Berlin IBAG Immobilien und Beteiligungen AG – 28,842
LBB Bauprojektgesellschaft mbH, Berlin Immobilien- und Baumanagement der
LBB Grundstücksentwicklungsgesellschaft mbH
Bankgesellschaft Berlin GmbH – 11,611 12/31/2000
Bau- und Projektentwicklungen, Berlin
LBB Grundstücks-Gesellschaft mbH der
IBAG Immobilien und Beteiligungen AG 203
Landesbank Berlin – Girozentrale –, Berlin Landesbank Berlin – Girozentrale – – 8,430 12/31/2000
LBB Kommunalbaugesellschaft mbH, Potsdam Landesbank Berlin – Girozentrale – 216
LdA LEASING GMBH DER ALLBANK, Hanover Allgemeine Privatkundenbank
Aktiengesellschaft 1
LfA Leasing für Automobile GmbH, Hanover Bankgesellschaft Berlin AG 3,473
Nordversicherungsdienst Versicherungs- Allgemeine Privatkundenbank
Vermittlungsgesellschaft mbH, Hanover Aktiengesellschaft 1
S.T.E.R.N. Gesellschaft der behutsamen LBB Grundstücksentwicklungs-
Stadterneuerung mbH, Berlin gesellschaft mbH Bau- und
Projektentwicklungen 26
1) Profit and loss transfer agreement ends Dec. 31, 2001.
2) Without mark = Transfer of profits to dominant company
–) = Loss takeover through dominant company
NOTES AND EXPLANATORY NOTES 173

List pursuant to section § 285 No. 10 of the German Commercial Code (HGB)
as at the balance sheet date December 31, 2001 or the date of retirement
Appendix 3 to the Notes
a) Membership in other statutory Supervisory Boards pursuant to section 100 of the German Stock Corporation Act (AktG)
a*) Membership Group companies pursuant to section 100 of the German Stock Corporation Act (AktG)
b) Membership in comparable domestic and foreign supervisory bodies of business enterprises
*) Staff representatives
Supervisory Board
Prof. Dr. Dieter Feddersen
Chairman
(until December 31, 2001)
Lawyer and Notary Public
White & Case, Feddersen,
Frankfurt/Main
a) Chairman of the Supervisory Board of
Drägerwerk AG, Lübeck
Deutsche Beteiligungsgesellschaft AG,
Frankfurt/Main
SAI Automotive AG, Frankfurt/Main 1)
Tarkett Sommer AG, Frankenthal
Member of the Supervisory Board of
FERI AG, Bad Homburg
b) Chairman of the Administrative Board of
Gesellschaft für Industriebeteiligungen
Dr. Joachim Schmidt AG & Co. Holding-
Kommanditgesellschaft, Berlin
Karl Munte Bauunternehmung
GmbH & Co. KG, Braunschweig
Ernst-Otto Sandvoß
Chairman since February 14, 2002
(Member since July 4, 2001)
Former Chairman of the Board of
Management of DGZ•DekaBank
Deutsche Kommunalbank,
Frankfurt/Main 2)
Helmut Tesch *)
Vice-Chairman
Chairman of the Central Personnel
Committee and the Personnel
Committee of Landesbank Berlin –
Girozentrale –, Berlin
a) Member of the Supervisory Board of
DAWAG Deutsche Angestellten
Wohnungsbau-AG, Hamburg
*) Staff representatives
1) The transitional provisions of section 12 of the Introductory Act to the German Stock Corporation Act (AktG) apply to the positions marked
2) Since December 13, 2001 Member and since February 28, 2002 Chairman of the Supervisory Board of Landesbank Berlin – Girozentrale –, Berlin
174
b) Chairman of the Supervisory Board of
WEV Waren Einkaufs- und Vertriebs-
Gesellschaft mbH, Hamburg
Member of the Supervisory Board of
Landesbank Berlin – Girozentrale –,
Berlin
VVdDAG GmbH Vermögensverwaltung
der Deutschen Angestellten-
Gewerkschaft, Hamburg
DAG-TVG GmbH Treuhandverwaltung
von Gewerkschaftsvermögen, Hamburg
Dr. h.c. Manfred Bodin
Chairman of the Board of Management
of Norddeutsche Landesbank
Girozentrale, Hanover
a) Member of the Supervisory Board of
Berlin-Hannoversche Hypothekenbank
AG, Hanover-Berlin
Nordland Papier AG, Doerpen
CeWe Color Holding AG,
Oldenburg
Continental AG, Hanover
Dragoco Gerberding & Co. AG,
Holzminden
MHB Mittelständische Handelsbank AG,
Frankfurt/Main
b) Chairman of the Supervisory Board of
LHI Leasing GmbH, Munich
NORD CON Asset Management
Holding GmbH, Berlin
Member of the Supervisory Board of
Bremer Landesbank Kreditanstalt
Oldenburg – Girozentrale –,
Bremen
LBS Norddeutsche Landesbausparkasse
Berlin-Hannover, Hanover/Berlin
Provinzial Lebensversicherung
Hannover, Hanover
Chairman of the Administrative Board of
Nord/LB Luxembourg S.A., Luxembourg
Member of the Administrative Board of
DGZ·DekaBank Deutsche
Kommunalbank, Frankfurt/Main
Skandifinanz AG, Zurich
NOTES AND EXPLANATORY NOTES
Wolfgang Branoner
(until June 20, 2001)
Senator for Economic Affairs and
Technology, Berlin
a) Member of the Supervisory Board of
Berlinwasser Holding AG, Berlin
b) Chairman of the Supervisory Board of
Berliner Hafen- und Lagerhaus-Betriebe
(BEHALA), Berlin
Berliner Stadtreinigungsbetriebe (BSR),
Berlin
Berliner Verkehrsbetriebe (BVG), Berlin
Berliner Wasser-Betriebe (BWB), Berlin
Wirtschaftsförderung Berlin GmbH,
Berlin
Berlin Tourismus Marketing GmbH,
Berlin
Vice-Chairman of the Supervisory Board
of
Landesbank Berlin – Girozentrale –,
Berlin
WISTA-Management GmbH (Wissenschafts-
und Wirtschaftsstandort
Berlin-Adlershof), Berlin
TSB Technologiestiftung
Innovationsagentur Berlin GmbH, Berlin
Member of the Supervisory Board of
The New German Länder Industrial
Investment Council GmbH, Berlin
Vice-Chairman of the Administrative
Board of
Feuersozietät Berlin Brandenburg, Berlin
Öffentliche Lebensversicherung Berlin
Brandenburg, Berlin
Dagmar Brose *)
Member of the Works Council at
Bankgesellschaft Berlin AG, Berlin
Thomas Dobkowitz
(since July 4, 2001)
Management consultant
a) Chairman of the Supervisory Board of
ADSIS Software AG Enterprise Management
Solutions, Berlin

