Landesbank Berlin Holding

Landesbank Berlin Holding
AnnuAl RepoRt 2007

Group key figures at a glance
Income statement
2007 2006 1) 2005 2) 2004
Net interest income s million 815 743 890 915
Allowance for losses on loans and advances s million – 53 118 192 255
Net commission income s million 297 368 322 308
Net income from hedge accounting s million 3 3 – 12 0
Net income from financial instruments recognised
at fair value through profit or loss 3) s million – 45 186 167 102
Net income from financial assets s million – 4 50 61 50
Net income from investments carried at equity s million 12 – 4 – 1 –
Other operating income s million 119 636 221 122
Administrative expenses s million 965 1,115 1,130 1,140
Operating result before restructuring s million 285 749 326 102
Restructuring expenditure and income (net) s million 6 35 – 50 – 27
Operating profit / earnings before taxes s million 291 784 276 75
Income tax expense s million 71 97 – 4 – 33
Consolidated net profit for the period / earnings
after taxes s million 220 687 280 108
Balance Sheet
Total assets s million 142,147 141,625 144,403 130,302
Shareholders’ equity including unappropriated surplus s million 2,831 2,624 1,901 1,957
Dormant participations (nom.) s million 700 700 1,100 1,100
Risk items in accordance with the German Banking Act s million 50,491 44,901 40,924 41,691
Key figures
Cost-income ratio % 80.6 56.3 68.6 76.2
Return on equity (before taxes) % 11.5 35.3 13.0 3.7
Overall capital ratio (German Banking Act) (reporting date) 4) % 15.0 10.6 11.6 11.1
Tier 1 ratio (German Banking Act) (reporting date) 4) % 11.8 7.2 8.1 7.5
Shares
Earnings per share s 0.20 0.67 0.28 0.09
Market capitalisation (reporting date) s million 6,366 7,851 2,906 1,963
Share price 1.1. – 31.12.
(closing price on Frankfurt Stock Exchange)
High s 8.18 7.96 3.51 2.08
Low s 5.25 3.11 2.02 1.80
Employee capacity (reporting date) number 5,965 5,960 7,336 7,782
1) Figures for the previous year have been adjusted
2) Comparative figures as per adjustment in Annual Report 2006
3) referred to as net trading income until 2005
4) from 2007 for the RVG Group, after approval of the financial statements

Ratings
Unguaranteed liabilities
Moody’s Fitch dbrs
Long-term rating A1 AA – A (high)
Short-term rating P-1 F-1+ R-1 (middle)
Outlook Stable Stable Stable
Financial strength
Financial strength D + C / D –
Guaranteed liabilities
Long-term rating Aa1 AAA –
Short-term rating P-1 F-1+ –
Outlook Stable Stable –
Pfandbriefs
Public-sector pfandbriefs Aaa AAA –
Mortgage bonds Aaa – –
Status: April 2008

Corporate Profile
Landesbank Berlin Holding AG is a listed financial holding headquartered in the German capital.
It is the parent company of Landesbank Berlin AG. Landesbank Berlin is universal bank in which all
the activities are bundled. The historic core of Landesbank Berlin AG is Berliner Sparkasse, founded
in 1818. From the day of its foundation until the present, Berliner Sparkasse has continuously fulfilled
a public-sector mandate in the service of the city. The Bank is the market leader in the Berlin banking
centre and stands for client orientation, fairness, security and modernity.
Our business model is built on four pillars: Retail Banking and Regional Corporate Banking, in which
we hold an excellent position as an innovative, customer-oriented bank; selected activities in Capital
Markets and Real Estate Financing, which is focused on the requirements of investors and residential
development companies throughout Germany.
Our Retail Banking clients have the comprehensive network of Berliner Sparkasse branches at their
disposal, which is rounded off by modern sales channels such as online banking, call centres and selfservice
facilities. Our banking products for pensions, asset accumulation, consumer and real-estate
financing as well as payment transactions and liquidity management enable us to provide our clients
with an extensive offering. We cater for the investment and finance requirements of high net-worth
retail banking clients in our Asset Management Centres.
In Regional Corporate Banking, Landesbank Berlin is one of the leading banking partners for small and
medium-sized companies. Expert and customised support are ensured by experienced advisers in
the Landesbank Berlin Regional Corporate Banking departments as well as the Berliner Bank Regional
Corporate Banking Centres. In addition, our business clients also have a state-of-the-art, efficient
sales channel in BusinessLine. The Regional Corporate Banking range of services is rounded off by
the Competence Centres for International Banking, Leasing & Factoring, Start-ups and Business
Succession as well as Electronic Banking.
The central task of Capital Markets is to intensify client trading and sales activities. The Bank is also
established as a renowned, expert provider of innovative capital market products for private investors
as well. We are recognised experts in structured products and funds in particular as well as finance
in Central and Eastern Europe.
The Real Estate Financing segment bundles Landesbank Berlin‘s competence individual financing
solutions for commercial real estate projects. With our two brands, Landesbank Berlin and Berlin Hyp,
we support institutional investors, residential development companies and developers in Germany
and selected international markets. In the market for commercial real estate finance, the Landesbank
Berlin Group is one of the largest providers in Germany.

Contents
Management 2
Letter to Shareholders 3
Report of the Supervisory Board of
Landesbank Berlin Holding AG 6
Corporate Governance Report 11
Executive Bodies of Landesbank Berlin Holding AG
and Landesbank Berlin AG 16
About the company 26
Strategic divisions 27
Retail Banking 28
Regional Corporate Banking 32
Capital Markets 36
Real Estate Financing 39
Employees 42
Share Price of Landesbank Berlin Holding AG 43
Group management report 45
Overview of the 2007 financial year 46
Development of business –
January to December 2007 58
Events after December 31, 2007 69
Final statement on the dependent company
report in accordance with Article 312 of the
German Stock Corporation Act 69
Risk report 70
Report on expected developments / Outlook 95
Annual Financial Statements for the Group 99
Income Statement 100
Balance Sheet 101
Statement of Changes in Equity 102
Consolidated Cash Flow Statement 103
Notes 105
Executive Bodies of Landesbank Berlin Holding AG 180
Responsibility Statement 182
Auditors’ report 183
Important Addresses 184

3 Letter to Shareholders
2
Management
6 Report of the Supervisory Board of Landesbank Berlin Holding AG
11 Corporate Governance Report
16
Executive Bodies of Landesbank Berlin Holding AG
and Landesbank Berlin AG

Letter to Shareholders
Dear Shareholders,
2007 was a very eventful year for the Landesbank Berlin Holding AG Group, which was dominated at times
by an intensive sales process from which the German savings banks emerged as the new principal shareholder.
The Bank’s Board of Management welcomes this result because it will give the Bank the stability it
needs while providing additional opportunities for business.
However, it was an extremely difficult year for the entire banking sector. Following a very successful first half
for our Bank, in which all divisions reported growth – in some cases, considerable growth – framework conditions
have deteriorated considerably in the wake of the financial crisis affecting the sector since August 2007.
Nevertheless, Landesbank Berlin succeeded in achieving its ambitious targets in the past financial year. With
a consolidated operating result before taxes of 0 291 million, the previous year’s result of 0 283 million (when
adjusted for non-recurring effects) was slightly exceeded.
Among other things, this success is attributable to further growth in the Bank’s sales and earnings power.
Berliner Sparkasse succeeded in expanding its position in the fiercely competitive Berlin market and in winning
market share in important segments. At the same time, we invested in issues that will be of importance in
future and have significantly strengthened the customer base through the majority holding in the direct banking
service “netbank” and through an acquisition in the sales financing sector at the beginning of the year.
We also made gratifying progress in real estate financing and significantly exceeded expectations. We are
delighted that we could benefit from our good reputation in the market and, in addition, from an improvement
in margins.
Management
3

4
Letter to Shareholders
We should also like to mention the pleasing growth in certificates and fund business by way of example. Sales
of certificates increased sharply and our investment company LBB-Invest reported appreciable growth in
publicly offered funds. In these important markets, our expertise and the quality of service offered in day-to-day
business with our customers is well-known.
Dear shareholders, our investment and lending decisions are always based on the strict guidelines and risk
tolerance of our business model. For you, it is important to know that the Bank has not invested in the subprime
segment of mortgage loans in the USA, which has suffered massive losses. As a result, we only have
indirect sub-prime components in a few investments amounting to only 0 40 million. We notified you to this
effect immediately the sub-prime crisis started in the middle of last year. The requisite write-downs have
already been taken into account in the consolidated result. At the same time, the massive crisis of confidence
in the financial sector and the associated revaluation of securities have, of course, also had an impact on
our annual financial statements. We shall also provide you with information about these important aspects
in this annual report.
The 2007 result shows that our balanced business model has proved itself even under difficult general conditions.
All four divisions, namely Retail Banking, Regional Corporate Banking, Capital Markets and Real Estate
Financing, have contributed to what was, by and large, a pleasing result on which we shall report in detail
in this annual report.

Ladies and gentlemen, last financial year we were able to pay a dividend for the first time after years of
restructuring. The Board of Management now considers that it has the scope needed to propose an increase
in the dividend to 10 cents per share to the Annual General Meeting.
Landesbank Berlin will continue to exploit its opportunities actively. We act prudently and in a risk-aware
manner in a challenging market environment, which will without doubt continue to be dominated by continuing
uncertainty on financial markets. At the same time, the Bank will work hard, with the help of its committed
staff, at expanding its market position, particularly in Retail and Regional Corporate Banking. The results that
we achieved in this extraordinary situation and the confidence that you place in us provide the motivation to
pursue the path we have adopted with determination.
With kind regards
The Board of Management
Hans-Jörg Vetter Dr. Thomas Veit
Management
Letter to Shareholders
5

6
Report of the Supervisory Board of Landesbank Berlin Holding AG
In financial year 2007, the Supervisory Board kept itself informed of current events and significant transactions
at six plenary sessions and a total of four committee meetings and by means of written and verbal
reports by the Board of Management. It reviewed the situation and business developments of the Bank
regularly, comprehensively and with appropriate urgency, and satisfied itself that the business was being
managed properly by the Board of Management.
The Supervisory Board was informed by the Board of Management about the intended business policy and
other fundamental issues of corporate planning, including in particular financial, investment and personnel
planning, the risk situation as well as compliance. It then advised the Board of Management on these matters
and gave recommendations where appropriate. Between these meetings, current issues and pending decisions
were discussed on an individual basis in regular discussions between the Chairman of the Board of Management
and the Chairman of the Supervisory Board.
In view of the largely identical topics, the Supervisory Board members of Landesbank Berlin Holding AG
(LBB Holding AG) and Landesbank Berlin AG (LBB AG) regularly met in joint meetings in each case – as
did the two Accounting, Personnel and Strategy Committees.
Focus of the work of the Supervisory Board
The first half of financial year 2007 was particularly influenced by the change in ownership. The Supervisory
Board was kept comprehensively informed of the course of the privatisation process.
On August 8, 2007, title to the State of Berlin’s share in Landesbank Berlin Holding AG was transferred to
Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG. Because of the change in the majority stake, the ten
shareholder representatives in the Supervisory Report were reappointed by the Local Court on August 30, 2007
with effect from September 1, 2007. The Supervisory Board elected Mr Heinrich Haasis, President of the German
Savings Banks and Giro Association, as its new chairman with effect from September 13, 2007 instead of
Dr. h. c. Klaus G. Adam, who had resigned his office with effect from August 31, 2007. Please refer to the
section on ‘Personnel changes’ in the latter part of this report for details of additional personnel changes in
the Supervisory Board.
Another important task for the Supervisory Board – in its previous composition – was to keep itself informed
on the divestiture of Berliner Bank from the Group and the successful takeover of netbank AG. Together with
the Board of Management, it received advice on this and, having examined all the issues involved, gave its
approval.

Meetings of the Supervisory Board
Management
Report of the Supervisory Board
On March 23, 2007, apart from reporting on financial year 2006, the priority as part of the accounts meeting
was consultation on the annual financial statements of Landesbank Berlin Holding AG as at December 31, 2006
prepared in accordance with the Handelsgesetzbuch (HGB), which were adopted by Supervisory Board, and
the resolution on the proposal for the appropriation of the 2006 unappropriated surplus. The 2006 annual
report of the Audit department was also dealt with. Other issues discussed were the Corporate Governance
Report including the current declaration of conformity as well as the efficiency review of the Supervisory
Board’s supervisory activities in 2006 when the Supervisory Board met without the Board of Management.
At the meeting of May 11, 2007, the IFRS consolidated financial statements as at December 31, 2006 were
approved by the Supervisory Board and consultations were held on the Group management report. Apart
from reporting on the earnings of the divisions in 2006 and current performance in the first quarter of 2007,
risk strategy was examined in particular. In addition, comprehensive details of the status of the privatisation
of the entire bank, which was proceeding on schedule, were provided in this meeting. In addition to preparing
to sell Landesbank Berlin Holding AG by means of a package sale, at the same time the option of a sale via
the stock market (dual track) was pursued. The Supervisory Board also approved the strategic investment
in netbank AG.
Apart from detailed information on the process of privatising the entire bank, the subject of the meeting on
July 6, 2007 was current business performance as at March 31, 2007.
As already mentioned, the Supervisory Board elected Mr Heinrich Haasis from among its members as its
Chairman at the constitutive meeting of September 13, 2007 following the change of principal shareholder.
Supplementary elections to the Accounting, Personnel and Strategy Committee and the Mediation Committee
were held following the appointment of new shareholder representatives to the Supervisory Board.
The subject of the Supervisory Board meeting on September 21, 2007 was current business performance in
the first half of 2007, in particular, the financial statements for the first half of 2007 and the strategic divisions’
earnings.
At its meeting on December 13, 2007, the Board of Management informed the Supervisory Board on business
performance as of September 30, 2007, the earnings of the strategic divisions and the results of the
audit of securities accounts operations and the audit pursuant to Article 36 of the Wertpapierhandelsgesetz
(WpHG = German Securities Trading Act WpHG) 2006 / 2007. This meeting focused on medium-term corporate
planning for the 2008 to 2012. The Supervisory Board also dealt with determining the focus of the audit
of the annual financial statements. It also approved the payment of 0 400 million to the capital reserve of
Landesbank Berlin AG by Landesbank Berlin Holding AG and debated the revision of the declaration of conformity
with the German Corporate Governance Code (GCGC).
All members of the Supervisory Board took part in at least half of the meetings of the Supervisory Board
in 2007. Outside the Supervisory Board meetings, three resolutions were passed by way of circulation
procedures in the financial year 2007.
7

8
Report of the Supervisory Board of Landesbank Berlin Holding AG
Committees of the Supervisory Board
In the past financial year, the work of the Supervisory Board was supported by Accounting, Personnel and
Strategy Committee (APS Committee) formed by members of the Supervisory Board. The APS Committee
dealt with questions of accounting, risk management and compliance as well as personnel matters relating
to the Board of Management in the past financial year. In the period under review, the Accounting, Personnel
and Strategy Committee met four times to prepare resolutions by the Supervisory Board. It prepared the
content of individual agenda items for the respective plenary session – especially the intensive preliminary
consultation on and audit of the annual financial statements – and intensively examined strategic issues and
transactions of particular significance. One resolution was passed by way of circulation. The representatives
of the auditors of the annual financial statements also took part in the meetings on the preliminary consultation
for the accounts.
The Mediation Committee formed in accordance with Article 27 (3) of the Mitbestimmungsgesetz (MitbestG –
German Codetermination Act) of 1976 was not required to meet in the past financial year either.
The Supervisory Board received regular and comprehensive reports on the work of the APS Committee in its
plenary sessions. All members of the APS Committee took part in at least half the meetings.
Corporate Governance
The implementation of the provisions of the German Corporate Governance Code (GCGC) was discussed
by the Supervisory Board in several meetings. In December 2007, the Board of Management and Supervisory
Board issued a new declaration of conformity on account of the amendments to the GCGC of June 2007.
Details of this can be found in the Company’s Corporate Governance Report. As the Supervisory Boards of
LBB Holding AG is largely occupied by the same persons as that of LBB AG, a joint corporate governance
report is issued. There were no conflicts of interest in the Board of Management or the Supervisory Board
in the year under review.
The declaration of conformity of Landesbank Berlin Holding AG has been published on the Company’s
homepage at www.lbb-holding.de.
The Supervisory Board reviewed the efficiency of its own supervisory activities with the help of a questionnaire
tailored specifically to the circumstances of the Supervisory Board of LBB Holding AG and, having
analysed it, discussed suggestions for improvement and passed resolutions accordingly. In cooperation with
the Board of Management, the findings of the efficiency review form the basis for the further optimisation
of the work of the Supervisory Board.
Further information on corporate governance in the Company and a detailed report on the amount and structure
of the remuneration of the Supervisory Board and the Board of Management can be found on pages 11 ff.
and 48 ff. of this Annual Report.

Annual financial statements 2007
Management
Report of the Supervisory Board
These annual financial statements of LBB Holding AG and the management report for the financial year 2007,
as well as the consolidated financial statements of LBB Holding with the Group management report, have been
audited by the auditor elected by the Annual General Meeting, PricewaterhouseCoopers Aktien gesellschaft
Wirtschaftsprüfungsgesellschaft, Frankfurt / Main, Berlin branch, taking into consideration the focus of the
audit determined by the Supervisory Board. In conclusion, the audits each led to unqualified audit opinions.
The annual financial statements of LBB Holding AG were prepared in accordance with provisions of the
German Commercial Code, while the consolidated financial statements of LBB Holding AG were prepared
in accordance with International Financial Reporting Standards (IFRS). The annual financial statements and
the consolidated financial statements together with the management report and the Group management
report were presented to the members of the Supervisory Board for inspection and to then be voted on
together with the auditor’s report following a detailed preliminary audit by the Accounting, Personnel and
Strategy Committee. The Chairman of the Supervisory Board was regularly informed of the status of the
audit by the auditor.
In financial year 2007, as in previous years, the auditors took part in both the meetings of the Accounting,
Personnel and Strategy Committee in which documents relating to the annual financial statements and
the findings of the audit were examined and discussed in detail, as well as the accounts meetings of the
Supervisory Board. The auditors reported on the key results of their audit and answered questions from
the members of these committees. The Supervisory Board is confident that the auditor has no conflicts of
interest in accordance with the GCGC 7.2.1 in terms of an independent audit.
There were no objections to the audit results. The Supervisory Board approved the annual financial statements of
LBB Holding AG and of the LLB Holding AG Group prepared by the Board of Management as of December 31,
2007 in its meetings on March 17, 2008 and April 25, 2008. The annual financial statements of Bankgesellschaft
Berlin AG are thereby adopted in accordance with Article 172 (1) sentence 1 of the German Stock
Corporation Act. The Supervisory Board approved the proposal by the Board of Management to appropriate
the Company’s unappropriated surplus reported for financial year 2007 of € 112,539 thousand as follows:
distribution of the amount of € 99,933 thousand to pay a dividend of € 0.10 per entitled share and a profit
carryforward of € 12,606 thousand.
The Supervisory Board also examined the Board of Management’s report on relations with affiliated companies
in accordance with Article 312 AktG for financial year 2007. Neither this examination nor the audit performed
by the auditors gave rise to any objections.
The audit company PricewaterhouseCoopers Aktiengesellschaft issued Landesbank Berlin Holding AG,
Berlin, with the following audit opinion for the period from 1 January to 31 December 2007:
“On completion of our audit in accordance with professional standards, we confirm that
1. the factual statements made in the report are correct,
2. the Company’s compensation with respect to the transactions listed in the report was not
inappropriately high in line with the circumstances known at the time,
3. with regard to the measures listed in the report, there were no circumstances that would justify
a materially different opinion than that of the Board of Management.”
9

10
Report of the Supervisory Board of Landesbank Berlin Holding AG
On completion of its examination, the Supervisory Board raised no objections to the closing statement
by the Board of Management in its report on relations with associated companies in accordance with
Article 312 AktG.
Personnel changes
There were no personnel changes in the Board of Management.
In financial year 2007, there were the following personnel changes in the Supervisory Board: in connection
with the change of principal shareholder, Senator Dr. Thilo Sarrazin and Senator Harald Wolf resigned
their office as of August 28, 2007 and Dr. h.c. Klaus G. Adam, Dr. h.c. Axel Berger, Thomas Dobkowitz,
Dr. Michael Endres, Dr. Thomas Guth, Dr. Hannes Rehm, Dr. Heinz-Gerd Stein and Bernd Wrede resigned
their office as of August 31, 2007.
At the request of the Board of Management on August 30, 2007, Dietmar P. Binkowska, Gregor Böhmer,
Hans Jörg Duppré, Heinrich Haasis, Jürgen Hilse, Claus Friedrich Holtmann, Thomas Mang, Peter Schneider,
Friedrich Schubring-Giese and Dr. Harald Vogelsang were appointed as new shareholder representatives
with effect from September 1, 2007 by the Local Court pursuant to Article 104 of the Aktiengesetz (AktG
= German Stock Corporation Act).
On January 1, 2007, Claudia Fieber, the former employee representative on the Supervisory Board of LBB
Holding AG was replaced by the elected substitute Astrid Maurer, Women’s Officer of Landesbank Berlin AG.
The Supervisory Board would like to thank the members of the Supervisory Board who have now left for their
commitment and the constructive support they provided to the Company in the difficult period of the past
few years and for the expertise they contributed and the productive cooperation. Particular thanks are due
to the longstanding Chairman of the Supervisory Board, Dr. h. c. Klaus. G. Adam, who led the Supervisory
Board with great expertise and outstanding commitment through the recent successful restructuring to the
successful conclusion of the sale process.
The Supervisory Board would also like to thank the members of the Board of Management and all the employees
of the Company for their work and their particular personal commitment over the past year.
Berlin, April 2008
The Supervisory Board
Heinrich Haasis
Chairman

Corporate Governance Report
Management
Report of the Supervisory Board | Corporate Governance Report
The Board of Management and the Supervisory Board are aware of the importance of reliable and efficient
rules for managing and monitoring the Company and its subsidiaries. Both executive bodies continue to
attach a high degree of importance to the subject of corporate governance following the successful conclusion
of the reconstruction and sale process. In so doing, the Supervisory Board and the Board of Management
act in the knowledge that sound corporate government is in the interests of the shareholders and the capital
markets and constitutes an important basis for the success of Group companies and ultimately also of the
employees. For the Company, compliance with the corporate governance guidelines is also an important
factor in further strengthening confidence among the general public.
The Group companies adhere to the recommendations of the German Corporate Governance Code (GCGC),
irrespective of their legal form, to the extent that these principles are applicable to and important for the
implementation of a Group-wide model.
In the interests of acting in a uniform manner, non-listed Landesbank Berlin AG (LBB AG) has also resolved
to apply the corporate governance principles voluntarily. This is therefore the joint Corporate Governance
Report of Landesbank Berlin Holding AG (LBB Holding AG) and LBB AG.
Berlin-Hannoversche Hypothekenbank AG describes its principles in its own corporate governance report,
including its declaration of conformity.
Board of Management
The Boards of Management of LBB Holding AG and LBB AG are committed to the principles of sound,
responsible, efficient corporate management and monitoring based on sustained value-added. They manage
the respective company under their own responsibility in accordance with statutory provisions, articles of
associations and internal regulations as well as internal directives and work towards the Group companies
complying with them. Each Board of Management develops the strategic orientation of the company with
the approval of the Supervisory Board and ensures that this strategy is implemented.
Both Boards of Management each inform their Supervisory Board promptly and comprehensively on the
Company’s business performance, its planning, risk situation, risk management as well as compliance and,
where applicable, on deviations in business performance from the original planning.
Neither the Board of Management of LBB Holding AG nor that of LBB AG were subject to conflicts of inter-
ests while carrying out their duties with the result that there is no information that must be reported. The
composition of both Boards of Management and the responsibilities of the individual Board of Management
members are presented on page 48.
11

12
Corporate Governance Report
Supervisory Board
The Supervisory Board of LBB Holding AG comprises 20 members. In accordance with the provisions of
the German Codetermination Act, it is composed of ten shareholder members and ten employee members.
Following the sale of the State of Berlin’s shares to Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG,
Berlin, the previous shareholder representatives in the Supervisory Board of LBB Holding AG resigned their
office. Through a resolution by the Charlottenburg Local Court on August 30, 2007, the new shareholder
representatives were appointed to the Supervisory Board with effect from September 1, 2007. Employees
will continue to be represented in the Supervisory Board of LBB Holding AG by the Supervisory Board
members elected in accordance with the regulations of the German Codetermination Act; an elected substitute
succeeded to the Supervisory Board as of January 1, 2007. The Supervisory Board of LBB AG comprises
16 members. In accordance with the provisions of the German Codetermination Act, it is composed
of eight shareholder members and eight employee members. In financial year 2007, the shareholder representative
members were newly elected within the framework of an extraordinary meeting following the conclusion
of the sales process because their predecessors had resigned their office. There were no changes
to the employee representatives. The Supervisory Boards of LBB AG and LBB Holding AG are therefore still
largely filled by the same people.
The members of both Supervisory Boards are named on pages 16 and 17 of the Annual Report.
The Supervisory Boards of LBB Holding AG and LBB AG advise and monitor the respective Board of
Management in its management of the company and cooperate closely with it in an environment of trust.
The Supervisory Boards have defined material transactions that the Board of Management may only perform
with the approval of the Supervisory Board. Furthermore, they have established rules aimed at preventing
conflicts of interest. The Chairman of the Board of Management constantly exchanges information with the
Chairman of the Supervisory Board.
In both Supervisory Boards, committees have been formed from the midst of Supervisory Board members
to increase the efficiency of the Supervisory Board’s work and to deal with complex matters. In addition to
the respective Mediation Committee and the Accounting, Personnel and Strategy Committee, there is also
a Credit Committee in the Supervisory Board of LBB AG.
The activity of the Supervisory Boards and their committees is governed in each case by the internal regulations
of these bodies. The respective Chairmen inform all Supervisory Board members about the ongoing
work of the committees in the following plenary meeting. The responsibilities of the individual committees
and the key topics discussed by the committees and in the Supervisory Board in financial year 2007 are
presented in detail in the Report of the Supervisory Board of LBB Holding AG or LBB AG respectively. As
in previous years, neither of the two Supervisory Boards was subject to conflicts of interests while carrying
out their duties with the result that there is no information that must be reported.

Management
Corporate Governance Report
The Supervisory Board of the listed LBB Holding AG undertook an efficiency review in the past year, as did
the Supervisory Board of its wholly-owned subsidiary LBB AG on a voluntary basis. The review was carried
out using a detailed checklist in each case in which all issues relating to the GCGC were dealt with and were
subjected to an individual assessment by each Supervisory Board member. In the result of the final survey
analysis in the Supervisory Board plenum, both bodies came to the opinion that the efficiency of the Supervisory
Board activities had further improved compared with the previous year. The existing proposals for
improvement were each conveyed to the Board of Management with a request that these be taken into account
when working together with the Supervisory Board in future.
A D&O insurance policy (director and officers’ liability insurance) is in place for members of the Supervisory
Board as well as for members of the Board of Management. To emphasise the responsibility of the individual
body members to the respective company and the shareholders, an appropriate deductible was agreed in
each case.
Transparency
In financial year 2007, the members of the Board of Management of LBB Holding AG carried out transactions
in LLB Holding AG shares that are reportable by accepting the public offer of Erwerbsgesellschaft der S-Finanzgruppe
mbH & Co. KG, Berlin on August 1, 2007. In line with the statutory regulation in Article 15a of the
Wertpapierhandelsgesetz (WpHG – German Securities Trading Act) and the provision under 6.6 of the GCGC,
these transactions were reported by the executive body members concerned to the Bundesanstalt für Finanzdienstleistungsaufsicht
(BaFin – Federal Financial Supervisory Authority) and immediately published on the
website of LBB Holding AG as follows:
BOARd OF MAnAGEMEnT
Trade date Name Position
11.10.2007 Hans-Jörg Vetter
11.10.2007 Dr. Thomas Veit
Chairman of
the Board of
Management
Board of
Management
Description of
the security ISIN
Acceptance of the public takeover bid by Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG, Berlin
Issuer: Landesbank Berlin Holding AG, Alexanderplatz 2, 10178 Berlin
Stock
exchange Shares
Type of
transaction
Rate /
price Volume
Landesbank
Berlin Holding AG
(unit quotation) DE0008023227 Off-board 30,000 Sale s 6.81 s 204,300
Landesbank
Berlin Holding AG
(unit quotation) DE0008023227 Off-board 20,000 Sale s 6.81 s 136,200
Members of the Board of Management of LBB AG, who do not perform management roles at LBB Holding
AG at the same time, have also carried out transactions in LBB Holding AG shares by accepting the public
offer of Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG, Berlin on August 1, 2007. These transactions
are not reportable under the statutory regulations; therefore this is not a notification pursuant to Article 15a
of the WpHG but a voluntary disclosure for reasons of transparency.
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Corporate Governance Report
BOARd OF MAnAGEMEnT
Trade date Name Position
11.10.2007 Serge Demolière
11.10.2007 Dr. Johannes Evers
11.10.2007 Hans Jürgen Kularz
Board of
Management
Board of
Management
Board of
Management
Description of
the security ISIN
Acceptance of the public takeover bid by Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG, Berlin
Issuer: Landesbank Berlin Holding AG, Alexanderplatz 2, 10178 Berlin
Stock
exchange Shares
Type of
transaction
Rate /
price Volume
Landesbank
Berlin Holding AG
(unit quotation) DE0008023227 Off-board 20,150 Sale s 6.81 s 137,222
Landesbank
Berlin Holding AG
(unit quotation)
Landesbank
Berlin Holding AG
DE0008023227 Off-board 20,900 Sale s 6.81 s 142,329
(unit quotation) DE0008023227 Off-board 20,000 Sale s 6.81 s 136,200
Since the Board of Management and Supervisory Board of the non-listed LBB AG have resolved to apply the
corporate governance principles voluntarily, as presented above, information relating to directors’ dealings
also refers to the executive body members of LBB Ag at the same time. No other shares of the Company or
related financial instruments that must also be reported under 6.6 of the GCGC were held by the Board of
Management or Supervisory Board members.
Remuneration report
The compensation of the Board of Management and the Supervisory Board is presented in a separate remuneration
report for fiscal year 2007 in the Annual Report. The compensation of the Board of Management and
Supervisory Board members is also broken down individually.
The remuneration report is included in the Group Management Report from page 48 with its presentation of
the remuneration system and from page 170 with details on the compensation of the Board of Management
and Supervisory Board by member in the Notes.
Accounting
The consolidated financial statements for LBB Holding and for LBB AG for financial year 2007 were reported
in accordance with International Accounting Standards (IAS) / International Financial Reporting Standards
(IFRS). The single-entity financial statements are prepared according to the provisions of the Handelsgesetzbuch
(HGB – German Commercial Code).
The consolidated and annual financial statements each contain a detailed risk report that provides information
on the Company’s risk position and risk control. The report for the consolidated financial statements of
LBB Holding AG can be found on pages 70 to 94.
Financial disclosure
Shareholders and other interested parties are kept informed about the business and earnings performance
of LBB Holding AG in the form of annual and interim reports (financial reports). All company news that could
affect the share price is published in ad hoc disclosures. The Internet is widely used in order to ensure that
shareholders, shareholder representatives, analysts and the media receive information – including key financial
dates – in a timely manner and, to the greatest possible extent, at the same time. The annual and interim
reports as well as important information can be found in the “Investor Relations” section here.

Recommendations of the German Corporate Governance Code
Management
Corporate Governance Report
In line with the amendments of the German Corporate Governance Code that came into force on June 14,
2007, the Board of Management and Supervisory Board of LBB Holding AG have revised the declaration of
conformity of LBB Holding AG and submitted it in December 2007.
Contrary to the recommendations of the German Corporate Governance Code, the Group was unable to
make the consolidated financial statements publicly available within 90 days of the end of the financial year
in the past and is not yet able to fulfil it for financial year 2007 due to the complexity of the transition to
IAS / IFRS. The Group was able to fulfil the requirement to publish IAS/IFRS interim reports within 45 days
of the end of the reporting period from the second quarter of financial year 2007.
Creation of a Nomination Committee was waived. No new Supervisory Board members are scheduled for
election in financial year 2008.
The application to have the shareholder representative Supervisory Board members appointed by the court
was not limited to the next Annual General Meeting in order to ensure continuity in the work of the Supervisory
Board following the conclusion of the restructuring and privatisation process.
In view of this, a revised declaration of conformity was issued as of December 2007 and published on the
Bank’s website.
The wording of the declaration of conformity of the Board of Management and the Supervisory Board in
accordance with Article 161 of the Aktiengesetz (AktG – German Stock Corporation Act), submitted on
the basis of the GCGC in the version published on June 14, 2007, is as follows:
§ 1 Landesbank Berlin Holding AG complied / complies with all the recommendations of the Government
Commission on the German Corporate Governance Code announced by the Federal Ministry of Justice
in the official section of the electronic Bundesanzeiger (Federal Gazette) with the exceptions mentioned
under Article 2.
§ 2 Landesbank Berlin Holding AG deviates from the following recommendations of the Code:
(a) The requirement to make the consolidated financial statements publicly accessible within 90 days of
the end of the financial year could not be met by the Group in the past and cannot be met for financial
year 2007 either. The requirement to publish IAS/IFRS interim reports within 45 days of the end of the
reporting period could be met from the second quarter in financial year 2007 and this requirement
should be met for future reporting cycles. (7.1.2 of the GCGC).
(b) The Supervisory Board does not form a Nomination Committee, which proposes suitable candidates
for its elections to the Annual General Meeting. (5.3.3 of the GCGC).
(c) The period in office of members of the Supervisory Board of Landesbank Berlin Holding AG appointed
by resolution of the Charlottenburg Local Court of August 30, 2007 is not limited to the next Annual
General Meeting (5.4.3 of the GCGC).
The Board of Management and Supervisory Board
of Landesbank Berlin Holding AG
15

16
Executive Bodies of Landesbank Berlin Holding AG
and Landesbank Berlin AG
Board of Management
Hans-Jörg Vetter
Chairman
Landesbank Berlin Holding AG
Landesbank Berlin AG
Dr. Thomas Veit
Landesbank Berlin Holding AG
Landesbank Berlin AG
Serge Demolière
Landesbank Berlin AG
Dr. Johannes Evers
Landesbank Berlin AG
Hans Jürgen Kulartz
Landesbank Berlin AG
Martin K. Müller
Landesbank Berlin AG
Supervisory Board
Heinrich Haasis
Landesbank Berlin Holding AG
Landesbank Berlin AG
Chairman
President of the German Savings Banks’
and Giro Association
Bärbel Wulff *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Deputy Chairwoman
Chair of the Works Council of
Landesbank Berlin AG
Dietmar P. Binkowska
Landesbank Berlin Holding AG
Landesbank Berlin AG
Chairman of the Board of Management of
Sparkasse KölnBonn
Gregor Böhmer
Landesbank Berlin Holding AG
Landesbank Berlin AG
Executive President of the Sparkassen-
und Giroverband Hessen-Thüringen
Dagmar Brose *
Landesbank Berlin Holding AG
Consultant in the Finance division at
Landesbank Berlin AG
Hans Jörg Duppré
Landesbank Berlin Holding AG
District Administrator of the Südwestpfalz District
Christina Förster *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Financial Services Secretary,
ver.di Berlin-Brandenburg region

Sascha Händler *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Member of the Works Council of
Landesbank Berlin AG,
Export finance customer adviser at
Landesbank Berlin AG
Jürgen Hilse
Landesbank Berlin Holding AG
Landesbank Berlin AG
Chairman of the Board of Management of
Kreissparkasse Göppingen
Claus Friedrich Holtmann
Landesbank Berlin Holding AG
Landesbank Berlin AG
Executive President of the
Ostdeutscher Sparkassenverband
(East German Savings Banks’ Association)
Michael Jänichen *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Divisional Manager of Regional Corporate Banking
at Landesbank Berlin AG
Daniel Kasteel *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Member of the Works Council of
Landesbank Berlin AG
Thomas Mang
Landesbank Berlin Holding AG
Landesbank Berlin AG
President of the Sparkassenverband Niedersachsen
(Lower Saxon Savings Banks’ Association)
Astrid Maurer *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Member of the Works Council Landesbank Berlin AG,
Women’s Officer of Landesbank Berlin AG
Andreas Rohde *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Member of the Works Council of
Landesbank Berlin AG
Peter Schneider
Landesbank Berlin Holding AG
Landesbank Berlin AG
President of the Sparkassenverband
Baden-Württemberg (Baden-Württemberg
Savings Banks’ Association)
Friedrich Schubring-Giese
Landesbank Berlin Holding AG
Chairman of the Board of Management of
Versicherungskammer Bayern
Joachim Tonndorf *
Landesbank Berlin Holding AG
Former Financial Services Secretary,
ver.di Berlin-Brandenburg region
Management
Executive Bodies
Dr. Harald Vogelsang
Landesbank Berlin Holding AG
Landesbank Berlin AG
Spokesman of the Board of Management of
HASPA Finanzholding and Hamburger Sparkasse AG
Frank Wolf *
Landesbank Berlin Holding AG
Landesbank Berlin AG
Head of Financial Services Department,
ver.di Berlin-Brandenburg region
* Employee representative
Status: April 2008
17

Retail Banking

Berliner SparkaSSe iS the market leader in
retail Banking BuSineSS and one of germany’S
largeSt SavingS BankS. one in two people in
Berlin putS their confidence in the Bank.
perSonal conSulting at more than 150
locationS in Berlin.
a univerSal Bank and a direct Bank in one.
efficient and State-of-the-art multi-channel
SaleS with online Banking, call centreS
and Self-Service facilitieS.
comprehenSive range. Banking productS
for penSionS, aSSet accumulation, con-
Sumer and real-eState financing aS well
aS payment tranSactionS and liquidity
management.
modern aSSet management centreS.
Service for the inveStment and finance
needS of high net-worth retail Banking
clientS.
largeSt iSSuer in national credit card
BuSineSS. innovation leader with trend-
Setting new developmentS.

Retail Banking

whether it‘s for a long-awaited acquisition, asset
accumulation or the dream of your own home.
we see ourselves as your partner and support
our customers in implementing their plans. what
matters most to us is always the individuality of
service. Building on this, we prepare a customised
solution. our customers can settle simple transactions
quickly, comfortably and in a timely manner
using the latest technology while at the same time
benefiting from personal consulting. thanks to
their many years of experience and work with a
number of professions, our consultants can always
find winning solutions for all financial questions.
we demand the highest levels of quality from our
services. in 2007, we extended the opening hours
of our retail Banking centres to be able to offer
more consulting services in the evening or on
Saturdays. we also added a number of new transaction
options to our online banking portal. we‘re
nearby, we‘re here, we‘re a part of Berlin.

Regional Corporate
Banking

the complexity of Some conSulting-intenSive
financing and inveStment iSSueS demandS
expert Support. thiS iS Something our
experienced cuStomer adviSerS can provide.
a competent, recogniSed and reliaBle
partner for Small and medium-Sized
BuSineSS cuStomerS in the core market
of Berlin / BrandenBurg. fair, cooperative,
perSonal.
comprehenSive product and Service
offering for the needS of regional
companieS.
comprehenSive Branch network, high
flexiBility and availaBility due to multichannel
SaleS.
Strong market poSition with regional
focuS and large range.
market leader for Start-upS. SpecialiSt
knowledge for growth induStrieS.
profeSSional conSulting for companieS,
from their formation, through eStaBliShment
to expanSion.

Regional Corporate
Banking

we offer our customers deep-rooted, regional
expertise, personal support, a comprehensive
range of services, short decision-making paths,
the best industry knowledge and a range of contacts.
we have the right solution, whether you‘re
financing an investment or settling transactions
with international partners. from formation
through expansion to the next generation – each
of the phases in the history of a company is of
fundamental importance and demands the right
financial service. we support our customers in
comprehensively preparing the necessary steps
at the right time. in Businessline, our customers
have a flexible and comfortable business connection
by phone or internet at their disposal.
Businessline was developed to combine simple
handling with high-quality, reliable consulting
and high levels of availability. the service and
consulting quality of Businessline and our
regional corporate Banking centre has been
confirmed by tÜv rheinland. we achieve all
this with the highest level of quality and our
hard-working employees.

Capital Markets

the Bank iS a renowned, expert provider
of innovative capital market productS for
private inveStorS aS well.
Broad range of StandardiSed and BeSpoke
capital market productS and ServiceS.
SyStematic focuS on individual cuStomer
requirementS.
innovative Strength and flexiBility in the
development of attractive and effective
productS.
award-winning productS BuSineSS for
certificateS.
recogniSed expertiSe aS a premium provider
of inveStment fundS.
partner for corporate cuStomerS and
BankS in international BuSineSS.

Capital Markets

in capital markets, we focus on selected activities
in which we have leading expertise. we offer our
customers a wide range of attractive and innovative
products and services. we offer individual support
for all products. thus, we can optimally track customer
requirements and tackle them with tailored
solutions. whether you have a sophisticated private
interest or are an institutional investor. we see ourselves
as a reliable provider of products for trade
and export finance for our german and international
customers. our market reputation is built on years
of expertise and a comprehensive understanding
of countries. we maintain a global network of local
trading partners and thereby offer direct market
access to all relevant trading centres for shares and
derivatives. in lBB-invest, we have a recognised
fund provider for private and institutional customers
that has established itself among the leaders of
german investment companies.

Real Estate
Financing

thiS BuSineSS area comBineS Berlin hyp and
landeSBank Berlin. it workS for cuStomerS
like an independent Bank.
in Selected, economically Strong growth
regionS of germany and europe, focuSed
on the needS of experienced private and
commercial inveStorS and reSidential
development companieS of high credit
Standing.
Streamlined StructureS, Short deciSion-
making pathS and product flexiBility, Speed
and excellent Service.
tailored financing SolutionS for cuStomerS
Supported By competitive termS.
financing of reSidential and mixed-uSe
propertieS Such aS office, retail and
logiSticS real eState with winning conceptS.

Real Estate
Financing

whether buying, building or financing a portfolio –
we develop individual real estate financing solutions
for different projects from a single source, optimally
coordinated for the project at hand. this includes,
for example, determining ideal financing structures,
integrating derivatives to hedge against interest rate
risks and for portfolio management. with our subsidiary,
Berlin hyp, we represent the culture of a
clear, specialist bank on the one hand. on the other,
landesbank Berlin offers the entire service range
of a universal bank. Both have real estate financing
expertise. day-to-day business is characterised by
comprehensive personal support, a broad range of
services and dependability. we have an excellent
network for syndicate business and maintain longstanding,
reciprocal business relations with other
banks. we provide finance for both individual properties
and large-volume and complex portfolio
transactions. our new business activities are geared
towards the financial centres of germany and selected
european locations.

