Annual Report 2001 - Landesbank Berlin

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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
Page 1 and 2: Annual Report 2001
Page 3: Bankgesellschaft Berlin Group at a
Page 7 and 8: • We intend to reorientate the Gr
Page 9 and 10: Corporate profile En route to becom
Page 11 and 12: Our share is still listed in offici
Page 13 and 14: curbed economic growth by approxima
Page 15 and 16: Eisenbrücke, Berlin-Friedrichshain
Page 17 and 18: Real Total client- Interest Corpora
Page 19 and 20: Retail Banking On the basis of high
Page 21 and 22: Deposit business Lending business S
Page 23 and 24: Outlook The next few years will lar
Page 25 and 26: Risks in Regional Corporate Banking
Page 27 and 28: Public Sector The market share of t
Page 29 and 30: Corporate/International Banking The
Page 31 and 32: Capital Markets In spite of the unf
Page 33 and 34: Outlook folio transactions with thi
Page 35 and 36: Clear decision-making structures Di
Page 37 and 38: Interest Rate Management Tegeler-Ha
Page 39 and 40: Corporate Centre Gertraudenbrücke,
Page 41 and 42: Real Estate Services IBV’s fund b
Page 43 and 44: LPFV Finanzbeteiligungs- und Verwal
Page 45 and 46: Government Assistance Programmes In
Page 47 and 48: In addition to the implementation o
Page 49 and 50: Liebknechtbrücke, Berlin-Mitte We
Page 51 and 52: Business with regional private and
Page 53 and 54: are to be reimbursed by the State a
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Berlin AG and individual Bankgesell
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The following table provides an ove
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Earnings from current operations fe
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The Euro II project for the euro ca
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Profit and loss account Extraordina
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The lending volume breaks down as f
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Liabilities and shareholders’ equ
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4. Bankgesellschaft Berlin AG The b
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5. Risk report Qualified risk manag
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• Other risks - Business policy a
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In the year under review, a prelimi
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Compared with the previous year, th
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In Corporate and International Bank
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5.2.4 Participation risk All Group
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maturity criteria. Furthermore, ana
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Furthermore, the New Product Commit
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Furthermore, the existing cooperati
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principle and the detailed agreemen
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5.6.4 Risks connected with the real
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• Establishing autonomous adminis
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LPFV is also exempted from the pend
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On the basis of the decision by the
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Landesbank Berlin/Investitionsbank
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The foundations have been laid for
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Liabilities See explanatory Previou
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Income See explanatory Previous not
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Page 111 and 112:
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Income See explanatory Previous not
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The following companies of the IBAG
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A special item subject to partial r
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Until now, CidS! Computer in die Sc
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companies of the IBAG Group/IBG Gro
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Explanatory notes to the balance sh
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(6) Development of fixed assets (6.
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(7) Trust transactions in € milli
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Notes on individual balance sheet i
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(15) Other liabilities in € milli
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(19) Subordinated liabilities (19.1
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The Annual General Meeting of Augus
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Notes on individual profit and loss
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The risk provisioning in the lendin
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(26) Geographic distribution of ear
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Extraordinary expenses and income i
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Cash flow statement (32) Informatio
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Cash flow statement of Bankgesellsc
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The Group’s capital market busine
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Real Total client- Interest Corpora
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As a result of the participation in
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(38) Information on derivative tran
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(38.2) Group Derivative transaction
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(40) Introduction of euro notes and
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Company, registered office Letter %
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Investment holdings of the IBAG sub
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Company Registered Capital Equity R
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Company Dominant company Profit bef
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Dr.-Ing. E.h. Heinz Dürr (until Ju
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Changes made since the balance shee
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) Chairman of the Supervisory Board
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Audit certificates 1. Bankgesellsch
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2. Bankgesellschaft Berlin Group We
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Report of the Supervisory Board Dur
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Further, at the request of the Supe
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The auditors’ report on this cont
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On December 31, 2001, Mr. Hans Leuk
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Dr. Heinz-Gerd Stein Member of the
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Group Banks and selected Group subs
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Financial service providers Landesb
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Further companies BankenService Gmb
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89.7% atypical dormant participatio
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Bankgesellschaft Berlin AG Alexande
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Annual Report 2001 - Landesbank Berlin

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