Dr.-Ing. E.h. Heinz Dürr
(until July 1, 2001)
Managing Director of
Heinz Dürr GmbH, Berlin
a) Chairman of the Supervisory Board
of
Dürr AG, Stuttgart
Krone GmbH, Berlin
Member of the Supervisory Board of
Benteler AG, Paderborn
Dussmann AG & Co. KGaA, Berlin
Stinnes AG, Mülheim/Ruhr
b) Vice-Chairman of the Supervisory Board
of
Österreichische Bundesbahnen –
special membership rights entity
pursuant to the Federal Railways Act
1992, Vienna
Foundation Commissioner of
Carl-Zeiss-Stiftung, Heidenheim
a.d. Brenz and Jena
Vice-Chairman of the Administrative
Board of
Alp Transit Gotthard AG, Bern
Member of the Administrative Board of
Landesbank Baden-Württemberg,
Stuttgart
Hartmut Friedrich *)
Deputy Regional Manager of ver.di
Berlin-Brandenburg region
a) Member of the Supervisory Board of
Herlitz PBS-AG, Berlin
Berliner Gaswerke (GASAG)-AG, Berlin
Berlinwasser Holding AG, Berlin
Carmen Hümpel *)
Chairwoman of the Central Works
Council of ALLBANK Allgemeine
Privatkundenbank AG, Hanover
a) Member of the Supervisory Board of
ALLBANK Allgemeine
Privatkundenbank AG, Hanover
Christiane Krajewski
(since June 19, 2001) 3)
Finance Senator, Berlin
b) Chairwoman of the Supervisory Board of
Berliner Verkehrsbetriebe (BVG), Berlin
Liegenschaftsfonds Berlin
Verwaltungsgesellschaft mbH
Vice-Chairwoman of the Supervisory
Board of
Landesbank Berlin – Girozentrale –,
Berlin
Member of the Supervisory Board of
NET-GE Kliniken für Berlin GmbH, Berlin
Member of the Administrative Board of
Feuersozietät Berlin Brandenburg, Berlin
Kreditanstalt für Wiederaufbau,
Frankfurt/Main
Öffentliche Lebensversicherung
Berlin-Brandenburg, Berlin
Ernst-Otto Kock *)
(until March 31, 2001)
Union Secretary ÖTV Berlin,
Berlin
a) Member of the Supervisory Board of
Bewag AG, Berlin
Peter Kurth
(until June 16, 2001)
Finance Senator, Berlin
a) Member of the Supervisory Board of
Messe Berlin GmbH, Berlin
NET-GE Kliniken für Berlin GmbH, Berlin
b) Chairman of the Supervisory Board of
Liegenschaftsfonds Berlin Verwaltungsgesellschaft
mbH, Berlin
Vice-Chairman of the Supervisory Board
of
Landesbank Berlin – Girozentrale –, Berlin
Member of the Administrative Board of
Feuersozietät Berlin Brandenburg, Berlin
Öffentliche Lebensversicherung Berlin
Brandenburg, Berlin
3) For information: Member of the Supervisory Board until January 23, 2002
Dr. Klaus Murmann
Chairman of Sauer Danfoss Inc., Ames,
Iowa (Neumünster)
a) Chairman of the Supervisory Board of
Sauer-Danfoss Inc., Ames/Neumünster
PARION Finanzholding AG, Cologne
Member of the Supervisory Board of
E.ON Energie AG, Munich
b) Chairman of the Supervisory Board of
PSVaG Pensions-Sicherungs-
Verein, Cologne
Gothaer Versicherungsbank VVaG,
Cologne
Member of the Supervisory Board of
Maschinenbau-Konzern GKN plc,
London
Administrative Board of
Gerling-Konzern Allgemeine
Versicherungs-Aktiengesellschaft,
Cologne
Advisory Board of
Accumulatorenwerk Hoppecke Carl
Zoellner GmbH & Co. KG, Brilon
Institut der Deutschen Wirtschaft,
Cologne
Dr. Wolfgang Peiner
(until October 31, 2001)
Chairman of the Boards of Management
of Parion OHG, Cologne, and
Parion Finanzholding AG, Berlin
a) Chairman of the Supervisory Board of
Aachener Bausparkasse AG, Aachen
Member of the Supervisory Board of
Roland Rechtsschutz-
Versicherungs-AG, Cologne
Deutsche Lufthansa AG, Frankfurt/Main
b) Member of the Supervisory Board of
EurAPCo, Zurich
Member of the Administrative Board of
Karl Munte Bauunternehmung
GmbH & Co. KG, Braunschweig
Kühne & Nagel International AG,
Schindellegi
Director (non-executive) of
Friends Providence plc., Dorking
NOTES AND EXPLANATORY NOTES 175

Bernd Reinhard *)
Chairman of the Works Council of
Berliner Bank, a branch of
Bankgesellschaft Berlin AG, Berlin
Andreas Rohde *)
In-house craftsman at
Bankgesellschaft Berlin AG, Berlin
Dr. Dieter Schadt
(until June 27, 2001)
Chairman of the Managing Board of
Franz Haniel & Cie. GmbH, Duisburg
a) Chairman of the Supervisory Board of
TAKKT AG, Stuttgart
Member of the Supervisory Board of
Delton AG, Bad Homburg
EXXON Mobil GmbH, Hamburg
GEHE AG, Stuttgart
RWE Umwelt AG, Essen
b) Member of the Supervisory Board of
Herba AG, Vienna
OCP S.A., St. Quen
Hans Christian Seidel *)
Bank Manager at Landesbank Berlin
– Girozentrale –, Berlin
Erwin Staudt 4)
Chairman of the Management of
IBM Deutschland GmbH, Berlin
a) Member of the Supervisory Board of
Krone GmbH, Berlin
a*) Chairman of the Supervisory Board of
IBM Deutschland Entwicklungs GmbH,
Böblingen
IBM Deutschland Speichersysteme
GmbH, Mainz
176
Dr. Heinz-Gerd Stein
Member of the Board of Management
of ThyssenKrupp AG, Düsseldorf
a) Member of the Supervisory Board of
AXA Colonia Versicherung AG, Cologne
Dürr AG, Stuttgart
Gerling Konzern Speziale Kreditversicherungs-AG,
Cologne
Wilo-Salmson AG, Dortmund
a*) Chairman of the Supervisory Board of
Thyssen Stahl AG, Duisburg
Member of the Supervisory Board of
Eisen- und Hüttenwerke AG, Cologne
ThyssenKrupp Technologies AG, Essen
ThyssenKrupp Materials AG, Düsseldorf
ThyssenKrupp Steel AG, Duisburg
b) Member of the Supervisory Board of
Evangelisches und Johanniter Klinikum
Duisburg/Dinslaken/Oberhausen gem.
GmbH, Duisburg
Institut für Management und Technologie
IMT Berlin GmbH, Berlin
Thumann & Heitkamp Verwaltungs-
GmbH, Düsseldorf
ThyssenKrupp Information Services
GmbH, Düsseldorf
Chairman of the Advisory Board of
Kunststoffwerk Philippine GmbH & Co.
KG, Lahnstein a. Rhein
Saarpor Klaus Eckhardt GmbH
Neunkirchen Kunststoffe KG,
Neunkirchen/Saar
Member of the Advisory Board of
Hülskens Holding GmbH & Co., Wesel
Member of the Board of Directors of
The Budd Company, Troy/Michigan
Thyssen Elevator Holding Corp.,
Dover/Delaware
Peter Strieder
(since June 22, 2001)
Senator for Urban Development, Berlin
b) Vice-Chairman of the Supervisory
Board of
Landesbank Berlin – Girozentrale –,
Berlin
4) For information: Member of the Supervisory Board until January 10, 2002
NOTES AND EXPLANATORY NOTES
Member of the Supervisory Board of
Wista-Management GmbH, Berlin
Technologiestiftung Berlin, Berlin
BBB Management GmbH Campus
Berlin-Buch, Berlin
Joachim Tonndorf *)
Head of department, Financial Services
of ver.di Berlin-Brandenburg region
a) Member of the Supervisory Board of
Deutsche Beamten-Versicherung AG,
Wiesbaden
b) Member of the Supervisory Board of
Berliner Volksbank eG, Berlin
Frank Wolf *)
(since April 17, 2001)
Financial services secretary of ver.di
Berlin-Brandenburg region
b) Member of the Supervisory Board of
Berliner Volksbank eG., Berlin
Bärbel Wulff *)
Vice-Chairwoman of the Central Personnel
Committee and the Personnel
Committee of Landesbank Berlin –
Girozentrale –, Berlin
b) Member of the Supervisory Board of
Landesbank Berlin – Girozentrale –, Berlin