26
27 Strategic divisions
28 Retail Banking
About the company
32 Regional Corporate Banking
36 Capital Markets
39 Real Estate Financing
42 Employees
43 Share Price of Landesbank Berlin Holding AG

Strategic divisions
The business model of Landesbank Berlin is based
on four divisions, namely Retail Banking, Regional
Corporate Banking, Capital Markets and Real Estate
Financing. With this strategic line-up LBB is an effective
universal bank for Berlin-Brandenburg. It occupies
leading market positions in all divisions in its core
region. In sub-areas such as credit card business,
publicly offered funds or in trade and export finance
for Eastern Europe it also ranks among the leading
providers nationally. In the German capital, Landesbank
Berlin is the top financial services provider and
stands for client orientation, security and innovation.
About the company
27

28
Retail Banking
The retail banking business of Landesbank Berlin is primarily oper-
ated by Berliner Sparkasse. Measured by the number of customer
accounts, it is the largest savings bank in Germany and is by far the
no. 1 among providers of comprehensive banking services for retail
customers in Berlin. One in two Berlin residents is a Landesbank
customer.
In 2007, the Retail Banking division was able to continue the gratifying growth in new
business of previous years despite intensifying competitive pressures and consequently
boost its sales figures. More and more people are choosing Berliner Sparkasse as their
key banking relationship: for example the number of customers with a personal current
account increased by 6,500. The acquisition of a majority holding in netbank AG has
also allowed us to boost our presence on the Internet, which is becoming an ever more
important sales channel.
While an increase in expenses relating to market investment has led to a temporary
fall in earnings, they will create the preconditions for long-term growth and the consolidation
of the Company’s good business performance.
RETAIL BAnkInG – LOAnS
in t million 31.12.2007 1) 31.12.2006
Overnight and term money 0 1
Overdraft facilities 298 307
Near-money market loans 400 263
Real estate loans 1,554 1,901
Other loans (e.g. consumer loans) 997 987
Total loans and advances to customers 3,249 3,459
RETAIL BAnkInG – dEpOSITS
in t million 31.12.2007 1) 31.12.2006
Demand deposits 3,441 2,989
Overnight deposits 17 17
Term deposits / savings certificates 572 273
Savings deposits 6,718 6,488
‘Cash direkt’ 735 670
Total customer deposits 11,483 10,437
1) including netbank AG acquired in 2007

Berlin economy remains restrained
In 2007, Berlin’s gross domestic product trended
slightly upwards with growth of 2.0%. As a result,
Berlin’s economic output has increased perceptibly
for the third time in succession but it remains in the
lower third compared with the other states.
By and large, the economic position of our retail
banking customers improved only slightly: disposable
income in Berlin remains below the national
average, as does the savings rate. At 6,023, the
number of personal insolvencies remains at a high
level.
Further increase in instalment loans
In 2007, Landesbank Berlin has also expanded its
business with instalment loans / all-purpose loans.
At the year-end, the portfolio of this type of loans
was 10% up on the same date in the previous year,
at € 543.2 million. New business in instalment
loans / all-purpose loans reached € 363.4 million
(previous year: € 364.7 million). Sales continue to
be concentrated in the auto loan introduced in 2005,
which accounted for 12% of total new business.
Landesbank Berlin continued its expansion in private
construction finance and consequently secured its
leading position in the Berlin market: new business in
loan extensions increased by 26% to € 166.1 million
in 2007.
The division’s lending volume totalled € 3.185 billion
as of December 31, 2007 and was consequently 8%
down on the figure for the previous year. The decrease
is primarily due to the sale of credit portfolios and to
the expiry of transactions that do not fit the division’s
strategic focus.
Positive response to certificates
Despite ferocious competition, Landesbank
Berlin’s deposit volume increased by 5% in total
to € 10.94 billion. Custodian account volume
(including LBB-Invest accounts and DekaBank
securities accounts) has fallen slightly compared
with the previous year (– 2%).
Certificate business recorded particularly gratifying
growth yet again with gross sales increasing by 6%
to € 351 million. Landesbank Berlin has achieved
a position as an innovator, whose products are positively
received by clients, in the rapidly expanding
certificates market in recent years. In 2007, a new
alternative product was added to the successful
FlexInvest range, which exploits changes in the
market for risk and return oriented strategies.
About the company
Retail Banking
29

30
Retail Banking
Insurance and building society business
in ascendance
Landesbank Berlin’s insurance business also recorded
gratifying growth in 2007. Net policy premiums (life
assurance and annuity insurance including fund-linked
agreements and direct public service insurance) rose
by 12% to € 245.8 million.
Building society business generated growth in total
savings of 8% to € 295.8 million.
324,000 new credit cards issued
Landesbank Berlin remains the largest issuer of credit
cards in Germany. This leading position is due not
least to a large number of co-branding programmes
where the Bank works with large numbers of well
known companies from the retail and services sectors.
These allow customers to enjoy innovative
products with obvious additional benefits such as
discounts or services. The Bank has partnerships
with ADAC, the online retailer Amazon, the airline
Air Berlin and with Microsoft Xbox.
Credit card business also performed well in 2007.
The number of credit cards issued rose to more than
1.8 million cards compared with 1.5 million cards at
the end of the previous year. The co-branding programme
with the online retailer Amazon has been
particularly popular with more than 100,000 cards
issued since it was launched in November 2006,
which is far higher than expected.
Internet banking expanded through netbank AG
On July 11, 2007, Landesbank Berlin acquired a
strategic majority holding in netbank AG based in
Hamburg with economic effect from January 1, 2007.
netbank operates exclusively as an Internet bank
and offers a wide range of banking and securities
services as well as financial products such as
insurance policies. At the end of 2007, it managed
approximately 87,000 clients. The acquisition is
allowing LBB to expand its position in the important
Internet sales channel and also to intensify business
with credit card customers.

A customer-oriented sales network
An effective and dense sales and service network
is a prerequisite for close contact with clients. In
2007, stationary sales comprised 148 Retail Banking
Centres, 27 Asset Management Centres, three Real
Estate Centres and one Private Banking Centre
at Berliner Sparkasse. This means that Berliner
Spar kasse can guarantee its expert consultancy
services are available throughout the capital. There
were also 21 self-service centres where clients
pROSpECTS FOR 2008
can carry out banking transactions independently
of branch opening hours, which were supplemented
by a further 75 ATMS.
This quality service is also characteristic of online
banking: in 2007, the Sparkasse’s website was fundamentally
redesigned, equipped with additional
functions and made more user-friendly.
notwithstanding the substantial market share of some 40% for the first current
account in the Berlin market, further consolidation of the Bank’s market position
through the acquisition of new clients and a deepening of business relations with
existing clients ranks right at the top of its agenda. At the same time, Landesbank
Berlin and Berliner Sparkasse will continue to refuse to participate in the aggressive
pricing policies adopted by their competitors in this market segment. Instead it
will continue its approach of persuading clients to pay appropriate and fair prices
for products and services through attractive products, personal advice and good
service.
Sales activities will remain concentrated on consumer loans and securities business.
Sales efficiency is also to be increased by increasingly combining different
offers (cross-selling). The range of current account services is to be improved in
2008 with the aim of matching client requirements more closely and continuing
to increase the number of key banking relationships.
About the company
Retail Banking
31

32
Regional Corporate Banking
With just over 62,500 business clients and small and medium-sized
enterprises, Landesbank Berlin ranks as one of the leading market
participants in the core region of Berlin-Brandenburg. The Bank’s
Regional Corporate Banking division is distinguished by a broad
range of services from basic services to individual, consultationintensive
investment and financing packages, high quality management
and comprehensive knowledge of the regional market.
In 2007, the division was able to consolidate its strong market position in a persist -
ently restrained economic environment, gaining a total of just over 700 clients. The
Regional Corporate Banking product and services range was further optimised to
meet requirements in individual client segments, particularly with regard to quality.
Expertise and high quality consultancy services for business start-ups have again
confirmed the Bank’s leading position in Berlin’s start-up business.
REGIOnAL CORpORATE BAnkInG – LOAnS
in t million 31.12.2007 31.12.2006
Overnight and term money 926 565
Overdraft facilities 183 196
Near-money market loans 0 20
Real estate loans 957 990
Other loans 3,767 4,056
Total loans and advances to customers 5,833 5,827
REGIOnAL CORpORATE BAnkInG – dEpOSITS
in t million 31.12.2007 31.12.2006
Demand deposits 1,287 1,431
Overnight deposits 588 531
Term deposits / savings certificates 1,081 459
Savings deposits 260 417
‘Cash direkt’ 299 321
Total customer deposits 3,515 3,159

Against the background of persistently subdued
demand for loans by companies in the core region,
shifts in deposits caused by market conditions and
intensive competition with regard to terms, net interest
income fell. This was offset by an increase in net
fee and commission income and a very favourable
trend in risk costs. Overall the division recorded a
sharp rise in earnings in 2007.
A challenging market environment
Despite the economic upturn and indications of an
improvement in the business climate, companies
based in the region continued to demonstrate little
propensity to invest and a restrained demand for
credit, which did not pick up until the fourth quarter.
At the same time, competition among financial services
providers intensified: the Bank’s competitors
have extended their activities in Berlin to all areas of
corporate banking business for business clients and
small and medium-sized enterprises. In this difficult
market environment, Landesbank Berlin was again
able to record net growth in client numbers.
Economic power and growth in productivity in the
Berlin-Brandenburg region remained below average
compared with the rest of Germany in 2007. However,
About the company
Regional Corporate Banking
Berlin is increasingly successful in positioning the
region around the capital as a competitive, attractive
services location with an outstanding scientific community
and high levels of research. In this connection,
technology-oriented growth sectors such as health,
media, transport, energy and the environment are
becoming particularly important. Landesbank Berlin
is adjusting to this development by establishing and
developing the requisite sector-related expertise.
Lending business reflects the market
Subdued demand for loans up to the end of the
third quarter of 2007 and a high level of self-financing
among companies was reflected by a decline in
new lending business at Landesbank Berlin. In this
connection, the Landesbank also adhered to the
principle of giving priority to a strict risk policy over
expanding volume in 2007. At the same time, there
was evidence of increased demand for short-term
finance.
Growth in deposits matches sector trend
The divisions’ deposit business again recorded gratifying
growth of 11% to € 3.5 billion. This meant
that in growth in deposits by German companies,
Landesbank Berlin matched the general trend among
banks in Berlin-Brandenburg. The growth in client
deposits at LBB documents corporate clients’ trust
in their bank, the quality of the end-to-end management
concept and the value of the business relationship.
33

34
Regional Corporate Banking
Range of services expanded
To guarantee that business clients and small and
medium sized enterprises are managed in a way
that meets all their needs, Landesbank Berlin has
adapted its range of products and services to meet
new market requirements and client needs and
extended its range of services. This includes clearly
differen tiating services according to target group
and demand, as in payment services for example,
in financing solutions, in consultancy services for
entrepreneurial schemes and in innovative capital
market products. Close collaboration with product
specialists in other Landesbank Berlin divisions,
such as investment or derivative business completes
the Bank’s market presence. Sales of derivatives
have gone well in the Regional Corporate Banking
segment.
Intensive use is also made of products and services
offered by subsidiaries, such as LBB-Invest, or structured
services offered by associates in the leasing
and insurance sectors. These activities also emphasise
the end-to-end management approach in the
Regional Corporate Banking segment.
The range of current accounts was also differentiated
to tailor prices and services more closely to
demand profiles and the respective usage patterns
of the customer groups.
The ongoing optimisation of processes also had
an impact on reducing costs. At the same time,
Landesbank Berlin was able to focus attention on
the quality of its services with its campaign promising
a decision on loans for corporate clients within
48 hours – assuming the preconditions for this
are met.
Support and sales concept that sets
high standards
In recent years, Landesbank Berlin has created a
completely modernised sales channel mix with its
innovative management, support and sales concept.
The clear allocation of clients to the BusinessLine,
Regional Corporate Banking Centres and Regional
Corporate Banking departments sales channels has
met with a positive response from clients. While
business clients are catered for by BusinessLine or
in the Regional Corporate Banking Centres, the four
departments are responsible for small and mediumsized
enterprises. Berliner Sparkasse’s Business-
Line, which was introduced in 2005 as an innovative
telephone banking sales channel for business clients
offering experienced client support and longer service
hours has been well received.

Having checked and certified the service and advice
quality offered by BusinessLine in 2006, TÜV Rheinland
again confirmed this quality award in 2007. In
addition, TÜV Rheinland also certified the Regional
Corporate Banking Centre sales channel for its good
service and advice quality in 2007. The certification
pROSpECTS FOR 2008
of entire sales channels in its corporate banking
business demonstrates LBB’s willingness to have
its high quality and service standards measured
by a national, independent inspection agency.
About the company
Regional Corporate Banking
In financial year 2008, Landesbank Berlin will again deploy its specific strengths
against its competitors and exploit its opportunities systematically. Its strong
presence in the core region Berlin-Brandenburg and close dialogue with corporate
clients are particular strengths for the Bank in this connection. The focus
will be on further improving market penetration through the acquisition of new
clients and among existing clients. The expansion in asset and commission
earnings services business will be accompanied by a continuous optimisation of
the product range and adaptation of the services range to meet clients’ requirements.
LBB is counteracting the increase in companies’ need for information
caused by Basel II through the widespread communication of rating results.
The principles of a strict earnings and risk oriented business policy will also be
adhered to in 2008.
35

36
Capital Markets
In the Capital Markets business, Landesbank Berlin provides innovative
capital market products for financial institutions, private
clients and institutional investors. It has acknowledged expertise
in structured products and funds as well as financing in Central
and Eastern Europe.
In 2007, the Capital Markets division systematically implemented its strategy of
expanding its client-based business, which is less volatile than proprietary trading.
Yet again its comprehensive range of products and services from Treasury products,
special-purpose and publicly offered funds to complex, structured financial instruments
was well received in the market.
However, business performance was massively affected by the general upheavals
on international financial markets, which were the result of the crisis in sub-prime
residential real estate lending in the USA.
CApITAL MARkETS – LOAnS
in t million 31.12.2007 31.12.2006
Loans and advances to banks 18,156 20,106
Total loans and advances to customers 2,198 1,809
Assets recognised at fair value
through profit or loss 12,817 11,912
Financial assets 35,666 32,299
CApITAL MARkETS – dEpOSITS
in t million 31.12.2007 31.12.2006
Deposits by banks 38,662 33,529
Total customer deposits 3,540 3,555
Securitised debt
Financial liabilities recognised at fair value
5,742 6,672
through profit or loss 9,972 9,668

Net interest income after allowances for losses
developed positively following the reversal of writedowns.
The division’s earnings were € 93 million
down on the previous year’s figure following losses
on assets recognised at fair value through profit
or loss.
Year dominated by the sub-prime crisis
In line with its strict risk policy Landesbank Berlin
has not been directly involved in the sub-prime
financing segment and this is why there were no
direct charges from this market segment in 2007
either.
Nevertheless, the loss of confidence in specific
categories of securities triggered by the sub-prime
crisis, which led to significant problems on inter na-
tional financial markets, will still have consequences
for the Bank’s trading and investment strategies.
Following a massive expansion in credit spreads and
shortages of liquidity, equities and interest markets
have been subject to considerable volatility; pricing
mechanisms failed to function intermittently.
This led to losses in proprietary trading despite the
wide range of strategies developed in recent years.
Even high quality assets in our investment strategies
had to accept marked falls in value, which had a
direct impact on earnings in some cases. However,
the quality of the assets is such that no defaults are
expected.
LBB-Invest remains on an expansionary course
In recent years, LBB-Invest has joined the top table
among German investment companies with its
special-purpose and publicly offered funds. The
maxim of the only investment company based in
Berlin is to offer an easily comprehensible range of
high quality, specialist fund products and at the
same time to respond flexibly to evolving markets
and client requirements.
In 2007, the net inflow of cash reached € 1.6 billion
and was consequently some € 400 million up on the
figure for the previous year. According to statistics
from the Bundesverband Investment und Asset
Management (BVI – German Investment and Asset
Management Association) this means that LBB-
Invest ranks eighth amongst all German investment
companies. The total fund volume increased from
€ 11.3 billion at the end of 2006 to € 12.8 billion at
the end of 2007.
Strong demand for structured products
In 2007, gross sales of certificates and structured
products amounted to € 1.9 billion and were consequently
almost € 430 million up on the level of the
previous year. The division’s range of services comprises
individual products and product solutions in
particular. Landesbank Berlin sees itself as a pioneer
in this respect and has launched several important
product innovations for this new market in recent
years, some of which have been awarded prizes.
Among others, the LBB Vietnam Opportunity certificate
received the audience award at the prestigious
Zertifikate Award in 2007.
About the company
Capital Markets
37

38
Capital Markets
Proven three-pillar structure
The Capital Markets division comprises the Treasury
& Trading, Client Business and International Business
units.
Treasury & Trading combines trading and investment
activities in treasury and proprietary trading. It holds
a central function for the entire Group’s liquidity support
and refinancing.
Client Business combines all cross-product customer
activities. The organisation was enhanced in 2007
by separating sales and productions into separate
teams. The division of responsibilities means that
the sales team can concentrate entirely on recording
and coordinating client requirements, which makes
sales more efficient.
pROSpECTS FOR 2008
The International Business unit provides corporate
clients and financial institutions with tailored financing
instruments for markets in Central and South
Eastern Europe as well as CIS countries, including
central Asia.
Business volume was markedly expanded in 2007,
particularly in export finance. By contrast, commodity
trade finance business, which had been falling
sharply recently, was discontinued.
The paramount aim remains increasing the proportion of earnings from client
business in order to make the Bank more independent of developments on
capital and financial markets and consequently reducing the extent to which
the division’s earnings fluctuate. LBB-Invest is to expand its market position
by developing its product range and by concluding sales agreements with
external partners. notwithstanding internal optimisation measures, business
performance in 2008 will, however, be substantially dependent on the extent
to which calm is restored to international financial markets.

Real Estate Financing
About the company
Capital Markets | Real Estate Financing
Landesbank Berlin combines its expertise in individual financing
solutions for commercial real estate projects in the Real Estate
Financing division. With our two brands, Landesbank Berlin and
Berlin Hyp, it caters for institutional investors, residential construction
companies and developers in Germany and selected foreign
markets. The LBB Group ranks as one of the largest providers in
the market for commercial real estate in Germany.
In 2007, the division picked up on the successful developments of previous years.
Contracted new business was well up on the level of the previous year, at € 10.2 billion,
and exceeded expectations (up 43 %). Foreign business, which started at the end of 2006,
also contributed to this. The difficult situation on financial markets also led to additional
opportunities for new business in the second half, since demand for finance exceeded
supply. Pressure on margins also decreased. The reversal of allowances for losses and
higher net commission income contributed to the fact that the division’s operating result
was significantly increased from € 147 million in the previous year to € 255 million.
REAL ESTATE FInAnCInG – LOAnS
in t million 31.12.2007 31.12.2006
Real estate loans 24,399 24,955
Other loans (public-sector loans) 8,635 10,234
Total loans and advances to customers 33,034 35,189
REAL ESTATE FInAnCInG – dEpOSITS
in t million 31.12.2007 31.12.2006
Demand deposits 406 396
Overnight deposits 140 110
Term deposits / savings certificates 6,910 5,883
Savings deposits 12
‘Cash direkt’ 4 1
Total customer deposits 7,460 6,402
Securitised debt 21,010 21,117
39

New business
in 2007 by
customer segment
New business
in 2007 by
lending region
New business
in 2007 by
property type
40
Real Estate Financing
New business exceeds previous year
and expectations
In 2007, the division achieved contracted new business
of € 10.2 billion compared with € 7.1 billion
in the previous year. In Germany, LBB continued to
concentrate on financial centres as target markets.
Despite strong growth in new business, the division’s
Investors 85%
Housing companies 3%
Property developers 9%
Building contractors 3%
Former West German states 47%
Berlin /
Former East German states 17%
International 34%
Other 2%
Office / Commercial 50%
Residential 26%
Retail 15%
Other 9%
portfolio of real estate loans remained virtually constant
at € 24.4 billion as of December 31, 2007
(December 31, 2006: € 25.0 billion), since the portfolio
of bad and doubtful debts was reduced far
more rapidly than planned. As a result, the quality
of the portfolio has improved dramatically.
An analysis of the structure of new business by
client segment shows that the focus has concentrated
increasingly on new business. A third of new
business volume was contracted abroad in 2007
thanks to the new offices. In return the volume of
transactions in Berlin and the surrounding area has
fallen slightly. In 2007, there was very little change in
the breakdown of new business by type of property
compared with the previous year. Details of this can
be seen in the opposite diagrams.
Positive growth in margins
Business in the first half of 2007 was dominated
by sustained and substantial interest in the German
real estate market by foreign investors in particular.
Landesbank Berlin and Berlin Hyp were able to
exploit the business opportunities this offered and
further their client base further. A process and structural
organisation that is systematically oriented to
customers’ requirements, allowing rapid decisionmaking,
again proved to be a factor in succeeding
against our competitors.
In the second half of the year, additional opportunities
for new business emerged as a consequence of
the crisis in financial markets. In contrast to many of
its competitors, LBB was able to maintain its offers
of finance at all times and consequently close gaps
in supply in the market. This development but also
the growing proportion of project development transactions
and the increase in foreign loans led to an
increase in the average margin on new business.

A further improvement in risk structure
In 2007, LBB adhered systematically to the principle
of foregoing transactions that did not correspond to
internal profitability and risk criteria. By and large,
the upheavals on financing markets have increased
market players’ comprehension of the fact that risk
must be adequately priced – a development that
matches LBB’s fundamental approach.
In 2007, the volume of risk carrying financing (work
out portfolio) was substantially reduced thanks to
successful restructuring or settlement activities
through the sale of smaller packages. The overall
improvement in the risk structure allowed us to write
back allowances for losses, which led to a positive
figure for allowances for losses.
pROSpECTS FOR 2008
Successful start abroad
In 2007, LBB successfully completed its venture into
neighbouring countries. A sales team had already
started work in London in 2006 and this was followed
by the opening of offices in Prague and Warsaw in
the year under review. A sales partnership was also
entered into in the Netherlands, which will cover the
entire Benelux market.
The activities abroad, which will be targeted at the
same client groups as in Germany, will serve to
secure future growth in volume and earnings but
also to diversify our business regionally and consequently
to spread risk. The proportion of business
generated abroad increased markedly in 2007.
Landesbank Berlin will continue its successful strategic course in real estate
financing. An effective, client-oriented sales team in the major German conurbations,
which can be specifically reinforced in line with regional market
potential, continues to form the backbone to this course. We shall press ahead
with expansion in the rest of Europe with the aim of gradually building up relevant
market positions in the individual countries. We shall also examine the options
of extending business abroad into new markets. Continuous adaptation of the
division’s range of products and services to evolving client requirements as
a consequence of structural changes in commercial real estate financing is
another important task.
About the company
Real Estate Financing
41

42
Employees
Following the end of the reconstruction and restructuring
phase, we systematically developed measures
to improve employees’ qualifications, to promote
junior staff and improve employability.
We attach particular importance to employees’ qualifications.
The constant extension and consolidation
of specialist knowledge guarantees staff will be able
to function at a high level professionally. Managers
are supported in their challenging role through specialist
training sessions, junior staff, who have been
selected for management positions, receive comprehensive
preparation for assuming their management
role in a one-year programme. Specialists are also
able to develop their personal and methodological
skills continuously.
At the same time, we increased the recruitment
figures for training places as a banker and for the
dual track course at universities of cooperative
education in 2007. In addition, we are recruiting
more university graduates. Given the background
of demographic change, taking on more successful
junior staff will secure a good, forward-looking,
balanced and stable employee structure.
We have also concluded an agreement on employability
with the Group’s employee representatives.
Employees will be given the opportunity to prepare
themselves comprehensively for the changing
requirements of professional life. The focus is on
continually promoting employees and opening up
and creating new professional prospects to remain
successful in the market in an environment of rapid
change and increasing competition.
As was the case last year, the 2007 business earnings
have allowed us to grant our employees an annual
bonus, which equates to 50% of their monthly salary
for employees on an agreed pay scale and 20% of
their monthly salary for employees not covered by
an agreed pay scale.
The Board of Management thanks all its employees
and their representatives for their dedication commitment
in implementing the 2007 operational targets.
This would have been impossible without their extra ordinary
commitment.

Share Price of Landesbank Berlin Holding AG
Following the conclusion of the bidding process for
the share in Landesbank Berlin Holding AG held by
160
the State of Berlin, the share price fell sharply. In
150
April 2008, the share was listed at almost € 6.
140
130Our
new principal shareholder made a so-called
120exempting
takeover offer to the remaining share-
110holders,
which included a purchase price of € 6.81
per LBBH share. The Board of Management and
100
Supervisory Board of LBB Holding made a statement
90
in response in which they declared their support
80
for the bid and recommended that the shareholders
70accept
it.
60
50
pRICE pERFORMAnCE AS AGAInST dAX And CdAX BAnkS
Closing price as at 29.12.2006 = 100%
in %
140
130
120
110
100
90
80
70
60
50
29.12.2006
05.02.2007
12.03.2007
Landesbank Berlin Holding AG’s shares are listed
in official trading (General Standard) on the Berlin-
Bremen, Frankfurt and Dusseldorf stock exchanges.
18.04.2007
24.05.2007
29.06.2007
03.08.2007
The majority of the free shareholders of LBB Holding
acted on this recommendation by the end of the
extended period for accepting the takeover bid on
November 1, 2007, so that the free float only stands
at 1.4% now.
About the company
Employees | Share Price
At this point, we should like to express our gratitude
for the loyalty of our shareholders, some of whom
were longstanding shareholders, who accepted the
bid, and also those, who continue to hold our shares.
We assume that not only the results of financial year
2007 but also those of subsequent years will be
sufficient to enable our company to pay a dividend
in the long term.
07.09.2007
12.10.2007
Landesbank Berlin Holding AG CDAX Banks DAX
16.11.2007
21.12.2007
01.02.2008
07.03.2008
15.04.2008
43

Group Management Report
Overview of the 2007 financial year 46
Company profile 46
Information in accordance with Article 315 (4)
of the German Commercial Code 55
General development 55
Development of business –
January to December 2007 58
Results of operations 59
Segment results 62
Net assets 65
Financial position 68
Effects of consolidation 68
Events after December 31, 2007 69
Final statement on the dependent company
report in accordance with Article 312 of the
German Stock Corporation Act 69
Risk report 70
Principles for risk management and control 70
Overall risk management 71
Counterparty default risk 74
Liquidity risks 83
Share and fund price risks 85
Real estate risks 89
Operational risks 89
Other risks 94
Report on expected developments / Outlook 95
Expected development /
Assessment of the economic situation 95
Business orientation 96
Development of the business segments 96
Comparison of projected and actual figures 98
Estimation procedure 98
Medium-term planning 98
Summary / Overall assessment 98
45

46
Overview of the 2007 financial year
Company profile
Organisational and legal structure
As of 31 December 2007, the organisational and
legal structure of the Group is as follows:
Erwerbsgesellschaft der
S-Finanzgruppe mbH & Co. KG
90.4 %
Berlin Hyp AG
Deutscher Sparkassen-
und Giroverband ö.K.
Landesbank Berlin Holding AG
Landesbank Berlin Holding AG (Holding) is the
parent company of the Landesbank Berlin Group.
It is a listed public limited company and a financial
holding company as defined in the German Banking
Act (KWG) headquartered in Berlin. Since 8 August
2007, its majority shareholder has been Erwerbsgesellschaft
der S­Finanzgruppe mbH & Co. KG
(S­Erwerbsgesellschaft) with a holding – as of
31 December 2007 – of 88.0 %. After the end of
Free float
88.0 % 10.6 % 1.4 %
100 %
Landesbank Berlin
International S.A.
100 %
Landesbank Berlin AG
– Berliner Sparkasse –
100 % 100 %
LBB-INVEST GmbH BankenService GmbH
the year, the shares of Deutscher Sparkassenund
Giroverband Körperschaft des öffentlichen
Rechts (DSGV ö.K.) were acquired by Beteiligungsgesellschaft
der S­Finanzgruppe mbH & Co. KG
(S Beteiligungsgesellschaft). Until mid­2006, the
holding operated as Bankgesellschaft Berlin AG,
the assets of which were almost entirely transferred
to Landesbank Berlin AG retroactively as
of 1 January 2006 as part of the spin­off.

Landesbank Berlin AG (LBB) is a wholly owned
subsidiary of the Holding. It is an unlisted public
limited company and a financial institution as
defined in the KWG. LBB emerged from Landesbank
Berlin – Girozentrale –, after the latter was
converted from a bank subject to private law into
a public limited company on 1 January 2006 in
accordance with the Berlin Savings Bank Act of
28 June 2005.
LBB holds the Group’s strategically important
investments, in particular, the interests in Berlin­
Hannoversche Hypothekenbank AG (Berlin Hyp),
in BankenService GmbH (BankenService) and
in Landesbank Berlin Investment GmbH (LBB­
INVEST). It also maintains branches in London
and Luxemburg.
The Group is organised as follows:
The Holding does not conduct any banking business
of its own and therefore does not employ any staff.
Its principal purpose is to hold the investment in
LBB. The work that this entails and the support for
the Holding’s executive bodies are provided on an
agency basis by LBB.
LBB is divided into four strategic business areas
and the Corporate Centres that support them. The
business areas consist of Retail Banking, Corporate
Banking, Capital Markets and Real Estate Financing.
The Corporate Centre units include IT, Controlling,
Risk Controlling, Corporate Development, Audit
and Finance. The real estate financing provided by
LBB and Berlin Hyp is, as far as is legally possible,
managed by the cross­bank business area. The
respective units in the two companies are also
linked correspondingly closely with each other.
Landesbank Berlin AG
Management Report
Overview of the 2007 financial year
Retail Banking Regional Corporate Banking Capital Markets Real Estate Financing
In the reporting year, the number of employees in the
Group declined by 28. Employee capacity is virtually
unchanged. The share of women in the Group on
Corporate Center
31 December 2007 was 62.1 % of the total staff. The
total fluctuation rate was encouragingly low at 3.6 %
or 2.4 % after adjustment for retirement.
47

48
Overview of the 2007 financial year
The Board of Management and the division
of departments
As of 31 December 2007, the Board of Management
of the Holding consisted of Hans­Jörg Vetter and
Dr. Thomas Veit.
Hans-Jörg Vetter
(Chairman)
Landesbank Berlin Holding AG
Landesbank Berlin AG
Corporate Development
Personnel
Audit Dept.
Legal
Dr. Thomas Veit
Landesbank Berlin Holding AG
Landesbank Berlin AG
Real Estate Financing
Finance
Organisation
Information Technology
Remuneration system for the Board of Management
and the Supervisory Board
The Supervisory Board of the listed Holding and its
wholly owned subsidiary LBB largely consist of the
same people. The members of the Board of Management
of the Holding are also the members of the Board
of Management of LBB. In the interests of clarity, a
summarised presentation in the form of the remuneration
report recommended by the German Corporate
Governance Code is provided for both companies.
This remuneration report summarises the principles
applied in stipulating the remuneration of the Board of
Management of the Holding and LBB and it presents
the structure and amount of the remuneration of
members of the Board of Management. In addition
the principles applicable to and the amount of the
remuneration paid to members of the Supervisory
Board and its committees are described.
Serge Demolière
Landesbank Berlin AG
Capital Markets
Dr. Johannes Evers
Landesbank Berlin AG
Retail Banking
Uwe Kruschinski
Landesbank Berlin AG
(left the company
as of 30 June 2007)
prior to this:
Lending business
Risk Management
All operating activities of the Holding are performed
by LBB on the basis of an agency agreement between
the Holding and LBB. In the 2007 financial year, the
responsibilities of the individual members of the Board
of Management were organised as follows:
Hans Jürgen Kulartz
Landesbank Berlin AG
Regional Corporate Banking
Martin K. Müller
Landesbank Berlin AG
Risk Controlling
Controlling
Compliance
Lending business
Risk Management
BankenService GmbH
In so doing, the remuneration report takes account
of the recommendations of the German Corporate
Governance Code for both companies and it contains
the details, which under German commercial
law are a component of the Group Management
Report pursuant to Article 315 (2) no. 4 of the
German Commercial Code and of the notes pursuant
to Article 314 (1) no. 6 a sentence 5 to 8 of
the German Commercial Code.
Remuneration of the Board of Management
At both the Holding and LBB, the Audit, Personnel
and Strategy Committee of the Supervisory Board is
responsible for stipulating the structure and amount
of the remuneration of members of the Board of
Management. The Audit, Personnel and Strategy
Committee stipulates the key points of employment
contracts, particularly salaries and other components
of their remuneration, for the Board of Management.

The remuneration is determined on the basis of an
analysis of the income paid to members of the executive
management within the Group and in comparable
German financial institutions.
For all members of the Board of Management,
the individual rights and duties resulting from their
membership of the Board of Management are
regulated through their contracts of employment
with LBB.
The Board of Management of the Holding is formed
by its Chairman Mr. Hans­Jörg Vetter and Dr. Thomas
Veit. They are also the members of the Board of
Management of LBB, to which almost all operations
of the Holding have been transferred. Accordingly,
notwithstanding their appointments as members of
the Holding’s Board of Management, the Board of
Management contracts for Mr. Hans­Jörg Vetter and
Dr. Thomas Veit as well as the supply agreements
and comparable contracts relating to them are with
LBB, for which the vast majority of their work is
undertaken.
On this contractual basis, LBB pays all the Board
of Management remuneration for the two members
of the Board of Management. In return, it receives
compensation from the Holding based on time spent
amounting to a monthly lump­sum of € 5,000 per
Board of Management member and € 6,000 for the
Chairman of the Board of Management. Accordingly,
the Holding reimbursed LBB € 132,000 in 2007.
In the reporting year, Mr. Uwe Kruschinski retired
as an active member of the Board of Management
of LBB as of June 30, 2007.
With regard to their remuneration, the following
components are stipulated in the contracts of employment
for members of the Board of Management:
Fixed annual salary:
The fixed salary is payable in equal monthly instalments.
In line with the agreements contained in the
contracts of employment, the Audit, Personnel and
Strategy Committee reviews the fixed remuneration
every two years to check that it reflects the responsibilities
of the respective member of the Board of
Management, his personal performance, the performance
of the body as a whole and the economic situation,
success and prospects of the Company, taking
into consideration its comparative environment. The
last such review took place in March 2007.
The salaries of the Board of Management are adjusted
on the basis of the Group’s earnings position but the
general increases in prices and collectively agreed
pay rates in the Federal Republic of Germany also
have to be taken into account and they are compared
with the structure of Board of Management remuneration
in other comparable financial institutions. There
is no legal entitlement to any increase in the fixed
salary.
Annual bonus:
Members of the Board of Management receive an
annual bonus for their work in the past financial
year, which is resolved in the following year. The
amount of the bonus is geared, in particular, to the
criteria for the fixed salary and to the development
of the results of the Holding and LBB and is payable
in one amount after the annual financial statements
of both companies have been approved. At the same
time, payment of a specific minimum is guaranteed
for each Board of Management member. Any amount
in excess of this figure is determined by the Audit,
Personnel and Strategy Committee taking account
of the parameters mentioned above, particularly the
individual performance appraisal.
There are no additional remuneration components
offering a long­term incentive (subscription rights,
other share­based payments etc.) for members of
the Board of Management.
Management Report
Overview of the 2007 financial year
49

50
Overview of the 2007 financial year
Other remuneration:
Each member of the Management Board also has
unlimited use of a company car plus driver. In this connection,
some of the Management Board members
are also entitled under their contracts of employment
to have the tax payable on the monetary benefit of
private use of the company car paid by their employer.
The Holding and LBB have concluded an appropriate
Group insurance policy covering economic losses
by third parties (D&O insurance) for the members of
their executive bodies. This also covers the personal
liability of members of the Boards of Management
of the Holding and LBB in the event that claims are
made against the group of persons in question for
economic losses incurred in carrying out their work.
A deductible, as defined in the German Corporate
Governance Code, amounting to three months’ fixed
salary is agreed for members of the Board of Management.
The Holding pays the premiums for these
Directors & Officers policies, which is also in the
interests of the two companies.
Under his contract of employment as a member
of the Board of Management, Mr. Martin K. Müller
is entitled to payment of the premiums for an insur­
ance policy equal to the compulsory health and
long­term support insurance by his employer up
to half the statutory maximum.
Total remuneration:
In financial year 2007, members of the Board of
Management received remuneration (including performance­related
components) totalling € 7,496 thousand
(previous year: € 6,396 thousand). This figure
includes the guaranteed components of the annual
bonus for the work of the Board of Management in
financial year 2007 amounting to € 2,242 thousand,
which will be paid in 2008 (comparative figure for
previous year: € 2,331 thousand). Total remuneration
also includes the performance­related components
of the annual bonus for financial year 2006 of € 2,325
thousand, which was paid in 2007 (comparative figure
for previous year: € 1,030 thousand).
Benefits from third parties were neither promised to
Board of Management members for their work as
a Board of Management member nor granted in the
financial year.
Pension plans:
In the event that members of the Board of Management
are unable to work as a result of accident or
illness, they are entitled to their full remuneration for
a specific period: Mr. Hans­Jörg Vetter, Dr. Thomas
Veit and Mr. Serge Demolière up to one year,
Dr. Johannes Evers, Mr. Hans Jürgen Kulartz and
Mr. Martin K. Müller up to two years not exceeding
the end of their employment agreements.
Following the end of the contractual relationship as
a result of reaching their 65th birthday, because of
occupational disability, at the end of their appointment
or as a result of the contractual relationship
being dissolved by LBB, which is not triggered by
good cause on the part of the Board of Management
member (Article 626 of the German Civil Code), the
members of the Board of Management are entitled
to a pension. After their 60th birthday, the service
agreements can be terminated by Mr. Serge Demolière,
Dr. Johannes Evers and Mr. Hans­Jörg Vetter or LBB.
Dr. Thomas Veit and Mr. Hans Jürgen Kulartz can
retire of their own volition after their 62nd birthday.
The members of the Board of Management will then
receive their pensions before their 65th birthdays.
During the first six months following their retirement
from the Company’s service, members of the Board
of Management are entitled to their official remuneration
but payment of their pension will start from the
seventh month. In the case of Mr. Martin K. Müller,
his pension will be paid in the first month following
his retirement from the Company’s service.

Depending on age, the pension is assessed according
to a specific percentage of the fixed annual salary
and increases by 2 % for each year spent working
as a member of the Board of Management up to an
agreed maximum for each member of the Board of
Management. In each case, the basis for calculating
the pension is the pensionable portion of the fixed
salary, which amounts to 100 % and 69 % in the
case of Mr. Serge Demolière.
Individual details:
Vested pension Maximum
entitlement as of
31.12.2007
in % in %
Mr. Demolière 47 60
Dr. Evers 56 75
Mr. Kulartz 54 75
Mr. Kruschinski 1) 58 70
Mr. Müller 40 70
Dr. Veit 50 60
Mr. Vetter 56 60
1) left the company as of 30 June 2007
Under their contracts of employment members of
the Board of Management are entitled to have their
ongoing pension benefits adjusted. This adjustment
is based on the percentage changes to collective
wages in the private banking industry and in public
banks.
In line with their service agreements and subject to
a future difference of opinions between the members
of the Board of Management on the one hand and
the Supervisory Board or the majority shareholder
on the other that cannot be resolved, Mr. Hans­Jörg
Vetter and Dr. Thomas Veit have a special right of
termination. If the contract of employment ends as a
result of notice being given on these grounds, both
men will be entitled to payment of the remuneration
still outstanding until the end of their contract term.
In 2007, € 754 thousand was recognised as provisions
for pension commitments and similar obligations
towards members of the Board of Management
under IFRS (previous year: € 1,981 thousand). As
at the balance sheet date, the net present value of
the pension provisions created for the Board of
Management (IFRS) amounted to € 11,840 thousand
(previous year: € 14,735 thousand).
As a result of the departure of Mr. Uwe Kruschinski
as an active member of the Board of Management
as of June 30, 2007, his pension provisions are now
reported under those for former members of the
Board of Management.
Members of the Board of Management have received
advances or loans from the Bank and there are contingent
liabilities amounting to € 388 thousand as of
December 31, 2007 (December 31, 2006: € 1,186
thousand).
Furthermore, remuneration (pensions, dependants’
pensions and related benefits) totalling € 6,160 thousand
was paid to former members of the Board of
Management or their surviving dependants in the
past financial year (2006: € 6,456 thousand).
The net present value of the provisions recognised
in 2007 for ongoing pensions and entitlements to
pensions for this group was € 90,661 thousand
(December 31, 2006: € 94,397 thousand).
It should be noted in this connection that this remuneration
and /or provisions also relate to former
members of the Holding’s Board of Management in
addition to those of LBB. This is based on the fact,
as shown above, that in the course of the virtually
complete divestment of the assets of the Holding
to LBB all supply agreements and similar contracts
were transferred to LBB. The corresponding provisions
for ongoing pensions and entitlements to
pensions were also transferred to LBB.
Management Report
Overview of the 2007 financial year
51

52
Overview of the 2007 financial year
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board is set
out in the respective Articles of Association, which
may be amended by resolution of the Annual General
Meeting if necessary. The remuneration of the Supervisory
Board is based on the size, the economic
position and the success of the respective company
as well as the particular tasks and the responsibility
of the members of the Supervisory Board.
The rules on remuneration applicable to the Holding
are set out in Article 13 of its Articles of Association.
Accordingly the members of the Supervisory Board
of the Holding receive a fixed remuneration annually
as well as a component linked to the company’s
performance.
The rules on remuneration applicable to the Supervisory
Board of LBB are set out in Article 11 of its
Articles of Association. Accordingly the members of
the Supervisory Board of the Holding receive a fixed
remuneration annually; separate, performance­based
remuneration is not provided for the Supervisory
Board of LBB.
Additional remuneration is paid for membership of
the committees as well as the roles of chairman and
deputy chairman of the Supervisory Board and of its
committees at the Holding and at LBB.
The remuneration of members of the Supervisory
Board is set out as follows:
Fixed annual remuneration:
Members of the Supervisory Board receive a fixed
annual remuneration of € 15,000 at the Holding
and € 10,500 at LBB.
Performance­related annual remuneration:
In addition to their fixed annual remuneration,
members of the Holding’s Supervisory Board
receive a performance­related remuneration of
€ 550 per half percent dividend if the dividend
exceeds 4 % of the share capital.
The chairman of the Supervisory Board at both
companies receives twice the amounts in question,
while his deputy receives one and a half times the
amounts in question.
Remuneration of the committees:
Members of the Audit, Personnel and Strategy
Com mittee of the respective Supervisory Board
and members of the Credit Committee of the
Supervisory Board of LBB each receive a fixed
remuneration in addition. At the Holding this
amounts to € 10,000 per year, the chairmen
receive € 15,000 each, their deputies € 12,500
each. At LBB, this remuneration amounts to
€ 6,000 per year, while the chairmen of these
committees each receive € 8,000 and their
deputies € 7,000.
Members of the two Supervisory Boards do not
receive a separate attendance fee for meetings.
For members of the Supervisory Board, who did not
belong to the Supervisory Board or one of its committees
for the entire financial year, their remuneration
is paid on the basis of the number of days they
were in office.
Dr. h. c. Axel Berger is also a member of the Super­
visory Board of Berlin Hyp, a subsidiary of LBB.
For this activity he received remuneration from Berlin
Hyp of € 10,500 (financial year 2006: € 3,911).

As described above for the Board of Management, the
members of the Supervisory Board of the Holding and
LBB also have appropriate Group insurance policy
covering economic losses by third parties (D & O
insurance). A deductible, as defined in the German
Corporate Governance Code, amounting to half their
fixed annual remuneration is agreed for each member
of the Supervisory Board. The Holding pays the
premiums for this D & O policy, which is also in the
interests of the two companies.
The members of both Supervisory Boards receive
their remuneration for their work carried out in the
respective financial year after the financial year in
question ends and after the companies’ Annual
General Meetings. Accordingly, the annual remuneration
for 2007 will be paid to the Supervisory Board
members of the Holding and LBB after the respective
resolution on the appropriation of profits and on
approving the actions of the Supervisory Board by
the Annual General Meeting of both companies.
Holding Supervisory Board:
For work on the Supervisory Board of the Holding,
total remuneration of € 374 thousand is payable
to the members of this Supervisory Board and its
committees for financial year 2007 (previous year:
€ 421 thousand); not including VAT.
LBB Supervisory Board:
For work on the Supervisory Board of LBB, total
remuneration of €251 thousand is payable to the
members of this Supervisory Board and its committees
for financial year 2007 (previous year:
€ 225 thousand); not including VAT.
Holding Supervisory Board (Group):
For work on the Supervisory Board of LBB Holding
AG and the Supervisory Boards of other group
companies including committees, total remuneration
of € 636 thousand is payable to the members
of this Supervisory Board of LBB Holding AG for
financial year 2007 (previous year: € 647 thousand);
not including VAT.
Apart from the trade union representatives, all
employee representatives on the Holding’s Supervisory
Board are employees of LBB. The employee
representatives on both Supervisory Boards em ­
ployed by LBB receive their salaries as employees
in addition to their Supervisory Board remuneration.
Members of the Supervisory Board of Management
have received advances or loans from the Bank in
the reporting year and there are contingent liabilities
amounting to € 98 thousand as of December 31, 2007
(December 31, 2006: € 120 thousand).
No remuneration or benefits for services supplied
personally, in particular, consultancy and brokerage
services were paid or granted to members of the
Supervisory Board of the Holding or LBB.
Segments
The Group’s banking business is conducted in the
following four strategic business segments and the
supporting Corporate Centres.
Retail Banking
The Group operates its retail banking business in
Berlin under the Berliner Sparkasse brand. Thus,
LBB is the clear market leader for retail banking in
its core region of Berlin. Retail banking products are
mainly centred on current account management,
investment consulting and asset management, consumer
finance and private construction finance. The
credit card business operated throughout Germany
with co­branding partners is another focal point
of activities. LBB also operates in direct banking
through the majority interest it acquired in netbank
AG (netbank) in the reporting year.
Management Report
Overview of the 2007 financial year
53

54
Overview of the 2007 financial year
Regional Corporate Banking
The Group’s regional corporate banking, which
comprises business with small and predominantly
medium­sized companies as well as the public sector,
is focused on Berlin and Brandenburg. It operates
under the Landesbank Berlin and Berliner Sparkasse
brands. In regional corporate banking, the traditional
banking services are offered to medium­sized companies
and businesses with payment services and
investment business. LBB also provides working
capital, investment and trade finance. The range of
services also includes international payment services,
leasing, factoring and electronic banking products
as well as consulting for start­ups and business succession.
LBB is one of the leading market players
in business client business and in SME corporate
business.
Capital Markets
The Capital Markets division of LBB comprises Client
Distribution, Client Production, Treasury & Trading
and International Business as well as the investment
LBB­INVEST, which is wholly assigned to the business
area. The Capital Markets business area also
includes operating units at the international locations
in London and Luxemburg.
Client Business designs (Client Production) and sells
(Client Distribution) mainly equity, interest and currency
products. The offering of LBB­INVEST includes
both publicly offered funds and special funds for
institutional investors. Treasury & Trading manages
the liquidity and refinancing of the Group and generates
income from trading and investment strategies.
International Business focuses on export finance
covered and not covered by the Export Credit Agency,
trade finance, commercial foreign business and lending
business with banks, companies and states in the
Central and Eastern Europe target area.
Real Estate Financing
The Real Estate Financing segment covers the real
estate financing business throughout Germany,
which is operated in close cooperation (sales and
organisation) by LBB and Berlin Hyp. To exploit
additional opportunities abroad, offices were opened
in London, Warsaw and Prague and a sales coordination
arrangement was entered into in the Netherlands
for the Benelux market. This segment includes
all the business activities of Berlin Hyp (exception:
changes in the carrying amount of derivatives for
managing the interest rate risk). Business activities
in commercial real estate financing are focused on
financing on a property­covered basis. Refinancing
is carried out by issuing mortgage bonds. The main
clients of the division are investors and residential
construction companies. The predominantly small
and medium­sized clients are offered the entire
range of real estate financing services. Flexible and
innovative solutions with short decision paths have
proved to be a special strength in this segment. In
terms of size, the division is in the top half of the
sector.
Additional segments in Group reporting
In addition to the divisions, Group segment reporting
includes the “Corporate Investments” and “Other /
Consolidation” segments. The Group management
and service functions, the balance sheet structure
management and the consolidation items in the
Group are shown under the latter.

Information in accordance with Article 315 (4)
of the German Commercial Code
The subscribed capital of Landesbank Berlin Holding
AG amounts to € 2,554 million and is divided into
999,327,870 shares. The shares are bearer shares
and each share entitles the holder to one vote.
Please refer to the section on the organisational and
legal structure with regard to the investments in the
capital.
The statutory regulations of Article 84 of the German
Stock Corporation Act apply to the appointment and
dismissal of the Board of Management while the
statutory provisions of Articles 179 ff of the German
Stock Corporation Act apply to changes to the Articles
of Association.
The Annual General Meeting of 23 August 2007
authorised Landesbank Berlin Holding AG to acquire
own shares for the purpose of securities trading until
September 30, 2008 in accordance with Article 71 (1)
No. 7 of the German Stock Corporation Act. The
acquisition prices may not exceed or fall short of the
average closing price of the shares for the ten preceding
trading days by more than 10 %. The trading
portfolio of the shares acquired for this purpose may
not exceed 5 % of the share capital at the end of
each day. In addition, in accordance with the resolution
of the Annual General Meeting on 23 August 2007,
there is the option to acquire treasury stock for purposes
other than securities trading in accordance with
Article 71 (1) no. 8 of the German Stock Corporation
Act until 30 September 2008. This option was not
exercised in the reporting year.
For information on the change of control clauses
arranged with the members of the Board of Management,
please refer to the section on the remuneration
system for the Board of Management and Supervisory
Board.
General development
General economic situation
The economic situation remained positive in Germany
in 2007, although private household spending was
initially limited in the first half of the year. The rate of
growth accelerated again in the second half of the
year.
Rising defaults on property loans in the US caused
the risk premiums on a number of financial instruments
to rise in the second half of the year. As a
result, the US residential property market suffered
significant price declines. Coupled with rising interest
and loan repayments by private households, this
increasingly spread to other areas of the economy
by the end of the year. However, the German current
account surplus was initially unaffected by this. The
trend even grew further, as demand from other parts
of the world and the constant rise in competitive
capability within the euro zone provided sufficient
stimulus to offset this so far.
In addition, buoyant domestic forces remained
in place. Good utilisation of production capacity
provided strong investment incentives. The rise
in employment helped to overcome the dip in
consumption following the sales tax hike as of
1 January 2007.
The economy in Berlin improved further in 2007.
GDP grew by 1.8 % as against the same period
of the previous year. In particular, strong impetus
was generated by business­related services, the
manufacturing industry and exports.
The positive overall economic development also
affected corporate personnel planning. Around
30,000 more people were employed in positions
where social insurance contributions are payable
than in the previous year. Thus, employment growth
in Berlin again exceeded the national average. The
drop in the unemployment rate was also stronger
in Berlin than for the country as a whole. However,
gross domestic product (per capita) is still 17 %
below the national average.
Management Report
Overview of the 2007 financial year
55

56
Overview of the 2007 financial year
Reorientation and measures to improve earnings
EU financial assistance proceedings
In its decision on 18 February 2004, the European
Commission approved the application for aid in
restructuring the former Bankgesellschaft Berlin AG
Group in full. In return, the German Federal Government
issued various statements regarding its reorientation
and restructuring.
Only one of these commitments was left to be implemented
in the reporting year: the disposal of the
80.95 % shares held by the State of Berlin in the
Holding in an open, transparent and non­discriminatory
process. The State of Berlin initiated the corresponding
disposal process by publicly tendering
its shares for sale on 19 January 2007. In the following
months, the State of Berlin prepared for both
a package sale of its 80.95 % of shares by way of
a bidding procedure and placement on the stock
exchange. On 15 June 2007, the State of Berlin
concluded a purchase agreement with S­Erwerbsgesellschaft.
This purchase agreement was carried
out on 8 August 2007.
Furthermore, S­Erwerbsgesellschaft bought a
further 7.06 % of shares on the market. In addition,
Deutsche Sparkassen­ und Giroverband Körper­
schaft des öffentlichen Rechts (DSGV ö.K.) acquired
share packages of around 10.0 % and 0.63 % in the
Holding. After the end of the year, the shares of
DSGV ö.K. were acquired by S­Beteiligungsgesellschaft.
Overall, the shares held by S­Erwerbsgesellschaft
including the shares held by S­Beteiligungsgesellschaft
as of 1 January 2008 amounted to
98.64 %.
By selling the shares in the Holding, the German
government, the State of Berlin and the Holding
satisfied the last of their commitments to the European
Commission. Thus, the EU financial assistance
proceedings have been concluded. The German
government stated this in its official correspondence
with the European Commission. In turn, the European
Commission confirmed this by declaring to
the German government that it had received all the
necessary information and did not require any
further details.
Other measures
Even after the reconstruction and restructuring phase
was officially completed in 2005, LBB rigorously continued
to pursue measures to reduce administrative
costs and improve its earnings structure.
At the end of 2007, a multi­business area project to
improve the transparency and management of the
central IT budgets was successfully concluded for
the entire Group. Among other things, the levers
for influencing IT costs were identified and IT cost
reporting was comprehensively optimised. As part of
this project, the cost level was permanently reduced
by around € 30.9 million p.a. € 28.9 million of this
was already realised in 2007, further savings of at
least € 2.0 million are expected for 2008.

In Retail Banking, the successful programme to
increase earnings was continued from the previous
year. Building on the already high level of process
efficiency, the division invested in sustainably
strengthening its sales power. Berliner Sparkasse
also further advanced the implementation of its
quality and service understanding. The introduction
of longer branch opening hours optimised the
offering for customers and helped to secure the
leading market position.
Regional Corporate Banking focused on the ongoing
development of value­oriented management of sales
activities. This included designing structured consulting
processes, optimising pricing and gearing
the product and service profile towards customer
demand in the sales channels. Berliner Sparkasse
was the first bank in Germany to be TÜV­certified for
the quality of its services and consulting for two full
sales channels (BusinessLine, Regional Corporate
Banking Centre). This supports its strong claim to
quality and performance in corporate banking business.
Capital Markets demonstrated further dynamic
growth in customer business in 2007. Its activities in
issuing and distributing specially structured products
were expanded strongly. To improve its focus
and specialisation and to increase its efficiency, the
Client Business area was broken down into Client
Business Distribution and Client Business Production.
Client Business Distribution is responsible for
issuing and distributing products, secondary market
regulation and support for retail banking sales. Client
Business Production concentrates primarily on
trading with institutional customers, the construction
of structured products and asset management
research.
In 2007, Real Estate Financing expanded its new
business in its core market of Germany and selected
international markets in compliance with strict risk
and profitability parameters. In 2007 – in addition
to the existing location in London – offices were
opened in Warsaw and Prague and a sales coordination
arrangement was entered into in the Netherlands
for the Benelux market to leverage the growth
opportunities of these markets. Also, the division
further expanded its market position in its core market
by increasing its sales capacity. In addition to new
business volumes, value­oriented parameters were
increasingly used in measuring and controlling sales
performance.
Management Report
Overview of the 2007 financial year
57

58
Development of business – January to December 2007
After a good start in financial year 2007, the negative
effects of the crisis on the bond markets became
highly apparent. Spread widening, particularly for
bank issues, led to considerable remeasurement
losses in the securities portfolio. LBB has no direct
exposure in the segment primarily affected, that of
US subprime mortgages. Indirect investments of
less than € 40 million through structured securities
(CDO of ABS) squeezed earnings in 2007 at around
€ 15 million.
Following the approval of all responsible supervisory
and antitrust authorities, the sale of the 80.95 %
interest held by the State of Berlin to S­Erwerbsgesellschaft
was concluded on 8 August 2007. As
a result, the change in the ownership structure also
led to personnel changes in the Supervisory Board
of Landesbank Berlin Holding AG. The disposal
also significantly reduced the related parties of the
Landesbank Berlin Holding AG as of December 31,
2007; as the former owner, the State of Berlin and
its sphere of interests are no longer related parties
and the new related parties are S­Erwerbsgesellschaft,
the new owner, and Regionalverbandsgesellschaft
mbH and its managing directors.
Following the Annual General Meeting on 23 August
2007, a dividend of 6 cents per share was distributed
to the shareholders. This corresponds to a total distribution
amount of € 60 million.
As part of the Joint Liability Scheme of the Savings
Bank Finance Group, the Bank participated in support
activities for IKB Deutsche Industriebank AG.
In addition, it is involved in a concerted action by
the German Savings Banks’ and Giro Association
(DSGV) for SachsenLB.

Results of operations
The operating profit / earnings before taxes declined
by € 493 million year­on­year to € 291 million. It
should be noted that the comparative figures for the
previous year still include the income and expenses
of Berliner Bank and the proceeds from the disposal
of this company and positive tax effects. Earnings
were driven by the stable net interest income, the
positive development of risk provisioning and the
continuing decline in administrative expenses.
Management Report
Development of business – January to December 2007
1.1. – 31.12. 1.1. – 31.12. Change
in t million 2007 2006 1) in %
Net interest income 815 743 10
Interest income 6,210 5,535 12
Interest expenses 5,395 4,792 13
Allowance for losses on loans and advances – 53 118 < – 100
Net interest income after risk provisioning 868 625 39
Net commission income 297 368 – 19
Fee and commission income 429 459 – 7
Fee and commission expense 132 91 45
Net income from hedge accounting 3 3 0
Net income from financial instruments recognised at fair value through profit or loss – 45 186 < – 100
Net income from financial assets – 4 50 < – 100
Net income from investments carried at equity 12 – 4 > 100
Other operating income 119 636 – 81
Administrative expenses 965 1,115 – 13
Operating result before restructuring 285 749 – 62
Restructuring expenditure and income (net) 6 35 – 83
Operating profit / earnings before taxes 291 784 – 63
Income tax expense 71 97 – 27
Consolidated net profit for the period / earnings after taxes 220 687 – 68
Net profit / loss attributable to minority interests 19 25 – 24
Consolidated net profit for the period of the shareholders of the parent company 201 662 – 70
1) Figures for the previous year have been adjusted
The change in tax expenses is also defined by nonrecurring
deferred tax expenses, particularly as a result
of the change in the rate of corporation tax in the 2008
German Corporate Tax Reform Act. The Group then
generated earnings after taxes of € 220 million after
€ 687 million in the same period of the previous year.
The individual earnings components of the Group are
presented below:
59

60
Development of business – January to December 2007
At € 815 million, net interest income was up on the
previous year’s level of € 743 million. Berliner bank’s
share of € 138 million in 2006 was more than com­
pensated for. The comparative prior­year figures are
down by a total of € 107 million. Above all, this
relates to the change in reporting for trade­induced
interest, which increases interest expenses in the
1.1. – 31.12. 1.1. – 31.12. Change
in t million 2007 2006 1) in %
Interest income
Interest income from receivables 3,205 3,559 – 10
Interest income from financial investments 1,868 1,328 41
Similar (interest) income from financial investments 25 23 9
Other interest income 1,112 625 78
Total interest income 6,210 5,535 12
Interest expenses
Interest expenses for liabilities 3,807 3,531 8
Interest expenses for subordinated liabilities 63 92 – 32
Similar (interest) expenses from financial investments 2 2 0
Other interest expenses 1,523 1,167 31
Total interest expenses 5,395 4,792 13
Net interest income 815 743 10
1) Figures for the previous year have been adjusted
adjusted prior­year figures. For more information
please see also note 58.
€ 381 million was added to write­downs. This was
offset by a reversal of € 434 million, resulting in
income of € 53 million reported under allowance
for losses on loans and advances. This develop­
ment is still due to systematic risk management and
the reduction of risk­related items.
1.1. – 31.12. 1.1. – 31.12. Change
in t million 2007 2006 1) in %
Income from the reversal of write-downs on receivables and from the
reversal of provisions in the lending business 434 460 – 6
Depreciation and amortisation expense and write-downs of receivables
and additions to provisions in the lending business 381 578 – 34
Total – 53 118 < – 100
1) Figures for the previous year have been adjusted
Net commission income declined by € 71 million
year­on­year to € 297 million (– 19 %). In particular,
this is due to the commission from Berliner Bank
(€ 78 million) included in the figures for the previous
year. In addition, there were also increased acquisition
expenses in credit card business that will
only lead to corresponding income at a later date.

The structure of net commission income is defined
by earnings contributions from securities and issue
business and payment services and account management.
Net income from hedge accounting remained
unchanged as against the figure for the previous
year (€ 3 million) and shows the net gain or loss
on the revaluation of effective fair value hedges.
Net income from financial instruments recognised
at fair value though profit or loss amounted to
€ – 45 million after € 186 million in the same period
of the previous year. The figure for the previous year
was adjusted by € 106 million as part of a change
in reporting relating to trade­induced interest. The
earnings components were marked by the distortions
on the international capital markets in the
second half of the financial year.
Management Report
Development of business – January to December 2007
1.1. – 31.12. 1.1. – 31.12. Change
in t million 2007 2006 in %
Fee and commission income
Securities and issue business 176 185 – 5
Payment services / account management 115 143 – 20
Lending business 35 32 9
Card business 76 65 17
Other services 14 23 – 39
Other fee and commission income 13 11 18
Total fee and commission income 429 459 – 7
Fee and commission expense
Securities and issue business 53 33 61
Payment services / account management 9 12 – 25
Lending business 7 5 40
Card business 45 27 67
Other services 14 12 17
Other fee and commission expense 4 2 100
Total fee and commission expense 132 91 45
Net commission income 297 368 – 19
Net income from financial assets was down by
€ 54 million to € – 4 million. This includes net
income from the disposal of financial assets of
€ 37 million and valuation expenses of € 41 million.
Net income from investments carried at equity
increased to € 12 million (previous year: € – 4 million).
In addition, to current income of € 3 million
(previous year: € 3 million), this included effects of
measurement changes of € 9 million (previous year:
€ – 7 million).
Other operating income declined by € 517 million
to € 119 million. The comparative figure for the previous
year was essentially defined by the gain on
the disposal of Berliner Bank (€ 452 million), the disposal
of property, plant and equipment (€ 44 million)
and tax effects. Total income of € 12 million (previous
year: € 64 million) was reported for taxes on assets
and transactions and interest on income taxes in the
financial year. A total expense of € 17 million was
reported for net income from promissory note loans.
61

62
Development of business – January to December 2007
At € 965 million, administrative expenses were
down on the previous year’s level of € 1.115 million
and broke down as follows:
Staff costs amounted to € 511 million after € 589 million
in the comparative year. The change is essentially
due to the drop in the number of employees following
the disposal of Berliner Bank as of 31 December
2006. Write­downs and other administrative expenses
declined by € 8 million and € 64 million respectively
as against the same period of the previous year.
The reduction in depreciation on property, plant and
equipment corresponds to the lower levels of such
assets.
Net restructuring expenditure and income relates
to expenditure for interest on restructuring provisions
and income from the reversal of provisions that are
no longer necessary.
The total income tax expense is reported at € 71 mil­
lion. This includes income of € 10 million for current
taxes, which include prior­period income of € 49 mil­
lion in addition to the expense for the current financial
year of € 39 million. Expenses of € 81 million were
reported for deferred taxes.
1.1. – 31.12. 1.1. – 31.12. Change
in t million 2007 2006 in %
Staff costs 511 589 – 13
Depreciation of property, plant and equipment and amortisation of intangible assets 66 74 – 11
Other administrative expenses 388 452 – 14
Total 965 1,115 – 13
The fourth quarter of the financial year was influenced
by the effects of the international capital markets.
The negative net income from financial instruments
recognised at fair value through profit or loss compared
to previous quarters was offset by the improved
net interest income and risk provisioning, with the
result than a positive operating profit / earnings before
taxes of € 10 million was reported for the fourth
quarter.
Segment results
In the Retail Banking segment, net interest income
was down only slightly year­on­year at € 340 million
despite the difficult market environment; the same is
true for the net commission income of € 198 million.
This success is largely due to the sales and earnings
power of Berliner Sparkasse, which further expanded
its position in the highly competitive Berlin market.

As a result of market conditions, volume growth of
deposits in particular (up 5 % as against 31 December
2006) entailed a reduction of margins. This development
also correlates with the most recent market
research reports that attest to the high importance
of “as high an interest rate as possible” in investment
decisions. At the same time, new business in
construction finance rose by 26 %. The number of
customers with private checking accounts in regional
business increased by almost 6,500 as against the
previous year. The positive development in net
commission income from securities also continued
(up 3 % as against 31 December 2006), which can
also be seen by the improved gross unit sales of
certif icates (up 6 %). Unit sales of insurance products
also developed well, with a 12 % increase in
net policy premiums as against the previous year.
The rapid growth in national credit card business
was responsible for the market investments required
for increased administrative expenses for marketing
and business operations. As against the previous
year, however, risk costs were significantly lower.
Furthermore, the segment invested in other promising
areas through its interest in netbank.
The Regional Corporate Banking segment consoli­
dated its strong market position. Interest­bearing
loans and advances to customers and customer
deposits grew year­on­year and the segment
attracted new commercial and regional corporate
clients. Nonetheless, net interest income was down
as against the previous year, essentially as a result
of narrower margins in deposit business. However,
the segment also profited from the positive developments
in the allowance for losses on loans and
advances. By contrast, net commission income
Management Report
Development of business – January to December 2007
increased slightly year­on­year. In 2006, net income
from financial assets was increased by a non­recurring
payment from a debtor warrant on an investment.
Net other operating income increased as
against the same period of 2006, particularly as a
result of the disposal of an investment.
The earnings of the Capital Markets segment in
financial year 2007 were dominated by the impact
of the subprime crisis in the US. The resulting crisis
of confidence led to limited liquidity, massive credit
spread growth and extreme volatility on the interest
and share markets.
The high­value assets of investment strategies were
also affected by credit spread increases. The valuation
corrections reported under the IFRS revaluation
reserve amounted to € 320 million. Despite a broad
range of strategies and portfolios, trading activities
suffered massively. The constant, non­volatile
income from customer business and investment
strategies failed to compensate for the losses
incurred.
In financial year 2007, Capital Markets generated an
operating profit of € 7 million, down € 93 million on
the figure for the previous year. This deviation was
mainly due to a € 128 million drop in net interest
income and net income from financial instruments
recognised at fair value. As a result of the impairment
losses on funds and investments, net income
from financial assets was down € 17 million on the
figure for the previous year. Despite additional portfolio
impairment losses of € 19 million, this was offset
by a € 37 million improvement in the allowance
for losses on loans and advances and a year­on­year
decline in administrative expenses of € 6 million.
63

64
Development of business – January to December 2007
The measures to attract new customers and intensify
sales were continued and expanded at all times
in 2007. Gross unit sales of certificates in 2007
amounted to € 1.9 billion as against € 1.45 billion
in the previous year. LBB­INVEST generated net
cash inflow from publicly offered funds of around
€ 1.6 billion in 2007, outperforming the figure for
the previous year by € 0.4 billion.
Volumes in international lending business, which is
essentially covered by state export credit agencies
(ECA), grew significantly over the course of the year.
As a result, net interest and commission income
were up on the previous year.
The Real Estate Financing segment generated oper­
ating earnings of € 255 million in the reporting period.
As against the previous year, this corresponds to an
increase of 73 % (previous year: € 147 million). The
balance of net interest income and net income from
financial instruments recognised at fair value through
profit or loss rose by € 19 million. There were reversals
in risk provisioning: This reflects the strategic
risk development of the lending portfolio. At the
same time, net commission income was improved
considerably as a result of the high levels of new
business.
At around € 10.2 billion (including non­recurring
transactions of € 3.6 billion), new business exceeded
the figure for the previous year of around € 7.1 billion
(including non­recurring transactions of € 3.4 billion)
to a highly significant degree. The positive development
in new business of previous years was therefore
continued. The breakdown of new business in
terms of property use, lending areas and customer
segments and the development of new business
margins were consistent with the segment’s objectives.
The segment’s strategy of risk limitation was
still systematically observed in new business.
In 2006, the Corporate Investments segment reported
only the earnings of Berliner Bank, which was sold
at that time.
The Group management and service functions,
the balance sheet structure management and the
consolidation items in the Group are shown under
Other / Consolidation. Other items reported in this
segment include non­interest­bearing balance sheet
items, such as non­current assets and the associated
write­downs in administrative expense in the
amount of € 33 million (previous year: € 40 million).
The operating profit in the reporting period declined
by € 497 million year­on­year to € – 110 million.
The previous year’s earnings were dominated by
the proceeds from the disposal of Berliner Bank of
€ 438 million and a high net figure for restructuring
expenditure and income (€ 35 million).
The number of full­time jobs in the Corporate Centres
amounted to 2,083 after 1,856 in the previous year.
Around 1,250 of these relate to Transaction Banking
(organisation, IT, BankenService GmbH). The increase
of 227 is predominantly due to the relocation of
direct banking services from Landesbank Berlin to
BankenService GmbH. In turn, this resulted in a
decline in employee capacity in the Retail Banking
segment, though to a lesser extent as the employees
of netbank were included as of 31 December
2007, which was not the case in the previous year.
This had no significant impact on the earnings of
either segment.

Net assets
Compared with the 2006 annual financial statements,
total assets changed only slightly at € 142.1 billion
(31 December 2006: € 141.6 billion). The declines in
loans and advances to banks and customers was
offset by a rise in financial assets.
ASSEtS
Management Report
Development of business – January to December 2007
31.12.2007 31.12.2006 1) Change
in t million in %
Cash 986 955 3
Loans and advances to banks 26,514 28,357 – 6
Loans and advances to customers 47,003 50,904 – 8
Risk provisioning – 1,411 – 1,825 23
Positive fair value of derivative hedging instruments 397 318 25
Financial assets recognised at fair value through profit or loss 13,637 14,652 – 7
Financial assets 50,696 43,538 16
Investments carried at equity 129 74 74
Intangible assets 665 650 2
Property, plant and equipment 583 613 – 5
Investment property 82 83 – 1
Current tax assets 85 128 – 34
Deferred tax assets 800 798 0
Other assets 1,915 2,270 – 16
Non-current assets and groups of assets held for sale 66 110 – 40
Total 142,147 141,625 0
1) Figures for the previous year have been adjusted
At € 26.5 billion, loans and advances to banks
were down 6 % year­on­year. This was due to a
reduction in loans and investments in the money
and capital markets. Public­sector loans developed
positively at € 0.7 billion. Other items declined.
Loans and advances to customers fell by € 3.9 billion
or 8 % year­on­year to€ 47.0 billion. Among other
things, this was due to sales of portfolios. The reduction
of public­sector loans as a result was particularly
strong at € 4.2 billion.
65

66
Development of business – January to December 2007
Overall, the above portfolio disposals and reversals
led to a reduction in the allowances for losses on
loans and advances of € 0.4 billion to currently
€ 1.4 billion (previous year: € 1.8 billion).
At € 0.4 billion, the positive fair value of derivative
hedging instruments remained virtually at the previous
year’s level of € 0.3 billion.
In addition to portfolio changes, the change in interest
rates also impacted the figures reported for
derivative financial instruments. The fair values of
financial assets recognised at fair value through
profit and loss fell by € 1.1 billion to € 13.6 billion
(previous year: € 14.7 billion) as against 31 December
2006.
Financial assets increased by € 7.2 billion year­on­
year to a total of € 50.7 billion. The addition primarily
resulted from setting up strategic items for bonds
and debt instruments.
Shares carried at equity had a value of € 129 million
compared with € 74 million in the previous year.
Changes arose from the inclusion of three further
companies in 2007.
Intangible assets rose only very slightly year­on­year.
They include goodwill of € 595 million. At € 21 mil­
lion, the change is due to the acquisition of netbank.
Property, plant and equipment declined from
€ 613 mil lion to € 583 million or 5 %. The main
reason for this was the reclassification of two
buildings (€ 20 million) to investment property.
Investment property used by third parties remained
virtually unchanged at € 82 million (previous year:
€ 83 million). In addition to the reclassification from
property, plant and equipment, there were also
disposals of € 21 million.
At € 85 million, current tax assets were down
slightly by € 43 million overall as against the figure
for the previous year.
Deferred tax assets increased by € 2 million to
€ 800 million.
The decline in other assets by € 355 million to
€ 1,915 million is essentially due to the reduced
receivables from collateral provided.
The figure shown in the item for non-current assets
and groups of assets held for sale relates mainly
to the intended disposal of investments.

LIABILItIES AND ShAREhOLDERS’ EquIty
Deposits by banks increased by € 1.8 billion or 4 %
year­on­year to € 50.7 billion. Increased use was
made of refinancing on the money market.
Amounts due to customers increased by € 1.2 bil­
lion or 4 % year­on­year to € 29.6 billion. A large
proportion of these increases related to registered
public­sector pfandbriefs at around € 0.9 billion.
In light of the crisis on the capital markets, the volume
of securitised debt declined by € 1.9 billion or 6 %
from € 32.4 billion to € 30.5 billion. € 15.3 billion of
this is attributable to public­sector mortgage bonds
and € 8.1 billion to debt instruments.
Management Report
Development of business – January to December 2007
31.12.2007 31.12.2006 1) Change
in t million in %
Deposits by banks 50,686 48,935 4
Amounts due to customers 29,552 28,367 4
Securitised debt 30,517 32,358 – 6
Negative fair value of derivative hedging instruments 985 1,090 – 10
Financial liabilities recognised at fair value through profit or loss 21,893 21,434 2
Provisions 1,270 1,463 – 13
Current tax liabilities 199 167 19
Deferred tax liabilities 32 73 – 56
Other liabilities 1,018 1,778 – 43
Liabilities assigned to groups of assets held for sale 1 8 – 88
Subordinated capital 3,163 3,328 – 5
of which: Dormant participations of the State of Berlin 700 700 0
Shareholders’ equity 2,831 2,624 8
Issued capital 2,554 2,554 0
Capital reserves 77 77 0
Retained earnings – 143 – 395 64
Revaluation reserve – 182 137 < – 100
Currency translation reserve – 2 1 < – 100
Minority interests 414 97 > 100
Unappropriated surplus / accumulated loss 113 153 – 26
Total 142,147 141,625 0
1) Figures for the previous year have been adjusted
The negative fair value of derivative hedging instruments
(€ 985 billion) remained virtually unchanged
as against the previous year (€ 1.1 billion).
The volume of financial liabilities recognised at fair
value through profit or loss rose as a result of portfolio
changes and changes in interest rates among
other things by € 0.5 billion to € 21.9 billion.
Provisions declined by € 0.2 billion year­on­year to
a total of € 1.3 billion. Reversals and utilisation of
€ 0.3 billion were offset by additions of € 0.1 billion.
Current income tax liabilities increased by € 32 million
to € 199 million.
67

68
Development of business – January to December 2007
Deferred income tax liabilities decreased by
€ 41 million to € 32 million.
Among other things, the other liabilities item includes
liabilities from collateral received. The comparative
figure for the previous year included a repayment
obligation for a dormant participation of € 0.4 billion.
Liabilities allocated to groups of assets held for
sale fell by € 7 million to only € 1 million and relate
to the obligations of available for sale investments.
The development of the applicable interest rate
(5.7 %; previous year: 4.5 %), the pension trend
(to 1.0 % to 3.0 %; previous year: 1.0 % to 2.5 %),
the salary trend (unchanged at 2.5 % to 3.0 %) and
the adoption of the Act on the Adjustment of the
Standard Age Limit (RVAGAnpG) passed by the
upper house of the German Federal Parliament
(Bundesrat) were taken into account in measuring
pension obligations in accordance with IAS 19. The
effects of this adjustment before deferred taxes served
to increase shareholders’ equity by € 101 million.
The overall capital ratio reported at the level of the
RVG Group as of 31 December 2007 was 15.04 %
(in accordance with the German Solvency Ordinance
(Solvabilitätsverordnung)); the tier 1 capital ratio
was 11.80 % (SolvV) ­ after approval of the financial
statements.
The subordinated capital item includes subordinated
liabilities and dormant participations.
The Group’s shareholders’ equity rose by € 207 million
as against 31 December 2006. The material factors
affecting this were the change in retained earnings
(up € 252 million), the change in the revaluation
reserve (down € 319 million) and minority interests
(up € 317 million). For more information, please see
the statement of changes in shareholders’ equity.
In the reporting year, loan collateral guarantees
(indefinite default guarantees) were issued for risk
subparticipation. These were three portfolios with
a volume of € 3.3 billion.
Financial position
The Bank has chosen not to prepare a more detailed
analysis of the cash flow statement as it does not
derive any impulses relevant to liquidity management
as a result. The aims of financial management
are the targeted and controlled risk­taking in line with
return­oriented parameters and regulatory standards.
The liquidity management relevant for the Bank is
based on principles derived from the German Banking
Act which are presented in the Risk Report. Please
also see the presentation on the cash flow statement.
In 1994, the Bank formed the external issue vehicle
“Checkpoint Charlie”, which acquires long­term
bonds and refinances itself by issuing short­term
money market papers. Starting with the first IFRS
annual financial statements for financial year 2005,
this entity was also included in the consolidated
financial statements. As a result of the crisis on the
bond markets, the refinancing of € 1.2 billion has
now almost entirely been provided by the Bank.
Despite the difficult market situation, the refinancing
situation at LBB allowed an ongoing expansion of
business. However, if crisis conditions continue, a
rise in refinancing costs in 2008 cannot be ruled out.
Effects of consolidation
The items of the consolidated income statement and
the consolidated balance sheet volume are primarily
determined by LBB and Berlin Hyp. Based on the
consolidated financial statements, 88.3% (previous
year: 90.4%) of total assets relate to these companies.

Management Report
Development of business – January to December 2007 | Events after December 31, 2007 | Final statement on the dependent company report
Events after December 31, 2007
Effective 2 January 2008, LBB acquired the sales
financing division of BHW Bank Aktiengesellschaft.
The acquisition includes a customer base of 179,000
customers with private loans and 125,000 credit
cards and around 8,300 active dealer relationships.
The credit volume amounts to around € 485 million.
Final statement on the dependent company report in accordance
with Article 312 of the German Stock Corporation Act
In accordance with Article 312 of the German Stock
Corporation Act, the Board of Management of the
Holding submitted a report on business relations
with affiliated companies for the 2007 financial year.
The declaration at the end of this report is as follows:
In connection with the sale of Berliner Bank, outstanding
issues relating to the final purchase price
were settled with the buyer on 4 February 2008.
The Board of Management and the Supervisory
Board will propose to the Annual General Meeting
the payment of a dividend of € 0.10 per share.
“The Board of Management of Landesbank Berlin
Holding AG hereby declares that the Landesbank
Berlin Holding AG companies received appropriate
consideration for all legal transactions and other
measures with the State of Berlin and companies
affiliated thereto (1 January 2007 – 7 August 2007) on
the one hand and Erwerbsgesellschaft der S­Finanzgruppe
mbH & Co. KG and Regionalverbandsgesellschaft
mbH (8 August 2007 – 31 December 2007)
on the other in accordance with the circumstances
known at the time of legal transactions or measures
and that these companies were not disadvantaged
by the measures taken.”
69

70
Risk report
For the first time, the Group’s risk report contains
the information required under GAS 5­10 and IAS /
IFRS. The Group is thereby exercising the regulation
under IFRS 7.B6, which allows bundling the information
required on the nature and extent of risks
arising from financial instruments in a risk report.
Please see also note 61 (risk management).
As the Group parent, Landesbank Berlin Holding AG
essentially performs the function of a financial holding
company that no longer performs its own banking
activities and is no longer a bank. Its central activity
is holding the 100% interest in LBB.
As a result of the transfer of risks to LBB in 2006 and
the fact that LBB was made the parent company of
the financial holding group in terms of regulatory law
and all the banks in the Group were merged under
its umbrella, since then there has been a high correlation
between the risks of the Landesbank Berlin
Group and the Landesbank Berlin Holding Group.
In light of the turbulence on the capital markets triggered
by the subprime crisis, our risk management
procedures and methods underwent an acid test in
the reporting year.
We handled the challenges well, particularly in market
price risk and liquidity risk, by modulating our positions
relatively conservatively overall and reporting
and analysing earnings and risk index developments
on a daily basis.
Principles for risk management and control
The targeted, controlled assumption of risks in
the context of return­oriented parameters is a key
component of the Group’s overall risk management
strategy. Risk control and qualified, timely risk
monitoring are performed in accordance with the
conditions of the Board of Management’s risk policy
as set out in the risk strategy and the risk manual.
Acting as an independent unit, Risk Management
is responsible for identifying and evaluating risks,
supporting the company’s risk management activities
and providing the company’s management
with regular information.
The risk strategy is derived from the Bank’s strategic
framework and principles, and sets out the provisions
of the latter with regard to the taking of risks. This
includes the stipulation of Group­wide methods and
procedures for risk measurement. In addition, all
companies and organisational units are responsible
for ensuring that all risks are transparent and can
be measured using uniform Group methods.
The risk manual, which sets out the framework for
operational risk control and applies to both the
Landesbank Berlin Holding Group, the Landesbank
Berlin Group and therefore the individual banks as
well, provides detailed information on conditions,
responsibilities and methods for the individual phases
of risk management.