Changes made since the balance sheet date:
Since February 4, 2002, or March 28, 2002, the following have been members of the Supervisory Board of
Bankgesellschaft Berlin AG and hold the following current mandates:
Dr. Thilo Sarrazin
(since February 4, 2002)
Finance Senator, Berlin
a) Member of the Supervisory Board of
Vivantes – Netzwerk für Gesundheit
GmbH, Berlin
b) Chairman of the Supervisory Board of
Berliner Verkehrsbetriebe (BVG), Berlin
Deputy Chairman of the Supervisory
Board of
Landesbank Berlin – Girozentrale –,
Berlin
Member of the Administrative Board of
Feuersozietät Berlin Brandenburg, Berlin
Kreditanstalt für Wiederaufbau, Berlin
Öffentliche Lebensversicherung Berlin
Brandenburg, Berlin
Dr. Michael Endres
(since March 28, 2002)
Former Member of the Board of
Management of Deutsche Bank AG,
Frankfurt/Main
Chairman of the Board of Management
of the Gemeinnützige Hertie-Stiftung,
Frankfurt/Main
a) Chairman of the Supervisory Board of
Deutz AG, Cologne
Lucent Technologies Network Systems
GmbH, Nuremberg
Member of the Supervisory Board of
ARCOR Verwaltungs-AG, Eschborn
Heidelberger Druckmaschinen AG,
Heidelberg
b) Member of the business council of
Schott Glas, Mainz
Dr. Thomas Guth
(since March 28, 2002)
Member of the Management Board of
Gesellschaft für Industriebeteiligungen
Dr. Schmidt AG & Co.
a) Chairman of the Supervisory Board of
R-Biopharm AG, Darmstadt
Member of the Supervisory Board of
Berliner Kindl Brauerei AG, Berlin
a*) Chairman of the Supervisory Board of
Comline Computer + Softwarelösungen
AG, Hamburg
Norddeutsche Mischwerke GmbH,
Berlin
b) Member of the Supervisory Board of
Preusse Bauholding GmbH & Co. KG,
Hamburg
Wirtschaftsförderung Berlin GmbH,
Berlin
Bernd Wrede
(since March 28, 2002)
Former Chairman of the Board of
Management of Hapag-Lloyd AG
a) Member of the Supervisory Board of
Bertelsmann AG, Gütersloh
Deutsche Hyp Deutsche
Hypothekenbank Frankfurt-Hamburg
AG, Frankfurt/Main
ERGO Versicherungsgruppe AG,
Düsseldorf
Goldschmidt AG, Essen
b) Member of the Administrative Board of
Kühne & Nagel International AG,
Schindellegi
NOTES AND EXPLANATORY NOTES 177

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, 2001 and the date of retirement
a) Membership in other statutory Supervisory Boards prescribed by law pursuant to section 100 of the German Stock Corporation Act (AktG)
a*) Membership in other statutory Group companies pursuant to section 100 of the German Stock Corporation Act (AktG)
� also positions held that must be declared pursuant to section § 340a subsection 4 no. 1 of the German Commercial Code
b) Membership in comparable domestic and foreign supervisory bodies of business enterprises
Board of
Management
Dr. Wolfgang Rupf
Chairman and Member of the Board of
Management until November 30, 2001
a) Chairman of the Supervisory Board of
CeWe Color Holding AG, Oldenburg �
Hornbach Baumarkt AG, Bornheim �
Vice-Chairman of the Supervisory Board
of
Hornbach Holding AG, Bornheim �
Member of the Supervisory Board of
Berlinwasser Holding AG, Berlin �
Messe Berlin GmbH, Berlin �
a)* Chairman of the Supervisory Board of
Berlin-Hannoversche Hypothekenbank
AG, Berlin/Hanover �
b) Chairman of the Supervisory Board of
Immobilien- und Baumanagement der
Bankgesellschaft Berlin GmbH, Berlin
Landesbank Berlin –Girozentrale–,
Berlin
Vice-Chairman of the Supervisory Board
of
Bau Holding Strabag Aktiengesellschaft,
A-Spittal a.d.Drau
Member of the Supervisory Board of
Partner für Berlin Gesellschaft für
Hauptstadt-Marketing mbH, Berlin
PEIKER acustic GmbH & Co. KG,
Friedrichsdorf
Member of the Administrative Board of
Gesellschaft für Industriebeteiligungen
Dr. Joachim Schmidt AG & Co.
Holding KG, Berlin
Member of the Investment Committee of
PEB Capital B.V., NL-Utrecht
178
Hans-Jörg Vetter
Member and Vice-Chairman of the
Board of Management since
November 1, 2001
Chairman of the Board of Management
since December 1, 2001
Chairman of the Board of Management
of Landesbank Berlin – Girozentrale –,
Berlin, since February 28, 2002
a) Chairman of the Supervisory Board of
Fay Management Holding AG,
Mannheim
Member of the Supervisory Board of
Interseroh AG, Cologne �
Serge Demolière
Member of the Board of Management
since November 1, 2001
Member of the Board of Directors of
Bankgesellschaft Berlin (UK) plc.,
London, since December 13, 2001
a) Chairman of the Supervisory Board of
RTS Realtime Systems AG,
Frankfurt/Main
b) Member of the Supervisory Board of
Bankgesellschaft Berlin INVESTMENT
GmbH, Berlin
Bankgesellschaft Berlin (Ireland) plc.,
Dublin
France Growth Fund, Inc., New York
Member of the Administrative Board of
Bankgesellschaft Berlin International
S.A., Luxembourg
Dr. Johannes Evers
Member of the Board of Management
of Landesbank Berlin – Girozentrale –.
Berlin
a)* Chairman of the Supervisory Board of
ALLBANK Allgemeine Privatkundenbank
Aktiengesellschaft, Hanover �
b) Chairman of the Supervisory Board of
Bankgesellschaft Berlin (Polska) S.A.,
Warsaw
NOTES AND EXPLANATORY NOTES
Cids! Computer in die Schulen gemeinnützige
Gesellschaft, Berlin
Vice-Chairman of the Supervisory Board
of
Atos Origin Processing Services GmbH,
Frankfurt/Main
Member of the Supervisory Board of
B + S Card Service GmbH,
Frankfurt/Main
Inteligo Financial Services S.A.,
Warsaw
LBS Norddeutsche
Landesbausparkasse Berlin-Hannover,
Berlin/Hanover
Wasserstadt GmbH Treuhänderische
Entwicklungsträger des Landes Berlin,
Berlin
Chairman of the Administrative Board of
Visa Deutschland e.V., Frankfurt/Main
Member of the Board of Directors
(non-executive) of
INOVANT, San Francisco
Visa International Service Association,
San Francisco
Visa EU, London
Dr. Thomas Kurze
Member of the Board of Management
until November 30, 2001
a) Chairman of the Supervisory Board of
Honeywell Bremsbelag GmbH, Glinde �
Tempelhofer Feld AG, Berlin �
Member of the Supervisory Board of
dvg Hannover Datenverarbeitungsgesellschaft
mbH, Hanover �
Honeywell Deutschland GmbH,
Raunheim
Honeywell Specialty Chemicals Seelze
GmbH, Seelze �
a)* Vice-Chairman of the Supervisory Board
of
ALLBANK Allgemeine Privatkundenbank
Aktiengesellschaft, Hanover �
Weberbank Privatbankiers KGaA,
Berlin �
Member of the Supervisory Board of
Berlin-Hannoversche Hypothekenbank
AG, Berlin/Hanover �

) Chairman of the Supervisory Board of
Zivnostenská banka a.s., Prague
Vice-Chairman of the Supervisory Board of
B + S Card Service GmbH,
Frankfurt/Main
Member of the Supervisory Board of
Bankgesellschaft Berlin INVESTMENT
GmbH, Berlin
Deka Investment Management GmbH
(DIM), Frankfurt/Main
Immobilien- und Baumanagement der
Bankgesellschaft Berlin GmbH, Berlin
Institut für Management und Technologie
IMT Berlin GmbH, Berlin
LBS Norddeutsche
Landesbausparkasse Berlin-Hannover,
Berlin/Hanover
Member of the Administrative Board of
Bankgesellschaft Berlin International
S.A., Luxembourg
DKLB Deutsche Klassenlotterie Berlin,
Berlin
VISA Deutschland e.V., Frankfurt/Main
Hans Leukers
Member of the Board of Management
until December 31, 2001
Member of the Board of Management
of Landesbank Berlin – Girozentrale –,
Berlin, until December 31, 2001
Chairman of the Board of Directors of
Bankgesellschaft Berlin (UK) plc.,
London 1)
a) Chairman of the Supervisory Board of
Berliner Börse AG, Berlin
b) Chairman of the Supervisory Board of
Bankgesellschaft Berlin INVESTMENT
GmbH, Berlin
LBB Landesbank Berlin Finance
Curaçao N. V., Curaçao
Member of the Supervisory Board of
Deutsche Sparkassen Leasing
AG & Co. KG, Bad Homburg v.d.H.
Deka International (Ireland) Ltd., Dublin
Chairman of the Board of Directors
(non-executive) of
Bankgesellschaft Berlin (Ireland) plc.,
Dublin
BGB Finance (Ireland) plc., Dublin
Chairman of the Administrative Board of
Bankgesellschaft Berlin International
S.A., Luxembourg
1) For information: until March 12, 2002
2) For information: until January 1, 2002
Member of the Administrative Board of
InvestitionsBank des Landes Brandenburg,
Potsdam
Norbert Pawlowski
Chairman of the Board of Management
of Landesbank Berlin – Girozentrale –,
Berlin, since March 28, 2001 until
February 28, 2002
Since February 28, 2002, Member of
the Board of Management of Landesbank
Berlin – Girozentrale –, Berlin
Member of the Board of Directors
(executive member) of Bankgesellschaft
Berlin (UK) plc., London
a)* Chairman of the Supervisory Board of
Weberbank Privatbankiers KGaA,
Berlin �
Member of the Supervisory Board of
Berlin-Hannoversche Hypothekenbank
AG, Berlin/Hanover �
b) Member of the Supervisory Board of
Bankgesellschaft Berlin INVESTMENT
GmbH, Berlin
Berliner Stadtreinigungsbetriebe (BSR),
Berlin
Berliner Wasserbetriebe (BWB), Berlin
Immobilien- und Baumanagement der
Bankgesellschaft Berlin GmbH, Berlin
Member of the Board of Directors
(non-executive) of
Bankgesellschaft Berlin (Ireland) plc,
Dublin
Member of the Administrative Board of
Bankgesellschaft Berlin International
S.A., Luxembourg
DGZ•DekaBank
Deutsche Kommunalbank,
Frankfurt/Main
Hubert Piel
Member of the Board of Management
of Landesbank Berlin – Girozentrale –,
Berlin, since June 1, 2001
a) Member of the Supervisory Board of
dvg Hannover Datenverarbeitungsgesellschaft
mbH, Hanover �
a)* Chairman of the Supervisory Board of
BANKENSERVICE GmbH –
Ein Unternehmen der Bankgesellschaft
Berlin, Berlin �
Member of the Supervisory Board of
ALLBANK Allgemeine Privatkundenbank
Aktiengesellschaft, Hanover �
Berlin-Hannoversche Hypothekenbank
AG, Berlin/Hanover �
b) Member of the Supervisory Board of
Atos Origin Processing Services GmbH,
Frankfurt/Main
Bankgesellschaft Berlin (Polska) S.A.,
Warsaw
BLEG Berliner Landesentwicklungsgesellschaft
mbH, Berlin
BLEG Berliner Landesentwicklung-
Verwaltungsgesellschaft mbH, Berlin
Dr. Lothar Wackerbeck
Member of the Board of Management
until November 30, 2001
Member of the Board of Directors
(executive member) of Bankgesellschaft
Berlin (UK) plc., London 2)
a) Chairman of the Supervisory Board of
Wall AG, Berlin �
Vice-Chairman of the Supervisory Board of
Gothaer Credit Versicherung AG,
Cologne �
Member of the Supervisory Board of
Specker Bauten AG, Berlin
b) Vice-Chairman of the Supervisory Board of
Bankgesellschaft Berlin (Polska) S.A.,
Warsaw
LHI Leasing GmbH, Munich
Member of the Supervisory Board of
AKA Ausfuhrkredit-Gesellschaft mbH,
Frankfurt/ Main
BVG Berliner Verkehrsbetriebe – Anstalt
des öffentlichen Rechts –, Berlin
Member of the Administrative Board of
Bankgesellschaft Berlin International
S.A., Luxembourg
Chairman of the Advisory Council of
Knipping Holding GmbH,
Gummersbach
Member of the Advisory Council of
Köppern Vermögensverwaltung GmbH,
Hattingen
Maschinenfabrik Köppern
GmbH & Co. KG, Hattingen
NOTES AND EXPLANATORY NOTES 179

List pursuant to section 340a subsection 4 number 1 of the German Commercial Code as at
the balance sheet date December 31, 2001
Appendix 4 to the Notes
Mandates occupied by Members of Staff in statutory Supervisory Boards
Dr. Matthias Bergmann
Member of the Supervisory Board of
Bankgesellschaft Berlin (Polska), S.A.,
Warsaw
Dr. Matthias von Bismarck-Osten
Member of the Supervisory Board of
Bankgesellschaft Berlin (Polska), S.A.,
Warsaw
Arnold Butzer
Member of the Supervisory Board of
IBAG Immobilien und Beteiligungen
Aktiengesellschaft, Berlin
Dariush Ghassemi-Moghadam
Member of the Supervisory Board of
Berlin-Hannoversche
Hypothekenbank AG, Berlin/Hanover
Member of the Supervisory Board of
IBAG Immobilien und Beteiligungen
Aktiengesellschaft, Berlin
Dr. Bertin Pietsch
Member of the Supervisory Board of
H5B5 Media AG
Wolfgang Radszuweit
Member of the Supervisory Board of
Vectron Systems AG, Münster
Member of the Supervisory Board of
Proalpha Software AG, Kaiserslautern
Gerhard Roller
Member of the Supervisory Board of
Bankgesellschaft Berlin (Polska), S.A.,
Warsaw
Heinz-Günter Scheer
Member of the Supervisory Board of
Allgemeine Privatkundenbank
Aktiengesellschaft, Hanover
Hadi Saidi
Member of the Board of Directors
BGB Finance (Ireland) plc., Dublin
180
NOTES AND EXPLANATORY NOTES

Audit certificates
1. Bankgesellschaft Berlin AG
We audited the annual financial statements, including the accounting records, and
the Management Report of Bankgesellschaft Berlin Aktiengesellschaft, Berlin, for
the financial year from January 1, 2001 to December 31, 2001. The accounting and
the preparation of the annual financial statements and the Management Report in
accordance with German Commercial Code regulations and the supplementary
statute rules is the responsibility of the legal representatives of the Company. Our
responsibility is to express an opinion on the annual financial statements, including
the accounting records and the Management Report on the basis 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 promulgated by the Institut der
Wirtschaftsprüfer (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 which could have a significant impact on the picture of the net
asset, financial position and results of operation presented by the annual financial
statements and the Management Report in line with the principles of proper and
orderly accounting. 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 legal representatives, and critically
examining the overall picture presented in the annual financial statements and
the Management Report. We believe that our audit provides a reasonable basis for
our assessment.
Our audit did not result in any objections or exceptions.
AUDIT CERTIFICATES 181