Overall risk management
Overall risk management for the Group is the
responsibility of the Board of Management of LBB.
In accordance with the Group’s business policy, the
Board of Management performs risk limitation and
allocation for the various companies and organisational
units of the Group by implementing limits and
structural requirements, taking into account economic
risk tolerance and the regulatory rules. The
Finance, Controlling and Risk Controlling divisions
report in the monthly joint top management report.
In addition to the financial analysis, this contains risk
reporting in line with the Minimum Requirements for
Risk Management (MaRisk). Using this report, which
summarises all risk types, the Board of Management
discusses the overall risk and result of operations
and examines the extent to which reactions are
required.
Within the Group, a distinction is made between the
following risk categories in terms of content:
Counterparty risks (including participation risks)
Liquidity risks
Market price risks, interest rate risks
(cash flow and fair value),
currency risks, share price risks
Real estate risks
Operational risks
Other risks
The risk categories are divided into monetary (quantitative
inclusion in total bank risk) and non­monetary
(liquidity risk and other risks, no risk capital backing).
In addition, for risk tolerance analyses, when significant
risks (i.e. potential losses of assets) are identified
that have not yet been included, they are reported
separately under remaining risks. At Group level, risks
are controlled and monitored at Group level by breaking
down all companies into a graded concept (internal
scope of consolidation) that is regularly reviewed.
The internal risk tolerance concept is composed of a
system of measurement procedures and limits for all
material risks that ensures down to a small residual
possibility that a defined maximum asset loss is not
exceeded. On the basis of the individual risk types
identified, the overall risk is calculated by aggregating
the individual risks, taking into account diversification
effects between the risk types. Based on the findings
of an extended analysis, the correlation matrix
was adjusted slightly in the reporting year and,
among other things, the previous correlation between
market and credit risks was increased. The overall
risk situation was measured by comparing the capital
available to cover risks (aggregate risk cover) with
the total risk.
To be able to interpret risk assessments more accurately,
the risk to the Bank as a whole is calculated
for various confidence levels. The results are compared
with various loss scenarios (e.g. loss equal
to the planned results for the year, falling short of
the overall capital ratio required by the supervisory
authorities). Furthermore, the discontinuation of all
diversification effects between risk categories is
defined as a crisis scenario at Group level. In the
reporting year, the scenario analyses for the individual
risk categories were developed further and
integrated into reporting.
Management Report
Risk report
71

Utilisation by
risk category for
the Group as of
31 December 2007
72
Risk report
Internal capital adequacy
To improve overall management further, a risk capital
figure is set at an overall level and for the divisions.
The risk capital is in addition to the existing limits
and functions as an observation limit derived from the
strategic goals, which means that countermeasures
can be taken in good time if the Group comes close
to this limit.
In the reporting year, the Bank introduced the Capital
Management Committee. The primary task of this
Committee is to coordinate Group­wide measures
to ensure a long­term, optimised capital structure in
line with internal and external conditions. To achieve
this, it compares the development of risk items at
the key Group companies and the Group on the
basis of approved medium­term planning and internal
(economic), accounting and regulatory capital
requirements.
in u million
Credit risk
Participation risk
Market price risk
Operational risk
Real estate risk
Remaining risks
Correlation
Total risk
Excess
Aggregate risk cover
836
35
449
1,182
94
117
72
– 421
The internal economic aggregate risk cover is defined
on the basis of regulatory capital resources. In addition,
the effects of the adoption of the annual financial
statements and the income for the current financial
year are also taken into consideration. Subordinated
liabilities are fully taken into account in economic
aggregate risk cover. As of 31 December 2007, the
Group had aggregate risk cover of € 5,293 million;
regulatory capital resources amounted to € 4,898 million
at the same date.
To ensure risk tolerance, there is a limit system along
with escalation processes based on this system. When
risk limits are approached (this is generally taken to
mean utilisation of more than 90 %), the Board of
Management decides on measures to prevent limits
being exceeded.
At LBB­ and Group level, even during periods of
greater risk values in connection with the US subprime
crisis, there was sufficient excess capacity
at all times in the reporting year, both in terms of
utilisation and the established limits.
The percentage utilisation by risk type, the overall
risk and the resulting unutilised coverage within the
Group as of 31 December 2007 were as shown:
4,111
5,293
0 1,000 2,000 3,000 4,000 5,000 6,000

OvERALL CAPItAL RAtIO (SOLvv)
15.0
10.0
5.0
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
Regulatory capital adequacy
(German Solvency Ordinance)
The German Solvency Ordinance (SolvV), based on
the conditions of the Second Basel Accord (Basel II),
came into force on 1 January 2007.
By way of the acquisition of the Holding by
S­Erwerbs gesellschaft with its partners Regional­
verbands gesellschaftmbH (RVG, general partner)
and DSGV ö.K. (limited partner), LBB is owned by
the RVG Group in terms of regulatory requirements.
Please see also the regulatory ratios at the level
of the Holding.
The Group prepared a statement in accordance with
the Solvency Ordinance for the first time as of the
reporting date 31 March 2007 1) . The internal ratingbased
approach (IRBA) was used for the credit risk
for LBB and LBB International S.A. In addition to
the risks that have required capital backing to date
July 2007
1) The values for January and February 2007 were calculated in line with Principle I.
August 2007
September 2007
LBBH 10.2 %
LBB 10.8 %
BHyp 9.7 %
October 2007
November 2007
December 2007
tIER 1 CAPItAL RAtIO (SOLvv)
15.0
10.0
5.0
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
LBBH 6.7 %
LBB 7.2 %
BHyp 5.3 %
(counterparty risk and market price risk), the operational
risk also required separate capital backing.
Berlin Hyp and netbank are utilising the transitional
provisions of Article 339 SolvV to report 2007 in line
with Principle I. The information shown on the overall
capital ratio and the Tier 1 capital ratio relates to
the figures reported to the regulatory authorities as
of the respective reporting date.
At the level of RVG, overall capital ratio (SolvV) as of
the end of the year was 15.04 % with a Tier 1 capital
ratio (SolvV) of 11.80 % – after approval of the financial
statements.
As shown by the graphic, the required minimum regulatory
ratios of 8 % for the overall capital ratio and
4 % for the Tier 1 capital ratio were maintained at all
times in the reporting year at the level of the Group
and the individual banks.
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
Management Report
Risk report
73

74
Risk report
Counterparty default risk
Counterparty default risk is defined as the risk of
loss or foregone profit as a result of default by a
business partner. This includes the risk that a contractual
partner of the bank does not meet its obligations
or does not do so in a timely manner or that
the bank itself must meet an obligation on account
of the non­performance of a third party and the participation
risk arising from the provision of equity.
In the commercial credit business, the counterparty
default risk when granting book loans is identical to
the credit risk. If the asset held is a security instead
of a book loan, the risk in question is an issuer risk.
Other types of risk included under risk of default, and
that are standard in trading business in particular,
are counterparty risk (risk of potentially disadvantageous
recoverage of a derivative transaction in the
event of default by a business partner), settlement
risk (risk that no counterperformance occurs on the
payment date in spite of performance) and country
risk (transfer risk).
The measurement and management of counterparty
default risks in the Group is based on a risk­adequate
presentation of transactions subject to credit risk.
Credit risks and counterparty and issuer risks are
measured specifically to each product and quantified
using the current credit exposure. The internal
reporting of credit risks to management is essentially
determined on the basis of this factor. In line with
this and in accordance with IFRS 7.34(a), the presentations
used internally are used below.
On account of the risk content orientation of positions
there are quantitative differences for some products
between the current credit exposure and the receivable
volume for accounting purposes. The reasons for
this are from the view of the current credit exposure
analysis:
For trade transactions including securities and
derivatives, the current credit exposure is calculated
on the basis of counterparty, issuer and
borrower risks. In addition, add­ons are included
for potential future exposure for counterparty risks.
Risks are mitigated by netting agreements and
by offsetting long and short positions for issuer
risks or by compensation agreements.
Passed on development loans that do not represent
a risk for the Group are not included.
In line with the method differences shown, the current
credit exposure can be reconciled to balance
sheet assets. It should be noted that balance sheet
assets also include items not subject to counterparty
risk – e.g. intangible assets or property, plant
and equipment. The table below shows the key
differences to the balance sheet assets.

in u billion
145.0
140.0
135.0
130.0
125.0
120.0
The Group’s entire current credit exposure as of
31 December 2007 was € 128.9 billion. € 41.6 billion
of this related to credit risks from commercial lending
business quantified on the basis of remaining carrying
amounts.
Issuer, counterparty and borrower risks of capital
market transactions are based on the market prices
of the financial instruments and are included in the
current credit exposure in the amount of € 87.3 billion.
The majority of the current credit exposure related
to the Capital Markets, Interest Management and
Real Estate Financing. The portion relating to Capital
StRAtEgIC BuSINESS AREA
in t million
Current
credit
exposure
128.9
Add-on
6.8
Netting
2.4
Offsetting
12.9
Compensation
0.7
Pass-through
loans
0.4
Markets consisted largely of low­risk treasury positions.
In addition to mortgages, the strategic real
estate business area also includes the low­risk
treasury business of Berlin Hyp.
Alongside current credit exposure, credit exposure
is also considered below. This additionally includes
limits promised to customers that have not yet been
drawn. These limits include both revocable and irrevocable
commitments.
In line with the above composition of credit exposure
and current credit exposure, the breakdown for the
Group’s strategic business areas as of 31 December
2007 was as follows:
Credit
exposure
Balance sheet items without
counterparty default risk
3.9
Difference in
amortised cost
0.2
Credit risks
Current credit exposure
Issuer,
counterparty,
borrower
risks
Total assets under
IFRS (LBBH Group)
142.1
Retail Banking 8,937.1 3,181.8 0.0 3,181.8
Regional Corporate Banking 7,281.6 5,466.7 0.0 5,466.7
Real estate 54,635.0 29,466.4 21,977.1 51,443.5
of which mortgages 27,170.8 26,360.6 0.0 26,360.6
Capital Markets 55,971.6 3,463.1 52,120.3 55,583.4
Interest management 13,201.1 1.1 13,199.4 13,200.5
Total 140,026.4 41,579.1 87,296.8 128,875.9
Other
0.1
Total
Management Report
Risk report
Reconciliation:
current credit
exposure to
balance sheet
assets
75

Regional distribution
of credit risks
(t 41.6 billion)
Regional distribution
of issuer,
counterparty and
borrower risks
(t 87.3 billion)
Credit risks
(t 41.6 billion)
Issuer, counterparty
and borrower risks
(t 87.3 billion)
76
Risk report
Former West German states 27 %
Former East German states 12 %
Berlin 43 %
International 18 %
Other 0 %
Former West German states 34 %
Former East German states 4 %
Berlin 4 %
International 58 %
Other 0 %
Real Estate Financing 48 %
Waived business 13 %
Banking sector 11 %
Private persons 8 %
Services 6 %
Trade and industry 5 %
Regional and local authorities 3 %
Health and social 2 %
Participation companies 2 %
Miscellaneous 2 %
Banking sector 79 %
Regional and local authorities 17 %
Services 2 %
Trade and industry 1 %
Miscellaneous 1 %
In line with its risk strategy, the Group primarily enters
into credit risks in Berlin and the Federal Republic
of Germany. In contrast, in line with its own strategy,
risks in Capital Markets are predominantly issuer,
counterparty and borrower risks abroad and in the
former West German states.
The industry breakdown is similar: The portfolio of
credit risks is largely determined by real estate finance
and retail and corporate customer business. In particular,
issuer and counterparty risks are entered into with
banks and regional and local authorities.

The volume­weighted residual term for credit risks
exceeds that for issuer, counterparty and borrower
risks.
Risk mitigation
Various risk mitigation elements are used in the
Group to reduce counterparty default risks. The key
element for credit risks are physical and personal
collateral. In addition, counterparty risks from trading
activities are reduced by way of agreements on
close­out netting. These make it possible to offset
receivables and liabilities in the event of a deterioration
in the counterparty’s credit rating, even if the
counterparty becomes insolvent. In addition, other
risk­minimising measures such as the conclusion
of credit derivatives and the exchange of collateral
are carried out in trading.
0 to 3 months 25 %
between 3 months and 1 year 4 %
between 1 and 5 years 12 %
more than 5 years 59 %
0 to 3 months 11 %
between 3 months and 1 year 12 %
between 1 and 5 years 47 %
more than 5 years 30 %
Credit risk measurement procedure
The probability of an exposure’s default is calculated
as the central parameter for determining credit risks
using rating and scoring methods. Each of these rating
methods serves the purpose of validly estimating the
probability of default for certain borrower groups on
the basis of statistical procedures. Scoring methods
are used for retail customers that the Group developed
as part of its cooperation with DSGV.
In Regional Corporate Banking, a method developed
with DSGV is used for companies with net sales of
up to € 500 million. The DSGV real estate rating is
used for Real Estate Financing. This method calculates
both a credit rating for the customer in line with
the DSGV corporate customer rating and a property
rating based on a cash flow analysis of the property.
Management Report
Risk report
Remaining terms
of credit risks
(t 41.6 billion)
Remaining terms
of Issuer,
counterparty
and borrower
risks
(t 87.3 billion)
77

78
Risk report
Together with other Landesbanks, eight rating procedures
were developed that take into account the
specific requirements of the Landesbanks’ customer
groups in risk assessment. The corporate rating is
used for large German corporate clients (net sales
upwards of € 500 million) and for foreign corporate
clients. Banks, insurance companies and lease
companies have their own measurement methods.
Special methods are used for aircraft and project
finance in which the risk of default is calculated
on the basis of a cash flow simulation. Specific
systems have also been developed and are now in
use for international regional authorities, countries
and industries.
All the risk classification systems used in the Group
are subject to permanent quality control by credit
risk controlling. Their ongoing development and
maintenance are the responsibility of S­Rating und
Risikosysteme GmbH and Rating Service Unit GmbH
& Co. KG. The Group participates in all the relevant
working groups and bodies at these companies.
The rating methods are calibrated to probabilities of
default in line with the default definitions of Basel II.
Based on the probability of default, they are assigned
to one of the 25 classes of the DSGV master scale.
The main rating methods were analysed and accepted
by banking supervisory authorities as part of the admissions
review for the internal rating­based approach
under Basel II.
As part of the credit analysis, a rating category is
determined for each borrower. The allocation of rating
classes to probabilities ensures the comparability
of borrower credit ratings across all segments. The
lending principles and allocation of competencies
are based on the risk category. In addition to the
probability of default determined from the rating, this
also includes the collateral provided, thus giving an
overview of the loss potential of a given exposure.
In line with the risk class, the portfolio can be broken
down into:
good loans,
sub­performing loans,
non­performing loans,
whereby non­performing loans are classed as
“defaulted” according to Basel II criteria.
Quantitative analysis of default risks using statistical
procedures is carried out for lending portfolios on
the basis of the credit portfolio model developed by
the Bank. This model, which is based on a Groupspecific
adaptation of standard models, enables
aggregation of borrower­specific risks of default
for a risk indicator at portfolio level, the credit value
at risk (CreditVaR). This figure is calculated daily on
the basis of confidence levels of 90 % and 99.9 %
with a holding period of one year for the main Group,
sub­bank and business area portfolios. It is included
in the monthly total risk report and risk tolerance
calculations.
On the basis of credit­specific exposure, the rating,
the collateral and correlation estimates, the credit
portfolio model estimates the probability of major
losses as a result of correlated credit default. Owing
to its structure, the model used reacts highly sensitively
to cluster risks or industry concentrations and
also takes into account the risk of country­transfer
events. The mapping of risks is refined by stochastic
modelling of loss ratios (e.g. collateral proceeds).

Credit monitoring
The Group uses various manual and automatic
methods to monitor the specific risk of borrowers
in order to detect credit risks at an early stage
and manage them proactively. Generally, borrower
ratings are updated at least once per year. Within
this framework, portfolios and the impairment of
collateral are also regularly monitored and may be
subject to remeasurement. In the event of rating
deterioration, a decision is made as to the nature
of the continued exposure.
The Group uses early warnings systems to identify
enhanced risk borrowers. Based on quantitative and
qualitative early warning indicators, corresponding
watch lists are prepared listing borrowers to be
examined separately.
The Group updates and refines the quality of its
credit monitoring on an ongoing basis to accelerate
decision­making processes and to improve the
quality of the available information for recognising
and measuring potential risks. The Group’s credit
business and in particular its credit processes are
regularly reviewed by the internal audit department.
Measures are derived from this to improve further
the quality of credit analysis and monitoring.
Risk limitation
Counterparty default risks are limited and managed
at the level of individual borrowers and at portfolio
level as part of strategic credit portfolio management.
In addition to portfolio analyses on the basis
of the credit value at risk model, country risks are
also managed using their own limits.
Specific borrower limits
Counterparty default risks are limited at specific
borrower level by individual limits for borrowers
in terms of amount, term and type of transaction.
These limits are systematically tracked and subjected
to a daily controlling process.
In retail credit business, which covers standard
credits such as instalment loans and overdraft
facilities, largely computer­based methods are used
for approval. For larger exposures, a vote by backoffice
is also required. For business not settled in
standardised processes, individual credit decisions
are made in clearly defined processes depending
on the amount of exposure and risk content. Larger
exposures are generally processed and decided
on by back­office.
Portfolio management
New business and the lending portfolio are limited
on a daily basis by portfolio limits on the basis of
the credit portfolio model. Limits are also in place
for the expected loss and the unexpected loss at
various confidence levels for the divisional portfolios
as well as those of the sub­banks and the Group.
The unexpected loss at a confidence level of 99.9 %
is included in risk tolerance. The Group’s expected
loss, unexpected loss (99.9 %) and its limit throughout
2007 are shown below.
Management Report
Risk report
79

International
volume:
net current credit
exposure
80
Risk report
CREDIt vALuE At RISk kEy FIguRES
in e million Unexpected loss Limit of unexpected loss Expected loss
1,400
1,200
1,000
800
600
400
200
January 2007
February 2007
Country and transfer risks are also limited using volume­based
country limits. The limits are determined
by the Board of Management with consideration of
economic influences and the actual development of
the lending portfolio on the recommendation of the
Credit Risk Committee.
No limit:
Western Europe and North America
e 7.83 billion
No limit:
EURO zone
e 30.52 billion
March 2007
No limit:
Rest of EU
e 15.28 billion
In addition to these limits, regular reports are submitted
on the lending volume by other categories.
A separate voting unit of Risk Management, which
gives an additional vote for loan commitments for
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
Country limits limit the current credit exposure after
taking into account collateral, referred to as the net
current credit exposure. As shown in the graphic
below, 95 % of this international volume relates to
countries in Western Europe and North America with
top credit ratings (i.e. with an internal rating classification
better than 1 (AA­)). These countries are not
subject to any limits.
Exposure with
country limit
e 2.53 billion
Low transfer risk e 1.92 billion
Medium transfer risk e 0.58 billion
Elevated transfer risk
or no rating e 0.03 billion
which the full Board of Management is responsible,
checks the portfolio compatibility of a major commitment.
October 2007
November 2007
December 2007

CREDIt RISk
in t million
Handling of problem credits
Age
< 1 year
Problematic loan commitments generally fall within
the processing competence and responsibility of
the credit risk divisions. Here, problematic loans are
subjected to restructuring or settlement. In case of
restructuring, the conditions of loans with a current
credit exposure of € 100.8 million were amended
without recognising a write­down. There were no
rescue acquisitions in the financial year.
Above, portfolios with credit risks are broken down
into good loans / sub­performing and non­performing
loans and by the age of the receivable. In addition,
the exposure of borrowers that are in arrears but
that have not been written down are also reported.
At the same time, the amount of performance in
arrears for these sub­portfolios is also stated. The
current credit exposure and in particular the performance
in arrears of non­performing loans have been
largely shielded by specific allowances for impairment
losses and as a result of the weighting of
collateral.
Age
1 – 5 years
Age
5 – 10 years
Age
> 10 years
On account of the largely low­risk structure of issuer,
counterparty and borrower risks, there are practically
no sub­ or non­performing loans.
ISSuER, COuNtERPARty, BORROwER RISkS
in t million in %
Good loans:
current credit exposure 87,287.9 99.99
Sub-performing:
current credit exposure 8.2 0.01
Non-performing:
current credit exposure 0.6 0.00
Total 87,296.7 100.00
Management Report
Risk report
Total Collateral 1) Valuation
allowances 2)
Good loans: current credit exposure 10,393.4 8,770.1 8,602.9 8,745.6 36,512.0 26,913.5
of which in arrears 90.2 505.9 711.4 822.9 2,130.4
of which performance in arrears 0.5 7.4 32.7 69.1 109.7
Sub-performing: current credit exposure 92.3 182.5 81.7 71.0 427.5 253.8
of which in arrears 2.7 12.6 12.6 4.2 32.1
of which performance in arrears 0.1 5.9 – – 6.0
Non-performing: current credit exposure 269.6 879.7 948.5 2,541.8 4,639.6 3,331.4 1,321.4
of which in arrears 11.7 46.5 119.4 562.7 740.3
of which performance in arrears 0.1 3.0 10.1 259.4 272.6
Total 10,755.3 9,832.3 9,633.1 11,358.4 41,579.1 30,498.7 1,446.4
of which in arrears 104.6 565.0 843.4 1,389.8 2,902.8
of which performance in arrears 0.7 16.3 42.8 328.5 388.3
1) In line with regulations on recognised collateral and other economically eligible shielding (e.g. expected proceeds from collection services)
2) For good Loans and sub-performing loans: portfolio and country valuation allowances;
for non-performing loans: specific allowances for impairment losses, specific impairment allowances calculated on a portfolio basis and provisions
125.0
81

Current credit
exposure
of non-performing
loans
82
Risk report
in u million
The share of non­performing loans in the Group’s
total exposure declined further in 2007. As of
31 December 2007, it amounted to 3.6 % of the
cur rent credit exposure. The above graphic shows
the decline in non­performing loans in recent
quarters.
6,000
5,500
5,000
4,500
4,000
Credit risk provisioning
The authority of the credit risk divisions includes
recognising specific allowances for impairment
losses. Above defined amounts, individual members
of the Board of Management or the Board of Management
as a whole decides on the amount of the
specific allowance for impairment losses.
Provisioning for credit risk made during the year
and the expected future developments are reported
monthly to the Board of Management. The level of
the proposed specific valuation allowance is based
on strictly defined criteria that depend on the type
of collateral provided and the status of the loan
commitment (restructuring or settlement), among
other things.
31.12.2006 31.03.2007 30.06.2007 30.09.2007 31.12.2007
In the context of a portfolio assessment, we also
calculate the credit risk provisioning requirement for
loan commitments for which no specific valuation
allowance is carried out. Any changes in the results
of the parameters of the credit risk measurement
procedure described above (e.g. rating, probability
of default, loss given default ratio) are included in
this calculation.
Participation risks
The participation risks are integrated into the internal
risk tolerance calculations. Risk capital for
investments is calculated not only on the basis of
book values, but also with a view to the probability
of default, contingencies and any liquidation periods,
as well as expert estimates. This ensures that risks
relating to the issuance of equity are reflected to the
greatest possible extent. Results are backtested
annually to confirm the quality of risk determination.
In the reporting year, scenario analyses, e.g. default
of the company with the highest exposure, were
developed and integrated into reporting.

The Group participations are generally allocated to
the individual divisions. The only exception to this
is a certain number of companies which primarily
perform central services, and which are therefore
managed centrally. The management in charge of
the respective division is responsible for setting the
operational and strategic objectives for its participations,
from which the corresponding operational
planning and management is then derived. The
participations form part of the risk strategy of the
division to which they are allocated.
The Board of Management of LBB is informed about
the risk situation on a monthly basis.
Under the premises of risk diversification and the
strategic risk approach of focusing on strategically
advantageous investments, the following sub­portfolios
were formed:
product suppliers promoting core business,
sales channels promoting core business,
investments in service providers,
investments within the Group,
bundling the real estate holdings of LBB,
financial investments.
In addition, there are investments intended for divestment,
including in particular companies that are no
longer operational, companies in silent liquidation
and restructuring activities.
Changes in the economic environment of the participations
are identified and analysed regularly by way
of benchmarking using external sector ratings.
The risks from property companies, which were
reported under participation risks in the past, appear
in the new category of real estate risks. In addition,
some companies are no longer assigned to participation
risk. Instead, there is a more detailed analysis
based on the type of risk and in line with reporting
under market, real estate or counterparty default
risk, depending on the nature of the risks in the
company. Overall, the Group’s participation risk
declined by 24 % as against the previous year.
Liquidity risks
The liquidity risk is the risk that at any time, the
Group may not be in a position to meet its proper
payment obligations on time and in full (solvency).
It is divided into procurement and maturity risk.
The procurement risk is the risk that it may no longer
be possible to meet short­term mature payment obligations
in the next 30 days with barred access to
the unsecured money market in the case of a crisis.
The maturity risk involves the risk that it may only
be possible for mature, originally medium­ and longterm
refinancing funds for which there are no assets
falling due to be extended for a short period, due to
credit rating problems or for market­related reasons.
In the Group, the liquidity risk is monitored in
accord ance with Article 11 of the German Banking
Act (KWG) and the internal liquidity risk measurement
procedure. Article 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. Liquidity is considered sufficient
if the liquidity ratio is at least 1.0.
Management Report
Risk report
83

84
Risk report
The liquidity ratios in the Group as of 31 December
2007 in line with the German Liquidity Ordinance,
which came into force on 1 January 2007 and replaced
Principle II, were:
Sub-bank 2007 2006
Landesbank Berlin 1.61 1.88
Berlin Hyp 1.19 1.29
Measuring and limiting liquidity risks
In addition, liquidity risk controlling that ranges far
beyond the Liquidity Ordinance has been introduced
for the Group. It forms the Bank’s internal framework
for measuring and limiting liquidity risks and is
adapted to the Group’s requirements.
The capital maturity statement, which reflects the
Bank’s cash flow profile, will now form the basis for
all liquidity risk assessments by Risk Management.
Factored into the capital maturity statement are the
assumptions on the prolongation of assets falling
due and the elimination of intra­group payments in
order to ensure that the actual liquidity effect of
each cash flow is presented correctly.
On the basis of the above, the Bank calculates the
daily refinancing balances required to be covered
for short­term assets with a term of up to 30 days.
These are monitored by Risk Management to ensure
that the Group’s liquidity is secure at all times,
even where restrictive assumptions are applied. The
assumptions reflect, to a varying extent, outflows
of short­term deposits, draw­downs on approved
credit lines and discounts on the sale of securities
port folios for the purposes of generating liquidity.
Some of the assumptions made here are based
on significantly higher liquidity charges than are
assumed in the Liquidity Ordinance, and are therefore
much more conservative in terms of the assessment
of the liquidity situation. In addition, in all
of these scenarios, it is assumed that access to
unsecured refinancing sources will no longer be
possible and that refinancing for each day in the
assessed period can only be secured using avail ­
able securities portfolios. The potential realisability
of each security in terms of its realisation period
and the associated costs is taken into account.
For assets with terms of between 31 and 360 days,
the limitation of refinancing balances for these terms
follows the same risk assessment. In this respect,
the cash flows are divided into different term bands,
some of which overlap. This limits the need for
short­term refinancing in the case of a crisis affecting
the Bank’s access to medium­ and longer­term
unsecured money market refinancing. The upper
limits are based on the securities liquidity reserve
that is available for the entire period.
In addition to this restriction due to the unused
liquidity reserve, the balances are also nominally
limited.
A representation of the liquidity risk situation, the
current risk utilisations and the short­term financing
requirement is made available to the Board of Management
every two weeks during the meetings of
the Asset Liability Committee and monthly in the
context of top management reporting. Reporting
covers the monitoring of prior warning levels. When
these are reached, defined escalation measures
are initiated. In 2007, utilisation of the limits for both
the procurement and the maturity risk was not a
problem either at the year­end or during the course
of the year.

Managing liquidity risks
Group­wide liquidity management is handled by
Treasury and Trading. The same system and methods
are used as for internal determination of liquidity
risks by Risk Management. The aim of liquidity management
is to ensure that sufficient liquidity is secured
at all times in line with the methodology described
above, even during short­term bottlenecks and longterm
general or bank­specific liquidity crises.
Concentrations of risk
The Group’s liquidity risk policy is based on maintaining
sufficient levels of assets that can be easily
liquidated to cover actual expenses and those
calculated in stress tests.
The location of the Group’s companies means
that regional concentrations arise in particular
with regard to customer deposits, which are highly
concentrated in the Berlin / Brandenburg regions.
At around 80 %, inter­bank financing is also largely
focused on Germany. The distribution is similar for
subordinated debt, with the share of placements
attributable to regions outside Germany is estimated
at 30 %. In line with its strategy, LBB’s new issues
were issued with shorter terms in 2007. A slightly
higher share of domestic placements was observed.
Balance sheet information
(shareholders’ equity and liabilities):
in % 2007 2006
Deposits by banks 35,7 34,6
Amounts due to customers 20,8 20,0
Securitised debt 21,5 22,9
Financial liabilities recognised at
fair value through profit or loss 15,4 15,1
Other liabilities 6,6 7,4
Total assets 100,0 100,0
Breakdown by residual term
The breakdown by residual term can be seen in note
47 (deposits by banks) and note 48 (amounts due to
customers).
Market price risks
The Group is exposed to market price risks in the
form of interest rate, currency, share price and other
price risks in the various divisions of Capital Markets
(trading portfolio) and in interest management (banking
book).
Trading portfolio and banking book activities
Trading portfolio activities form an integral part of
the written individual strategies of the respective
Capital Markets divisions. For the trading portfolio
and banking book activities alike, the strategic
framework is transformed into firm market price
limits (value­at­risk 1) (VAR limits) and approved by
the LBB Board of Management on the basis of the
risk tolerance concept and annual planning.
1) 10-day value-at-risk at a confidence level of 99 %
Management Report
Risk report
85

86
Risk report
MARkEt PRICE RISk LIMItS AND utILISAtION IN thE gROuP IN 2007
in t million Capital-at-risk Group 2007
Risk concentration
Average Minimum Maximum Limit as at
Unit 2007 2006 2007 2006 2007 2006 31.12.2007 31.12.2006
Trading 23.78 20.04 14.27 13.55 42.95 34.54 81.29 40.00
Client Business 6.07 4.07 2.74 2.48 27.32 9.34 25.00 25.00
Treasury 46.92 21.93 12.17 5.62 110.48 36.08 160.00 60.00
International business 2.74 1.68 1.88 1.30 4.03 2.93 5.00 5.00
Capital Markets 67.33 37.22 29.81 18.29 128.04 59.25 175.00 75.00
Landesbank banking book 22.07 28.73 8.03 10.60 41.96 43.60 150.00 250.00
Berlin Hyp banking book 6.14 18.28 0.90 2.48 20.89 53.30 90.00 90.00
Other banking books 1.68 3.17 1.15 1.53 2.54 8.16 11.65 11.65
Banking book 24.64 49.79 9.03 17.63 56.13 110.11 251.50 351.65
LBB Group (total) 78.05 75.52 35.03 37.85 144.87 123.66 426.50 426.65
Price risk 23.92 30.20 13.30 15.24 40.80 50.07
Currency risk 4.92 7.33 0.73 1.04 12.18 12.53
Interest rate risk 41.10 64.89 16.75 34.09 78.88 115.14
Credit spread risk 42.20 20.42 11.21 2.88 97.59 41.25
LBB Group (total) 78.05 75.52 35.03 37.85 144.87 123.66
Due to diversification effects, the Group amounts are not calculated as the total of the individual activities.
The Group’s daily MaRisk reports extensively on
detailed and specific risks. In addition, there are
a large number of prescribed detail stress tests, a
variable stress test counter to the current positioning
and scenario­based risk calculations with changing
correlations. These presentations serve to identify
and therefore help avoid concentration risks.
Interest rate risk
Uncertainty regarding future changes in market
interest rates and the resulting losses are a major
risk factor for the Bank. This risk is determined
in the Group as part of VaR calculations. It is limited
and regularly monitored. Interest rate risk is managed
at Group level, taking into account all cash flows.
The Group’s position in terms of interest rate fluctuations
is largely neutral. Exposure in the Group
remained constant as against the previous year.
In addition, scenario calculations have been drawn
up in order to determine the effect that a rise in overall
interest rates of 100 basis points would have on the
Group’s portfolio as a whole.

in t million
Currency risk
The Group does not have any significant currency
exposure. The price risk shown is predominantly
due to residual amounts from customer transactions,
foreign currency liquidity support and individual
trading items with foreign currency assets. There is
no significant risk for any currency.
Share and fund price risks
Share price risks primarily result from trading
strategies and surpluses in issuing business from
structured share products. Losses mainly occur
when share prices fall.
130
120
100
Group
Landesbank
Berlin
Berlin Hyp Others
Stress test at end of 2007 – 176.9 – 152.7 – 21.5 – 2.7
Stress test at end of 2006 – 277.1 – 223.7 – 45.0 – 8.4
gROuP MARkEt PRICE RISk
in e million
120
110
100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0
110
02.01.2007
120
16.01.2007
110
30.01.2007
13.02.2007
27.02.2007
13.03.2007
27.03.2007
12.04.2007
26.04.2007
11.05.2007
29.05.2007
12.06.2007
26.06.2007
Over the course of 2007, the Group mainly held
bond funds, equity funds, mixed funds, hedge funds
and real estate funds in its banking book. Funds are
treated as shares in risk measurement methods. In
addition, there are separate stress tests for bond
funds, hedge funds and real estate funds.
In 2007, utilisation for capital markets business
(trading; limit € 175 million) and the banking book
(limit € 251.5 million) was as follows:
10.07.2007
24.07.2007
07.08.2007
21.08.2007
04.09.2007
18.09.2007
02.10.2007
17.10.2007
Banking book Capital Markets
31.10.2007
14.11.2007
28.11.2007
12.12.2007
28.12.2007
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Risk report
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88
Risk report
Management of market price risks
Risk management for trading portfolio activities is
carried out by the front office divisions on the basis
of market price risk limits / utilisation, stress tests and
the profit and loss (P&L) analyses for each division
and desk or trader. It is supplemented by daily and
annual loss limits and other front office procedures
that are tailored to the respective type of transaction
and that vary depending on the division involved
(e.g. scenario matrix limits, shift sensitivity limits,
basis point value limits, duration limits or vega limits).
The results of the daily risk and P&L analyses are
reported to risk controlling and to the member of
the Board of Management of LBB responsible for
Capital Markets.
Risk and income monitoring for the banking book is
also performed daily on the basis of the procedures
used for managing trading transactions. Economic
income effects (changes in net asset value) are analysed,
thus enabling control based on net present
value and maturity criteria. In addition, analyses are
carried out with regard to current income, especially
net interest income; these also form the basis for the
management of the profit and loss account. At least
every 14 days, the Asset Liability Committee of the
Board of Management discusses and decides on
business policy re­evaluation and, where appropriate,
the reorientation of the interest rate and price risk
incurred.
Monitoring market price risks
In December 2004, the internal procedures for market
price risk monitoring (full­use model including specific
price risks and currency risks) received regulatory
approval. Since then the Group’s trading portfolio
activities have been reported on the basis of this
internal model. Equity tie­up has been significantly
reduced as a result.
The monitoring of market price risk incorporates a
system of limits to restrict risk and loss and a set
of related procedural rules. The Product Committee
meets regularly and is required to assess the risks
and organisational effects from new forms of business,
and to monitor the necessary steps up until
their launch. Final authorisation of any new product
is issued by the respective Board of Management on
the basis of a joint proposal by the General Product
Committee. Comparable procedures apply for the
initiation of activities in new markets.
Risk assessment methods for market price risks
In terms of methodology, the procedures applied for
risk assessment (VaR exposure) are based on an
analytical delta­gamma approach including volatility
risks on the basis of a 10­day holding period and
99 % confidence level. The spread risks inherent
to the interest­bearing operations are measured
explicitly, taking into account government, mortgage
bond and swap curves. For interest rate­related
products, individual price risks are calculated by way
of implicit default intensities. Share price­related
products are split into an equity index­related portion
and an individual portion (single index model). This
procedure means that the Group is also able to
anticipate unexpected price movements of individual
securities in the risk model that fall outside market
trends. Integrative reporting of option risks is carried
out in the form of gamma and vega risks.
Correlations of the approximately 2,000 risk factors
are taken into account in full for each division and
for the report on the Bank as a whole. In addition to
the provisions mentioned, the risk content of the
positions is examined on a daily basis in a large
number of different (historical, fixed and exposure
related) scenarios by means of stress tests and
reported to the Board of Management.

The forecasting quality of the models is determined
by means of clean backtesting (ex post testing of
intra­day changes in value of a constantly held portfolio.
Since 2002, backtesting checks in all divisions
have produced results that confirm the high level
of forecasting quality. The validity of model assumptions
is regularly analysed using other mathematical
methods.
The risk and income calculations for trading transactions
are updated every 15 minutes. This means
that the Group’s market risk system clearly exceeds
the requirements of the MaRisk, as well as enabling
the effective monitoring of trading activities during
the course of the day.
Reporting market price risks
The Group has established a comprehensive and
detailed risk reporting system for market price risks:
Intraday monitoring of the risks and income of
the trading divisions (every 15 minutes),
Submission of a daily report in accordance with
the MaRisk to the responsible members of the
Board of Management,
Fortnightly asset / liability report for discussion by
the Asset Liability Committee,
Monthly report in accordance with MaRisk to the
Group Board of Management with an explanation
of the changes that have occurred during the
month.
The risk control procedures used in the Group have
proved their worth in all market situations during the
year under review. This is particularly true for the
unusual market developments as a result of the subprime
crisis. Risks are identified in a timely manner,
reported, and controlled by the respective decisionmakers.
Real estate risks
The portfolio of the Group’s real estate consists
of properties, which are reported in Group banks’
non­current assets or are owned by the Group’s
property companies. In addition, this includes real
estate the economic risk of which, but not the legal
risk, can be assigned to the Group. These finance
lease properties mainly include the “Service Centre”
and “Alexanderhaus” office buildings.
The risks are monitored on a regular basis and
measured using the value at risk procedure. The
properties’ exposure – current carrying amounts,
impairment or survey values – is allocated to individual
location­ and use­related property indices,
whose volatility is calculated on the basis of price
trends over the past 15 years. Account is also taken
of correlations between the property indices when
aggregating the risks. In the reporting year, scenario
analyses, e.g. changes in volatilities, were developed
and integrated into reporting.
Real estate risks are managed on the basis of the
independent “real estate risk” category, for which
limits have been determined for both the Group and
the strategic business areas. Utilisation of these limits
is monitored in rotation. The figures are reported every
quarter. The risk declined by around € 10 million in
2007.
Operational risks
In the Group, operational risk in line with Article 269 (1)
SolvV is defined as the risk of losses arising from the
inadequacy or failure of internal methods and systems,
people or as a result of external events. This
definition includes legal risks, but excludes strategic
risks and reputation risks. Legal risks are the risks
of violations of current and changing legal conditions,
particularly legal provisions arising from contracts,
law or court rulings. This includes the risk of violations
of legal conditions due to ignorance, insufficient diligence
in legal application (negligent interpretation),
negligent action or late implementation.
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Organisational structure
The controlling of operational risks is the responsibility
of the Controlling division. This independent
unit is responsible for the development of a framework
of operational risks, which includes strategy,
principles and procedures for identifying, measuring,
monitoring, analysing and reporting and developing
methods for controlling operational risks, and ensures
its implementation and application. In addition, it
handles the monitoring and application of existing
and new regulatory requirements. Changes in the
framework are submitted to the Risk Board for coordination.
In line with the Group’s strategy for operational risks,
the implementation of the framework described above
and day­to­day management of operational risks
are the responsibility of the divisions as part of their
responsibility for earnings.
The OpRisk Committee is a body for all issues relating
to the controlling and management of operational
risks. It supports the Board of Management in the performance
of its monitoring function for operational
risks. The Committee consists of representatives of
the business and central divisions and the Group
companies. Among other things, the body serves
the purpose of an exchange of information on new
controlling instruments and current risk developments
and the clarification of operational risk issues
(e.g. new regulatory requirements). It also serves to
promote risk culture in the Bank. The responsible
member of the Board (Risk Board) is informed of the
resolutions passed by the OpRisk Committee.
Risk management and monitoring
The operational risk is included in the risk tolerance
concept for the Group’s overall risk management.
Operational risk is managed on the basis of the
Group­wide framework. The operational risk profile
is determined by comparison with the Group’s risk
propensity and measures and priorities for risk mitigation
are defined. The current operational risk situation
is reported to the Board of Management as a
whole on a monthly basis. Special, detailed reports
on operational risks are prepared for the individual
strategic business areas each year and presented
to the responsible member of the Board of Management
and the local OpRisk officer.
Various instruments are used to manage operational
risk efficiently, including:
self­assessment (qualitative OpRisk inventory),
which uses a bottom­up approach,
scenario analysis, which is used to determine the
loss potential of critical scenarios for the Bank,
loss event accumulation (internal / external),
early warning system (tracking and monitoring risk
indicators),
controlling of measures: identified measures from
loss events, risk indicators and self­assessment
are tracked and monitored,
a risk transfer through insurance protection for
various matters (such as economic losses) is
installed; the use of special insurance against
OpRisk loss events is currently under examination.
The Group has developed its own software tools to
prepare / manage and report on the above data.

Measurement of operational risks –
adequacy of capital resources
The Group currently uses the standard approach in
line with Article 272 SolvV for regulatory equity requirements.
In line with the provisions of the standard
approach, regulatory capital of € 160 million was
determined in 2007.
The Group has further refined its model for calculating
internal (economic) capital. The components of the
model are:
loss distribution approach (past loss distribution),
features of risk indicators (measurement using
traffic light status),
loss analysis, particularly for large­scale losses,
scenario analysis (determination of future loss for
critical scenarios).
In particular, the scenario analysis was improved
to better estimate the risk of large­scale losses
and the loss distribution approach (LDA) was introduced.
LDA is a statistical model for determining
the amounts of losses based on loss analyses which
is integrated into the process of determining operational
risk (determining economic capital). The result
of the interplay of the above model components is a
specific risk assessment for each strategic business
area examined. By aggregating all business areas
and Group companies included, this produces the
Group’s operational risk (economic capital requirement).
As of 31 December 2007, the risk calculation based on
the internal model produced a value of € 94 million,
which is included in the Group’s risk tolerance calculation.
Past and forward­looking risk indicators are regularly
examined to identify negative developments in the
above risks in a timely manner. There were no develop
ments threatening the future of the Bank as a going
concern in 2007.
Personnel risks
The Group monitors and controls personnel risks in
line with the four MaRisk risk factors with the aim of
identifying negative trends and introducing suitable
measures to prevent or minimise them:
Fluctuation risk: Appropriate representation regulations
in the divisions ensure that the departure of
employees does not lead to long­term disruptions
in operating processes.
Availability risk: Qualitative and quantitative per­
sonnel resources are managed on the basis of
the individual goals and requirements of divisions,
including in particular business activities, risk
strategy and the risk situation.
Qualification risk: The Bank implements targeted
training measures to ensure that the level of
employee qualifications is consistent with current
developments at all times.
Motivation risk: Disincentives and conflicts of
interests are countered by the use of special
remuneration and incentive programmes.
IT and system risks
Extraordinary IT and system risks can result from
insufficient security and quality and errors or disruptions
in key IT systems and processes.
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At present, no high­probability IT or system risks
threatening the future of the Bank as a going concern
are expected. The future systematic ongoing
development and improvement of the IT infrastructure
and methods is ensured by proper IT operations.
Restructuring goals were met and legal requirements
were satisfied.
IT risk management is defined centrally and holistically
and includes constant risk awareness training
for employees and regular risk analysis in the context
of established procedures. Defined risk indicators
are examined periodically to aid risk identification.
This enables LBB to identify operative IT risks and
implement risk­reducing measures.
The quality of information security is constantly
updated and refined in line with ISO standard 17799.
For this purpose, the Group has implemented a
comprehensive set of regulations on information
security and the necessary organisational structures
and methods. The integrity, availability and confidentiality
of information and information goods are
ensured by the application of typical quality standards
for the industry in designing IT systems and processes
and the use of best practices. The ability
to maintain business capacity during crises and
emergencies is regularly and successfully evidenced
by corresponding certification and emergency drills.
In 2007, the IT project portfolio focused on the
implementation and ongoing development of
projects to
meet changing legal requirements,
optimise data management and data quality,
reduce structural complexity,
modernise, consolidate and integrate the
IT infrastructure and IT processes and
introduce monthly IFRS reporting.
The management of operational risks and emergency
provision are essential elements of project requirements.
This ensures that projects continue to make
a key contribution to the reduction of operational
risks in future.
Security and emergency plans
The Group has established a crisis team for the
management of catastrophe situations to perform
decision­making and management functions in the
event of crisis. Regular drills are performed in this
context.
Against the background of securing bank operations
on an ongoing basis and reducing losses in the event
of severe disruptions of operations to a minimum,
the Group also has a detailed information security
policy and an extensive written emergency plan for
its critical and highly critical business processes.
The Group has appointed a Chief Security Officer
(CSO) for the coordination and monitoring of information
security and the topicality of its emergency
plans including the necessary emergency drills.
The OpRisk unit in the Controlling division works
closely with core competence divisions (e.g. CSO,
working group for information security and emergency
planning for IT and non­IT) in regular work meetings
and committees.
Outsourcing
As part of the consultation phase to adapt and integrate
existing outsourcing guidelines into MaRisk,
the Group began establishing initial, emerging
requirements from measuring the risk content of
outsourcing in­house at an early stage. 2008 will
focus on the implementation of the new provisions
following their final publication in MaRisk. In particular,
the Bank attaches a great deal of importance
to increased integration in its risk management and
monitoring.

Legal risks
Legal risks are countered by observing the legal
environment, specifying guidelines and utilising
standard contracts. Sufficient provisions are recognised
for legal risks.
Indemnity declarations by LBB and IBG
As stated in previous annual reports, LBB and Immobilien­
und Baumanagement der BIH­Gruppe GmbH
(IBG), previously Immobilien­ und Baumanagement
der Bankgesellschaft Berlin GmbH, issued so­called
declarations of exemption to natural persons
between 1994 and 1997. Under the terms of the
declarations, these persons were exempted by
LBB and IBG from their full liability to third parties
as partners in various real estate funds.
The Federal Financial Supervisory Authority (BaFin)
stated that it considered the declarations of exemption
to be invalid under civil law. LBB and IBG are
of the same opinion. Accordingly, the declarations
of exemption do not have any relevance under
commercial or regulatory law.
Disposal of the shares in Allgemeine
Privatkundenbank Aktiengesellschaft (Allbank)
Bankgesellschaft Berlin AG sold its shares in Allbank
to GE Bank GmbH in 2003. Its legal successor,
GE Money Bank GmbH, is now enforcing guarantee
claims arising from the share purchase agreement
due to imminent limitation as part of an affirmative
action for a right, for which adequate provisions
have been created.
Risks from the implementation of the detailed
agreement and the disposal of the key Group real
estate companies to the State of Berlin
The Landesbank Berlin Holding Group is largely
shielded by the “Detailed agreement on the shielding
of the Bankgesellschaft Group from material
risks of Real Estate Services” (DetA) by the State
of Berlin dated 16 April 2002. Among other things,
the shielding relates to certain letters of comfort
and the loans issued by Group banks to certain Real
Estate Services companies. For assuming the various
guarantees, the Holding is to pay guarantee
commission of € 15 million p.a. until at least 2011
inclusively. In addition, a debtor warrant was agreed
that carries with it certain conditions, the costs of
which are to be borne by the Holding alone as the
principal beneficiary of the detailed agreement.
Prior to the sale of Real Estate Services to the State
of Berlin, which has since been concluded with the
performance of a settlement agreement in relation to
the IDL purchase agreement on 1 June 2007, the
assets and contracts not intended for sale were taken
on by companies remaining in the Group. Any settlement
risks that could resulting from the regulations
of the detailed agreement to be observed, in particular,
by Group banks are countered by procedures
agreed jointly with the controlling company formed
by the State of Berlin (BCIA) and through appropriate
risk management systems. The risks remaining in the
Landesbank Berlin Holding Group and allocated to
GfBI Gesellschaft für Beteiligungen und Immobilien
mbH (GfBI) or GfBI Immobilien Solutions GmbH
(GfBI IS), in particular, the items on the Extended
Negative List and other items not covered by the
detailed agreement are processed centrally at GfBI
and are managed and monitored there through an
appropriate risk management and control system.
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Various restructuring measures under company law
have taken place in connection with the transfer. With
restructuring measures of this kind, the pertinent
provisions of company law and the law governing
the reorganisation of companies grant the creditors
of the companies affected a claim to collateral security
for their existing claims under certain preconditions.
Corresponding claims have meanwhile been
registered at the Holding, LBB, GfBI and GfBI IS.
However, they will not result in any additional risks.
Should the Group have to provide collateral in this
connection, it would only be a case of providing
additional collateral for existing obligations so there
would be no increase in the Group’s obligations.
Prospectus liability proceedings with regard to the
closed-end real estate funds (IBV investment funds)
and proceedings instigated by a fund company
Proceedings have been instigated against the Holding,
LBB and other former Group companies, both
individually and jointly in differing configurations,
with regard to the preparation and distribution of
allegedly incorrect prospectuses for IBV investment
funds. The funds were initiated by Immobilien Beteiligungs­
und Vertriebsgesellschaft der IBAG­Gruppe
mbH, now trading as Immobilien Beteiligungs­ und
Vertriebsgesellschaft der BIH­Gruppe (IBV).
Following so­called conciliatory offers that were
made to the subscribers of 15 IBV funds in 2005
and a further five IBV funds in 2007, the majority
of subscribers have withdrawn their prospectus
liability suits.
If the prospectus liability proceedings are decided
in favour of the subscribers in the court of last
instance, the Landesbank Berlin Holding Group is
protected against any damages awarded under
the terms of the detailed agreement.
A fund company, LBB Fonds 13, also filed for damages
amounting to € 29.25 million against the Holding, LBB
and IBG on account of the transfer of swaps to the
fund company that were originally concluded between
the Holding and Bavaria Objekt­ und Baubetreuung
GmbH (BOB). The Holding and LBB served notice of
the legal dispute to BOB and IBV – the latter as the
managing limited partner of the fund company. In its
ruling of 2 August 2007, the Berlin District Court
found the Holding, LBB and IBG jointly and severally
liable to pay compensation. After examining and
analysing the ruling, the defendants have appealed
to the Court of Appeal. The Holding and LBB have
recognised sufficient risk provisions in the event that
the ruling is upheld.
Other risks
Business policy and strategy decisions
The overall bank strategy, which was approved by
the Board of Management of LBB and is regularly
updated, represents a synopsis of the strategies
of all divisions, back­office sectors and corporate
centres.
A standardised report geared towards strategic indicators
that can be managed by the bank structure
has been developed as an instrument for monitoring
and managing the result targets of the divisions.
Deviations from plans in terms of the result targets
are to be regarded as early warning indicators. In
these cases, appropriate measures are instigated
and their success is examined. The report is regularly
presented at Board of Management meetings.
Adherence to the strategy is regularly examined
at the same time.

Report on expected developments / Outlook
Expected development / Assessment of the
economic situation
In Germany, investment propensity will remain above
average in 2008. Export markets will also continue to
offer good sales prospects for German manufacturers.
While the US economy will continue to weaken, this
development will be offset by the expansion of trade
relationships with Asian markets and stronger demand
from oil­producing nations. In 2008, private consumption
– which is expected to recover following the
upward trend on the employment market after several
years – will provide further stimulus in Germany.
Nonetheless, economic risks have grown. Although
the ECB is not raising key lending rates, turbulence
on the financial markets in the second half of 2007
went hand­in­hand with a sharp intensification of
financing conditions that will continue to have aftereffects
in 2008. Furthermore, the strength of the
euro and the loss of purchasing power due to high
energy costs will also have a negative impact. Overall,
economic momentum in Germany is not expected
to match the rate of the last two years.
Management Report
Risk report | Report on expected developments / Outlook
The economic prospects of the Berlin­Brandenburg
region are positive for 2008. Order levels in the manufacturing
industry are high. In addition, the improving
employment situation, the boom in Berlin tourism
and growth impetus from India, China, Russia and
the EU Member States will all support economic
development. There are risks in respect of the implications
of the subprime crisis in the US that cannot
yet be quantified. All in all, however, the assessment
for the Berlin economy for 2008 is favourable, although
overall economic performance is expected to grow
more slowly than in 2007 at 1.5 %.
The region’s growth prospects have also expanded
structurally in the last few years. As an economic
location, Berlin can boast intensive research and
development activities and successful productivity
improvement measures compared with the rest of
Germany. Working in conjunction with existing scientific
institutions, the region is expected to expand
its presence in innovative sectors in particular. Here,
bio­ and medical technology, traffic engineering,
information and communication technology in association
with the media sector and the development
of Berlin­Brandenburg as a base for science and
technology should be mentioned as areas of expertise.
Berlin has significantly improved the general
conditions for companies in recent years. Since
2002, the annual growth rate of companies in Berlin
has been higher than the national average for all
sunrise industries.
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Report on expected developments / Outlook
While the outlook for the economy as a whole is
decidedly positive, the conditions for the banking
sector remain difficult. The yield curve is also likely
to limit the potential for generating income from
maturity transformation in future. In addition, there
has been no let­up in the consolidation pressure on
the German banking market, while foreign banks are
simultaneously increasing their market penetration.
Business orientation
The Landesbank Berlin Group is still focused on
continuing its growth in its four strategic business
areas, leveraging market opportunities with investments
and improving quality. The Group has a strong
market position in its core region of Berlin and the
surrounding region, but this region is marked by the
weaker income and assets structure of its private
households than the rest of Germany, a small­scale
corporate structure and, despite its recovery, its
underdeveloped real estate market. The investments
that have been made in national credit card, direct
banking and point­of­sale business and the national
outlook of real estate financing business should off ­
set the limited growth prospects in the Bank’s core
region. The new ownership structure could also
open up additional market prospects through the
cooperation with other German savings banks.
The Group’s strategic business areas are managed
using the following performance ratios: operating
result/earnings before taxes, return on equity 1) and
the cost/income ratio. Adequate capital resources
and dividend performance are also used as control
parameters at Group level and the level of the individual
banks.
Development of the business segments
Given the changes in the market environment and
the general orientation described above, the following
developments are expected in the individual
business segments.
Retail Banking
The Group focuses on three areas of Retail Banking:
with the intensification in customer loyalty, the business
base is to be further broadened by an increase
in current account holders. Consolidation of the
Group’s investment business and intensification of
its consumer finance is also a priority. The increase
in cross­selling involving securities transactions and
instalment credit should lead to a rise in income.
National card business will continue to generate
rising earning contributions, particularly with regard
to online business, thanks to the previous and on ­
going expansion of co­branding. Through netbank
we have the opportunity to offer our national credit
card customers more banking products.
Berliner Sparkasse’s core business will continue to
develop positively and will lead to a return on equity
in the segment of over 45 % in the next two years.
1) The return on equity is determined by dividing the “operating result” and “tied-up equity capital”. The tied-up equity capital is calculated
by means of a 6 % weighting of the average risk items in line with the German Banking act as well as a weighting of operational risks in
accordance with the Basel II standard approach.

Regional Corporate Banking
In Regional Corporate Banking the strategic starting
points lie in increasing market reach (acquisition of
new customers) and increasing cross­selling to
improve earnings. The focus is on lending business
and increasing net commission income. The latter
will be achieved by boosting sales of derivatives and
other innovative products and in optimising charges
for payment services.
The core business of Landesbank Berlin and Berliner
Sparkasse will continue the positive trend of recent
years. A return on equity of almost 20 % is expected
in the next two years.
Capital Markets
Sales activities with bank, institutional and other
financial service providers will continue in the Client
Business division. As regards the savings banks,
some hurdles should be removed after privatisation
is concluded and the long­term affiliation to the
savings bank sector. The integration with our private,
corporate and real estate financing customers will
be intensified further and the interaction with international
business will be expanded. This will continue
in our target region of Central and Eastern
Europe, focusing on trade and export finance, in
particular.
The market position of LBB­INVEST will also be
expanded by additional external sales agreements
to maintain its high rate of growth, particularly for
publicly offered funds. Its profile will be raised within
the savings bank organisation.
Management Report
Report on expected developments / Outlook
Treasury and Trading are concentrating on defined
short­term strategies that enable us to respond flexibly
to current market developments in combination
with long­term, broadly diversified investment strategies.
Overall, this means that the stable earnings in
Capital Markets will become increasingly important.
Despite this, earnings in this segment are strongly
dependent on the development of markets, so earnings
may fluctuate more significantly here than in
other segments. As capital tie­up is increased significantly
by volume growth, particularly for investment
strategies, we are assuming a possible return on
equity for the segment as a whole of around 15 %.
Real Estate Financing
In commercial real estate financing, the focus on
investor finance and innovative financing structures
throughout Germany remains unchanged. To exploit
additional opportunities abroad, we opened offices
in London, Warsaw and Prague and entered into a
sales cooperation arrangement in the Netherlands
for the Benelux market. This will assist us in our goal
of increasing the real estate loan portfolio, improving
the quality of credit portfolio through regional diversification
and risk distribution. The return on equity
is expected to range between 15 % and 20 %.
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Report on expected developments / Outlook
Comparison of projected and actual figures
The goal for 2007 of a return on equity of more than
12 % was almost achieved with 11.5 %.
After a good start in financial year 2007, the negative
effects of the crisis on the bond markets became
highly apparent. Spread growth, particularly on bank
issues, lead to considerable remeasurement losses
in the securities portfolio. The Landesbank Berlin
Holding Group has no direct exposure in the segment
primarily affected, that of US subprime mortgages.
Estimation procedure
The business planning and forecasts of the Landesbank
Berlin Holding Group are based on macroeconomic
assumptions about the development of the
economy, the labour market and interest rates. For
2008 and the medium term planning horizon up to
2012, we expect economic growth in our core region
of Berlin­Brandenburg to be positive albeit below
the average for the whole of Germany. At the same
time, we assume that the yield curve will be flatter
on average than in recent years. On the basis of
these assumptions regarding framework conditions,
we set central key points. Subsequently, the previous
medium­term planning was revised throughout
the Group by the divisions. This process detailed
the targets for clients and market position, new business
and earnings and risks were planned and
investments and costs.
Medium-term planning
The above estimate of development in our core
divisions is based on our medium­term planning,
which extends to 2012.
The plan is based on approved business and risk
strategies. The effects of the change in corporation
tax in the 2008 German Business Tax Reform Act
were taken into consideration.
2008 will be the Group’s first full financial year following
the conclusion of all its restructuring measures
and its privatisation. The management and employees
will therefore be able to focus fully on expanding
its market position; hence, its cost, risk and quality
management will consistently remain at its already
high level.
Summary / Overall assessment
The Landesbank Berlin Holding Group is generating
positive operating results following its privatisation.
The Group’s net asset situation is in order. In a difficult
sector environment and in spite of the strong
competitive pressure, the Board of Management
feels that the Group is strategically well positioned.
There is growth potential in all four business areas,
leading it to expect stable earnings development in
customer business. In light of the ongoing distortion
on the finance markets, the Landesbank Berlin Holding
Group is anticipating that its overall earnings will be
squeezed.

Annual Financial
Statements for the Group
Consolidated Income Statement 100
Consolidated Balance Sheet 101
Statement of Changes in Consolidated Equity 102
Consolidated Cash Flow Statement 103
Notes to the Financial Statements 105

Consolidated Income Statement
for the period from 1 January to 31 December 2007
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in u million in u million in u million in %
Net interest income 815 743 72 10
Interest income 6,210 5,535 675 12
Interest expenses 5,395 4,792 603 13
Allowance for losses on loans and advances – 53 118 – 171 < – 100
Net interest income after risk provisioning 868 625 243 39
Net commission income 297 368 – 71 – 19
Fee and commission income 429 459 – 30 – 7
Fee and commission expense 132 91 41 45
Net income from hedge accounting 3 3 0 0
Net income from financial instruments recognised at fair value through profit or loss – 45 186 – 231 < – 100
Net income from financial assets – 4 50 – 54 < – 100
Net income from investments carried at equity 12 – 4 16 > 100
Other operating income 119 636 – 517 – 81
Administrative expenses 965 1,115 – 150 – 13
Operating result before restructuring 285 749 – 464 – 62
Restructuring expenditure and income (net) 6 35 – 29 – 83
Operating profit / earnings before taxes 291 784 – 493 – 63
Income tax expense 71 97 – 26 – 27
Consolidated net profit for the period / earnings after taxes 220 687 – 467 – 68
Net profit / loss attributable to minority interests 19 25 – 6 – 24
Consolidated net profit for the period of the shareholders of the parent company 201 662 – 461 – 70
Earnings per share
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Consolidated net profit for the period of the shareholders of the parent company
(e million) 201 662 – 461 – 70
Average number of ordinary shares outstanding 999,327,870 986,246,150 13,081,720 1
Earnings per share (e) 2) 0.20 0.67 – 0.47 – 70
1) Figures for the previous year have been adjusted
2) Diluted / basic earnings
100
Change
in %

Consolidated Balance Sheet
as of 31 December 2007
Assets
31.12.2007 31.12.2006 1) Change
in u million in u million in u million in %
Cash 986 955 31 3
Loans and advances to banks 26,514 28,357 – 1,843 – 6
Loans and advances to customers 47,003 50,904 – 3,901 – 8
Risk provisioning – 1,411 – 1,825 414 23
Positive fair value of derivative hedging instruments 397 318 79 25
Financial assets recognised at fair value through profit or loss 13,637 14,652 – 1,015 – 7
Financial assets 50,696 43,538 7,158 16
Investments carried at equity 129 74 55 74
Intangible assets 665 650 15 2
Property, plant and equipment 583 613 – 30 – 5
Investment property 82 83 – 1 – 1
Current tax assets 85 128 – 43 – 34
Deferred tax assets 800 798 2 0
Other assets 1,915 2,270 – 355 – 16
Non-current assets and groups of assets held for sale 66 110 – 44 – 40
Total 142,147 141,625 522 0
1) Figures for the previous year have been adjusted
Liabilities and shareholders’ equity
31.12.2007 31.12.2006 1) Change
in u million in u million in u million in %
Deposits by banks 50,686 48,935 1,751 4
Amounts due to customers 29,552 28,367 1,185 4
Securitised debt 30,517 32,358 – 1,841 – 6
Negative fair value of derivative hedging instruments 985 1,090 – 105 – 10
Financial liabilities recognised at fair value through profit or loss 21,893 21,434 459 2
Provisions 1,270 1,463 – 193 – 13
Current tax liabilities 199 167 32 19
Deferred tax liabilities 32 73 – 41 – 56
Other liabilities 1,018 1,778 – 760 – 43
Liabilities assigned to groups of assets held for sale 1 8 – 7 – 88
Subordinated capital 3,163 3,328 – 165 – 5
of which: Dormant participations of the State of Berlin 700 700 0 0
Shareholders' equity 2,831 2,624 207 8
Issued capital 2,554 2,554 0 0
Capital reserves 77 77 0 0
Retained earnings – 143 – 395 252 64
Revaluation reserve – 182 137 – 319 < – 100
Currency translation reserve – 2 1 – 3 < – 100
Minority interests 414 97 317 > 100
Unappropriated surplus / accumulated loss 113 153 – 40 – 26
Total 142,147 141,625 522 0
1) Figures for the previous year have been adjusted
Consolidated Financial Statements
Income Statement | Balance Sheet
101

Statement of Changes in Consolidated Equity
for the period from 1 January to 31 December 2007
in u million
102
Issued
capital 1)
Capital
reserves
Retained
earnings
Currency
translation
reserve
Revaluation
reserve
Minority
interests
Unappropriated
surplus /
accumulated
loss
Total
shareholders’
equity
Shareholders’ equity
as of 31.12.05 2,484 15 – 515 1 250 36 – 370 1,901
Treasury shares 70 62 132
Consolidated net profit for the period 25 660 685
Recognised income and expense – 19 – 113 – 132
Changes in scope of consolidation
and other changes 135 36 – 137 34
Shareholders’ equity as of 31.12.06 2,554 77 – 399 1 137 97 153 2,620
1) including treasury shares
in u million
Issued
capital 1)
Capital
reserves
Retained
earnings
Currency
translation
reserve
Revaluation
reserve
Minority
interests
Unappropriated
surplus /
accumulated
loss
Total
shareholders’
equity
Shareholders’ equity
as of 31.12.06 2,554 77 – 399 1 137 97 153 2,620
Adjustments in accordance with IAS 8 4 4
Adjusted shareholders’ equity
as of 31.12.06 2,554 77 – 395 1 137 97 153 2,624
Change in retained earnings 90 – 90 0
Distributions – 60 – 60
Consolidated net profit for the period 19 201 220
Recognised income and expense 72 – 308 – 236
Changes in scope of consolidation
and other changes 90 – 3 – 11 298 2) – 91 283
Shareholders’ equity as of 31.12.07 2,554 77 – 143 – 2 – 182 414 113 2,831
2) including 0 187 million from the first-time consolidation of Albatros Select Fund and 0 68 million from the first-time consolidation of Keppler Global Value
Presentation of recognised income and expenses
The income and expenses recognised directly in equity relate to the changes in the revaluation reserve from the fair value measurement of
available-for-sale securities (0 – 428 million), cash flow hedge changes (0 – 32 million) and changes in retained earnings as a result of the
remeasurement of pension obligations (0 100 million). Deferred taxes on changes in value charged directly to equity amounted to 0 124 million,
resulting in a net reduction in equity of 0 236 million.
Taking into consideration the consolidated net profit for the period, the total figure for the financial year in accordance with IAS 1.96
was 0 – 16 million, of which 0 – 14 million was attributable to the shareholders of the parent company and 0 – 2 million to minority interests.

Consolidated Cash Flow Statement
for the period from 1 January to 31 December 2007
in u million 2007 2006 1)
Consolidated net profit for the period 220 687
Non-cash items included in consolidated net profit for the period and reconciliation
to net cash from / used in from operating activities
Depreciation and amortisation, allowances for impairment losses, reversals of impairment losses 37 188
Changes in provisions (additions and reversal only) 70 69
Change in other non-cash items – 16 – 429
Net income from the disposal of property, plant and equipment and intangible assets – 34 – 71
Other adjustments (net) – 663 – 1,492
Subtotal – 386 – 1,048
Change in assets and liabilities used in operating activities after adjustment for non-cash items
Loans and advances to banks 1,885 – 1,928
Loans and advances to customers 3,486 354
Financial assets recognised at fair value through profit or loss 1,103 1,988
Other assets used in operating activities 239 638
Payments for the acquisition of financial assets used in operating activities – 20,095 – 19,719
Proceeds from the disposal of financial assets used in operating activities 12,828 17,496
Deposits by banks 1,705 4,498
Amounts due to customers 618 783
Securitised debt – 1,895 – 1,214
Financial liabilities recognised at fair value through profit or loss 645 – 3,613
Other liabilities used in operating activities – 952 – 268
Interest and dividends received 6,228 5,970
Interest paid – 5,383 – 4,950
Income tax payments 86 – 82
Cash flow from operating activities 112 – 1,095
Proceeds from the disposal of financial assets
used in investing activities 96 391
property, plant and equipment 5 269
intangible assets 1 6
Payments to acquire
financial assets used in investing activities – 4 – 323
property, plant and equipment – 23 – 44
intangible assets – 16 – 23
Effect of changes in the scope of consolidation
Proceeds from the disposal of consolidated companies after deduction of transferred cash 57 490
Payments for the acquisition of consolidated companies after deduction of transferred cash – 16 0
Change in cash and cash equivalents due to other investing activities 0 0
Cash flow from investing activities 100 766
Proceeds from capital increases 0 0
Dividends paid – 60 0
Cash inflows from subordinated capital 40 58
Cash outflows from subordinated capital – 161 – 53
Change in cash and cash equivalents due to other financing activities 0 0
Cash flow from financing activities – 181 5
Cash and cash equivalents at the beginning of the prior period 955 1,279
Cash flow from operating activities 112 – 1,095
Cash flow from investing activities 100 766
Cash flow from financing activities – 181 5
Changes in cash due to exchange rate, consolidation and measurement-related changes 0 0
Cash and cash equivalents at the end of the period 986 955
1) Figures for the previous year have been adjusted
Consolidated Financial Statements
Statement of Changes in Equity | Cash Flow Statement
103

The cash flow statement provides information on the amounts and development of cash and cash equivalents for the financial year, broken
down into operating, investing and financing activities.
The cash flow from operating activities is shown using the indirect method based on the net profit for the period. Cash flows
from operating activities essentially include cash flows from loans and advances to banks and customers as well as deposits by banks and
amounts due to customers, cash flows from securitised debt and assets and liabilities recognised at fair value through profit or loss, cash
flows from financial assets allocated to operating activities and cash flows from interest paid and received. In particular, this includes interest
and dividend income, interest expense and income tax expenses.
The cash flow from investing activities essentially results from receipts and payments in conjunction with the sale or acquisition
of financial assets, property, plant and equipment and intangible assets, as well as changes in the scope of consolidation.
In addition to investor relations, the cash flow from financing activities also includes changes in subordinated liabilities.
The reported cash and cash equivalents are composed of cash, which consists of cash on hand and balances at central banks.
104

Notes – Contents
Notes to the Financial Statements
1 Principles of reporting 107
2 Standards and interpretations applied 107
3 Accounting policies 108
4 Principles of consolidation 108
5 Scope of consolidation 109
6 Segment reporting 112
Notes on Accounting Policies
7 Financial instruments 117
8 Cash 121
9 Investments carried at equity 121
10 Intangible assets 122
11 Property, plant and equipment 122
12 Impairment of property, plant and equipment and intangible assets
including goodwill 122
13 Leases 123
14 Investment property 124
15 Non-current assets and groups of assets held for sale 124
16 Provisions 125
17 Income taxes 125
18 Subordinated capital 126
19 Shareholders’ equity 126
20 Off-balance sheet transactions 127
Notes to the Income Statement
21 Net interest income 128
22 Allowance for losses on loans and advances 128
23 Net commission income 129
24 Net income from hedge accounting 129
25 Net income from financial instruments recognised at fair value through profit or loss 130
26 Net income from financial assets 130
27 Net income from investments carried at equity 131
28 Other operating income 131
29 Administrative expenses 132
30 Restructuring expenditure and income (net) 133
31 Income tax expense 134
32 Earnings per share 135

Notes – Contents
Notes to the Balance Sheet
33 Cash 136
34 Loans and advances to banks 136
35 Loans and advances to customers 137
36 Allowance for losses on loans and advances 138
37 Positive fair value of derivative hedging instruments 140
38 Financial assets recognised at fair value through profit or loss 140
39 Financial assets 141
40 Investments carried at equity 142
41 Intangible assets 143
42 Property, plant and equipment 143
43 Investment property 144
44 Income tax assets 145
45 Other assets 145
46 Non-current assets and groups of assets held for sale 146
47 Deposits by banks 146
48 Amounts due to customers 147
49 Securitised debt 148
50 Negative fair value of derivative hedging instruments 149
51 Financial liabilities recognised at fair value through profit or loss 149
52 Provisions 151
53 Income tax liabilities 156
54 Other liabilities 157
55 Liabilities allocated to groups of assets held for sale 157
56 Subordinated capital 158
57 Shareholders’ equity 158
Other Notes
58 Adjustments due to changes in accordance with IAS 8 159
59 Trust activities 160
60 Contingent liabilities and similar obligations 160
61 Risk management 162
62 Fair values of financial instruments 162
63 Assets pledged as collateral 163
64 Volume of foreign currency items 164
65 Related party disclosures 164
66 Number of employees 173
67 Events after 31 December 2007 173
68 List of investment holdings 174
69 Corporate governance 179

Notes to the Financial Statements
1 Principles of reporting
Landesbank Berlin Holding AG (hereinafter referred to as the “Holding”) is the parent company of the Landesbank Berlin Holding Group,
Berlin, Germany (hereinafter referred to as the “Group”). Its head office is in Berlin, Germany, and it is entered in the commercial register
there. Regionalverbandsgesellschaft mbH (RVG), based in Berlin, Germany, is the Group’s parent company. As of 31 December 2007,
it directly and indirectly holds 98.64 % of shares in Landesbank Berlin Holding AG.
This report is a full annual financial report as defined by Article 37v of the German Securities Trading Act (WpHG). The consolidated
financial statements of Landesbank Berlin Holding for the financial year 2007 found here were prepared in accordance with the International
Financial Reporting Standards (IFRS) applicable in the EU and also the applicable provisions in accordance with Article 315a (1) of the German
Commercial Code (HGB).
Furthermore, the German Accounting Standards (GAS) passed by the German Accounting Standards Committee and promulgated
by the Federal Ministry of Justice in accordance with Article 342 (2) of the German Commercial Code by 31 December 2007 were observed.
An overview of all standards applied can be found in the following note.
The Holding also prepares and publishes a Group management report in accordance with Article 315a HGB in conjunction with
Articles 315, 340k HGB. The relevant GAS were also complied with here.
Unless otherwise indicated, all amounts are shown in millions of euro (0 million). In isolated cases there may be minor deviations
in additions due to rounding figures up or down.
2 Standards and interpretations applied
In its accounting policies, the Group applies all valid standards that are mandatory as of the reporting date. The consolidated financial
statements for 2007 are based on the IASB framework concept and the following relevant IAS / IFRS:
Standard Title
Status /
last amendment
Consolidated Financial Statements
Date of
first­time
application
IAS 1 Presentation of Financial Statements rev. 2003 / 18.08.2005 01.01.2007
IAS 7 Cash Flow Statements rev. 1992 01.01.1994
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors rev. 2003 01.01.2005
IAS 10 Events After the Balance Sheet Date rev. 2003 01.01.2005
IAS 12 Income Taxes rev. 2000 01.01.2001
IAS 14 Segment Reporting rev. 1997 01.07.1998
IAS 16 Property, Plant and Equipment rev. 2003 01.01.2005
IAS 17 Leases rev. 2003 01.01.2005
IAS 18 Revenue rev. 1993 / Dec. 1998 01.01.2001
IAS 19 Employee Benefits rev. 2002 / 16.12.2004 01.01.2005
IAS 21 The Effects of Changes in Foreign Exchange Rates rev. 2003 / 15.12.2005 01.01.2006
IAS 23 Borrowing Costs rev. 1993 01.01.1995
IAS 24 Related Party Disclosures rev. 2003 01.01.2005
IAS 27 Consolidated and Separate Financial Statements in accordance with IFRS rev. 2003 01.01.2005
IAS 28 Investments in Associates rev. 2003 01.01.2005
IAS 31 Interests in Joint Ventures rev. 2003 01.01.2005
IAS 32 Financial Instruments: Presentation rev. 2003 / 18.08.2005 01.01.2007
IAS 33 Earnings per Share rev. 2003 01.01.2005
IAS 36 Impairment of Assets rev. 2004 31.03.2004
IAS 37 Provisions, Contingent Liabilities and Contingent Assets 1998 01.07.1999
IAS 38 Intangible Assets rev. 2004 31.03.2004
IAS 39 Financial Instruments: Recognition and Measurement rev. 2004 / 18.08.2005 01.01.2006
IAS 40 Investment Property rev. 2003 01.01.2005
IFRS 3 Business Combinations rev. 2004 31.03.2004
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 2004 01.01.2005
IFRS 7 Financial Instruments: Disclosures 18.08.2005 01.01.2007
The standards IAS 2, 11, 20, 26, 29, 34 and 41 and IFRS 1, 2, 4 and 6 were not pertinent to the Group and therefore were not applied in
the consolidated financial statements. IFRS 3 (rev. 2007) and IFRS 8 were not yet mandatory. The future application of IFRS 8 from the
financial year 2009 will not have any material effect. IFRS 7 was applied for the first time. Also, the application of IAS 30 and parts of IAS 32
were replaced by IFRS 7.
Notes
107

Notes to the Financial Statements
In addition to the standards listed, the following interpretations of the International Financial Reporting Interpretations Committee (IFRIC)
and the Standing Interpretations Committee (SIC) were also applied in the preparation of the consolidated financial statements:
Standard Title Relates to As at
Date of
first­time
application
SIC-12 Consolidation – Special Purpose Entities IAS 27 1998 01.07.1999
SIC-15 Operating Leases – Incentives IAS 17 1998 01.01.1999
SIC-21 Income Taxes – Recovery of Revalued Non-Depreciable Assets IAS 12 1999 15.07.2000
SIC-25 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders IAS 12 1999 15.07.2000
SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease IAS 1, 17, 18 2000 31.12.2001
IFRIC 4 Determining whether an Arrangement contains a Lease IAS 17 02.12.2004 01.01.2006
IFRIC 9 Reassessment of Embedded Derivatives IAS 39 01.03.2006 01.06.2006
IFRIC 10 Interim Financial Reporting and Impairment IAS 34, 36, 39 02.06.2007 01.11.2006
The interpretations SIC-7, 10, 13, 29, 31 and 32 and IFRIC 1, 2, 5-8 and 11-14 were not pertinent to the Group or were not yet mandatory
and therefore were not included in the consolidated financial statements.
Furthermore, the following German Accounting Standards (GAS) passed by the German Accounting Standards Committee and
promulgated by the Federal Ministry of Justice in accordance with Article 342 (2) of the German Commercial Code by 31 December 2007
were observed in these consolidated financial statements:
GAS 2-10 Cash Flow Statements of Financial Institutions
GAS 3 Segment Reporting
GAS 3-10 Segment Reporting by Financial Institutions
GAS 5 Risk Reporting
GAS 5-10 Risk Reporting by Financial Institutions and Financial Service Institutions
GAS 15 Management Reporting
DRS 15 Lageberichterstattung
3 Accounting policies
Basic principles
The consolidated financial statements 2007 of the Holding are prepared in accordance with International Financial Reporting Standards (IFRS).
Items are recognised and measured under the assumption of the going concern principle. Income and expenses are recognised in
the income statement pro rata temporis in the period to which they relate.
The main accounting policies applied in the preparation of these consolidated financial statements are detailed below. These notes
initially explain general aspects; detailed information can be found in notes 7 to 20. Unless stated otherwise, the policies described were
applied uniformly and consistently to the reporting periods presented.
Uncertainty in estimates and assumptions
The presentation of the net assets, financial position and results of operations in the consolidated financial statements is dependent on
the recognition and measurement policies as well as assumptions and estimates used as the basis for the preparation of the consolidated
financial statements.
The estimates and assessments required in IFRS accounting are made in line with the respective standard, reassessed on an ongoing
basis and based on historical experience and other factors, including expectations with regard to future events that appear reasonable under
the given circumstances.
Stock exchange prices and internal measurement models with current market parameters for assets and liabilities carried at fair value.
Details of this plus information on assumptions and estimates can be found in other notes (note 62).
The recognition of property, plant and equipment and intangible assets entails estimates to determine their fair value at the date of
acquisition. This applies to such assets that were acquired as part of a business combination. The expected useful life of assets is also
estimated. The calculation of the fair values of assets and liabilities and the useful lives of assets are based on management assessments
made in line with the standards on the basis of all available information.
108

Currency translation
In the companies’ financial statements, foreign currency payments are translated using the exchange rate at the date of initial recognition.
Exchange rate gains and losses on monetary items are recognised in the income statement. Exchange rate gains and losses on non-monetary
items are recognised directly in equity.
In the Group, the annual financial statements of foreign entities are translated in line with the functional currency concept in accordance
with IAS 21. For most foreign entities, foreign currencies are translated into the functional currency (euro) in line with the temporal method.
Exchange gains and losses are recognised in the income statement.
The other companies operate independently in GBP and USD. The functional currency is therefore GBP or USD and prices are
translated in accordance with IAS 21 using the modified balance sheet date rate method. Exchange gains and losses of these companies
are recognised separately in shareholders’ equity.
Changes in accounting policies
The accounting policies used in the consolidated financial statements for 2006 have been essentially retained for these consolidated financial
statements. The following adjustments arose as a result of revisions or amendments of individual IAS / IFRS standards.
In accordance with the treatment permitted by IFRS 7 since 2007 onwards, trade-induced refinancing interest is no longer allocated to
net income from financial instruments recognised at fair value through profit or loss (net trading income) but to net interest income. The
comparative figures as at 31 December 2006 have been restated accordingly.
The structure of information on financial instruments, particularly reporting in tables, has been changed to reflect the greater level of detail
required by IFRS 7 on financial instruments. In particular, information on financial instruments is now shown following the respective
categories.
Voluntary changes in accounting policies and estimates:
There has been a change in risk provisioning in line with IAS 8.39. Risk provisioning for insignificant receivables with indications of impair-
ment has been calculated for an extended group of receivables based on an individual assessment rather than a general approach since
the financial statements as of 30 September 2007. The effects of this change in estimates have been taken to income in accordance with
IAS 8.36 and increased risk provisioning by 0 21 million as of 30 September 2007.
In the 2007 financial year, in light of the improved options for analysing repayment behaviour, estimates of recovery rates were changed in the
calculation of fair values of impaired receivables. In line with this, the fair value is €837 million, the previous estimate had been 0 1,238 million.
This did not have any effect on the balance sheet or income statements.
For the purposes of reporting as at 31 December 2007, adjustments in accordance with IAS 8.42 were made to the comparative figures as
at 31 December 2006. A detailed presentation of these adjustments and their quantitative effects can be found in the other notes (note 58).
4 Principles of consolidation
Consolidated Financial Statements
The consolidated financial statements of the Holding were prepared using uniform accounting policies in accordance with IAS 27.28. The
consolidated financial statements essentially include all companies controlled directly or indirectly by the Group. Companies that are not
classed as controlled companies, in spite of a voting majority, and companies that are classed as controlled companies, in spite of the
Group not having a voting majority, are indicated in the list of investment holdings. In addition, companies (special-purpose entities) in line
with SIC-12 must be consolidated under certain conditions. This applies to entities such as special funds and ABS constructions, details
of which can be found in “Scope of consolidation”.
As part of capital consolidation, assets as well as liabilities and contingent liabilities of the acquired company are completely revalued
at fair value at the date of acquisition. Positive differences between the cost of the business combination and the net fair value of the assets
and liabilities are capitalised as goodwill. Acquisitions of minority interests are treated in the same way (modified parent company model). In
subsequent years, goodwill is carried at cost, subject to an annual impairment test. Impairment is recognised under other operating expenses.
After checking the measurement of assets or liabilities and contingent liabilities again, negative differences are recognised in the income statement
together with gains on deconsolidation under other operating income.
Intra-group receivables and liabilities, income and expenses arising from intra-group transactions and any intra-group results are
eliminated in accordance with IAS 27.24 et seq. and IAS 28.20 et seq.
Notes
109

Notes to the Financial Statements
All fully consolidated companies and joint ventures and associated companies carried at equity prepared their annual financial statements
as at the balance sheet date 31 December 2007. Funds and special purpose vehicles with a different balance sheet date presented audited
reports as at the balance sheet date 31 December 2007. Thus, all material transactions in the reporting year were included in the consolidated
financial statements. The inclusion of financial statements with a balance sheet date other than that of the Group is indicated in the list of
investment holdings (note 68).
Non-consolidated subsidiaries are categorised as available for sale and reported at fair value under financial assets in line with IAS 39.46.
If there is no listed price on an active market and the fair value cannot be reliably determined, measurement is at cost in line with IAS 39.46 (c).
Joint ventures where there is a contractual agreement whereby two or more parties undertake an economic activity which is subject
to joint control are carried at equity and reported under a separate balance sheet item in accordance with IAS 31.38.
An associated entity is one over which the Group has the power to exert significant influence by participating in its financial and
operating policy decisions but which is neither a subsidiary nor a joint venture of the Group. Companies not classed as an associated entity
despite an interest of more than 20 % and companies classed as an associated entity despite an interest of less than 20 % are indicated in
the list of investment holdings.
Associated companies are measured in accordance with the equity method. The Group’s share of changes reported directly in the
shareholders’ equity of the associated entities is reported directly in the shareholders’ equity of the Group. Gains and losses of associated
entities are recognised pro rata under “Net income from investments carried at equity”.
Changes in the carrying amount of associates’ equity are recognised on the basis of audited financial statements which are adapted
to comply with uniform Group accounting policies via reconciliations. Shares in associated entities not valued at equity are valued in accordance
with IAS 39.
Shares in subsidiaries and associated entities held for sale are measured and reported separately in line with IFRS 5.
5 Scope of consolidation
As of 31 December 2007, 110 companies are included in the consolidated financial statements in addition to Landesbank Berlin Holding AG.
These companies represent the scope of consolidation and can be seen in the list of investment holdings (note 68). The changes in the
scope of consolidation in the 2007 financial year were as follows:
31.12.2006 Additions Disposals 31.12.2007
Subsidiaries 27 2 5 24
Special purpose entities (SIC-12)
Special funds 12 2 1 13
Holdings in mutual funds 3 3 2 4
Other special purpose entities (SIC-12) 8 63 2 69
Total 50 70 10 110
Company acquisitions and business combinations
Acquisition of shares in netbank AG
During the 2007 financial year, Landesbank Berlin (LBB) acquired shares in netbank AG, Hamburg, (netbank). The economic transfer of
5,533,232 shares (including dividend rights) in netbank took place on 31 December 2006 / 1 January 2007. The agreement was concluded
on 11 July 2007. In line with the terms of the agreement, the voting rights attached to the shares can be exercised from this date onwards.
The shares were transferred to LBB for a purchase price of 0 27 million. LBB holds 75 % of the company’s share capital minus one share.
In connection with the acquisition of shares by LBB, a cash capital increase of 0 20 million was resolved by the Annual General Meeting
of netbank AG on 11 July 2007. This is around four times the current share capital. In line with its holding ratio, LBB assumed an amount
of 0 15 million. The new shares entitle the bearer to share in profits from 1 January 2007.
110

As a result of the business combination and the first-time adoption of IFRS at netbank, the following assets and liabilities were included in
the consolidated financial statements for the first time:
in u million
Carrying
amount
under HGB
Adjustment
due to
purchase price
allocation
Fair value
under IFRS
Cash and cash equivalents 12 0 12
Current receivables, other assets and deferred tax assets 97 6 103
Financial assets 405 – 10 395
Intangible assets 0 3 3
Property, plant and equipment 1 0 1
Current liabilities and provisions 504 – 1 503
Non-current liabilities and provisions 0 0 0
Deferred tax liabilities 0 1 1
Acquired net assets 11 – 1 10
It was not possible to calculate the carrying amounts of the acquired assets and liabilities in line with IFRS immediately before the merger as
netbank only prepared its single-entity financial statements in line with HGB provisions.
In purchase price allocation in line with IFRS 3, the purchase price was allocated to the identifiable assets and liabilities at fair values.
The calculation of goodwill is shown in the table below:
in u million 11 July 2007
Purchase price 27
Incidental costs of acquisition 1
Total cost of acquisition 28
Less pro rata net assets measured at fair value 7
Goodwill 21
The goodwill reflects our expectations of additional customer potential in the expanding direct banking business, which has no reliable fair
value. The purchase price was paid in full with cash and cash equivalents.
Under local accounting provisions (HGB), netbank AG generated earnings before taxes of 0 0.3 million and net interest income of
0 6.5 million in 2007. These amounts are attributable to LBB in line with its investment ratio and do not include any possible consolidation
effects. It was not possible to state the revenues, profits and losses for the Group as if the acquisition had taken place at the start of the
reporting period as netbank only prepared accounts in accordance with HGB.
Since the acquisition date, netbank AG and its entire earnings have been included in the consolidated financial statements at
0 – 0.7 thousand.
Other additions to the scope of consolidation
Consolidated Financial Statements
In the past financial year, 62 companies were formed and added to the scope of consolidation in the context of the tender option bond
programme and Crown Court I LLC, Wilmington, Delaware.
In addition, the special purpose vehicle Albatros Select Fund, Luxemburg, the special fund LBB Prisma Unit Trust, Georgetown / Cayman
Islands, and BB-TBG-Fonds, Berlin, and the mutual funds ConvertibleBond-INVEST, Berlin, Keppler-Global Value-LBB-INVEST, Berlin,
and Keppler-Global Alpha-LBB-INVEST, Berlin, were issued and also added to the scope of consolidation.
Notes
111

Notes to the Financial Statements
Company disposals and other disposals from the scope of consolidation
The subsidiary Berlin Capital Fund GmbH, Berlin, was sold in the first quarter.
The Group’s remaining holding in the mutual fund FlexBond-Vario-Invest, Berlin, was sold to third parties in three tranches.
An application was made for the deletion of the subsidiary ABT No. 3 Limited, London, from the commercial register in the first quarter,
as this company no longer has a public commercial function. It was deleted from the commercial register on 11 September 2007.
The subsidiary Rhea CDO 1 PLC, Dublin, was liquidated.
Mario Göhr Grundstücks GmbH, Berlin, was merged with GfBI Gesellschaft für Beteiligungen und Immobilien mbH, Berlin, with retroactive
effect from 1 January 2007; this merger was entered in the commercial register on 3 April 2007.
The special fund BB-BG 11-Fonds, Berlin, was dissolved with effect from 27 June 2007.
BB-ASSET MANAGEMENT Vermögensverwaltung GmbH, Berlin, was merged with Landesbank Berlin Investment GmbH, Berlin, by way
of entry in the commercial register on 11 July 2007.
On 22 August 2007, the shares of LBB AG and LBB Holding AG in BUVI Besitz- und Verwaltungsgesellschaft für Immobilien mbH, Berlin,
were legally sold to GfBI Gesellschaft für Beteiligungen und Immobilien mbH, Berlin. A merger agreement was concluded at the same
time. The merger and thereby the deletion of BUVI Besitz- und Verwaltungsgesellschaft für Immobilien mbH, Berlin, came into effect on
18 September 2007 by way of entry in the commercial register.
The activities of PPC Repo Ltd., London, were discontinued from 30 September 2007 onwards.
The mutual fund FlexBond-Plus-INVEST, Berlin, has not been included in the scope of consolidation since the fourth quarter of 2007
and is now carried at equity as the holding in this fund has dropped permanently below 50 %.
6 Segment reporting
The Landesbank Berlin Holding Group is a universal bank; its business activities comprise the four business areas described below.
Segment results are presented in line with business areas; there is no secondary segment reporting level.
Description of segment results
In the Retail Banking segment, net interest income was down only slightly year-on-year at 0 340 million despite the difficult market
environment; the same is true for the net commission income of 0 198 million. This success is largely due to the sales and earnings power
of Berliner Sparkasse, which further expanded its position in the highly competitive Berlin market.
As a result of market conditions, volume growth of deposits in particular (up 5 % as against 31 December 2006) entailed a reduction
of margins. This development also correlates with the most recent market research reports that attest to the high importance of “as high
an interest rate as possible” in investment decisions. At the same time, new business in construction finance rose by 26%. The number of
customers with private checking accounts in regional business increased by almost 6,500 as against the previous year. The positive development
in net commission income from securities also continued (up 3 % as against 31 December 2006), which can also be seen by the
improved gross unit sales of certificates (up 6 %). Unit sales of insurance products also developed well, with a 12 % increase in net policy
premiums as against the previous year. The rapid growth in national credit card business was responsible for the market investments
required for increased administrative expenses for marketing and business operations. As against the previous year, however, risk costs
were significantly lower.
Furthermore, the segment invested in other promising areas through its interest in netbank.
The Regional Corporate Banking segment consolidated its strong market position. Interest-bearing loans and advances to customers
and customer deposits grew year-on-year and the segment attracted new commercial and regional corporate clients. Nonetheless,
net interest income was down as against the previous year, essentially as a result of narrower margins in deposit business. However, the
segment also profited from the positive developments in the allowance for losses on loans and advances. By contrast, net commission
income increased slightly year-on-year. In 2006, net income from financial assets was increased by a non-recurring payment from a debtor
warrant on an investment. Net other operating income increased as against the same period of 2006, particularly as a result of the disposal
of an investment.
112