182
It is 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
Company’s net asset, financial position and results of operation. The Management
Report presents an accurate overall picture of the Company’s situation and accurately
describes the risks to future development.
As required, we refer to the fact that the reconstruction measures by the State of
Berlin taken into account in these annual financial statements (capital increase
from August 29, 2001; protection of the Bankgesellschaft Berlin AG Group from
the substantial risks from Real Estate Services pursuant to the detailed agreement
dated April 16, 2002) will only continue if they are approved as restructuring aid
by the European Commission, and that the continued existence of the company is
endangered if approval is not granted as applied for (see section “5.6.6 Legal risks”
in the Management Report).
Berlin, April 26, 2001
PwC Deutsche Revision
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
(Eckes) (ppa. Palm)
Auditor Auditor
AUDIT CERTIFICATES

2. Bankgesellschaft Berlin Group
We audited the consolidated financial statements and the consolidated Management
Report drawn up by Bankgesellschaft Berlin Aktiengesellschaft, Berlin, for
the financial year from January 1, to December 31, 2001. The preparation of the
consolidated financial statements and the consolidated Management Report in
accordance with German Commercial Code regulations is the responsibility of the
legal representatives of the Company. Our responsibility is to express an opinion
on the consolidated financial statements and the consolidated Management
Report on the basis 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 promulgated by the Institut
der Wirtschaftsprüfer (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 which could have a significant impact on the picture of the
net asset, financial position and results of operation presented by the consolidated
financial statements and the consolidated Management Report in line with the
principles of proper and orderly accounting. 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 consolidated Management Report. The audit involves assessing the
annual financial statements of the companies included in the consolidated financial
statements, the delimitation of the scope of consolidation, the accounting
methods and consolidation principles applied and significant estimates made by
the legal representatives, and critically examining the overall picture presented by
the consolidated financial statements and the consolidated Management Report.
We believe that our audit provides a reasonable basis for our assessment.
Our audit did not result in any objections or exceptions.
AUDIT CERTIFICATES 183

184
It is 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 Company’s net asset, financial position and results of operations. The consolidated
Management Report presents an accurate overall picture of the Group’s
situation and accurately describes the risks to future development.
As required, we refer to the fact that the reconstruction measures by the State of
Berlin taken into account in these consolidated financial statements (capital
increase from August 29, 2001; protection of the Bankgesellschaft Berlin AG
Group from the substantial risks from Real Estate Services through the detailed
agreement dated April 16, 2002) will only continue if they are approved as restructuring
aid by the European Commission, and that the continued existence of the
parent company and major subsidiaries is endangered if approval is not granted
as applied for (see section “5.6.6 Legal risks” in the Management Report).
Berlin, April 26, 2001
PwC Deutsche Revision
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
(Eckes) (ppa. Palm)
Auditor Auditor
AUDIT CERTIFICATES

Report of the Supervisory Board
During the 2001 financial year, the Supervisory Board kept itself well informed on the current situation at the
bank and on fundamentally important matters relating to the Group at fourteen plenary sessions, some of
which were also attended by representatives of the Federal Banking Supervisory Office, and by means of written
reports.
The Board reviewed the situation and business developments at Bankgesellschaft Berlin AG and the Bankgesellschaft
Group comprehensively and with appropriate urgency and satisfied itself that business was being
managed properly, in as far as no special audit was granted.
In this context, the Board of Management informed the Supervisory Board about intended business policy and
corporate planning, in particular financial, investment and personnel planning.
Furthermore, individual issues of material importance were discussed in regular work consultations between
the Chairman of the Supervisory Board and the Chairman of the Board of Management.
In the 2001 financial year, as a whole, the Supervisory Board dealt in detail with the current risk situation and
the results of the special audits, and the additional risk requirements arising from these and the resulting measures.
As was to be assumed from the financial report of the previous year, the Supervisory Board dealt intensively
with the new discoveries and necessary conclusions with regard to the sale of IBG. In July 2001, the transaction
was reprocessed with the result that Bankgesellschaft Berlin AG acquired the former IBG/IBAG companies
back under the umbrella of IBAG.
The special audit initiated by the Supervisory Board with regard to the conclusion of the transaction and concerning
the audit of possible obligating negotiations for damages in connection with the IBG/IBAG transaction
resulted in all necessary permits being granted and adequate decisions were taken by the committees responsible.
As a result of the prompted special audit in this context at Berlin Hyp concerning the adequacy of the processing
of real estate business, appropriate concepts were drafted for Berlin Hyp and suitable precautions taken.
REPORT OF THE SUPERVISORY BOARD 185

In connection with the discoveries already presented and based on the results expected from the special audits,
the Supervisory Board appointed a renowned law firm in June 2001 to investigate, follow up and subsequently
implement rights of recourse against officers.
After the Senate of Berlin made a binding announcement prior to the Annual General Meeting to the Federal
Banking Supervisory Office to provide new capital of a sufficient amount, it was agreed at the Annual General
Meeting of August 29, 2001 to increase equity capital to €2 billion.
In addition, fundamental decisions about continuing the strategic realignment of the Group and implementing
further measures for reducing costs are at the centre of the Supervisory Board’s work.
After the interim status for the restructuring concept, the development of which will be continued in the next
few months, was presented for the Group as early as last summer, the Supervisory Board agreed a far-reaching
supplement of the capital reorganisation and restructuring concept in November. An essential component
of this restructuring concept is the complete indemnification of the bank from real estate business risks
(IBG/IBAG) by agreements conforming to EU legislation to be made with the State of Berlin.
A further focus is the subsequent redimensioning of business activity and alignment of banking capacity to meet
the abilities and the infrastructure of a regional bank. Part of this is the concentration on two trademarks in retail
business with reviews of branch locations and the focus on some profitable product segments in the wholesale
and real estate businesses, from which a considerable reduction of service and staff divisions results, with the
aim of generating sustainable, stable income in defined strategic business fields.
In December, two basic agreements on restructuring were introduced in connection with this. After the Senate
of Berlin confirmed in principle the ruling by the State of Berlin on protecting the Bankgesellschaft Group
from risks in the real estate business of the Group on December 17, 2001, the Supervisory Board unanimously
approved the imminent conclusion of the basic agreement. In addition, the Board of Management informed
the Supervisory Board in detail about the conclusion of the framework agreement for realising personnel management
measures in the context of the restructuring concept and clarified the important points.
Before the restructuring concept was presented to the EU Commission in Brussels at the end of January 2002,
the Supervisory Board was informed about the current situation of the restructuring project including the EU
notification.
186
REPORT OF THE SUPERVISORY BOARD

Further, at the request of the Supervisory Board, the Board of Management reported on the new strategies for
Capital Markets developed in the first quarter of this year, which were agreed and noted by the Supervisory
Board.
On April 9, 2002, the parliament in Berlin approved the detailed agreement on the protection against the major
risks associated with the real estate business. As part of the restructuring programme of Bankgesellschaft
Berlin, risk protection is subject to the approval of the EU Commission in the context of the notification as
restructuring aid.
With the adoption of the protection agreement, the prerequisite for the signature of the agreement by the bank
with employee representatives in the Bankgesellschaft Berlin Group for a sustainable reduction in personnel
costs was fulfilled. The agreement was adopted on April 10, 2002.
The Supervisory Board also dealt extensively with segment reporting in the Group in the past financial year. It
also kept itself regularly informed about issues of risk controlling and the risk situation at Bankgesellschaft.
In the year under review, there was increased cooperation between the Supervisory Board committees created
to take on special control activities and to generally support the work of the plenary sessions:
The Working Committee met 20 times over the past year to prepare adoptions of resolutions in the plenary session,
and in particular to conduct intensive pre-consultation for the annual accounts. It also dealt in depth with
particular sets of problems and strategic issues as well as regulating management matters.
In a total of 13 meetings, the Credit Committee advised the Board of Management about the principles of
corporate policy in the lending business of the Group from the point of view of risks associated with credit
worthiness. 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.
Some resolutions were passed by circulating them amongst members. The Credit Committee principally
held detailed discussions relating to loan and market risks as well as the structure of the Group loan portfolio
and risk management of the Group. The credit committee thereby intensively followed the further development
of the risk control instruments.
As in previous years, there was no need to convene meetings of the existing “Directive Committee” (Committee
pursuant to section 11 subsection 3 of the agreement concluded between Bankgesellschaft Berlin and Landesbank
Berlin on a dormant company and on the establishment of a unified system of management) or meetings
of the “Mediation Committee pursuant to section 27 subsection 3 of the Codetermination Act of 1976” during
the year under review.
REPORT OF THE SUPERVISORY BOARD 187

PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Berlin, audited the annual financial
statements for the 2001 financial year drawn up by the Board of Management as well as the management
report and the consolidated financial statements and awarded them an unqualified audit certificate. The
annual financial statements, the management report and the audit report were submitted to the Supervisory
Board for examination.
The auditors also took part in Working Committee sessions in 2002, in which documentation relating to the
annual financial statements and the results of the audit were examined and discussed in detail, and the balance
sheet meeting of the Supervisory Board. In both of these bodies, the auditors reported on the main results
of their audit and answered questions from members of the Supervisory Board. The consolidated financial
statements, the Group management report and the report by the consolidated financial statements auditor
were also available to the Supervisory Board for inspection.
Against the background of increased requirements by the law on monitoring and transparency in company
divisions (KonTraG) with regard to the monitoring obligations of the Supervisory Board, but also due to the
special situation of Bankgesellschaft Berlin AG after having submitted the 2000 annual financial statements,
the Working Committee, as in the previous year, also consulted an external balance sheet and controlling
expert for the audit of the annual financial statements of the AG and the Group for support.
When auditing the annual financial statements, the Supervisory Board examined in particular the suitability
of the risk management system of the bank and Group, the lending business, trading transactions and the
observance of the Minimum Requirements for Trading. It also dealt with the risk situation and protection
against risks in the real estate business and the activities of the Group audit department, about which it was
advised in detail by the auditors.
The annual financial statements prepared by the Board of Management as at December 31, 2001 were
endorsed in the Supervisory Board session on May 17, 2002 and are thus approved pursuant to section 172 subsection
1 clause 1 German Stock Corporation Act.
The Supervisory Board examined the Board of Management’s report on relations with affiliated companies for
the 2001 financial year. Neither this examination nor the audit performed by the auditors gave rise to any objections.
188 REPORT OF THE SUPERVISORY BOARD

The auditors’ report on this 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 listed in the report was not unreasonably high,
3. there are no circumstances regarding the measures listed in the report that would suggest an essentially
different assessment from that made by the Board of Management.”
The Supervisory Board does not raise any objections to the statement made by the Board of Management at the
end of the report on relations with affiliated companies for the 2001 financial year.
As was partly to be assumed from the previous report by the Supervisory Board, there were major changes to
personnel in the 2001 financial year:
The former Senator for finance, Mr. Peter Kurth, who has been part of the Supervisory Board of Bankgesellschaft
since February 17, 2000, by representing the State of Berlin, resigned from his seat on the Supervisory
Board with immediate effect with a letter dated June 16, 2001, having concluded his office. In his place,
Ms. Christiane Krajewski was appointed to the Supervisory Board of the bank by the State of Berlin as his
successor on June 19, 2001 pursuant to section 8 of the memorandum and articles of association of Bankgesellschaft.
Mr. Peter Strieder, Senator for Urban Development, was appointed by the State of Berlin in place of the former
Senator for Economics, Mr. Wolfgang Branoner, who left the Supervisory Board of the bank on June 20, 2001
having concluded his office. Mr. Strieder has been on the Supervisory Board since June 22, 2001. Mr. Branoner
is also thanked for the two and a half years of cooperation in the interest of the future of the Group.
Having assumed other responsibilities, Mr. Ernst-Otto Kock resigned from his position as Staff Representative
on the Supervisory Board of the bank on March 31, 2001 after having been a member for almost seven years.
Mr. Kock is thanked for his intensive support on the Supervisory Board and his commitment in the interests of
the staff within the Group. Since being officially appointed on April 17, 2001, Mr. Frank Wolf, already elected
as substitute member in May 1999, has been a member of the Supervisory Board.
REPORT OF THE SUPERVISORY BOARD 189

In agreement with the major shareholder, Dr. Dieter Schadt and Dr. E.h. Heinz Dürr resigned from their positions
on June 27, 2001 and July 1, 2001 respectively. A resolution of the local court on July 4, 2001 appointed
Mr. Ernst-Otto Sandvoß, former Chairman of the Board of Management at DGZ•Deka Bank, and Mr. Thomas
Dobkowitz, Management Consultant, as members of the Supervisory Board.
On October 31, 2001, Dr. Wolfgang Peiner, who had been a member of the committee since July 22, 1994, concluded
his office, since he left the Parion Group.
Prof. Dr. Dieter Feddersen, who was elected to the Supervisory Board at the Annual General Meeting of May
26, 1999, and as Chairman of the Supervisory Board at the ensuing formative Supervisory Board meeting,
resigned from his office on December 31, 2001. Mr. Ernst-Otto Sandvoß was elected as his successor as Chairman
of the Supervisory Board of Bankgesellschaft Berlin AG by the Supervisory Board on February 14, 2002.
Mr. Erwin Staudt, who has also been a member of the Supervisory Board since May 26, 1999, concluded his
office on January 10, 2002.
Ms. Christiane Krajewski, Senator for Finance until January 17, 2002, left the Supervisory Board of Bankgesellschaft
on January 23, 2002. On February 4, 2002, her successor as Senator for Finance, Dr. Thilo Sarrazin,
was appointed to the Supervisory Board by the State of Berlin.
A resolution of the Charlottenburg local court, with effect from March 28, 2002, appointed Dr. Michael Endres,
Dr. Thomas Guth and Mr. Bernd Wrede as members of the Supervisory Board.
The Supervisory Board appointed Mr. Serge Demolière and Mr. Hans-Jörg Vetter as ordinary members of the
Board of Management of Bankgesellschaft with effect from November 1, 2001. Mr. Vetter, who was appointed
as Deputy Chairman of the Board of Management, is was made responsible for the Real Estate and Real Estate
Services department. As Mr. Leukers’ successor, Mr. Demolière has assumed responsibility for the Capital
Markets division.
Following the departure of Dr. Thomas Kurze, Dr. Lothar Wackerbeck and the previous Chairman of the Board
of Management, Dr. Wolfgang Rupf from the Board of Management of Bankgesellschaft on November 30, 2001,
the Supervisory Board appointed Mr. Vetter as the new Chairman of the Board of Management with effect from
December 1, 2001.
190 REPORT OF THE SUPERVISORY BOARD

On December 31, 2001, Mr. Hans Leukers retired from the Board of Management of Bankgesellschaft Berlin
AG, after many years’ work. Since 1994 he led the Capital Markets in Berlin and London within the framework
of his departmental responsibility.
The Supervisory Board wishes to thank the outgoing members of the Supervisory Board, the Board of Management
and all employees of the Group for their active support and for their high level of commitment and
involvement in mastering the particular challenges of the past year in difficult times and in making a considerable
contribution to the future of the Bankgesellschaft Group.
Berlin, May 2002
The Supervisory Board
Ernst-Otto Sandvoß
Chairman
REPORT OF THE SUPERVISORY BOARD 191