Consolidated Financial Statements
The earnings of the Capital Markets segment in financial year 2007 were dominated by the impact of the subprime crisis in the US. The
resulting crisis of confidence led to limited liquidity, massive credit spread growth and extreme volatility on the interest and share markets.
The high-value assets of investment strategies were also affected by credit spread increases. The valuation corrections reported
under the IFRS revaluation reserve amounted to 0 320 million. Despite a broad range of strategies and portfolios, trading activities suffered
massively. The constant, non-volatile income from customer business and investment strategies failed to compensate for the losses
incurred.
In financial year 2007, Capital Markets generated an operating profit of 0 7 million, down 0 93 million on the figure for the previous
year. This deviation was mainly due to a 0 128 million drop in net interest income and net income from financial instruments recognised at
fair value. As a result of the impairment losses on funds and investments, net income from financial assets was down 0 17 million on the
figure for the previous year. Despite additional portfolio impairment losses of 0 19 million, this was offset by a 0 37 million improvement in
the allowance for losses on loans and advances and a year-on-year decline in administrative expenses of 0 6 million.
The measures to attract new customers and intensify sales were continued and expanded at all times in 2007. Gross unit sales of
certificates in 2007 amounted to 0 1.9 billion as against 0 1.45 billion in the previous year. LBB Invest generated net cash inflow from mutual
funds of around 0 1.6 billion in 2007, outperforming the figure for the previous year by 0 0.4 billion.
Volumes in international lending business, which is essentially covered by state export credit agencies (ECA), grew significantly over
the course of the year. As a result, net interest and commission income were up on the previous year.
The Real Estate Financing segment generated operating earnings of 0 255 million in the reporting period. As against the previous
year, this corresponds to an increase of 73 % (previous year: 0 147 million). The balance of net interest income and net income from financial
instruments recognised at fair value through profit or loss rose by 0 19 million. There were reversals in risk provisioning: This reflects the strategic
risk development of the lending portfolio. At the same time, net commission income was improved considerably as a result of the high levels
of new business.
At around 0 10.2 billion (including non-recurring transactions of 0 3.6 billion), new business exceeded the figure for the previous
year of around 0 7.1 billion (including non-recurring transactions of 0 3.4 billion) to a highly significant degree. The positive development
in new business of previous years was therefore continued. The breakdown of new business in terms of property use, lending areas and
customer segments and the development of new business margins were consistent with the segment’s objectives. The segment’s strategy
of risk limitation was still systematically observed in new business.
In 2006, the Corporate Investments segment reported only the earnings of Berliner Bank, which was sold at that time.
The Group management and service functions, the balance sheet structure management and the consolidation items in the Group
are shown under Other / Consolidation. Other items reported in this segment include non-interest-bearing balance sheet items, such as
non-current assets and the associated write-downs in administrative expense in the amount of 0 33 million (previous year: 0 40 million).
The operating profit in the reporting period declined by 0 497 million year-on-year to 0 – 110 million. The previous year’s earnings
were dominated by the proceeds from the disposal of Berliner Bank of 0 438 million and a high net figure for restructuring expenditure and
income (0 35 million).
The number of full-time jobs in the Corporate Centres amounted to 2,083 after 1,856 in the previous year. Around 1,250 of these
relate to Transaction Banking (organisation, IT, BankenService GmbH). The increase of 227 is predominantly due to the relocation of direct
banking services from Landesbank Berlin to BankenService GmbH. In turn, this resulted in a decline in employee capacity in the Retail
Banking segment, though to a lesser extent as the employees of netbank were included as of 31 December 2007, which was not the case
in the previous year. This had no significant impact on the earnings of either segment.
Notes
113

Notes to the Financial Statements
Segment Results
Retail Banking 1)
Regional
Corporate Banking 1) Capital Markets Real Estate Financing
in u million 2007 2006 2007 2006 2) 2007 2006 2) 2007 2006
Net interest income 340 342 111 123 148 126 274 421
Allowance for losses on loans and advances 32 45 – 22 19 – 30 7 – 32 54
Net interest income after risk provisioning 308 297 133 104 178 119 306 367
Net commission income 198 200 29 28 52 52 19 14
Net income from hedge accounting – 1 2 3
Net income from financial instruments recognised
at fair value through profit or loss – 41 109 48 – 118
Net income from financial assets 4 16 – 26 – 9 8 6
Net income from investments carried at equity 4 2 8
Other operating income 9 3 6 9 9 – 6 – 6
Administrative expenses 409 390 88 90 173 179 122 119
Operating result before restructuring 110 116 80 58 7 100 255 147
Restructuring expenditure and income (net)
Operating profit / earnings before taxes 110 116 80 58 7 100 255 147
Segment assets 4) 4,026 3,677 5,861 5,837 68,921 66,078 49,624 49,484
Segment liabilities
(not including shareholders’ equity) 4) 11,489 10,440 4,699 3,866 58,106 53,703 40,367 40,219
Risk items in accordance with the
German Banking Act (reporting date) 2,652 2,695 4,234 4,499 21,850 18,485 18,581 15,135
Tied-up equity (average) 5) 226 256 280 295 1,274 1,052 1,000 978
Employee capacity (reporting date) 2,255 2,427 636 661 454 445 537 571
Return on equity 6) 48.7 % 45.3 % 28.6 % 19.7 % 0.5 % 9.5 % 25.5 % 15.0 %
Cost-income ratio 6) 74.2 % 70.8 % 60.3 % 53.9 % > 100 % 62.6 % 35.4 % 37.2 %
1) The results of Berliner Bank are reported under Corporate Investments for 2006.
2) Figures for the previous year have been adjusted
3) The proceeds from the sale of Berliner Bank are included in “Other / Consolidation”.
4) Segment assets / liabilities not including tax items (reporting date 31.12)
5) Core capital in accordance with Article 10 of the German Banking Act, including and excluding the dormant participations of the State of Berlin,
is reported under “tied-up equity” for the Group as a whole
6) Calculated with rounded figures in 0 million
114

Corporate Investments 1) Other / Consolidation
GROUP before remuneration
of dormant participations
Remuneration of
dormant participations
Consolidated Financial Statements
GROUP after remuneration
of dormant participations
2007 2006 2007 2006 2) 3) 2007 2006 2) 2007 2006 2007 2006 2)
138 – 7 – 329 866 821 – 51 – 78 815 743
3 – 1 – 10 – 53 118 – 53 118
135 – 6 – 319 919 703 – 51 – 78 868 625
78 – 1 – 4 297 368 297 368
1 1 3 3 3 3
– 52 195 – 45 186 – 45 186
14 33 – 4 50 – 4 50
– 6 12 – 4 12 – 4
10 101 620 119 636 119 636
169 173 168 965 1,115 965 1,115
54 – 116 352 336 827 – 51 – 78 285 749
6 35 6 35 6 35
54 – 110 387 342 862 – 51 – 78 291 784
12,830 15,623 141,262 140,699 141,262 140,699
24,424 30,533 139,085 138,761 139,085 138,761
3,174 4,087 50,491 44,901 50,491 44,901
187 450 536 3,230 3,304 – 700 – 1,100 2,530 2,204
2,083 1,856 5,965 5,960 5,965 5,960
28.9 % 10.6 % 26.1 % 7.2 % 7.1 % 11.5 % 35.6 %
74.8 % 77.3 % 54.1 % 80.6 % 56.3 %
Notes
115

Notes to the Financial Statements
Methods and changes in line with IAS 8
Income and expenses are allocated to segments in accordance with the principle of causality. In order to allocate third-party net interest
income to the segments, the market interest rate method is applied for interest, supplemented by net interest income from the application
of the IFRS accounting policies on which the consolidated financial statements are based. For each product, a margin result is calculated
as the difference between the customer interest rate and an internal interest rate on an individual transaction basis. Berlin Hyp uses derivatives
to manage its interest rate risk. The changes in the carrying amount of these derivatives has been shown in “Other / Consolidation” since
1 January 2006. Interest-induced changes in host contracts from issues that have to be separated are charged directly to equity between
the Capital Markets and Other / Consolidation segment. Income tax assets/liabilities are not included in segment assets/liabilities.
All other income and credit risk provisions are allocated to the segments on a counterparty basis. The administrative expense consists
of staff costs, other administrative expenses, depreciation of property, plant and equipment and amortisation of other intangible assets
(excluding goodwill). Inter-segment services are recognised at full cost by way of cost allocation. Within staff costs, the interest effect on the
transfer of pensions reserves is now allocated to the “Other / Consolidation” segment, where the provisions are invested in a central portfolio.
Segment assets include the balance sheet assets of the respective segment. For the segments operating in the area of banking
business, these are essentially loans and advances to customers; in Capital Markets, these also include loans and advances to banks,
financial assets (securities), assets held for trading and positive fair values of derivatives. Accordingly, segment liabilities are defined as
balance sheet liabilities, i.e. primarily amounts due to customers and, in Capital Markets, deposits by banks and securitised debt as well
as liabilities held for trading and negative fair values of derivatives.
The risk positions consist of the risk assets and the market risks in accordance with Principle I on Article 10 KWG. In line with these
risk positions and the operational risks in accordance with the German Solvency Ordinance (Solvabilitätsverordnung), LBB provides the
segments with equity capital and calculates the investment benefit, which is included in the net interest income of the respective segment.
LBB uses an interest rate corresponding to a risk-free, rolling long-term investment on the capital market. The average equity capital tie-up
is reported for each segment. This subsequently forms the reference base for determining the return on equity, which is calculated for the
segment results before taxes. At Group level, tier 1 capital as of 31 December of the previous year after determination of earnings in accordance
with Article 10 KWG, both including and excluding the dormant participations of the State of Berlin, forms the reference base for
calculating the return on equity.
The number of employees reported is the employee capacity (converted to full-time employees, not including trainees and
apprentices) at the balance sheet date. The employees of Berliner Bank are no longer included in the figure as at the balance sheet date
31 December 2006.
The cost-income ratio is calculated as the ratio of administrative expenditure and the total of net interest income, net commission
income, net income from hedges, net gain from financial instruments recognised at fair value through profit or loss, net gain from financial
investments, net income from investments carried at equity and other operating income.
The adjustments in line with IAS 8 resulted in the following changes in reporting in the segment presentation for 2006:
116
In the Regional Corporate Banking segment, the inclusion of financing expenses in the financing of a movable leased item led to a rise in
interest expenses of 0 1 million and thereby a reduction in operating results by 0 1 million.
In the Capital Markets segment there was a change in the reporting of trade-induced refinancing interest of 0 106 million. Net interest
income was reduced retroactively by this amount and the net income from financial instruments recognised at fair value through profit or
loss increased without affecting the operating result.
In the Other / Consolidation segment, the method for determining full reversals of impairment losses on receivables was developed further
in the financial year 2007, resulting in a 0 5 million adjustment in the allowance for losses on loans and advances.

Notes on Accounting Policies
7 Financial instruments
The Group recognises all financial instruments, including financial assets and liabilities, in line with IAS 39. On initial measurement, all financial
instruments are measured at cost on their addition, which is the fair value of the amount given or received in exchange for the financial
instrument. Both primary financial assets and primary financial liabilities are carried in line with their carrying amount, partly at amortised cost
and partly at fair value. Derivative financial instruments are measured solely at fair value. Specific subsequent measurement is based on
which category these financial instruments are assigned to. First-time recognition of financial instruments is as the trade date (trade date
accounting).
Financial instruments are broken down by class. In addition to distinguishing between financial assets, liabilities and equity, a key
feature of categorisation is subsequent measurement at either fair value or amortised cost. There is also a further breakdown.
Categorisation of financial assets and liabilities
Consolidated Financial Statements
The Group assigns financial assets and liabilities to the (measurement) categories shown below. However, there are differences in the reporting
of financial assets and liabilities, so categories do not correspond directly to balance sheet items. A reconciliation of the respective carrying
amounts per category can be found in note 62 of this report.
Loans and receivables (L&R)
Loans made directly to debtors and receivables due directly from debtors are allocated to this category. The Group reports these under loans
and advances to banks and loans and advances to customers. Acquired loans and receivables are also shown in this category if they are
not traded in an active market (e.g. ABS securities). These are reported under financial assets.
Measured is at amortised cost less impairment. Premiums and discounts are recognised in income over their term as net interest
income in line with the effective interest method.
Financial assets and liabilities recognised at fair value through profit or loss
Assets and liabilities held for trading (HFT)
All financial assets and liabilities held for trading purposes are assigned to this sub-category. These are primary financial instruments –
bonds and other fixed-income securities, shares and other non-fixed-income securities – and trading book derivatives with a positive fair
value (assets held for trading) on the one hand and obligations from short sales of securities as well as derivative financial instruments with
negative fair values (liabilities held for trading) on the other. Investment book derivatives are also assigned to assets or liabilities held for
trading. Derivative financial instruments used in IAS 39 hedge accounting are not assigned to this category.
Assets and liabilities held for trading including investment book derivatives are reported on the balance sheet under assets and
liabilities recognised at fair value through profit and loss. They are measured at fair value at each balance sheet date. Gains and losses
on remeasurement and current interest, commission and dividend payments are recognised under net income from financial instruments
recognised at fair value through profit or loss.
Financial assets and liabilities designated at fair value (fair value option)
The Group uses the fair value option and designates selected financial assets and liabilities at fair value. For assets the fair value option is
applied to bonds and share if these are managed on a fair value basis or in order to avoid measurement incongruencies in economic hedges
(accounting mismatches). The liabilities are securitised debt containing separable embedded derivatives are designated using the fair value
option. In addition, the fair value option was used for selected securitised liabilities and liability promissory notes if they are hedged by derivative
transactions but are not suitable for effective IAS 39 hedge accounting and there was therefore an accounting mismatch.
Financial instruments assigned to this sub-category are recognised at fair value in first-time and subsequent measurement. They
are also a component of the balance sheet item for financial instruments measured at fair value through profit or loss. Gains and losses on
remeasurement are taken directly to the corresponding income item. Current interest and dividend payments and commission from these
financial instruments are reported in net interest and net commission income.
Notes
117

Notes on Accounting Policies
Financial assets available for sale (AFS)
This category covers the non-derivative financial assets that are not allocated to any of the above categories. These essentially include
interest-bearing securities, shares, investments and associated companies not included in consolidation or carried at equity. They are
reported under financial assets. The Group also assigns loans for which there is an active market to the AFS category. They are reported
under loans and advances to banks and loans and advances to customers.
Assets are measured at cost on the date of acquisition. Subsequent measurement is at fair value – with the exception of non-listed
equity securities. Changes in value that are not impairment are recognised separately in equity (revaluation reserve). On disposal of the
financial asset, the cumulative net gain or loss on remeasurement recognised in the revaluation reserve is reversed and reported under net
income from financial assets. In the event of impairment, the revaluation reserve is corrected directly and the impairment amount is taken
to net income from financial assets. Reversals of impairment on borrowing securities are shown in income and reversals of impairment on
equity securities are shown in equity. Premiums and discounts are recognised in income over their term – as are interest and dividend
payments – as net interest income in accordance with the effective interest rate method.
Other financial liabilities (OL)
This category includes all primary financial liabilities that are not held for trading or designated at fair value. They are reported in the balance
sheet as deposits by banks and amounts due to customers, securitised debt, other liabilities and subordinated capital.
They are measured at amortised cost. Premiums and discounts are recognised in income over their term, as are interest payments,
as net interest income in accordance with the effective interest rate method.
Receivables
Receivables are broken down into loans and advances to banks and loans and advances to customers. They include mortgage loans,
public-sector loans, loans secured by real estate liens and other loans – lending business – and receivables from money market business.
Receivables covered by the detailed agreement with the State of Berlin are allocated to public-sector loans due to the guarantee for these
loans by the State of Berlin. They are predominantly measured at amortised cost, thereby taking into account any premiums /discounts.
Any valuation allowances required are reported in the balance sheet item for allowance for losses on loans and advances. A small group
of receivables are therefore part of the AFS category and therefore measured at fair value. The fair value is calculated by determining the
present value of contractually agreed cash flows discounted using a risk-adjusted market interest rate based on the respective partner’s
credit rating. Projected cash flows (e.g. interest or principal payments, realisation of collateral) are applied for impaired receivables.
Selected receivables are used in the context of hedge accounting as hedged items in micro fair value hedges. The carrying
amounts of these receivables are adjusted for the book gain or loss attributable to the hedged risk; this is recognised in net income from
hedge accounting.
Premiums and discounts are recognised in net interest income over the term of the related assets in line with the effective interest
method. Deferred interest on receivables as well as unamortised premiums and discounts are included as part of the receivables balance
within the relevant balance sheet line item.
Financial assets voluntarily measured at fair value (fair value option) are not reported under receivables.
Write-downs of receivables
The Group takes account of the risks from on-balance sheet loans and advances by recognising specific allowances for impairment losses,
portfolio-based allowances for impairment losses and specific impairment allowances calculated on a portfolio basis.
Specific allowances for impairment losses
Significant receivables are considered on a case-by-case basis. If there is an indication of impairment (breach of contract, concessions to
borrowers on account of financial difficulties, insolvency, other restructuring measures or financial difficulties on the part of the issuer or
debtor) this is recognised taking the expected default into account. Specific allowances for impairment losses are reversed as soon as
either the value of the receivable is decreased by inflows, additional collateral is pledged, or the value of the collateral or the credit rating
of the borrower shows a fundamental and sustained improvement.
118

Portfolio-based allowances for impairment losses
In the case of portfolios of receivables for which no specific allowances for impairment losses have been recognised, portfolio-based allowances
for impairment losses are recognised for general credit risks (e.g. general economic risks) and transfer risks (valuation allowances for
country risks). The basis of measurement is the entire portfolio of receivables, less receivables that have already been subject to a specific
allowance for impairment losses. Corresponding probabilities of default, calculated using ratings and scorings, are applied to the basis of
measurement.
Specific impairment allowances calculated on a portfolio basis
Non-significant receivables with the above indications of impairment and receivables subject to legal uncertainty are combined into narrowly
defined portfolios and measured as groups of receivables using a standard method.
If necessary, allowances for off-balance sheet transactions (loan commitments, liabilities in relation to bills) are accounted for using a
provision for risks from loans and advances or included in the portfolio-based allowances for impairment losses. Non-collectable receivables
are written down directly. Recoveries on loans previously written down are recognised in income.
Further information can be found in Risk Management.
Liabilities
Financial liabilities are broken down into deposits by banks and amounts due to customers, securitised debt and subordinated capital and
reported accordingly. Some financial liabilities are also recognised under other equity and liabilities. Financial liabilities are reported at amortised
cost. Premiums and discounts are recognised in net interest income over the term of the related assets in line with the effective interest method.
Deferred interest is reported as part of the respective liability in the balance sheet. When buying back own bonds, securitised debt is reported
net in the balance sheet. Any gains or losses between the carrying amount and the cost (fair value) on buying back bonds are reported under
net interest income.
Selected financial liabilities are designated in the context of hedge accounting as hedged items in micro fair value hedges. The carrying
amounts of these liabilities are adjusted for the book gain or loss attributable to the hedged risk; this change in value is recognised in net
income from hedge accounting.
Financial liabilities voluntarily measured at fair value (fair value option) are not reported under liabilities.
Financial instruments recognised at fair value through profit or loss
This balance sheet item is divided into held for trading financial instruments on the one hand – including financial assets and liabilities held
for trading and investment book derivative transactions (assets and liabilities held for trading) – and fair value option financial instruments
on the other. Financial instruments in this category with positive fair values are reported as financial assets recognised at fair value through
profit and loss, those with negative fair values are reported as financial liabilities recognised at fair value through profit and loss.
Derivatives used in hedge accounting are reported separately as positive and negative fair values of hedging derivatives.
Embedded derivatives
Consolidated Financial Statements
Embedded derivatives are derivative financial assets or liabilities that are not independent instruments but are components in structured
financial instruments. These are usually structured products that consist of an interest-bearing host contract not held for trading purposes
and one or more derivatives. These individual components form an inseparable legal and economic entity.
In the Group, separable embedded derivatives were identified in structured issues of equity securities as well as structured interest
rate issues with an inherent credit risk (credit-linked notes).
If these derivatives are separated, the host contract is assigned to the OL category, measured at amortised cost and reported under
securitised debt. In contrast, separated derivatives belong in the HFT sub-category, are measured at fair value and reported under assets
held for trading. If structured financial instruments containing embedded derivatives are recognised for the first time after 31 December 2005
they are designated as financial instruments recognised at fair value through profit or loss without exception. Separation of the components
is not possible in such cases and instead the entire structured financial instrument is measured at fair value and reported in the balance sheet
in the appropriate category.
Notes
119

Notes on Accounting Policies
Hedge accounting
The rules of IAS 39 allow the presentation of economic hedges under restrictive conditions. It proposes three concepts for presenting
hedge accounting. Of these, the Group uses micro fair value hedging and macro cash flow hedging.
Micro fair value hedge accounting
In micro fair value hedges, the Group hedges the fair value of financial instruments against fluctuations arising from changes in reference
interest rates or currencies. Among other things, this affects the Group’s issuing business and fixed-interest securities used in liquidity
management. Interest rate swaps, currency swaps and interest rate-currency swaps are used in these hedges.
Hedging derivatives are reported in the balance sheet under positive or negative fair values of derivative hedging instruments
respectively and measured at fair value. Measurement differences are taken in full to net income from hedge accounting. For L&R / OL
hedged items, the carrying amount in the balance sheet is adjusted for the change in fair value resulting from hedged (interest rate) risk
(hedge adjustment). This change in value is recognised in net income from hedge accounting. For AFS hedged items, the hedge adjustment
is also reported under net income from hedge accounting while the remainder of the change in value – the component not due to the
hedged interest rate risk – is recognised in equity in the revaluation reserve.
As this balance sheet treatment is dependent on the effectiveness of micro fair value hedges, the Group performs effectiveness tests.
It does this using the dollar offset method on a cumulative basis and regression analysis. The fair value changes in the hedging instrument
(derivative) and the hedged item are compared over all past reporting periods since the inception of the hedge relationship. In a prospective
effectiveness test, fair values are calculated to the end of the term of the hedging instrument and the hedged item on the basis of market
data scenarios (+ 100 bp shift) or a critical term match is carried out.
Macro cash flow hedge accounting
In a macro cash flow hedge, the Group uses interest rate swaps to hedge against cash flow fluctuations due to variable interest rates on
loans, securities and liabilities used in asset/liability management.
All the interest rate derivatives used and designate for this are recognised as positive or negative fair values of hedging instruments
at fair value. Provided that they do not exceed the hedged items (the effective portion), cumulative changes in value are recognised in equity
in the revaluation reserve for cash flow hedges. If the total cumulative changes in value of the hedged derivative exceed the total changes in
value of the hedged item (ineffective portion), the difference is recognised under net trading income.
The general accounting rules do not change for the hedged items.
The change in fair value of cash flows method is used to test the effectiveness of macro cash flow hedges. In the prospective test,
expected cash flows from the hedging instrument and the hedged item are compared for the corresponding maturity bands. Retrospectively,
the Group checks that effectiveness is within a range of 80% - 125% using the hedge ratio of actual cash flows from the hedging instrument
and the hedged item.
Financial assets
Financial assets include all bonds and other fixed-income securities, shares and other non-fixed-income securities, investments and investments
in associates (not measured at equity) and investments in unconsolidated subsidiaries that are not held for trading. These assets are
generally in the AFS category. In addition, financial assets include asset-backed securities categorised as loans and receivables that are not
traded on an active market.
AFS assets are measured at fair value. The changes in value are recognised in the revaluation reserve in equity until disposal. If the
fair value of equity securities cannot be reliably measured, they are carried at cost. Asset backed securities are measured at amortised cost.
All financial instruments received are regularly tested for material permanent impairment. If there is any corresponding impairment,
the amount is recognised in the income statement in net income from financial assets. For debt securities, the impairment loss is reversed
to amortised cost, also in net income from financial assets. Impairment losses on equity securities cannot be reversed to the income statement
when the reason for impairment ceases to exist; instead they are taken directly to the revaluation reserve in equity and eliminated in
the income statement upon disposal, in net income from financial assets. The reversal of impairment is generally not permitted for equity
securities measured at amortised cost.
120

Securities repurchase and securities lending agreements
Repurchase agreements (repo agreements)
Repo agreements are a combination of regular purchases or regular sales of securities with a simultaneous agreement to forward sale or
repurchase with the same counterparty. The securities sold under repo agreements (regular way sales) continue to be recognised and
measured as securities in the consolidated balance sheet. The liquidity from the repo agreement is recognised under deposits by banks
or amounts due to customers. Agreed interest payments are recognised as interest expenses.
In reverse repo agreements, the securities received (regular way purchases) are not recognised by the Group. The resulting outflows
of liquidity are recognised as loans and advances to banks or customers and measured accordingly. Agreed interest is recognised as interest
income.
Securities lending transactions
Securities lending agreements are entered into with banks and with customers. The securities lent by Landesbank Berlin are reported under
securities, whereas the securities lent to Landesbank Berlin are not recognised in the balance sheet. Cash collateral provided for securities
lent by Landesbank Berlin is reported under receivables, whereas collateral received for securities lent to Landesbank Berlin is reported
under liabilities. The income and expense resulting from securities lending agreements is included in the income statement as net interest
income.
Financial guarantees
Financial guarantees are agreements whereby the Bank, as the guarantor, is under obligation to make certain payments to compensate the
guaranteed party for losses arising because a certain obligor does not meet its payment obligations as per the original or amended conditions
of a debt instrument on time. Financial guarantees can include bank guarantees, credit guarantees and letters of credit.
The Bank measures financial guarantees at fair value on first-time recognition. The fair value of financial guarantees issued as part
of a transaction conforming to market terms is equal to the premium for granting the guarantee (IAS 39.43 in conjunction with IAS 39.AG 4 (a)).
The net method is used. If payment of the premium to the guarantor is spread over the term of the financial guarantee, it is carried at nil and
the respective premium payment is recognised. Financial guarantees against one-off payments are deferred pro rata over the full term of the
financial guarantee.
The financial guarantee is recognised at the higher of measurement in line with IAS 37 and the value calculated in first-time measurement
amortised under IAS 18 at subsequent balance sheet dates.
8 Cash
Public-sector debt instruments are measured at fair value. All other items (cash in hand and credit at central banks) are reported at nominal
amount.
9 Investments carried at equity
Consolidated Financial Statements
Investments in associates and joint ventures carried at equity are reported in this category.
Associates as defined by IAS 28 are investments over which an investor has the power to exert significant influence without there
being joint control. Joint ventures as defined by IAS 31 are contractual agreements whereby two or more parties undertake an economic
activity which is subject to joint control.
31.12.2006 Additions Disposals 31.12.2007
Joint ventures (IAS 31) – carried at equity 1 0 0 1
Associated companies (IAS 28) – carried at equity 3 0 0 3
Special purpose and publicly issued funds – carried at equity 0 2 0 2
Total 4 2 0 6
Notes
121

Notes on Accounting Policies
Investments carried at equity are initially reported at cost and, in subsequent periods, their carrying amount changes in line with the investor’s
share in its net profit or loss for the period. Changes in the equity of the associate or join venture also result in changes in its carrying amount
in equity. Distributions by the investment company are recognised in equity and reduce the carrying amount of the investment.
Income from transactions with companies carried at equity are eliminated pro rata.
10 Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance held for use in the supply of services or for administrative
purposes. Intangible assets are divided into acquired and internally generated intangible assets. In particular, intangible assets include software,
rights, licenses and goodwill. The straight-line amortisation period for such assets – with the exception of goodwill – is between three
and five years.
Intangible assets are reported at historical cost net of straight-line depreciation. Internally generated intangible assets can only be
capitalised if certain conditions of IAS 38.21 and IAS 38.57 are met.
11 Property, plant and equipment
Property, plant and equipment are reported at historical cost net of straight-line depreciation.
The depreciation period is calculated on the basis of the economic life. Any legal or contractual restrictions are also taken into
consideration. Property, plant and equipment is depreciated on a straight-line basis to a residual value of 0 1. If there are indications of
impairment in excess of depreciation, impairment tests are carried out in accordance with IAS 36 and any necessary impairment losses
are recognised in the income statement. If the reasons for impairment cease to apply, the impairment is reversed up to the maximum of
the amortised cost.
Depreciation period in years
Owner-occupied buildings and other property, plant and equipment are written down on a straight-line basis over the following periods in
line with their type of use:
Type of use Economic life
Residential and commercial properties (< 10 % commercial share) 60 – 80 years
Residential and commercial properties (> 10 % commercial share) 50 – 70 years
Office buildings, office and commercial properties 40 – 60 years
Car parks, underground garages 40 – 50 years
Operating and office equipment 7 – 25 years
Acquired computer systems 3 – 8 years
The economic useful life of finance lease items is based on the term of the lease agreement, taking into account residual values.
Gains and losses on the disposal of property, plant and equipment are reported under other operating income. Impairment and
write-downs are reported under administrative expenses.
12 Impairment of property, plant and equipment and intangible assets including goodwill
Property, plant and equipment and intangible assets, including goodwill, are tested for impairment at every balance sheet date to determine
whether there are indications of impairment. If such indications exist, the recoverable amount of the asset is calculated in order to determine
the amount of the corresponding impairment loss. The recoverable amount of an asset is the greater of the fair value net of selling costs and
the value in use.
Estimates relating to factors such as cause, date and amount of impairment are also made in calculating the impairment of property,
plant and equipment and intangible assets. The identification of indications of impairment, estimates of future cash flows and the calculation
of the fair values of assets (or groups of assets) entail material estimates that must be made by the management with regard to identifying
and reviewing indications of impairment, expected cash flows, the applicable discount rates, the respective useful lives and the remaining
values.
122

Impairment is based on a large number of factors, such as changes in current competitive conditions, expectations of growth, increased
cost of capital, changes in the future availability of financing, technological obsolescence, discontinuance of services, current replacement
costs and other changes in circumstances that indicate impairment. The recoverable amount and the fair values are typically determined
using a discounted cash flow method which incorporates reasonable market participant assumptions.
Recognised goodwill is not amortised but checked for impairment. An impairment test is conducted once a year as of the balance
sheet date and whenever there are indications of impairment.
If the recoverable amount of an asset is less than its carrying amount, the asset is written down to the recoverable amount. The
impairment loss is recognised immediately in the income statement; for intangible assets (not including goodwill) this is reported under
administrative expenses, while for goodwill it is reported under other operating income.
If impairment losses are reversed in subsequent periods, the carrying amount of the asset is adjusted to equal the new recoverable
amount. This is restricted, however, such that the carrying amount of the asset cannot exceed what its carrying value would have been had
no impairment taken place. The reversal of impairment is taken directly to profit and loss and is reported in other operating income. Goodwill
impairment cannot be reversed.
13 Leases
In accordance with IAS 17, leases are assessed and recognised based on consideration of whether the risks and rewards of ownership of
the leased item are borne by the lessor or by the lessee.
A lease is classified as a finance lease if all the risks and rewards of ownership are substantially transferred to the lessee. All other
leases are classified as operating leases. Leases are classified at their inception.
Group as lessor (operating leases)
If leases are operated by Group companies, economic ownership of the leased item remains with the Group company. The leased items are
reported in the consolidated balance sheet as property, plant and equipment and under investment property. They are recognised at cost less
depreciation over the useful life or impairment losses. Unless otherwise indicated for individual leases, proceeds from leases are recognised
on a straight-line basis over the term of the lease and are included in the income statement within other operating income.
Group as lessee (operating leases)
Economic ownership of assets leased under an operating lease remains with the lessor.
Lease instalments paid for operating leases are reported in full as an expense in the income statement. The expense is recognised
on a straight-line basis over the term of the contract. As with rental payments, lease instalments are calculated on a regular basis in line with
the pattern of benefits received from the lease agreement and reported in the income statement under administrative expenses.
Group as lessor (finance leases)
As of the balance sheet date, there were no finance leases in which the Group is the lessor.
Consolidated Financial Statements
Group as lessee (finance leases)
Assets held under finance leases are recognised as assets of the Group at the lower of fair value and the present value of the minimum
lease payments at the inception of the lease. Both the asset value (leased item) and the associated liability (present value of minimum lease
payments) are reported in its balance sheet.
The leased item is reported in the balance sheet under either property, plant and equipment or investment property and the associated
liability is shown under amounts due to customers or deposits by banks.
The lease instalments to be paid by the Group are divided into a repayment portion (which has no impact on the income statement
when paid as it simply reduces the lease liability) and an interest expense portion (which is recognised directly in the income statement). The
lease payments are divided between interest expense and a reduction of the lease liability such that the remaining liability incurs a constant
rate of interest. Interest expense is recognised directly in the income statement. The repayment portion included in the lease instalments is
deducted from lease liabilities.
The leased items reported as assets are depreciated in the same manner as assets acquired by the Group itself. The depreciation
is disclosed in the same manner as depreciation of non-leased property, plant and equipment or investment property.
Notes
123

Notes on Accounting Policies
14 Investment property
In accordance with IAS 40, investment property refers to property that is held to earn rental income or for capital appreciation. It is not intended
to use these properties to render services or for the entity’s own administrative purposes. In order to distinguish investment property from
owner-occupied property, the following characteristics have been defined:
Investment property generates cash flows that are largely independent of other assets held by the enterprise.
Mixed-use properties in which own use accounts for more than 5 % of total space are classified and reported as owner-occupied
property, plant and equipment in accordance with IAS 16.
The Group has no property held for sale in the ordinary course of business (IAS 2).
In line with the cost model, investment property is carried at historical cost and reported in the balance sheet as a separate item.
It is shown net of straight-line depreciation; it is depreciated to a residual value of 0 1. The depreciation period is calculated on the basis
of the economic life. Any agreed legal or contractual restrictions are also taken into consideration. Any impairment in excess of depreciation
is recognised. If the reasons for impairment cease to apply, the impairment is reversed up to the maximum of the amortised cost.
Costs incurred subsequent to initial recognition are capitalised when it is probable that additional future economic benefits will flow
to the entity.
All income and expenses resulting from investment property are recognised under other operating income.
Investment property is depreciated on a straight-line basis over the following periods:
Type of use Economic life
Residential and commercial properties (< 10 % commercial share) 60 – 80 years
Residential and commercial properties (> 10 % commercial share) 50 – 70 years
Office buildings, office and commercial properties 40 – 60 years
Car parks, underground garages 40 – 50 years
The economic useful life of finance lease items is based on the term of the lease agreement, taking into account residual values.
There are no restrictions on the usability or disposal of investment property.
15 Non-current assets and groups of assets held for sale
Non-current assets and groups of assets held for sale are recognised at the lower of the carrying amount and the fair value less costs of
disposal. The present value of the costs of disposal is used if the disposal will take place after more than twelve months.
Assets and disposal groups are classified as held for sale if the intention is to dispose of them rather for them to continue in use.
This condition is satisfied when it is highly likely that a planned disposal will take place and when the non-current asset or disposal group
is available for immediate disposal in its current condition.
No adjustments or reclassifications are made to prior periods in respect of non-current assets and groups of assets held for sale.
Depreciation of non-current assets and groups of assets held for sale ceases from the date of reclassification. Impairment is only
recognised on these assets if the carrying amount exceeds the fair value less costs to sell. If the fair value less costs to sell later rises again,
the previous impairment is reversed. The reversal is limited to the impairment previously recognised on the assets concerned. The liabilities
assigned to these assets are measured in the amount of the reportable payment obligations.
Income from the reversal of write-downs on long-term assets and disposal groups available for sale are recognised under other
operating income.
124

16 Provisions
Provisions are recognised when the Group has present obligations that arise from past events, which are expected to result in an outflow
of economic resources that can be reliably estimated. The timing or the amount of the obligation are uncertain. Owing to the uncertainties
associated with this assessment, actual obligations may deviate from the original estimates and thereby from the provision amount. In addition,
significant estimates are involved in the determination of provisions related to taxes and litigation risks.
Provisions are recognised for pensions and similar obligations in line with IAS 19.
Other provisions are only recognised for uncertain obligations to third parties and onerous contracts in accordance with IAS 37
when utilisation of the provision is likely and the amount of utilisation can be reliably determined.
Provisions with a term of more than one year are discounted using a rate of interest which is uniform across the Group and accrue
interest in the income statement in subsequent periods.
The recognition and measurement of provisions in connection with pending legal disputes are largely associated with appraisals by
the Group. Thus, the assessment of the probability that pending proceedings will be successful or will result in a liability or the quantification
of the possible amount of the payment obligation is based on an appraisal of the respective situation. Provisions resulting from general legal
disputes with other parties are not disclosed as the publication of this information could damage the Group’s standing in respect of other
parties in ongoing litigation (IAS 37.92).
The measurement of pension provisions is based on the projected unit credit method for defined benefit retirement plans set out in
IAS 19. The measurement of the obligation is subject to various estimations. In particular, these include assumptions about long-term salary
and pension increases and average life expectancy. The assumptions about trends in salary and pension increases are based on observations
of past development and take into consideration developments on the labour market. Estimates of average life expectancies is based
on recognised biometric accounting principles (Prof. Klaus Heubeck tables).
The expected long-term development of the available plan assets is determined in line with the fund structure, taking historic data
into consideration.
17 Income taxes
Consolidated Financial Statements
Deferred taxes are recognised for all temporary differences between IFRS valuations and tax values (balance sheet approach). Temporary
differences arise between these differing valuations which mean that income taxes will be either higher or lower in the future. Deferred taxes
on tax losses carried forward are recognised at the amount at which they can realistically be expected to be realised within a planning period
of five years – in line with minimum taxation and taking into account a security discount for years two to five. This applies when sufficient future
taxable profit is generated; the company’s current earnings planning is used to judge this. Deferred tax assets and liabilities are measured
at the tax rates that apply at the balance sheet date.
Expenses and income from deferred taxes are reported in the income statement together with from current tax expenses and income
as “Income taxes”. Depending on the accounting treatment of items to which the deferred taxes relate, deferred tax assets and liabilities are
recognised and written down either in the income statement under income taxes or through equity under the appropriate equity item.
Current tax assets result from advance tax payments and eligible capital gains taxes if they exceed the current tax expense calculated
by the respective company for the relevant assessment year and refund claims in line with past tax assessment notices. Tax provisions have
been recognised for expected tax liabilities of previous years in line with the advance payments made and eligible capital gains taxes using
the calculated tax results of the companies and for audit risks.
Current and deferred tax assets and liabilities are each reported separately in the balance sheet.
Notes
125

Notes on Accounting Policies
18 Subordinated capital
Subordinated capital is capital transferred to the Group that qualifies as a financial obligation on account of the right to restitution of the
respective capital provider and has a temporary liability function.
Subordinated capital consists of participations by dormant partners (Article 10 (4) KWG) and subordinated obligations (Article 10 (5a)
KWG). Subordinated capital is recognised at amortised cost. Premiums and discounts are recognised in income over their term in line with the
effective interest method and included as part of net interest income in the income statement. Subordinated capital used for hedge accounting
purposes is adjusted for the gains or losses attributable to the hedged risk.
19 Shareholders’ equity
Composition of shareholders‘ equity
The equity of Landesbank Berlin Holding AG consists of issued capital (share capital) in the form of bearer shares and various reserves.
Issued capital
The issued capital (share capital) of Landesbank Berlin Holding AG consists of no-par-value bearer shares with a notional value of 0 2.56
per share. The issued capital amounts to 0 2,554 million. There are no preferential rights or restrictions on the distribution of dividends at
Landesbank Berlin Holding AG. All issued shares are fully paid up.
Treasury sharesn
The Group did not hold any treasury shares in the financial year.
Capital reserves
Premiums on the issuance of shares are reported under capital reserves. Capital reserves also include amounts generated on the issuance
of bonds for conversion and option rights for the acquisition of shares.
Retained earnings
Retained earnings consist of the legal reserves and other reserves. In accordance with national law, mandatory reserves are recognised in
the legal reserves; the amounts appropriated to the legal reserves are subject to a prohibition on distribution in the single-entity financial
statements of the Holding. The total amount of retained earnings reported in the balance sheet consists of 0 13 million (previous year:
0 7 million) of legal reserves (German Stock Corporation Act) and 0 – 156 million (previous year: 0 – 402 million) of other retained earnings.
Currency translation reserve
The currency translation reserves contains gains and losses on translation arising from capital consolidation. This includes currency translation
differences from the consolidation of subsidiaries and associates.
Revaluation reserve
The revaluation reserve includes the gain or loss on revaluation of investment and AFS securities consisting of interest-bearing and dividendoriented
instruments, as well as loans and advances to banks and customers at fair value. Gains and losses are only recognised in the income
statement when the asset has been sold or written off. This equity items also includes the net gains or losses on revaluation of macro cash
flow hedging instruments in effective hedges. 0 – 32 million (previous year: 0 48 million) was recognised for this in the reporting period;
however, no amounts were derecognised or reported in net interest income in 2007 and 2006.
The revaluation reserve also includes deferred taxes that are reported in equity (e.g. those on AFS securities and cash flow hedge
derivatives).
126

Minimum capital requirements
The German Solvency Ordinance (SolvV), based on the conditions of the Second Basel Accord (Basel II), came into force on 1 January 2007.
The capital covered by capital management, i.e. internal economic cover assets pool, includes regulatory capital resources, the effects of
the approval of the annual financial statements, the income for the current year and subordinated liabilities. As of 31 December 2007, the
Landesbank Berlin Holding Group has aggregate risk cover of 0 5,293 million; regulatory capital resources amounted to 0 4,898 million
at the same date.
By way of the acquisition of Landesbank Berlin Holding by Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG der Regionalverbandsgesellschaft
mbH (RVG, general partner) and DSGV ö.K. (limited partner), the Holding is owned by the RVG Group in terms of
regulatory requirements. The capital resources are now significantly more favourable. Regulatory disclosures are issued for RVG. Please
also see the values at the level of Landesbank Berlin Holding.
The Group prepared a statement in accordance with the Solvency Ordinance for the first time as of the reporting date 31 March 2007.
The internal rating-based approach (IRBA) was used for the credit risk for LBB and LBB International S.A. In addition to the risks that have
required capital backing to date (counterparty risk and market price risk), the operational risk also required separate capital backing.
Berlin Hyp and netbank are utilising the transitional provisions of Article 339 SolvV to report 2007 in line with Principle I. At the level
of RVG, the overall capital ratio (SolvV) as of the end of the year was 15.04 % with a Tier 1 capital ratio (SolvV) of 11.80 % after adoption of
the financial statements. Both regulatory minimum ratios were maintained at all times at the level of the Group and the individual banks.
Capital management
In the reporting year, the Bank introduced the Capital Management Committee. The primary task of this Committee is to coordinate Groupwide
measures to ensure a long-term, optimised capital structure in line with internal and external conditions. Detailed information on capital
management can be found in the section on overall risk management in the risk report.
Dividend payment
In 2007, a dividend of 0 0.06 per share was distributed to the shareholders. This corresponds to a total distribution amount of 0 60 million.
20 Off-balance sheet transactions
Consolidated Financial Statements
Trust Activities
Trust activities which involve the holding or placing of assets in the Bank’s name but on behalf of third parties are not recognised under
IFRS as they represent off-balance sheet transactions. Commission payments for such activities are included in the income statement in
net commission income.
Contingent liabilities
Contingent liabilities are obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of the Group. In banking business these include guarantee liabilities and
irrevocable loans commitments.
This also includes current obligations that arise from past events but that cannot be recognised in the balance sheet as it is not
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation
cannot be measured with sufficient reliability.
Commission payments for the above activities are included in the income statement in net commission income.
Notes
127