Corporate Governance Structures of Bankgesellschaft Berlin Aktiengesellschaft
Supervisory Board
Ernst-Otto Sandvoß Former Chairman of the
Chairman since February 14, 2002 Board of Management
(Member from July 4, 2002) of DGZ•DekaBank
Helmut Tesch *) Chairman of the Central Personnel
Vice Chairman Committee and the Personnel Committee
of Landesbank Berlin – Girozentrale –
Dr. h.c. Manfred Bodin Chairman of the Board of Management
of Norddeutsche Landesbank Girozentrale
Dagmar Brose *) Member of the Works Council
at Bankgesellschaft Berlin AG
Thomas Dobkowitz Management consultant
(since July 4, 2001)
Dr. Michael Endres Former member of the Board of Management
(since March 28, 2002) of Deutsche Bank AG
Hartmut Friedrich *) Deputy Regional Manager of ver.di
Berlin-Brandenburg region
Dr. Thomas Guth Member of the Board of Management
(since March 28, 2002) of Gesellschaft für Industriebeteiligungen
Dr. Schmidt AG & Co.
Carmen Hümpel *) Chairwoman of the Central Works Council of
ALLBANK Allgemeine Privatkundenbank AG
Dr. Klaus Murmann Chairman of Sauer-Danfoss Inc.
Bernd Reinhard *) Chairman of the Works Council
of Berliner Bank, a branch of
Bankgesellschaft Berlin AG
Andreas Rohde *) In-house craftsman at
Bankgesellschaft Berlin AG
Dr. Thilo Sarrazin Finance Senator
(since February 4, 2002)
Hans Christian Seidel *) Bank Manager at
Landesbank Berlin – Girozentrale –
192 CORPORATE GOVERNANCE STRUCTURES

Dr. Heinz-Gerd Stein Member of the Board of Management
of ThyssenKrupp AG
Peter Strieder Senator for Urban Development
(since June 22, 001)
Joachim Tonndorf *) Head of department, Financial Services
of ver.di Berlin-Brandenburg region
Frank Wolf *) Financial services secretary
(since April 17, 2001) of ver.di Berlin-Brandenburg region
Bernd Wrede Former Chairman of the
(since March 28, 2002) Board of Management
of Hapag-Lloyd AG
Bärbel Wulff *) Vice-Chairwoman of the Central Personnel
Committee and the Personnel Committee
of Landesbank Berlin – Girozentrale
*) Staff representatives
CORPORATE GOVERNANCE STRUCTURES 193

Board of
Management
194
Hans-Jörg Vetter Real Estate and Real Estate Services
Chairman Group Development and Central Office
Group Personnel
Law within the Group
Group Audits
Corporate Communications
Serge Demolière Capital Markets
Dr. Johannes Evers Retail Banking
Corporate Banking
Corporate/International Banking
Norbert Pawlowski Asset/Liability Management
Finances
Controlling
Risk and Performance
for Capital Markets
Credit Risk and Portfolio Management
Group Risk Evidence
Compliance
Hubert Piel Information Technology Organisation
Operations
CORPORATE GOVERNANCE STRUCTURES

Group Banks and selected Group subsidiaries
Banks
Allgemeine Privatkundenbank Board of Management:
Aktiengesellschaft Emanuel H. Brinkhaus
Buchholzer Strasse 98 (Speaker)
D-30655 Hanover Dr. Matthias Bergmann
Tel.: (+49 511) 646 50 (since April 9, 2002)
Fax: (+49 511) 646 52 33 Jens-Peter Knoblauch
Internet: www.allbank.de (until April 9, 2002)
Bankgesellschaft Berlin Management:
International S.A. Horst-Dieter Hochstetter
30, Boulevard Royal (Speaker and Administrateur-Délégué)
L-2449 Luxembourg Uwe Jungerwirth
Luxembourg
Tel.: (+352) 477 81
Fax: (+352) 477 829 99
Internet: www.bankgesellschaft.lu
BANKGESELLSCHAFT BERLIN Management:
INVESTMENT GmbH Günter Laubner
Kurfürstendamm 201 Hans-Werner Wilms
D-10719 Berlin
Tel.: (+49 30) 245 645 00
Fax: (+49 30) 245 646 00
Internet: www.bb-invest.de
Bankgesellschaft Berlin Board of Directors:
(Ireland) plc David Allen
No. 5 George’s Dock Serge Demolière
I.F.S.C. Dublin 1 Heinz D. Gottschalk
Ireland Hans Leukers
Tel.: (+353 1) 819 44 00 (until March 11, 2002)
Fax: (+353 1) 819 44 99 Norbert Pawlowski
Gerald Scanlan
Dr. Noel Whelan
GROUP BANKS AND SELECTED GROUP SUBSIDIARIES 195

Bankgesellschaft Berlin (UK) plc Board of Directors:
1 Crown Court, Cheapside Serge Demolière
GB-London EC2V 6LR Hans Leukers
Great Britain (Chairman, until March 12, 2002)
Tel.: (+44 171) 572 62 00 Frank-Michael Boenke
Fax: (+44 171) 572 62 99 (Joint Managing Director)
Hans Keller
Norbert Pawlowski
Gerhard Richter
(Joint Managing Director)
Carlos Santistivan
Dr. Lothar Wackerbeck
(until January 1, 2002)
Malcolm Winston
Bankgesellschaft Berlin Board of Management:
(Polska) S.A. Tomasz Taraba
Al. Jana Pawla II Nr. 15 (Chairman, until April 8, 2002)
PL-00-828 Warsaw Michal Jonczynski
Poland Andrzej Klesyk
Tel.: (+48 22) 697 72 00
Fax: (+48 22) 697 72 05
Jaroslaw Konieczka
Berlin-Hannoversche Board of Management:
Hypothekenbank AG Jan Bettink
– Berlin Hyp – (Speaker, since April 1, 2002)
Budapester Strasse 1 Horst Behren
D-10787 Berlin (since March 1, 2002)
Tel.: (+49 30) 259 990 Heinz Dieter Gottschalk
Fax: (+49 30)259 991 31 Dr. Dirk Hoffmann
Landschaftstrasse 8
D-30159 Hanover
Tel.: (+49 511) 301 10
Fax: (+49 511) 301 13 84
Internet: www.Berlin Hyp.de
196 GROUP BANKS AND SELECTED GROUP SUBSIDIARIES

Financial service
providers
Landesbank Berlin – Girozentrale – Board of Management:
Bundesallee 171 Hans-Jörg Vetter
D-10715 Berlin (Chairman, since February 28, 2002)
Tel.: (+49 30) 869 801 Dr. Johannes Evers
Fax: (+49 30) 869 830 74 Hans Jürgen Kulartz
Internet: www.berliner-sparkasse.de Bernd-Peter Morgenroth
(until March 19, 2002)
Norbert Pawlowski
Hubert Piel
Weberbank Privatbankiers KGaA Personally liable partners:
Hohenzollerndamm 134 Dr. Christian Grün
D-14199 Berlin (Speaker)
Tel.: (+49 30) 897 980 Dr. Andreas Bödecker
Fax: (+49 30) 897 980 0 Cornelius Koch
Internet: www.weberbank.de Michael Graf Strasoldo
Zivnostenská banka a.s. Board of Management:
Na Prikope 20 Josef Pitra
CZ-11380 Prague 1 (Vice-Chairman)
Czech Republic Ales Barabas
Tel.: (+42 224) 121 111 Thomas Bürkle
Fax: (+42 224) 125 555
Internet: www.ziba.cz
Tomas Zraly
BB-ASSET MANAGEMENT Managing Directors:
Vermögensverwaltung GmbH Hans-Werner Wilms
Kurfürstendamm 201
D-10719 Berlin
Tel.: (+49 30) 245 645 00
Fax: (+49 30) 245 645 88
GROUP BANKS AND SELECTED GROUP SUBSIDIARIES 197