Notes to the Income Statement
21 Net interest income
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in %
Interest income
Interest income from receivables 3,205 3,559 – 10
Interest income from financial investments 1,868 1,328 41
Similar (interest) income from financial investments 25 23 9
Other interest income 1,112 625 78
Total interest income 6,210 5,535 12
Interest expenses
Interest expenses for liabilities 3,807 3,531 8
Interest expenses for subordinated liabilities 63 92 – 32
Similar (interest) expenses from financial investments 2 2 0
Other interest expenses 1,523 1,167 31
Total interest expenses 5,395 4,792 13
Net interest income 815 743 10
1) Figures for the previous year have been adjusted
Other interest income / expenses include income of 0 185 million (previous year: 0 63 million) and expenses of 0 632 million (previous year:
0 649 million) resulting from financial instruments designated at fair value through profit or loss (FVO). This also includes interest income of
0 927 million (previous year: 0 558 million) and interest expenses of 0 891 million (previous year: 0 519 million) from hedge accounting; this
was reported under interest income/expenses from receivables / liabilities in the previous year.
Interest income also includes income from financial instruments subject to valuation adjustments in the amount of 0 109 million
(previous year 0 126 million) (unwinding effects). The unwinding effects result from the adjustment of present values as at the balance sheet
date, assuming no change in future cash flows. The original effective interest rate of the respective financial instrument is used to determine
the present value.
22 Allowance for losses on loans and advances
Risk provisioning in the consolidated income statement is as follows:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in %
Income from the reversal of write-downs on receivables and from the reversal
of provisions in the lending business 434 460 – 6
Depreciation and amortisation expense and write-downs of receivables and
additions to provisions in the lending business 381 578 – 34
Total – 53 118 < – 100
1) Figures for the previous year have been adjusted
Risk provisioning results from receivables in the loans and receivables category.
Risk provisioning in the lending business is determined on the basis of the structure and quality of lending portfolios and general
economic factors.
128

23 Net commission income
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Fee and commission income
Securities and issue business 176 185 – 5
Payment services/account management 115 143 – 20
Lending business 35 32 9
Card business 76 65 17
Other services 14 23 – 39
Other fee and commission income 13 11 18
Total fee and commission income 429 459 – 7
Fee and commission expense
Securities and issue business 53 33 61
Payment services/account management 9 12 – 25
Lending business 7 5 40
Card business 45 27 67
Other services 14 12 17
Other fee and commission expense 4 2 100
Total fee and commission expense 132 91 45
Net commission income 297 368 – 19
Net commission income also includes commission income and expenses arising from financial instruments recognised at fair value through
profit or loss (FVO).
Commission income from trust activities amounts to 0 1 million (previous year: 0 0 million) and is included in other commission income.
Commission expenses from trust activities were not incurred in either 2007 or 2006.
24 Net income from hedge accounting
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Consolidated Financial Statements
Change
in %
Loss from hedged underlyings – 67 – 115 42
Income from derivatives used as hedge accounting instruments 70 118 – 41
Total 3 3 0
This includes net income from the remeasurement of hedged items and hedging instruments in micro fair value hedges that meet the IAS 39
criteria for hedge accounting.
Earnings effects can also result from macro cash flow hedges. Owing to the model, there is no portion of the change in value of
derivatives in macro cash flow hedges that can be designated as ineffective.
In addition, the Group does not use hedge accounting.
Notes
129

Notes to the Income Statement
25 Net income from financial instruments recognised at fair value through profit or loss
Net income from fair value measurement through profit or loss breaks down into:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in %
Income from financial instruments
classified as trading (Held-for-Trading) – 373 – 329 – 13
designated at fair value (Fair-Value-Option) 328 515 -36
Total – 45 186 < – 100
1) Figures for the previous year have been adjusted
These components can be broken down as follows:
Net income from the trading category (HFT)
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in %
Net trading book income 164 322 – 49
Net foreign exchange gains/losses – 71 – 72 1
Net income from investment book derivatives – 466 – 579 20
Total – 373 – 329 – 13
1) Figures for the previous year have been adjusted
Net income from financial instruments designated at fair value (FVO)
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Net income from remeasurement of assets 161 39 > 100
Net income from remeasurement of equity and liabilities 167 476 – 65
Total 328 515 – 36
In addition to measurement and disposal effects, net income from the trading category (HFT) also includes interest income and expenses,
commission income and expenses and dividend income. However, these components are not included in net income from financial
instruments designated at fair value (FVO).
26 Net income from financial assets
Net income from financial investments contains gains/losses on the disposal and remeasurement of financial assets.
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Net gain on disposal of financial assets 37 52 – 29
Income from the disposal of financial assets 59 90 – 34
Expenses from the disposal of financial assets 22 38 – 42
Net income from the remeasurement of financial assets – 41 – 4 < – 100
Income from reversals of write-downs on financial assets 3 1 > 100
Expenses from write-downs on financial assets 44 5 > 100
Other net income from financial assets 0 2 – 100
Total – 4 50 < – 100
0 – 6 million (previous year:0 44 million) of net income from financial assets relates to AFS financial assets and 0 2 million (previous year:
0 6 million) related to L&R assets.
130

The so-called “net income” is calculated for each category of financial instruments. The net income for the L&R, AFS and OL categories
include the earnings effects of measurement on the one hand (write-downs – recognised as risk provisioning – and impairment and reversals)
including the measurement of hedge accounting and disposals on the other. Net income breaks down as follows:
Net income for the L&R category amounts to 0 – 71 million (previous year: 0 – 330 million). This includes the share of income from financial
assets relating to L&R instruments, the recognised (or reversed) risk provisioning, measurement effects from hedged L&R items and a
portion of income from receivables sold, which is included in other operating income.
The net income for the AFS category consists of the AFS share of income from financial assets and measurement effects of hedged
AFS items and amounts to 0 – 125 million (previous year: 0 – 259 million). This includes 0 – 6 million (previous year: 0 44 million) which
was taken from the revaluation reserve (AFS) and recognised in income.
In addition, 0 – 434 million (previous year: 0 – 169 million) was transferred directly to equity in this reserve. Including deferred taxes, the
total effect on the revaluation reserve amounted to 0 – 308 million (see statement of changes in consolidated equity).
The net income of the OL category includes only the earnings effects of buying back own promissory note loans and the measurement
effects of hedged OL transactions and amounts to 0 161 million (previous year: 0 419 million).
27 Net income from investments carried at equity
This item consists of income from associates and joint ventures carried at equity.
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Net income from remeasurement 9 – 7 > 100
Current income 3 3 0
Total 12 – 4 > 100
28 Other operating income
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Consolidated Financial Statements
Change
in %
Non-recurring effects from investments 0 452 – 100
Net income from the disposal of financial assets, property,
plant and equipment and intangible assets 18 44 – 59
Interest on tax rebates 8 27 – 70
Net income from investment property 7 – 9 > 100
Net income from promissory note loans – 17 16 < – 100
Non-bank revenue 33 23 43
IT income and expenses 12 3 > 100
Deconsolidation effects 4 6 – 33
Other tax expenses – 4 – 37 89
Miscellaneous other operating income 50 37 35
Total 119 636 – 81
Net income from promissory note loans includes net gains on the disposal of L&R promissory note loans. Income from buying back own
promissory note loans is also recognised here.
The “other tax expenses” item corresponds to income. This includes tax rebates and income from the reversal of provisions for
capital levies on account of external tax audits and excise duty.
The effects on income of investments in the previous year relate to the disposal of Berliner Bank.
Other operating income is composed of items that cannot be allocated to any other income statement account.
Notes
131

Notes to the Income Statement
The Group as lessor (operating leases)
Other operating income and expenses include operating lease income relating to the lessor function of a movable equipment lease fund.
Following the end of the lease term, the lease fund has the right to offer the leased asset to the lessee for minimum proceeds on disposal of
around 0 28 million. The future minimum lease payments are allocated across the residual term of the lease, which ends on December 16, 2008,
and consist of the minimum proceeds on disposal and current payments of around 0 3 million p.a.
The gross carrying amount of leased items is 0 85 million.
Total future minimum lease payments from non-cancellable operating leases breaks down as follows:
Remaining term
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
less than one year 4 3 0
between one and five years 4 4 33
more than five years 1 0 0
Total 9 7 29
29 Administrative expenses
The Group’s administrative expenses are composed of staff costs, depreciation of property, plant and equipment and amortisation of
intangible assets (not including goodwill) and other administrative expenses. These expenses break down as follows:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Staff costs 511 589 – 13
Depreciation of property, plant and equipment and amortisation of intangible assets 66 74 – 11
Other administrative expenses 388 452 – 14
Total 965 1,115 – 13
Staff costs:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Wages and salaries 389 446 – 13
Social security contributions 60 70 – 14
Expenses for pensions and other benefits 62 73 – 15
Total 511 589 – 13
Depreciation of property, plant and equipment and amortisation of intangible assets (not including goodwill):
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Depreciation of property, plant and equipment 37 43 – 14
Depreciation 37 41 – 10
Impairment 0 2 – 100
Amortisation of intangible assets 29 31 – 6
Depreciation 29 31 – 6
Impairment 0 0 x
Total 66 74 – 11
132

Other administrative expenses:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
Office space costs 69 74 – 7
Operating and office equipment 4 4 0
IT costs 153 205 – 25
Advertising and marketing 28 30 – 7
Business operating costs 60 65 – 8
Consulting, audits and contributions 57 54 6
Staff-related operating costs 15 15 0
Miscellaneous 2 5 – 60
Total 388 452 – 14
The fees paid to auditors in financial year 2007 are composed as follows:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
for audits 5 5 0
for other assurance and valuation services 3 1 > 100
Total 8 6 33
Other assurance and valuation services mainly relate to assurance services for projects in connection with the privatisation.
The Group as lessee (operating leases)
Future minimum lease payments from non-cancellable operating leases breaks down as follows:
Remaining term
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Change
in %
less than one year 23 23 0
between one and five years 71 57 25
more than five years 21 5 > 100
Total 115 85 35
Total future minimum payments from subleases amount to 0 2 million.
Minimum lease payments in the financial year amounted to 0 39 million (previous year: 0 32 million), contingent rent amounted to
0 1 million (previous year: 0 1 million); no payments were incurred for subleases in 2007 or the previous year.
This primarily relates to operating leases for branch offices of 0 101 million (previous year: 0 69 million) and IT systems in the amount
of 0 8 million (previous year: 0 14 million).
30 Restructuring expenditure and income (net)
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006
Consolidated Financial Statements
Change
in %
Restructuring income 11 43 – 74
Restructuring expenditure 5 8 – 38
Total 6 35 – 83
Notes
133

Notes to the Income Statement
31 Income tax expense
The Landesbank Berlin Holding Group consists of two groups of integrated companies and companies that do not belong to any of these
tax groups.
Our foreign subsidiaries and branches are taxed in the respective country in which they are based. Dividends flowing to Landesbank
Berlin AG are essentially tax-free in Germany. The profits from foreign branches are fully tax-free in Germany.
Income tax expenses break down as follows:
in u million
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in %
Current taxes – 10 96 < – 100
Deferred taxes 81 1 > 100
Total 71 97 – 27
1) Figures for the previous year have been adjusted
The greater expense for deferred taxes as against the previous year is due to the business tax reform, the effects of which are mitigated by
the additional capitalisation of deferred taxes on tax loss carryforwards on account of improved medium-term planning. The net income
from deferred taxes reported in the previous year related to the recognition of deferred tax assets on tax losses carried forward. The income
from current taxes is based on prior-period effects.
The following statement of reconciliation shows the differences between the expected and reported tax expense in the Group:
in u million 2007 2006 1)
Profit before income taxes in accordance with IFRS 291 784
Consolidated income tax rate (%) 38.9 % 38.9 %
Expected income tax expense 113 305
1. Tax-free income – 24 – 40
2. Non-deductible expenses 39 72
3. Differences in the basis of calculation of trade tax 10 5
4. Changes in tax rates 1 – 2
5. (Non-)recognition and measurement of deferred tax assets – 241 – 176
6. Effects of changes in tax rates 220 0
7. Prior-period effects – 48 – 71
8. Other 1 4
Reported income tax expense / tax income (–) 71 97
Effective tax rate 24.4 % 12.2 %
1) Figures for the previous year have been adjusted
The consolidated rate of income tax selected as the basis for the statement of reconciliation is composed of the corporation tax rate of 25 %
applicable as of 31 December 2007 in Germany, plus the solidarity surcharge in place until 31 December 2007 of 5.5 % and the trade tax
rate of 17.0 %. As the Group companies are primarily based in Berlin, trade tax was calculated on the basis of the Berlin assessment rate
of 410 %. Taking into consideration the deductibility of trade tax from the basis of measurement for corporation tax, the consolidated rate
of income tax amounts to 38.9 %. .
134

However, deferred taxes were calculated on the basis of the income tax rates applicable to the respective companies, and future tax rates
are used to measure deferred taxes. As a result, calculations were based on the legal situation in Germany from 2008 following the German
Business Tax Reform Act of 14 August 2007. As a result, the Group tax rate of Landesbank Berlin Holding AG will decline from 38.9 % to
30.2 %. The cut in the tax rate will lead to a considerable deferred tax expense overall.
The effects of tax-free income primarily results from income that is tax-free income under Article 8b (1) and (2) KStG.
The additional charges for non-deductible expenses primarily include the non-deductible expenses in accordance with Articles 8a and
8b (2) and (3) KStG, to the extent that they have not already been added separately in calculating trade income, and guarantee commission
to be paid to the State of Berlin on the basis of the risk shielding assumed under the detailed agreement.
The foreign tax rates are between 12 % and 31 %. The tax effect due to the difference from the consolidated tax rate is shown in the
statement of reconciliation under changes in tax rates.
The item (non-)recognition and valuation of deferred tax assets primarily relates to tax effects in connection with the additional capitalisation
of deferred taxes on loss carryforwards on account of improved medium-term planning results.
Deferred taxes totalling 0 1,132 million (previous year: 0 573 million) were recognised for corporation tax loss carryforwards of
0 766 million (previous year: 0 447 million) and for trade tax loss carryforwards of 0 294 million (previous year: 0 209 million). Deferred tax
assets of 0 23 million (previous year: 0 125 million) were reversed as a result of the utilisation of loss carryforwards. This related to the companies
LBB Holding AG and Berlin Hyp (previous year: LBB Holding AG and Berlin Hyp). No deferred taxes were recognised for corporation
tax loss carryforwards of 0 2,307 million (previous year: 0 3,082 million) and for trade tax loss carryforwards of 0 2,723 million (previous year:
0 3,237 million). There are no limits on the use of losses carried forward.
The recognisability and value of deferred tax assets on loss carryforwards and deductible temporary differences are examined on
the basis of a forecast of future taxable income. This forecast takes into account regulations on off-balance sheet tax reduction and addition
(including Article 8b KStG, tax-free permanent establishment results and Article 8 GewStG in particular). The deferred tax assets recognised
in the LBBH Group are covered by future positive tax results. No write-downs of deferred taxes were required in the period under review.
The revaluation reserve for deferred taxes amounted to 0 77 million (previous year: 0 – 75 million). 0 82 million of this (previous year:
0 – 56 million) related to the AFS reserve and 0 – 5 million (previous year: 0 – 19 million) to the reserve for cash flow hedges.
The temporary differences in accordance with IAS 12.81 (f) for which no deferred tax liabilities were recognised amount to 0 1 million
(previous year: 0 1 million).
The nominal amount of the corporation tax credit in line with Article 37 (2) KStG was 0 4 million (previous year: 0 4 million). This will
be paid out in ten equal annual instalments from 2008 to 2017. The final EK02 amount is 0 0 million.
32 Earnings per share
1.1. – 31.12.
2007
1.1. – 31.12.
2006 1)
Change
in %
Consolidated net profit for the period of the shareholders of the parent company (0 million) 201 662 – 70
Average number of ordinary shares outstanding 999,327,870 986,246,150 1
Earnings per share (u) 0.20 0.67 – 70
1) Figures for the previous year have been adjusted
Consolidated Financial Statements
There were no conversion or option rights outstanding in the financial year or as at 31 December 2007. The diluted earnings per share
are therefore the same as the basic earnings per share.
Notes
135

Notes to the Balance Sheet
33 Cash
The cash item breaks down as follows:
in u million
31.12.2007 31.12.2006 Change
in %
Cash in hand 503 420 20
Central bank balances 483 535 – 10
Total 986 955 3
All assets are available at short notice.
0 451 million of central bank balances relates to the balance at Deutsche Bundesbank (previous year: 0 513 million).
As at the balance sheet date, the required minimum reserve amounted to 0 495 million (previous year: 0 387 million).
34 Loans and advances to banks
Loans and advances to banks are as follows:
in u million
31.12.2007 31.12.2006 Change
in %
L&R
Mortgage bank mortgage loans 7 7 0
up to three months 1 1 0
between three months and one year 0 0 0
between one and five years 2 1 100
more than five years 4 5 – 20
Mortgage bank public­sector loans 3,050 1,856 64
up to three months 180 90 100
between three months and one year 698 112 > 100
between one and five years 1,484 1,351 10
more than five years 688 303 > 100
Other loans and advances 22,930 25,462 – 10
payable on demand 3,368 6,752 – 50
up to three months 10,937 5,228 > 100
between three months and one year 5,466 8,867 – 38
between one and five years 2,419 3,602 – 33
more than five years 740 1,013 – 27
Total L&R 25,987 27,325 – 5
AFS
Mortgage bank public­sector loans 527 1,032 – 49
up to three months 59 59 0
between three months and one year 176 450 – 61
between one and five years 292 523 – 44
more than five years 0 0 0
Other loans and advances 0 0 0
Total AFS 527 1,032 – 49
Total 26,514 28,357 – 6
These include 0 26,005 million (previous year: 0 27,912 million) of loans and advances to banks in Germany and 0 509 million (previous year:
0 445 million) of loans and advances to banks outside Germany. Loans and advances are classed as in Germany or outside Germany on
the basis of the registered office of the subsidiary.
As of 31 December 2007, there were allowances for impairment losses on loans and advances to banks in the amount of 0 9 million
(previous year: 0 13 million).
136

35 Loans and advances to customers
Loans and advances to customers are as follows:
in u million
31.12.2007 31.12.2006 1) Change
in %
L&R
Mortgage bank mortgage loans 14,545 14,885 – 2
up to three months 2,402 2,547 – 6
between three months and one year 2,167 1,511 43
between one and five years 6,099 7,251 – 16
more than five years 3,877 3,576 8
Loans secured by real estate liens 1,808 2,265 – 20
up to three months 53 339 – 84
between three months and one year 96 79 22
between one and five years 374 413 – 9
more than five years 1,285 1,434 – 10
Mortgage bank public­sector loans 6,531 7,545 – 13
up to three months 765 457 67
between three months and one year 710 1,294 – 45
between one and five years 1,362 2,321 – 41
more than five years 3,694 3,473 6
Public­sector loans of other banks 8,655 11,193 – 23
up to three months 1,998 2,702 – 26
between three months and one year 1,359 2,159 – 37
between one and five years 2,366 3,321 – 29
more than five years 2,932 3,011 – 3
Other loans and advances 13,481 12,366 9
payable on demand 2,357 2,187 8
up to three months 1,884 1,532 23
between three months and one year 1,492 974 53
between one and five years 3,288 3,096 6
more than five years 4,460 4,577 – 3
Total L&R 45,020 48,254 – 7
AFS
Mortgage bank public­sector loans 1,983 2,650 – 25
up to three months 76 353 – 78
between three months and one year 370 323 15
between one and five years 1,089 1,506 – 28
more than five years 448 468 – 4
Other loans and advances 0 0 0
Total AFS 1,983 2,650 – 25
Total 47,003 50,904 – 8
1) Figures for the previous year have been adjusted
Consolidated Financial Statements
These include 0 46,961 million (previous year: 0 50,866 million) of loans and advances to customers in Germany and 0 42 million (previous
year: 0 38 million) of loans and advances to customers outside Germany. Loans and advances are classed as in Germany or outside Germany
on the basis of the registered office of the subsidiary.
Loans and advances to customers with an indefinite term amount to 0 2,374 million (previous year: 0 3,159 million).
As of 31 December 2007, there were allowances for impairment losses on loans and advances to customers in the amount of
0 1,402 million (previous year: 0 1,812 million).
Group as lessor (finance leases)
There are currently no loans and advances to customers arising from leases in which the Group is the lessor (finance leases).
Notes
137

Notes to the Balance Sheet
36 Allowance for losses on loans and advances
Risk provisioning was recognised for (loans and receivables category only):
in u million
31.12.2007 31.12.2006 Change
in %
Loans and advances to banks 9 13 – 31
Loans and advances to customers 1,402 1,812 – 23
Total 1,411 1,825 – 23
in Mio. u
31.12.2007 31.12.2006 Change
in %
Risk provisioning 1,411 1,825 – 23
Plus provisions 35 74 – 53
Total 1,446 1,899 – 24
In the financial year, risk provisioning reported as assets and provisions developed as follows:
Loans and advances
to banks
Specific allowances
for impairment losses
Loans and advances
to customers
Specific impairment
allowances calculated
on a portfolio basis
Portfolio­based
allowances for
impairment losses
in u million 2007 2006 2007 2006 2007 2006 2007 2006
As of 1.1
prior to change in the scope of consolidation 1 4 1,224 3,793 386 29 119 178
Change in scope of consolidation 0 0 1 – 437 0 – 2 1 – 11
As of 1.1. 1 4 1,225 3,356 386 27 120 167
Additions 1 0 273 437 33 35 0 0
Disposals
Utilisation 0 0 191 1,795 86 35 0 0
Reversals 0 3 227 311 70 0 6 47
Unwinding 0 0 105 114 4 12 0 0
Changes in exchange rates / reclassifications 0 0 139 – 349 – 148 371 1 – 1
As of 31.12. 2 1 1,114 1,224 111 386 115 119
As of 31.12.
by type of receivable:
Mortgage bank mortgage loans (L&R) 0 0 306 392
Loans secured by real estate liens (L&R) 0 0 101 172
Mortgage bank public-sector loans (L&R) 0 0 0 0
Public-sector loans of other banks (L&R) 0 0 0 0
Other receivables (L&R) 2 1 707 660
Mortgage bank public-sector loans (afs) 0 0 0 0
Other receivables (AFS) 0 0 0 0
1) Figures for the previous year have been adjusted
138

Existing loans
Provisions for
lending business
Country risk
Total
Consolidated Financial Statements
Existing loans are defined as loans acquired by the LBB as part of the European Monetary Union. The necessary risk provisioning for these
loans was calculated for the opening balance sheet as at 1 July 1990 and assigned as an equalisation claim. LBB still manages these loans.
As risk provisioning is not recognised in the Bank’s own income statement and is instead deducted from equalisation claims, receipts on loans,
for which impairment allowances exist, do not accrue to LBB but to the German government (Currency Conversion Equalisation Fund) and
must be transferred accordingly.
Of which recognised
in the income statement
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
78 305 74 138 17 16 1,899 4,463
0 0 0 – 7 0 0 2 – 457
78 305 74 131 17 16 1,901 4,006
0 0 14 25 2 6 323 503 323 503
19 225 10 2 0 1 306 2,058
0 0 46 39 9 4 358 404 358 404
0 0 0 0 0 0 109 126 109 126
0 – 2 3 – 41 0 0 – 5 – 22
59 78 35 74 10 17 1,446 1,899 – 144 – 27
Notes
Direct write-downs 38 75
Recoveries on loans previously written off 56 56
Total – 162 ­8
of which:
Risk provisioning recognised in the income statement – 53 118 1)
Interest income recognised in the income statement (unwinding) 109 126
139

Notes to the Balance Sheet
37 Positive fair value of derivative hedging instruments
Hedging instruments with a positive fair value to which hedge accounting in line with IAS 39 was applied break down as follows:
in u million
31.12.2007 31.12.2006 Change
in %
Positive fair values of derivatives in micro fair value hedges 378 260 45
Positive fair values of derivatives in macro cash flow hedges 19 58 – 67
Total 397 318 25
38 Financial assets recognised at fair value through profit or loss
This item includes trading assets and investment book derivatives (HFT) and financial instruments designated at fair value (FVO).
in u million
31.12.2007 31.12.2006 Change
in %
Assets held for trading 10,231 11,626 – 12
Financial instruments designated at fair value (fair value option) 3,406 3,026 13
Total 13,637 14,652 – 7
Assets held for trading (HFT)
in u million
31.12.2007 31.12.2006 Change
in %
Bonds and other fixed-income securities 2,713 2,620 4
Money market instruments 53 0 x
Bonds and notes 2,660 2,620 2
Shares and other non-fixed-income securities 1,568 1,854 – 15
Positive fair value of trading book derivative financial instruments 4,927 5,917 – 17
Positive fair value of investment book derivative financial instruments 1,023 1,235 – 17
Total 10,231 11,626 – 12
Breakdown of assets held for trading by remaining maturity:
in u million
up to
three months
between
three months
and one year
between
one and five
years
more than
five years
Bonds and other fixed-income securities 292 184 1,476 761 2,713
Money market instruments 42 11 0 0 53
Bonds and notes 250 173 1,476 761 2,660
Shares and other non-fixed-income securities 0 0 0 1,568 1,568
Positive fair value of trading book derivative financial instruments 395 549 2,351 1,632 4,927
Positive fair value of investment book derivative financial instruments 136 100 416 371 1,023
Other assets held for trading 823 833 4,243 4,332 10,231
Total
140
Total

Financial instruments designated at fair value (FVO)
in u million
31.12.2007 31.12.2006 Change
in %
Financial instruments designated at fair value (FVO) 51 104 – 51
Financial assets 3,355 2,922 15
Total 3,406 3,026 13
As at 31 December 2007, the maximum default risk of loans and advances to customers was 0 51 million (previous year: 0 104 million);
there were no credit derivatives or similar instruments to hedge this risk as at the balance sheet date.
Breakdown of fair value option financial assets (FVO) by contractual remaining maturity:
in u million
up to
three months
between
three months
and one year
between
one and five
years
more than
five years
Loans and advances to customers 0 0 0 51 51
Financial assets 36 75 1,349 1,895 3,355
Total 36 75 1,349 1,946 3,406
The change in the fair values of the above items due to a change in the default risk (credit spread) for 2007 amounts to 0 – 60 million
(previous year: 0 – 1 million).
In calculating the above amounts, receivables and financial assets were initially measured at the respective current credit spread on
the balance sheet date and then at the respective credit spread of the previous year’s balance sheet date. The difference between these
two measurements is the change in fair value due to the change in credit spread.
39 Financial assets
Financial assets break down as follows:
in u million
31.12.2007 31.12.2006 Change
in %
L&R 5,341 4,275 25
Bonds and other fixed-income securities 5,341 4,275 25
AFS 45,355 39,263 16
Bonds and other fixed-income securities 44,763 38,464 16
Shares and other non-fixed-income securities 423 512 – 17
Investments 165 275 – 40
Affiliated companies 4 12 – 67
Total 50,696 43,538 16
They break down by contractual remaining term as follows:
in u million
up to
three months
between
three months
and one year
between
one and five
years
Consolidated Financial Statements
more than
five years
L&R
Bonds and other fixed-income securities 26 2 414 4,899 5,341
AFS
Bonds and other fixed-income securities 2,444 5,135 26,028 11,156 44,763
Shares and other non-fixed-income securities 6 37 0 380 423
Investments 0 0 0 165 165
Affiliated companies 0 0 0 4 4
Total 2,476 5,174 26,442 16,604 50,696
Notes
Total
Total
141

Notes to the Balance Sheet
In the financial year, investments and unconsolidated affiliated companies developed as follows:
in u million
Investments Affiliated companies
31.12.2007 31.12.2006 31.12.2007 31.12.2006
Carrying amount at 1.1 275 292 12 29
Additions 2 320 1 4
Disposals 73 297 7 20
Reclassification – 5 – 12 0 0
Write-downs 20 3 2 1
Impairment 0 0 0 0
Reversals of impairment losses 0 0 0 0
Effects of changes in exchange rates 0 0 0 0
Cumulative change due to fair value measurement – 14 – 25 0 0
Carrying amount at 31.12 165 275 4 12
The disposals at affiliated companies include 0 6 million of changes in the scope of consolidation.
Associated companies and joint ventures
Investments include 20 (previous year: 28) associated companies and joint ventures not carried at equity. Measurement is at cost in line with
IAS 39. This number includes two (previous year: two) associated companies measured under IFRS 5.
Companies not classified as associated entities despite a share of voting rights of more than 20 % due to immateriality and companies
classified as associated entities despite a share of voting rights of less than 20 % due to a material influence in the form of representation
on governing bodies are indicated in the list of investment holdings.
Summary of financial information on associated companies and joint ventures not carried at equity:
in u million
31.12.2007 31.12.2006 Change
in %
Total assets 382 492 – 22
Total liabilities 325 289 12
Revenue 256 325 – 21
Net profit for the year 8 – 4 > 100
40 Investments carried at equity
A total of three (previous year: three) associated companies, one (previous year: one) joint venture and two (previous year: zero) funds
were carried at equity and reported separately in the income statement and the balance sheet.
Companies not classified as associated entities despite a share of voting rights of more than 20 % due to immateriality and companies
classified as associated entities despite a share of voting rights of less than 20 % due to a material influence in the form of representation
on governing bodies are indicated in the list of investment holdings.
Investments carried at equity break down as follows:
in u million
31.12.2007 31.12.2006 Change
in %
Investments in banks 68 70 – 3
Investments in other companies 61 4 > 100
Total 129 74 74
142

The following table provides a summary of financial information on associates and joint ventures carried at equity:
in u million
31.12.2007 31.12.2006 Change
in %
Total assets 7,962 8,103 – 2
Total liabilities 7,458 7,732 – 4
Revenue 542 520 4
Net profit for the year 41 – 13 > 100
41 Intangible assets
in u million
31.12.2007 31.12.2006 Change
in %
Goodwill 595 571 4
Other internally generated intangible assets 6 8 – 25
Other acquired intangible assets 64 71 – 10
Total 665 650 2
Capitalised development costs amounted to 0 1 million (previous year: 0 2 million). Non-capitalisable research expenses for internally
generated software amount to 0 1 million (previous year: 0 1 million).
In the financial year, intangible assets developed as follows:
Goodwill Other internally generated
intangible assets
Other acquired
intangible assets
in u million 2007 2006 2007 2006 2007 2006 2007 2006
Carrying amount at 1.1 571 570 8 8 71 79 650 657
Additions 0 1 1 2 16 20 17 23
Additions from business combinations 24 0 0 0 4 0 28 0
Additions from internal development 0 0 0 0 0 0 0 0
Disposals 0 0 0 0 1 0 1 0
Reclassification 0 0 0 0 0 0 0 0
Write-downs 0 0 3 2 26 28 29 30
Impairment 0 0 0 0 0 0 0 0
Reversals of impairment losses 0 0 0 0 0 0 0 0
Effects of changes in exchange rates 0 0 0 0 0 0 0 0
Carrying amount at 31.12 595 571 6 8 64 71 665 650
For both the year under review and the previous year, the gross carrying amount of goodwill was the same as the respective carrying amount.
There was no amortisation of goodwill.
The gross carrying amount of other intangible assets is 0 255 million (previous year:0 237 million). Cumulative amortisation amounted
to 0 158 million at the beginning of the period and 0 185 million at the end of the period.
42 Property, plant and equipment
in u million
Consolidated Financial Statements
31.12.2007 31.12.2006 Change
in %
Land and buildings 448 473 – 5
Operating and office equipment 135 140 – 4
Total 583 613 – 5
Property, plant and equipment with a net carrying amount of 0 329 million (previous year: 0 344 million) is used in the context of finance leases.
Total
Notes
143

Notes to the Balance Sheet
The development of property, plant and equipment as against the previous year is as follows:
Land and buildings Operating and
office equipment
in u million 2007 2006 2007 2006 2007 2006
Carrying amount at 1.1 473 594 140 158 613 752
Additions – 6 16 23 22 17 38
Additions from business combinations 0 0 0 0 0 0
Disposals 0 79 4 3 4 82
Reclassification – 20 – 49 0 – 14 – 20 – 63
Write-downs 14 19 24 23 38 42
Impairment 0 0 0 0 0 0
Reversals of impairment losses 17 9 0 0 17 9
Effects of changes in exchange rates – 2 1 0 0 – 2 1
Carrying amount at 31.12 448 473 135 140 583 613
The gross carrying amount of owner-occupied land and buildings is 0 537 million (previous year: 0 651 million). Cumulative amortisation
amounted to 0 178 million at the beginning of the period and 0 89 million at the end of the period.
The gross carrying amount of operating and office equipment is 0 386 million (previous year: 0 391 million). Cumulative amortisation
amounted to 0 251 million at the beginning of the period and 0 251 million at the end of the period.
43 Investment property
This item relates to land and buildings used by third parties in line with IAS 40.
in u million
31.12.2007 31.12.2006 Change
in %
Undeveloped land 1 1 0
Developed land and buildings 81 82 – 1
Total 82 83 – 1
Investment property with a net carrying amount of 0 16 million (previous year: 0 47 million) is used in the context of finance leases.
Investment property developed as follows:
Investment property
in u million 2007 2006
Carrying amount as of 01.01. 83 183
Additions – 1 30
Additions – subsequent cost 0 0
Additions from business combinations 0 0
Disposals 21 104
Reclassification 20 – 10
Write-downs 3 17
Impairment 0 0
Reversals of impairment losses 4 1
Effects of changes in exchange rates 0 0
Carrying amount at 31.12 82 83
The gross carrying amount of investment property is 0 194 million (previous year: 0 116 million). Cumulative amortisation amounted to
0 33 million at the beginning of the period and 0 112 million at the end of the period. Fair values cannot be calculated owing to the lack
of current market data.
144
There is also a contractual obligation to acquire one property in 2008 at a purchase price of 0 64 million.
Total

44 Income tax assets
Income tax assets break down as follows:
in u million
31.12.2007 31.12.2006 1) Change
in %
Current taxes 85 128 – 34
Deferred taxes 800 798 0
Total 885 926 – 4
1) Figures for the previous year have been adjusted
Deferred tax assets reflect the potential income tax benefits of timing differences between the carrying amounts of assets and liabilities
in the IFRS consolidated balance sheet and the tax base in accordance with local tax laws for Group companies. In addition, deferred tax
assets are recognised on tax loss carryforwards if it is sufficiently likely that they will be utilised.
Deferred tax assets were recognised in connection with the following items (before netting):
in u million
31.12.2007 31.12.2006 1) Change
in %
Loans and advances to banks and customers less risk provisioning 629 450 40
Financial assets recognised at fair value 1 173 – 99
Financial assets 194 63 > 100
Property, plant and equipment and intangible assets 6 18 – 67
Other assets 6 18 – 67
Deposits by banks and amounts due to customers 18 3 > 100
Securitised debt 35 488 – 93
Negative fair value of derivative hedging instruments 153 189 – 19
Financial liabilities held at fair value 1,914 3,709 – 48
Provisions 132 102 29
Subordinated capital 38 47 – 19
Other liabilities 34 60 – 43
Loss carryforwards 294 209 41
Subtotal 3,454 5,529 – 38
Netted against deferred tax liabilities – 2,654 – 4,731 44
Total 800 798 0
1) Figures for the previous year have been adjusted
For the purposes of presentation in the balance sheet deferred tax assets and liabilities were netted at the level of the individual company or
the respective group of companies taking into account the operations in Income Tax Treaty States.
45 Other assets
in u million
31.12.2007 31.12.2006 Change
in %
Receivables from collateral provided 1,774 2,062 – 14
Trade receivables 59 63 – 6
Prepaid expenses 8 12 – 33
Other tax receivables (not including income tax assets) 2 5 – 60
Miscellaneous 72 128 – 44
Total 1,915 2,270 – 16
All reported assets are available at short notice.
Consolidated Financial Statements
Notes
145

Notes to the Balance Sheet
46 Non-current assets and groups of assets held for sale
in u million
31.12.2007 31.12.2006 Change
in %
Land and buildings used by third parties 8 22 – 64
Financial assets 58 88 – 34
Total 66 110 – 40
The assets and disposal groups classified as held for sale are being sold as part of the Bank’s long-term strategy of focussing on its core business
areas. The sale or transfer of ownership of the respective non-current assets and disposal groups is scheduled to take place in 2008.
There were no impairment requirements in the “assets held for sale” category.
Land and buildings used by third parties and financial assets – four investments and assets of another company – are included
in the “Real Estate Financing” and “Other” segments respectively.
47 Deposits by banks
in u million
31.12.2007 31.12.2006 Change
in %
Term and demand deposits 35,468 30,947 15
payable on demand 702 1,914 – 63
up to three months 31,854 23,217 37
between three months and one year 2,912 5,816 – 50
Mortgage bank pfandbriefs 385 434 – 11
up to three months 28 12 > 100
between three months and one year 112 5 > 100
between one and five years 134 246 – 46
more than five years 111 171 – 35
Other liabilities 14,833 17,554 – 16
payable on demand 196 952 – 79
up to three months 9,507 7,841 21
between three months and one year 1,347 3,674 – 63
between one and five years 2,523 3,758 – 33
more than five years 1,260 1,329 – 5
Total 50,686 48,935 4
These include 0 47,302 million (previous year: 0 46,158 million) of deposits by banks in Germany and 0 3,384 million (previous year:
0 2,777 million) of deposits by banks outside Germany. Liabilities are classed as in Germany or outside Germany on the basis of the
registered office of the subsidiary.
146
This item also includes deferred interest of 0 348 million (previous year: 0 302 million).