Finance companies
198
Berlin Capital Fund GmbH Management:
Hauptstrasse 65 Markus Müller von Blumencron
D-12159 Berlin Wolfgang Radszuweit
Tel.: (+49 30) 859 54 30
Fax: (+49 30) 859 543 20
Internet: www.berlin-capitalfund.de
BGB Finance (Ireland) plc Board of Directors:
No. 5 George’s Dock David Allen
I.F.S.C. Dublin 1 Hans Leukers
Ireland Martin Müller
Tel.: (+353 1) 819 44 00 Hadi Saidi
Fax: (+353 1) 819 44 99 Carlos Santistevan
LfA Leasing für Automobile GmbH Management:
Buchholzer Strasse 98 Wolfgang Luda
D-30655 Hanover Jan Welsch
Tel.: (+49 511) 646 55 25
Fax: (+49 511) 646 54 97
LHI Leasing GmbH Management:
Bahnhofplatz 1 Ralf Kirberg
D-80355 Munich Helmut Philipp
Tel.: (+49 89) 512 00
Fax: (+49 89) 512 020 00
Internet: www.LHI.de
Oliver Porr
GROUP BANKS AND SELECTED GROUP SUBSIDIARIES

Further
companies
BankenService GmbH Management:
Unternehmensgruppe Stefan Haemmerling
Landesbank Berlin
(formerly BANKENSERVICE
GmbH Ein Unternehmen der
Bankgesellschaft Berlin)
Brunnenstrasse 111
D-13355 Berlin
Tel.: (+49 30) 245 538 82
Fax: (+49 30) 245 546 70
Bauprojekt- und Facility- Management:
management GmbH der Joachim Antczack
Unternehmensgruppe (since January 29, 2002)
Bankgesellschaft Berlin Stefan Haemmerling
Brunnenstrasse 111 (since January 29, 2002)
D-13355 Berlin Dr. Heinz Neubauer
Tel.: (+49 30) 245 514 00
Fax: (+49 30) 245 514 02
(since January 25, 2002)
BerlinOnline Stadtportal Management:
GmbH & Co. KG As Managing Director of BerlinOnline
Karl-Liebknecht-Strasse 29 Stadtportalbeteiligungsgesellschaft mbH:
D-10178 Berlin Dr. Jörg Klein
Tel.: (+49 30) 232 755 30
Fax: (+49 30) 232 755 96
Internet: www.berlinonline.de
Oliver Prothmann
BG-SYS Bankgesellschaft Berlin Executive Managers holding
AG & Co. Systementwicklungsge- a general power of attorney:
sellschaft beschränkt haftende oHG Stefan Trägler
Brunnenstrasse 111 Dr. Peter-Michael Weber
D-13355 Berlin
Tel.: (+49 30) 245 569 05
Fax: (+49 30) 245 566 11
GROUP BANKS AND SELECTED GROUP SUBSIDIARIES 199

200
BILDUNGSAKADEMIE DER Management:
BANKGESELLSCHAFT Gesellschaft Horst Eimer
mit beschränkter Haftung
Wilmersdorfer Strasse 138–140
D-10585 Berlin
Tel.: (+49 30) 245 584 00
Fax: (+49 30) 245 584 09
Internet: www.bildungsakademie.de
IBAG Immobilien- und Management:
Beteiligungen AG Reinhard Gennies
Kurfürstendamm 207/208 (Chairman)
D-10719 Berlin Klaus Hansen
Tel.: (+49 30) 224 99-0 Wolfgang Pritzsche
Fax: (+49 30) 224 99-645 Friedhelm Schaperjahn
Internet: www.ibag-berlin.com (until January 28, 2002)
Immobilien- und Baumanagement Management:
der Bankgesellschaft Berlin GmbH Dr. Matthias von Bismarck-Osten
Berliner Strasse 44 Wilhelm Schmalfuß
D-10713 Berlin (until January 25, 2002)
Tel.: (+49 30) 864 72 00
Fax: (+49 30) 864 72 02
Internet: www.ibg-berlin.de
Versicherungsservice GmbH Management:
Unternehmensgruppe Dirk Bachnick
Bankgesellschaft Berlin Detlef Bienkowski
Wexstrasse 1
D-10825 Berlin
Tel.: (+49 30) 310 932 75
Fax: (+49 30) 310 933 88
GROUP BANKS AND SELECTED GROUP SUBSIDIARIES

89.7%
atypical dormant participation
Bankgesellschaft Berlin
International S.A.,
Luxembourg
99.8%
Allgemeine Privatkundenbank
AG, Hanover
20.0%
Bankgesellschaft Berlin
(Ireland) plc, Dublin
80.0%
LfA Leasing für Automobile
GmbH, Hanover
Banks and Financial Services Real Estate Companies Other Services
Bankgesellschaft
25%
Berlin
(UK) plc, London
50.0%
BB-ASSET MANAGEMENT
Vermögensverwaltung
GmbH
25.0%
Investitionsbank des
Landes Brandenburg
AöR, Potsdam
Bankgesellschaft Berlin
(Polska) S.A., Warsaw
25.0%
Bankgesellschaft
Berlin INVESTMENT
GmbH
25.0%
95.0%
Weberbank
Privatbankiers KGaA
85.2%
Zivnostenska banka a.s.,
Prague
40.0%
Berlin Capital Fund GmbH
60.0%
66.7%
BGB Finance (Ireland) plc,
Dublin
33.3%
25.0%
LHI Leasing GmbH,
Munich
25.0%
Berlin Hyp
Immobilien GmbH
Grundstücksgesellschaft
„Berlin“ mbH
Bauprojekt- und Facilitymanagement
GmbH
der Unternehmensgruppe
Bankgesellschaft Berlin
IDLG
Immobiliendienstleistungen
GmbH
Berlin Hyp
Grundstücksverwaltung
GbR
IBAG Immobilien und
Beteiligungen AG
BB-Immobilien-Service
GmbH
LBB Grundstücks-
Gesellschaft mbH der
Landesbank Berlin
– Girozentrale –
40.0%
30.0%
Immobilien- und Baumanagement
der
Bankgesellschaft Berlin
GmbH
30.0%
LBB Kommunalbaugesellschaft
mbH,
Potsdam
Bildungsakademie der
Bankgesellschaft GmbH
10.0%
dvg Hannover Datenverarbeitungsgesellschaft
mbH, Hanover
10.0%
BankenService GmbH
Unternehmensgruppe
Landesbank Berlin
BerlinOnline Stadtportal
GmbH & Co. KG
50.0%
BG-SYS Bankges. Berlin
AG&Co. Systementwicklungsgesellschaft
beschränkt haftende oHG
90.0%
47.6%
Versicherungsservice
GmbH Unternehmensgruppe
Bankgesellschaft
Berlin
52.4%
This chart shows the most important holdings of Bankgesellschaft Berlin. as of May 2002
Unless otherwise stated, holdings are 100% and company head offices are in Berlin.

Imprint
Published by
Bankgesellschaft Berlin AG
Investor Relations
Alexanderplatz 2
D-10178 Berlin
Designed and produced by
Charles Barker GmbH,
Frankfurt am Main
Photos
Sabine Wenzel, Berlin
Photo design
Adjouri, Berlin
Printed by
Druckerei Hachenburg GmbH, Hachenburg

Bankgesellschaft Berlin AG
Alexanderplatz 2
D-10178 Berlin
P.O. Box 110801
D-10838 Berlin
Telephone: (+49 30) 245 500
Telefax: (+49 30) 245 509
Shareholders please contact:
Investor Relations
Telephone: (+49 30) 245 663 89
Telefax: (+49 30) 245 663 93
Internet:
www.bankgesellschaft.de
E-mail: IR@bankgesellschaft.de
V 140 1229