48 Amounts due to customers
in u million
31.12.2007 31.12.2006 Change
in %
Term and demand deposits 2,654 3,015 – 12
payable on demand 1,396 1,700 – 18
up to three months 1,073 928 16
between three months and one year 185 387 – 52
Mortgage bank pfandbriefs 3,830 2,862 34
up to three months 167 106 58
between three months and one year 71 29 > 100
between one and five years 1,247 1,204 4
more than five years 2,345 1,523 54
Savings deposits 7,033 6,942 1
up to three months 6,964 6,856 2
between three months and one year 14 13 8
between one and five years 50 67 – 25
more than five years 5 6 – 17
Other liabilities 16,035 15,548 3
payable on demand 6,660 6,484 3
up to three months 2,454 1,609 53
between three months and one year 594 1,093 – 46
between one and five years 2,420 2,724 – 11
more than five years 3,907 3,638 7
Total 29,552 28,367 4
These include 0 29,439 million (previous year: 0 28,261 million) of amounts due to customers in Germany and 0 113 million (previous
year: 0 106 million) of amounts due to customers outside Germany. Liabilities are classed as in Germany or outside Germany
on the basis of the registered office of the subsidiary.
In total, this item includes deferred interest of 0 309 million (previous year: 0 244 million).
The Group as lessee (finance leases)
The net carrying amounts of leased assets classified as the economic property of the Group amount to 0 345 million (previous year:
0 382 million).
Lease liabilities mainly relate to liabilities from long-term rental agreements (up to and including 2026) for offices and business premises
at Alexanderplatz, Gustav-Meyer-Allee / Brunnenstrasse, Prinzregentenstrasse, Hardenbergstrasse, Bismarck- / Wilmersdorfer Strasse and
Fasanenstrasse.
The buildings used by the Bank at Alexanderplatz and Prinzregentenstrasse (central buildings) and Brunnenstrasse (service centre)
are held by closed-end real estate funds launched by Group companies. The use of these facilities currently entails annual rent obligations
of 0 57 million for the Group (previous year: 0 58 million).
The total portfolio of liabilities includes finance lease liabilities of 0 618 million (previous year: 0 611 million).
The minimum lease payments are as follows:
in u million
31.12.2007 31.12.2006 1) Change
in %
less than one year 58 58 0
between one and five years 243 303 – 20
more than five years 904 967 – 7
Total 1,205 1,328 – 9
1) Figures for the previous year have been adjusted
Consolidated Financial Statements
Notes
147

Notes to the Balance Sheet
The discount amounts break down as follows:
in u million
31.12.2007 31.12.2006 1) Change
in %
less than one year 2 3 – 33
between one and five years 50 54 – 7
more than five years 522 573 – 9
Total 574 630 – 9
1) Figures for the previous year have been adjusted
The present value of the minimum lease payments (remaining maturities) breaks down as follows:
in u million
31.12.2007 31.12.2006 1) Change
in %
less than one year 56 55 2
between one and five years 193 249 – 22
more than five years 382 394 – 3
Total 631 698 – 10
1) Figures for the previous year have been adjusted
This is offset by future income from non-cancellable subletting agreements of 0 38 million (previous year: 0 42 million).
49 Securitised debt
The following table shows a breakdown of total securitised debt by type of financial instrument. Information on the carrying amount has
been disclosed for each category of securitised debt.
in u million
31.12.2007 31.12.2006 Change
in %
Bonds issued 30,035 32,186 – 7
Mortgage bonds 6,625 7,726 – 14
Public-sector pfandbriefe 15,291 14,588 5
Other bonds 8,119 9,872 – 18
Other securitised debt 482 172 > 100
Total 30,517 32,358 – 6
Other bonds include money market papers (e.g.: commercial papers, certificates of deposit and euro notes) and promissory notes.
Contractual remaining maturities of securitised debt:
in u million
31.12.2007 31.12.2006 Change
in %
up to three months 2,289 2,232 3
between three months and one year 5,417 5,108 6
between one and five years 12,912 17,409 – 26
more than five years 9,899 7,609 30
Total 30,517 32,358 – 6
148

Material issuances, repurchases and repayments of debt and equity securities in the 2007 financial year can be broken down as follows:
Category Currency
Nominal amount
(in million
currency units)
Issues Money market instruments GBP 1,970
Bonds EUR 6,460
Repayments Money market instruments GBP 2,000
Bonds EUR 6,315
Bonds DEM 473
Repurchases None
The total amount of securitised debt includes deferred interest of 0 528 million (previous year: 0 474 million).
No collateral was pledged for own debt in the financial year or the previous year.
50 Negative fair value of derivative hedging instruments
Hedging instruments with a negative fair value to which hedge accounting in line with IAS 39 was applied break down as follows:
in u million
31.12.2007 31.12.2006 Change
in %
Negative fair values of derivatives in micro fair value hedges 555 578 – 4
Negative fair values of derivatives in macro cash flow hedges 430 512 – 16
Total 985 1,090 – 10
51 Financial liabilities recognised at fair value through profit or loss
This item includes trading liabilities and investment book derivatives (HFT) and financial liabilities designated at fair value (FVO).
in u million
31.12.2007 31.12.2006 Change
in %
Trading liabilities 7,774 8,217 – 5
Financial investments designated at fair value (fair value option) 14,119 13,217 7
Total 21,893 21,434 2
Trading liabilities (HFT)
in u million
Consolidated Financial Statements
31.12.2007 31.12.2006 Change
in %
Obligations from short sales of securities 811 471 72
Negative fair value of trading book derivative financial instruments 5,432 5,797 – 6
Negative fair value of investment book derivative financial instruments 1,531 1,949 – 21
Total 7,774 8,217 – 5
Notes
149

Notes to the Balance Sheet
Breakdown of trading liabilities by contractual remaining maturity:
in u million
up to
three months
between
three months
and one year
between
one and five
years
more than
five years
Obligations from short sales of securities 470 0 80 261 811
Negative fair value of trading book derivative financial instruments 408 560 2,383 2,081 5,432
Negative fair value of investment book derivative financial instruments 144 129 626 632 1,531
Total 1,022 689 3,089 2,974 7,774
Financial liabilities designated at fair value (FVO)
in u million
31.12.2007 31.12.2006 Change
in %
Deposits by banks 465 390 19
Amounts due to customers 873 858 2
Securitised debt 12,604 11,787 7
Subordinated capital/hybrid capital 177 182 – 3
Total 14,119 13,217 7
Breakdown of fair value option financial liabilities (FVO) by contractual remaining maturity:
in u million
up to
three months
between
three months
and one year
between
one and five
years
more than
five years
Deposits by banks 0 20 370 75 465
Amounts due to customers 52 13 389 419 873
Securitised debt 566 2,095 5,787 4,156 12,604
Subordinated capital/hybrid capital 0 0 52 125 177
Total 618 2,128 6,598 4,775 14,119
The change in the fair values of the above items due to a change in the (Bank’s own) credit spread for 2007 amounts to 0 6 million
(previous year: 0 – 1 million).
In calculating the above amounts, liabilities were initially measured at the respective current credit spread on the balance sheet date.
The liabilities were then measured at the respective credit spread of the previous year’s balance sheet date. The portion of the change in fair
value relating to the change in (the Bank’s own) risk of default (credit spread) is therefore the difference between these two measurements.
The difference between the carrying amount of the financial liability and the greater amount to be repaid by the Bank on maturity as
contractually agreed was 0 809 million (previous year: 0 948 million). This includes the effect of zero bonds and zero promissory notes in
the amount of 0 612 million (previous year: 0 1,092 million) arising from the discounted payment typical for zero bonds and zero promissory
notes and repayment at the nominal amount. This is offset by 0 197 million (previous year: 0 144 million) from liabilities bearing current interest.
150
Total
Total

52 Provisions
Provisions break down as follows:
in u million
31.12.2007 31.12.2006 Change
in %
Pension provisions 842 920 – 8
Other provisions 428 543 – 21
Provisions for EU measures 21 32 – 34
Restructuring provisions 63 81 – 22
Provisions for risks from the lending business 35 74 – 53
Miscellaneous other provisions 309 356 – 13
Total 1,270 1,463 – 13
Provisions for pensions, restructuring and EU measures are predominantly not due within one year. Other provisions include amounts for staff
and other taxes. These are generally due within one year.
Pension provisions
Detailed information on provisions for pensions and similar obligations.
General information
In the Landesbank Berlin Holding Group, employees acquire rights and benefits from direct pension plans. The pension provisions required
to satisfy the obligations arising from these direct pension plans are recognised in the balance sheet accordingly.
Measurement method and actuarial assumptions
Provisions for retirement benefits are calculated annually by third-party actuarial experts using the projected unit credit (PUC) method in
accordance with IAS 19.64. This method sees each period of service as giving rise to an additional unit of the final benefit entitlement and
measures each unit separately to build up the final obligation.
Assets
Plan assets are recognised at fair value (IAS 19.102).
Consolidated Financial Statements
Recognition of actuarial gains and losses
In order to settle actuarial gains and losses, the Bank exercises the option to offset all gains and losses incurred in a reporting year against
equity (IAS 19.93A). As a result, actuarial gains and losses are shown in full in equity.
In financial year 2007, the effects in equity amount to 0 101 million (previous year: 0 – 20 million). In addition, actuarial gains and
losses of 0 – 7 million were offset against retained earnings in equity for Berliner Bank.
Pension obligations
a) Defined contribution plan
For one group of employees, the pension plan is an indirect defined contribution plan in which the employer pays set pension contributions
to third-party funds (pension funds and life insurance companies), possibly with the employee also contributing. In such cases, the amount
of future benefits is determined by the contributions paid and – for the non-guaranteed portion of benefits – the cumulative return on these
assets. As a result of the classification of this pension scheme, the contributions paid to third-party insurance funds are recognised as a
current expense; accordingly, no pension provisions are required to be recognised.
In the financial year, 0 595 thousand was recognised in the income statement as a current expense (previous year: 0 563 thousand).
Notes
151

Notes to the Balance Sheet
b) Defined benefit plan
There are several pension schemes of various methodologies in the Landesbank Berlin Holding. All pension plans are based on corresponding
collective service agreements or individual commitments contained in employment contracts (pension agreements). The key pension schemes are:
Group pension scheme (Plan 100)
Pension schemes for employees who joined the Company before 1 July 1988 (Plan 200)
Pension schemes for employees who joined the Company after 30 June 1988 (Plan 210)
Individual pension agreements (Plan 220/230)
Pension in accordance with the articles of association of the Versorgungsanstalt des Bundes und der Länder – VBL – (Plan 300)
Pension scheme for Landesbank Berlin (Plan 310)
Pension scheme dated 1 January 1984 (Berlin Hyp)
Pension scheme dated 30 December 1993 (Berlin Hyp)
Pension scheme of the former Berliner Industriebank (Plan 520/521)
These are essentially defined contribution systems (pension unit/points system), salary-based benefit systems (final salary pension plans)
and nominal amount systems (flat salary pension plans). Retirement, reduced working capacity earnings and surviving dependants’ pensions
are provided for depending on the occurrence of the insured event under the statutory pension scheme. There are no gender-specific or
age-based distinctions. The standard age limit is generally the employee’s 65th birthday, unless the age limit for the statutory pension
scheme is applied. Company pensions are paid for life; lump-sum benefits are not generally provided for. Benefits are adjusted in accordance
with agreed criteria (e.g. development of collective salary agreements) or under the duty to make adjustments in accordance with
Article 16 BetrAVG (German Company Pensions Act).
As at 31 December 1994, all collective pension schemes were closed for new entrants. Since 1 January 1995, direct pension
schemes for newly appointed employees have been defined in accordance with the regulations of the Group pension scheme.
There is an occupational pension scheme for Landesbank Berlin International S.A. (Luxemburg) and Landesbank Berlin AG, Luxemburg
branch. The obligation was spun off to a third-party insurance company. The scheme provides for retirement benefits and benefits for the
event of invalidity and for surviving dependents. The financing of this scheme is the responsibility for the employer only. The annual premiums
are calculated in line with German Commercial Code regulations. This is also a defined benefit system as the amount of benefits – irrespective
of the premiums paid – is ultimately based on the pensionable annual salary at the time of the occurrence of the insured event.
In the financial year, the effects on pension obligations of the act to adjust the age limit in line with demographic developments and
to strengthen the finance base of statutory pensions (RVAGAnpG) for all pension schemes were recognised in income as past service cost
(around 0 – 7 million).
Provident fund
The “Unterstützungskasse der Landesbank Berlin Holding AG e.V.” provident fund is a legally independent pension institution in the legal
form of a registered association. It was formed in 1952 and has the sole purpose of providing its members with benefits (pensions due to
old age, reduced earnings capacity, pensions for surviving dependents). The provident fund is financed in accordance with the principles
of Article 4d EStG, which defines the scope and permissibility of allocations/voluntary grants by sponsoring companies and the amount
of cash assets permissible under tax regulations.
As at 1 July 1999, the method of performance for occupational pension schemes in the Group was harmonised. From this date
onwards, ongoing company pensions in the Group are financed exclusively from the pension provisions of the companies. Members receiving
ongoing benefits from the provident fund prior to the above date were not affected by this.
As at 31 December 2007, 913 pensions were receiving monthly benefits from the provident fund. The cash assets of the provident
fund (all sponsoring companies) as at 31 December 2007 amounted to around 0 22.7 million (previous year: around 0 25.6 million).
152

Actuarial assumptions
Economic assumptions
31.12.2007 31.12.2006
Interest rate 5.70 % 4.50 %
Salary trend 2.50 % – 3.00 % 2.50 % – 3.00 %
Pension trend (individually by pension plan) 1.00 % – 3.00 % 1.00 % – 2.50 %
Development of income threshold in statutory pension scheme (BBG) 1.00 % – 2.50 % 1.00 % – 2.50 %
Asset yields (provident fund only) 4.93 % 3.91 %
Fluctuation (total asset holdings)
Up to age of 30 5.00 % 5.00 %
Up to age of 40 3.00 % 3.00 %
Up to age of 50 1.00 % 1.00 %
From 50 and upwards 0.00 % 0.00 %
Demographic assumptions
Pension age: Earliest possible start of pension in statutory pension scheme in accordance with RVAGAnpG
Biometric risks: Prof. Heubeck tables, 2005 G IGSS mortality tables (Luxemburg)
Structure of provisions for pensions
in u million 31.12.2007 31.12.2006
Present value of funded pension provisions (DBO) 26 28
Less fair value of plan assets – 23 – 26
3 2
Present value of non-funded pension provisions (DBO) 839 918
Total 842 920
Development of provisions for pensions
in u million 2007 2006
Provisions for pensions as at 1 January 920 915
Current service cost 23 25
Past service cost – 7 0
Interest cost 42 40
Expected return on plan assets – 1 – 1
Pension benefits paid in reporting year – 34 – 32
Changes in the scope of consolidation 0 – 54
Actuarial gain / loss – 101 27
Provisions for pensions as at 31 December 842 920
Development of pension obligations (DBO)
Consolidated Financial Statements
in u million 2007 2006
Pension obligations as at 1 January 946 943
Current service cost 23 25
Past service cost – 7 0
Interest cost 42 40
Pension benefits paid in reporting year – 37 – 36
Changes in the scope of consolidation 0 – 53
Actuarial gain / loss – 102 27
Pension obligations as at 31 December 865 946
Notes
153

Notes to the Balance Sheet
The provisions for pensions and similar obligations in the Group – including actuarial gains and losses – declined by 0 78 million to
0 842 million (previous year: 0 920 million).
Structure of plan assets
The structure of plan assets shown relates solely to the provident fund.
in % 2007 2006
Bonds
Fixed-income 74.2 84.4
Non-fixed income 4.5 4.0
Shares, investment certificates, options
Domestic 16.9 6.2
International 3.7 5.1
Bank balances 0.7 0.3
Other assets 0.0 0.0
Total 100.0 100.0
The expected return on plan assets is derived from current returns for the financial year for the various asset classes, taking into consideration
their weighting in total assets.
Development of plan assets
The plan assets consist of the assets of the provident fund (0 22.5 million) and three direct insurance policies (0 0.4 million).
in u million 2007 2006
Fair value of plan assets as at 1 January 26 28
Expected return on plan assets 1 1
Actuarial gain / loss – 1 0
Pension payments – 3 – 3
Fair value of plan assets as at 31 December 23 26
Current income from plan assets amounts to 0 – 81 thousand (previous year: 0 1,132 thousand).
The assets of the provident fund include fixed-income debt securities of a subsidiary in the amount of 0 2.4 million (previous year:
0 2.4 million) and non-fixed-income securities of 0 0.1 million (previous year: 0 0 million).
Actuarial gains and losses offset against shareholders’ equity
in u million 2007 2006
Actuarial gains / losses
Financial year 101 – 20
Cumulative previous years – 143 – 123
Total – 42 – 143
Summary of amounts recognised in the income statement
in u million 2007 2006
Current service cost 23 25
Past service cost – 7 0
Interest cost 42 40
Expected return on plan assets – 1 – 1
Total 57 64
These amounts are all reported in the income statement under administrative expenses.
154

Overview of key data for the financial year and the maximum four preceding years
in u million 2007 2006 2005 2004
Pension obligation (DBO) 865 946 943 780
Plan assets 23 26 28 29
Actuarial gains and losses 101 – 20 1) – 86 – 37
in %
Experience adjustments to:
DBO 12.5 2) – 0.75
Plan assets – 5.0 1.4
1) Not including Berliner Bank
2) Relates almost exclusively to the effects of changes in actuarial assumptions
Expected future receipts and payments
in u million 2008 2007
Payments into plan assets (provident fund) 0 0
Expected direct pension payments – 34 – 33
Pension-related obligations also include obligations for early retirement plans and partial retirement plans, which are also calculated on an
actuarial basis. As at 31 December 2007, calculations were based on an interest rate of 4.8 % (previous year: 3.8 %). These obligations are
reported under “Other provisions”.
Other provisions
in u million 2007 2006 1)
As of 1.1 543 758
Additions 129 132
Utilisation 144 149
Reversals 122 132
Reclassification 15 – 41
Change in scope of consolidation 0 – 31
Interest effects 7 6
As of 31.12 428 543
1) Figures for the previous year have been adjusted
Of which: provision for EU measures
in u million 2007 2006 1)
As of 1.1 32 108
Additions 0 0
Utilisation 6 13
Reversals 6 38
Reclassification 0 – 31
Change in scope of consolidation 0 4
Interest effects 1 2
As of 31.12 21 32
1) Figures for the previous year have been adjusted
Consolidated Financial Statements
Notes
155

Notes to the Balance Sheet
Of which: restructuring provisions
in u million 2007 2006 1)
As of 1.1 81 91
Additions 1 3
Utilisation 8 27
Reversals 8 3
Reclassification – 6 16
Change in scope of consolidation 0 – 1
Interest effects 3 2
As of 31.12 63 81
1) Figures for the previous year have been adjusted
Of which: provisions for risks from the lending business
in u million 2007 2006
As of 1.1 74 138
Additions 14 25
Utilisation 10 2
Reversals 46 39
Reclassification 3 – 41
Change in scope of consolidation 0 – 7
As of 31.12 35 74
Of which: miscellaneous other provisions
in u million 2007 2006 1)
As of 1.1 356 421
Additions 114 104
Utilisation 120 107
Reversals 62 53
Reclassification 18 15
Change in scope of consolidation 0 – 26
Interest effects 3 2
As of 31.12 309 356
1) Figures for the previous year have been adjusted
53 Income tax liabilities
Income tax liabilities break down as follows:
in u million
31.12.2007 31.12.2006 1) Change
in %
Current taxes 199 167 19
Deferred taxes 32 73 – 56
Total 231 240 – 4
1) Figures for the previous year have been adjusted
156

Deferred tax liabilities reflect the potential income tax charges arising from timing differences between the carrying amounts of assets and
liabilities in the IFRS consolidated balance sheet and the tax base in accordance with local tax laws for Group companies. Deferred tax
liabilities were recognised in connection with the following items (before netting):
in u million
31.12.2007 31.12.2006 1) Change
in %
Loans and advances to banks and customers less risk provisioning 16 43 – 63
Positive fair value of derivative hedging instruments 110 101 9
Financial assets recognised at fair value 1,719 3,277 – 48
Financial assets 11 98 – 89
Property, plant and equipment and intangible assets 114 190 – 40
Other assets 153 216 – 29
Deposits by banks and amounts due to customers 441 375 18
Securitised debt 86 74 16
Provisions 3 10 – 70
Other liabilities 33 420 – 92
Subtotal 2,686 4,804 – 44
Netted against deferred tax assets – 2,654 – 4,731 – 44
Total 32 73 – 58
1) Figures for the previous year have been adjusted
For the purposes of presentation in the balance sheet deferred tax assets and liabilities were netted at the level of the individual company or
the respective group of companies taking into account international operations.
54 Other liabilities
in u million
31.12.2007 31.12.2006 Change
in %
Liabilities from collateral received 675 821 – 18
Trade payables 69 177 – 61
Deferred income 98 117 – 16
Other tax liabilities (excluding income taxes) 4 4 0
Miscellaneous 172 659 – 74
Total 1,018 1,778 – 43
All liabilities are to be met in the short term.
55 Liabilities allocated to groups of assets held for sale
in u million
Consolidated Financial Statements
31.12.2007 31.12.2006 Change
in %
Deposits by banks 0 8 – 100
Amounts due to customers 1 0 x
Total 1 8 – 88
The reported item includes the liabilities of a company held for sale (see note 46). The disposal of this company relates to the Bank’s strategy
of focusing on its core business areas.
Notes
157

Notes to the Balance Sheet
56 Subordinated capital
in u million
31.12.2007 31.12.2006 Change
in %
Subordinated liabilities 2,459 2,628 – 6
up to three months 23 149 – 85
between three months and one year 224 14 > 100
between one and five years 1,948 1,743 12
more than five years 264 722 – 63
Profit participation certificates 4 0 x
up to three months 4 0 x
Dormant participations of the State of Berlin 700 700 0
up to three months 0 0 0
between three months and one year 0 0 0
between one and five years 0 0 0
more than five years 700 700 0
Total 3,163 3,328 – 5
In accordance with Article 10 (5a) KWG, subordinated liabilities count as equity for regulatory purposes. Subordination refers to the order
in which creditors’ claims are satisfied in the event of insolvency or liquidation. In such cases, subordinated liabilities are only repaid after
the claims of all prior creditors have been satisfied.
Interest expenses of 0 51 million (previous year: 0 78 million) were reported for dormant participations. Two dormant participations
of 0 1,100 million, which were contributed by the State of Berlin in 2004 in connection with the spin-off of Investitionsbank Berlin (IBB),
were reported as dormant participations in the previous year. Effective 31 December 2006, partial repayments totalling 0 400 million were
paid by Landesbank Berlin AG to the State of Berlin for the dormant participations. Prior to payment, this amount was reported under other
liabilities. The remaining dormant participation of 0 700 million was transferred from the State of Berlin to S-Erwerbsgesellschaft effective
1 January 2008. The profit-related interest rate for this is 7.22 %. The earliest date at which the Bank can terminate this relationship is
31 December 2014.
57 Shareholders’ equity
in u million
31.12.2007 31.12.2006 1) Change
in %
Issued capital 2,554 2,554 0
Capital reserves 77 77 0
Retained earnings – 143 – 395 64
Legal reserves 13 7 86
Other retained earnings – 156 – 402 61
Currency translation reserve – 2 1 < – 100
Revaluation reserve – 182 137 < – 100
Revaluation reserve (AFS) – 275 164 < – 100
Revaluation reserve (CFH) 16 48 – 67
Revaluation reserve for deferred taxes 77 – 75 > 100
Minority interests 414 97 > 100
Unappropriated surplus / accumulated loss 113 153 – 26
Total 2,831 2,624 8
1) Figures for the previous year have been adjusted
158

Other Notes
58 Adjustments due to changes in accordance with IAS 8
Adjustments were made in line with IAS 8.42 in the annual financial statements as at 31 December 2006 and the interim financial statements
as at 31 March, 30 June and 30 September 2007. The adjustment of an old matter resulted in the following adjustment to the figures for the
previous year as at 31 December 2006:
Movable equipment leases
The financing expense for one movable leased item was recognised in the consolidated financial statements for the first time in 2007.
The subsequent recognition resulted in an increase in interest expenses in 2006 of 0 1.1 million.
As at 31 December 2007, a new matter resulted in further adjustments:
Reversal of impairment losses on receivables
In financial year 2007, the method for determining full reversals of impairment losses on receivables was developed further. The method
allows the precise identification of the relevant receivables and the quantification of the corresponding amounts. In connection with the
use of this method, reversals of impairment losses were also identified relating to 2006 (0 5.3 million) and 2005 (0 1.4 million). In this context,
matters were also identified for 2006 (0 0.7 million) that were also adjusted at the same time to allow correct presentation of the development
of risk provisioning.
Deferred taxes
The above earnings adjustments, including the downstream effects of the adjustment made in the previous year, resulted in a net deferred
tax expense of 01.4 million in the comparative income statement as at 31 December 2006 and a reduction in the retained earnings in
equity in the amount of 01.0 million.
The above adjustments had the following effect on the comparative figures for the income statement as at 31 December 2006 (after calculation
of deferred taxes on the adjustments):
Income statement 2006
in u million
Published
consolidated
financial
statements
Adjustment
Consolidated
financial
statements
after
adjustment 1)
Interest expenses 2) 4,685 1 4,686
Allowance for losses on loans and advances 3) 123 5 118
Operating result before restructuring 745 4 749
Restructuring expenditure and income (net) 35 – 35
Net profit before taxes 780 4 784
Income tax expense 4) 95 2 97
Earnings after taxes 685 2 687
1) Before change in reporting for trade-induced interest (0 106 million; see note 3)
2) Due to movable leased item
3) Due to reversal of impairment losses
4) Due to deferred taxes
These adjustments have no effect on the previous year’s earnings per share.
In connection with the above adjustments, we corrected the 2006 comparative figures for the relevant balance sheet items as follows:
Balance sheet as at 31.12.06
in u million
Published
consolidated
financial
statements
Adjustment
Consolidated
financial
statements
after
adjustment
Loans and advances to customers 1) 50,898 6 50,904
Deferred income tax liability 2) 71 2 73
Retained earnings 1) 2) – 399 4 – 395
1) Due to reversal of impairment losses
2) Due to deferred taxes
Consolidated Financial Statements
Notes
159

Other Notes
The following adjustments were also made:
Fair values
In determining the fair values for loans and advances to banks and customers and deposits by banks and amounts due to customers as at
31 December 2006 (note 75 in the Annual Report as at 31 December 2006), no fair value was stated for reclassified finance lease liabilities.
In addition, balances not relating to customer accounts (real accounts) were not taken into account. The corresponding figures for the
previous year were adjusted in the fair value table (note 62).
Calculation of present value of finance leases
In the previous year, the present value was calculated as of the start of the respective lease rather than as of the balance sheet date. At the
same time, the stated amounts were corrected for delivery payments for two items. The corresponding figures for the previous year were
adjusted under “The Group as lessee” (note 48).
The 2006 comparative figures for segment reporting, which were also adjusted, and other method-related changes made in the segments
are presented in note 6.
59 Trust activities
Trust activities, which are not reported in the balance sheet, existed as follows at the balance sheet date:
in u million
Loans and advances to customers
31.12.2007 31.12.2006 Change
in %
343 413 – 17
Trust assets 343 413 – 17
Deposits by banks 3 2 50
Amounts due to customers 340 411 – 17
Trust liabilities 343 413 – 17
60 Contingent liabilities and similar obligations
The following items were not recognised as expenses. They describe current obligations of the Group in which an outflow of economic
resources to settle the obligations is not likely or the amount / settlement date of the obligation cannot be reliably determined.
Risk provisioning for contingent liabilities was deducted from the corresponding item. A possible default from irrevocable loans
commitments was taken into consideration by the recognition of a portfolio-based allowance for impairment losses, which was reported
under risk provisioning (note 36).
Quantifiable
in u million
31.12.2007 31.12.2006 Change
in %
Contingent liabilities from guarantees and warranties 4,399 1,402 > 100
Credit guarantees 2,334 868 > 100
Letters of credit 52 41 27
Other guarantees 2,013 493 > 100
Irrevocable loan commitments (current account credits, guarantee loans,
public-sector / mortgage loans, other irrevocable loan commitments) 5,402 4,606 17
Other contingent liabilities (checks, bills) 59 29 > 100
Total 9,860 6,037 63
As at 31 December 2007, contingencies from rental guarantees in the Group still amounted to 0 1,153 million (previous year: 0 499 million).
Under the terms of the detailed agreement, the Group is largely exempted from these contingencies by the State of Berlin.
160

Liability for the joint and several liability of various companies agreed for some cases in the detailed agreement with the State of Berlin was
allocated internally by way of an agreement dated August 2002, supplemented in August 2004. This provides for a partial reimbursement of
costs, largely in line with the investments in the company with which liability originated.
The detailed agreement also includes provisions relating to a debtor warrant, which is designed as a partial profit transfer agreement
with a term of 15 years and based on defined equity ratios. In exchange for protection from risks, a fixed amount of 0 15 million is to be paid
annually to the State of Berlin, starting from the 2002 financial year and initially continuing up to and including 2011. Negotiations will then
be reopened. These costs were also allocated on the basis of the agreement dated August 2002, supplemented in August 2004, providing
for the reimbursement of the costs by Landesbank Berlin AG, Berlin-Hannoversche Hypothekenbank AG and Investitionsbank Berlin in
accordance with the volume ratios of the banks’ loans protected by the loan guarantee.
In the year under review, the additional funding obligations from investments in the amount of 0 13 million (previous year: 0 13 million)
relate solely to the investment in Liquiditätskonsortialbank GmbH. There are also payment obligations for investments of 0 10 million
(previous year: 0 3 million).
In the case of four closed-end real estate funds, Group companies are obliged to acquire the limited partners’ units on request.
These obligations have a total nominal (100 %) amount of 0 188 million. The redemption values may be up to 115 % or 0 216 million of the
nominal obligations if the rights of tender are not exercised before 2024.
Like other Landesbanks and the Deutscher Sparkassen- and Giroverband, corporation under public law, Landesbank Berlin AG
was a guarantor of DekaBank Deutsche Girozentrale. On 30 November 2002, Landesbank Berlin sold its shares in DekaBank. The obligations
of Landesbank arising from the Anstaltslast (maintenance obligation) and Gewährträgerhaftung (guarantee obligation) that it assumed
for DekaBank ended as of the date of the sale with effect for the foreseeable future. Landesbank continues to have a guarantee obligation
for liabilities arising prior to that date.
The contributions for the Sicherungsreserve der Landesbanken und Girozentralen were measured in line with risk-oriented principles. As
of the end of the year, this resulted in an obligation to make a supplementary contribution on the part of Landesbank Berlin AG of 0 134.6 million.
In the event of support being required, these contributions can be called up immediately.
The Bank achieved the agreed minimum acceptance quantities in the IT service agreements with FinanzIT GmbH (FinanzIT) and
Siemens Business Services Management GmbH (SIS).
Non-quantifiable
In accordance with Article 5 (10) of the Statutes of the Deposit Guarantee Fund, Landesbank Berlin Holding AG is obliged to exempt
Bundesverband deutscher Banken e.V. in the event of any losses that may occur as a result of measures taken for Berlin-Hannoversche
Hypothekenbank AG.
The main contingent liabilities relating to litigation or legal risks are as follows:
Indemnity declarations by LBB and IBG,
Disposal of the shares in Allgemeine Privatkundenbank Aktiengesellschaft (Allbank),
Risks from the implementation of the detailed agreement and the disposal of the key Group real estate companies to the State of Berlin and
Prospectus liability proceedings with regard to the closed-end real estate funds (IBV investment funds) and proceedings instigated by
a fund company.
Consolidated Financial Statements
On 10 and 13 December 2007, DSGV and LBB signed an agreement to settle a dispute concerning the use of DSGV’s brands and the
membership of LBB in DSGV. The settlement has since received the necessary approval by the relevant executive bodies and has become
effective. The dispute has been resolved. In line with the settlement, LBB is a member of DSGV and is authorised to use its brands.
There are also contingent assets arising from litigation, the amount of which cannot be reliably measured at the current time.
Therefore, no figure has been disclosed in accordance with IAS 37.92.
Further information on legal risks can be found in the management report in the risk report section.
As part of the Joint Liability Scheme of the Savings Bank Finance Group, the Bank participated in support activities for IKB Deutsche
Industriebank AG. In addition, it is involved in a concerted action by the German Savings Banks’ and Giro Association (DSGV) for SachsenLB.
Notes
161

Other Notes
Letters of comfort
Landesbank Berlin AG ensures that its subsidiaries, as defined by Article 290 (1) and 2 HGB indicated as currently covered in the list of
shareholdings in accordance with Article 313 (2) HGB, can meet their obligations, with the exception of political risks, in the amount of its
(calculated) investment rate in these companies.
In addition, Landesbank Berlin AG bears all liabilities and obligations of the above letters of comfort expressly issued by the former
Bankgesellschaft Berlin AG (now Landesbank Berlin Holding AG), Berlin, to a specific creditor of IDLG Immobiliendienstleistungen GmbH,
Berlin, and the former Mario Göhr Grundstücks GmbH, Berlin, (merged to form GfBI Gesellschaft für Beteiligungen und Immobilien mbH,
Berlin in 2007). In the case of IDLG Immobiliendienstleistungen GmbH, this letter of comfort is limited until 30 June 2015; for the liabilities
and obligations of the former Mario Göhr Grundstücks GmbH assumed by GfBI Gesellschaft für Beteiligungen und Immobilien GmbH, this
applies until no later than 31 December 2010.
61 Risk management
The purpose of the disclosure requirements under IFRS is to ensure that readers of the financial statements have a comprehensive overview
of the risk situation of the Group, thus giving them a better understanding of the effects of financial instruments on the net assets, financial
position and results of operations.
The information required by IFRS 7 on the nature and extent of risks arising from financial instruments and their management can
be found in the risk report in the management report
62 Fair values of financial instruments
Fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm’s
length transaction. Quoted market prices are used if available. Otherwise, fair values are calculated using investment techniques, and in
particular the discounted present value method and the option pricing model. The parameters included in calculation are based on market
conditions at the reporting date.
Below, there is a list comparing the fair values and carrying amounts for each class of financial instruments carried in the balance
sheet (in full or in part) at amortised cost:
Fair value Carrying amount Difference
in u million 31.12.2007 31.12.2006 1) 31.12.2007 31.12.2006 1) 31.12.2007 31.12.2006
Assets
L&R 75,172 79,423 74,937 78,028 235 1,395
Loans and advances to banks 25,949 27,362 25,978 27,312 – 29 50
Loans and advances to customers 44,028 47,774 43,618 46,441 410 1,333
Financial assets 5,196 4,287 5,341 4,275 – 145 12
AFS 47,865 42,945 47,865 42,945 0 0
Loans and advances to banks 527 1,032 527 1,032 0 0
Loans and advances to customers 1,983 2,650 1,983 2,650 0 0
Financial assets 45,355 39,263 45,355 39,263 0 0
Total 123,037 122,368 122,802 120,973 235 1,395
Liabilities and shareholders' equity
OL
Deposits by banks 50,734 49,137 50,686 48,935 48 202
Amounts due to customers 2) 28,438 27,435 29,552 28,367 – 1,114 – 932
Amounts due to customers 3) 29,569 28,557 29,552 28,367 17 190
Securitised debt 30,424 32,331 30,517 32,358 – 93 – 27
Subordinated capital incl. dormant participations 3,134 3,368 3,163 3,328 – 29 40
Total 2) 112,730 112,271 113,918 112,988 – 1,188 – 717
Total 3) 113,861 113,393 113,918 112,988 – 57 405
1) Figures for the previous year have been adjusted
2) including theoretical tax scenarios for variable financial instruments
3) not including theoretical tax scenarios for variable financial instruments
Fair values cannot be determined for certain equity instruments in financial assets or off-balance sheet transactions and have therefore not
been reported.
162

For fair value category financial instruments (HFT and FVO) and hedging derivatives the carrying amounts are equal to the fair values; these
transactions are therefore not shown in the above table and can be found under the appropriate note.
Methods and assumptions used in calculating fair values
HFT and FVO financial instruments and hedging derivatives
In line with the measurement hierarchy of IAS 39, the fair values of trading financial instruments and investment book derivatives (HFT) and
hedging derivatives are primarily calculated on the basis of stock market and broker prices. If these amounts do not exist, fair value measurement
relies on standard market measurement models using market parameters specific to the financial instruments. The latter applies to all
OTC derivatives.
Receivables and liabilities recognised under the fair value option are generally measured using stock market prices. The fair values
of promissory note loans and selected FVO bonds are determined using standard, recognised measurement models.
AFS receivables and financial assets
Securities not held for trading, investments and affiliated companies reported as financial assets and some loans for which there is an active
market are assigned to the AFS category. Their fair value is determined on the basis of exchange or market prices. If the fair value cannot
be reliably determined they are recognised at cost. The latter predominantly applies to non-listed shares in companies.
L&R receivables and financial assets
The Group carries loans made directly to debtors and receivables due directly from debtors, acquired loans and receivables and ABS securities
not traded on an active market at amortised cost – taking into account any impairment. The fair values stated here are generally calculated
using standard measurement models. Market-based measurement factors are generally used; internal estimates relating to probabilities of
default based on internal ratings and product-specific maturities are only used in the model for amounts due from customers. For impaired
receivables, cash flow profiles are derived on the basis of the collateral provided and realisation periods and expectations of future payments
and costs. The recoverable amount and therefore the fair value are determined by adding the discounted cash flows as at the measurement
date.
Liabilities, securitised debt and subordinated capital (OL category)
Deposits by banks and amounts due to customers, securitised debt and subordinated capital are carried at amortised cost. The fair values
for liabilities – of there are no market prices for these or securitised debt – are determined using standard, recognised measurement models.
The measurement model is specified further for variable products as theoretical scenarios validated by past observations are also included
here. In line with IAS 39.49, the above table (footnote 3) compares the fair values without these theoretical scenarios.
The fair values of subordinated capital including dormant participations are based on the present value method using the current
market interest rate and appropriate risk premiums.
63 Assets pledged as collateral
Financial assets pledged as collateral include the following items (carrying amounts):
in u million
Consolidated Financial Statements
31.12.2007 31.12.2006 Change
in %
Loans and advances to banks 3,873 4,950 – 22
Loans and advances to customers 6,186 6,722 – 8
Financial assets recognised at fair value through profit or loss 1,040 1,286 – 19
Financial assets 31,073 30,326 2
Other assets 1,281 1,556 – 18
Collateral was pledged in the context of standardised master agreements (in line with ISDA and the German Master Agreement for Financial
Derivatives Transactions), as is standard practice in international banking.
There was no collateral that the Group received and can use if the event of the secured party not defaulting.
Notes
163

Other Notes
64 Volume of foreign currency items
in u million USD JPY GBP Others
31.12.2007
Total
31.12.2006
Total
Change
in %
Assets
Cash 0 0 1 0 1 0 0
Loans and advances to banks 4,494 8 491 541 5,534 2,174 > 100
Loans and advances to customers 566 15 392 674 1,647 1,315 25
Allowance for losses
on loans and advances – 27 0 0 0 – 27 0 0
Financial assets recognised
at fair value through profit or loss 2,495 194 1,196 1,555 5,440 620 > 100
Financial assets 3,223 77 1,350 51 4,701 3,965 19
Other items 264 4 41 1 310 150 > 100
Foreign currency assets 11,015 298 3,471 2,822 17,606 8,224 > 100
Liabilities and shareholders’ equity
Deposits by banks 3,059 3 1,183 1,111 5,356 4,757 13
Amounts due to customers 117 0 204 10 331 693 – 52
Securitised debt 680 6 371 0 1,057 1,820 – 42
Other items including financial
liabilities recognised at fair value
through profit or loss 2,139 806 967 1,548 5,460 1,473 > 100
Foreign currency liabilities 5,995 815 2,725 2,669 12,204 8,743 40
65 Related party disclosures
In line with the agreement of 18 February 2004 with the European Commission (EU assistance ruling), the State of Berlin sold its majority
investments in Landesbank Berlin Holding AG in financial year 2007. Effective 8 August 2007, Erwerbsgesellschaft der S-Finanzgruppe
mbH & Co. KG (hereafter: S-Erwerbsgesellschaft) acquired all shares held by the State of Berlin (around 81% of shares in the Holding),
thereby becoming the new majority owner.
Thus, the Landesbank Berlin Holding Group’s related parties in line with IAS 24 include the groups
the State of Berlin and the sphere of interests of the State of Berlin (until 7 August 2007),
S-Erwerbsgesellschaft and (as the general partner of S-Erwerbsgesellschaft) Regionalverbandsgesellschaft mbH – RVG
(from 8 August 2007),
the subsidiaries of the Holding and companies over which the Group is able to exercise a significant influence and
natural person in key positions at LBB and the Holding, particularly the members of the Board of Management and the Supervisory
Board, and the managing directors of the controlling parent companies.
Transactions and legal ties with the majority owners of the Holding
Business relations with the State of Berlin and investments majority owned by the State in private and public law companies
for the period from 1 January 2007 to 7 August 2007
Until 7 August 2007, the State of Berlin held around 81% of the shares of Landesbank Berlin Holding AG, and is therefore considered to
represent a related party in accordance with IAS 24. The Company had business and legal relationships with the State of Berlin and its
sphere of interests.
In the period under review, the following companies were majority owned by the State of Berlin and therefore fell within the sphere of
interests of the State of Berlin and were considered related parties as defined by IAS 24 until the disposal of the shares in the Holding:
164

Investments of the State of Berlin in private law companies:
BBB Infrastruktur GmbH & Co. KG
BBB Infrastruktur-Verwaltungs GmbH
BCIA Berliner Gesellschaft zum Controlling der Immobilien-Altrisiken mbH
BEHALA Berliner Hafen- und Lagerhausgesellschaft mbH
Berliner Großmarkt GmbH
BIH Berliner Immobilien Holding GmbH und Tochtergesellschaften (including LPFV, IBG, BAVARIA, ARWOBAU, IBV)
Berliner Immobilienmanagement GmbH
Berliner Werkstätten für Behinderte GmbH (BWB)
Berlinwasser Holding AG
Betriebsgesellschaft Stadtgüter Berlin mbH
BGZ Berliner Gesellschaft für internationale Zusammenarbeit mbH
BSGM Berliner Stadtgutliegenschafts-Management GmbH
BSGM Berliner Stadtgutliegenschafts-Management GmbH & Co. Grundstücks KG
DEGEWO Deutsche Gesellschaft zur Förderung des Wohnungsbaues gemeinnützige AG
Deutsche Film- und Fernsehakademie Berlin GmbH
Friedrichstadtpalast Betriebsgesellschaft mbH
Gemeinnützige Wohnungsbau-Aktiengesellschaft Berlin (GEWOBAG)
GESOBAU AG
Grün Berlin Park und Garten GmbH
Hebbel-Theater Berlin GmbH
HOWOGE Wohnungsbaugesellschaft mbH
Kinder- und Jugendfreizeitzentrum Wuhlheide – Landesmusikakademie – gGmbH
Kulturprojekte Berlin GmbH
Liegenschaftsfonds Berlin GmbH & Co. KG
Liegenschaftsfonds Berlin Projektgesellschaft mbH & Co. KG
Liegenschaftsfonds Berlin Verwaltungsgesellschaft mbH
Messe Berlin GmbH
Olympiastadion Berlin GmbH
STADT UND LAND Wohnbauten-Gesellschaft mbH
Vivantes – Netzwerk für Gesundheit GmbH
Wasserstadt GmbH Treuhänderischer Entwicklungsträger des Landes Berlin
WBM Wohnungsbaugesellschaft Berlin-Mitte mbH
WISTA-MANAGEMENT GMBH
Investments of the State of Berlin in public law companies:
Berliner Bäder-Betriebe Anstalt des öffentlichen Rechts
Berliner Stadtreinigungsbetriebe Anstalt des öffentlichen Rechts (BSR)
Berliner Verkehrsbetriebe Anstalt des öffentlichen Rechts (BVG)
Berliner Wasserbetriebe Anstalt des öffentlichen Rechts (BWB)
BF Rückversicherung Anstalt des öffentlichen Rechts
Deutsche Klassenlotterie Berlin Anstalt des öffentlichen Rechts
Investitionsbank Berlin Anstalt des öffentlichen Rechts (IBB)
IT-Dienstleistungszentrum Berlin Anstalt des öffentlichen Rechts
Consolidated Financial Statements
The Landesbank Berlin Holding Group is largely shielded by the “Detailed agreement on the shielding of the Bankgesellschaft Group from
material risks of Real Estate Services” (DetA) by the State of Berlin dated 16 April 2002. Among other things, the shielding relates to certain
letters of comfort and the loans issued by Group banks to certain Real Estate Services companies. For assuming the various guarantees, the
Holding is to pay guarantee commission of 0 15 million p.a. until at least 2011 inclusively. In addition, a debtor warrant was agreed that carries
with it certain conditions, the costs of which are also to be borne by the Holding as the principal beneficiary of the detailed agreement.
Notes
165

Other Notes
The assets and contracts not intended for sale were taken on by companies remaining in the Group. In particular, this includes the transfer
of the assets of BIH by way of its hiving off to GfBI Gesellschaft für Beteiligungen und Immobilien mbH (GfBI) and the separation of items on
the Extended Negative List from various RES companies for inclusion in GfBI Immobilien Solutions GmbH (GfBI IS). Among other things, GfBI
still held receivables from companies transferred to the State of Berlin (mainly BIH und Bavaria Objekt- und Baubetreuung GmbH (BOB) i.L.).
These Group receivables were bought by Landesbank Berlin AG in August 2006 (BOB i.L. 0 66 million) and May 2007 (BIH 0 25 million).
The risks remaining with the Group and those assigned to GfBI or its subsidiaries that could result from the regulations of the
detailed agreement to be observed, in particular, by Group banks are countered by procedures agreed jointly with the controlling company
formed by the State of Berlin (BCIA) and through appropriate risk management systems. The risks remaining in the Holding and allocated to
Gesellschaft für Beteiligungen und Immobilien mbH (GfBI) and its subsidiary, in particular, the items on the Extended Negative List and other
items not covered by the detailed agreement are processed centrally at GfBI and are managed and monitored there through an appropriate
risk management and control system.
On account of the purchase agreement of 19 December 2005, the key factors of equity resources and business performance
determining the purchase price were to be reviewed as at 30 June 2006. In a settlement agreement on the IDL purchase agreement concluded
in Q2 2007, the parties to the agreement settled all mutual claims arising from the agreement against a payment made by the
seller of 0 37 million on 1 June 2007.
Landesbank Berlin Holding AG additionally gives an unlimited assurance that BIH and its subsidiaries do not harbour any risks that
are expressly excluded from the risk shielding in accordance with the detailed agreement.
In the agreement to transfer the Real Estate Services companies to the State of Berlin, the Group banks undertake to maintain the
existing financing of the transferred companies. Since 1 January 2006, the loans to these companies bear interest at 12-month Euribor,
the rate agreed in the detailed agreement and the rate assumed in the joint appraisal of the RES companies by KPMG and SUSAT (referred
to as the reference interest rate). As of 31 December 2007, this affected credit lines in the Group amounting to 0 875 million, which have
been exclusively provided by Landesbank Berlin AG alone.
Also in the context of the purchase agreement, an unlimited obligation to acquire claims against the State of Berlin arising from the
detailed agreement was assumed. In the context of this obligation, Landesbank Berlin Holding AG – or a subsidiary – shall continue to
acquire settlement claims in respect of the State of Berlin settled in the context of the detailed agreement that are recognised in terms of
their basis and amount from the companies subject to the detailed agreement. This serves to guarantee the liquidity of the companies
affected. Receivables are regularly acquired that were essentially already financed in the context of other lines of credit. Thus, the State of
Berlin is the debtor for this financing. As with the other financing for the RES companies shown, the reference interest rate in the detailed
agreement (12-month Euribor or a proven higher bank rate) applies to this forfaiting line.
As of 31 December 2007, receivables of 0 97.1 million were acquired from the carrying amount guarantee in addition to the interest
received in line with the detailed agreement. In addition, in December 2007, settlement claims of LPFV Finanzbeteiligungs- und Verwaltungs
GmbH (LPFV), where risk management and control with regard to the detailed agreement is combined, from the settlement transfer guarantee
against the State of Berlin of 0 23.9 million were acquired (plus the amounts from the forfaiting of settlement claims against the State of
Berlin from the acquisition of fund units described below) in addition to interest claims (moving 12-month EURIBOR). The recognised annual
balance for 2006 (0 35.8 million) and the carrying amount guarantee claims purchased in February and June 2007 (0 54.1 million in total)
were fully settled together with the claims from the settlement transfer guarantee acquired in July 2007 (0 16.7 million) including interest by
the State of Berlin on 1 October 2007 (0 109.4 million in total). The acquisitions of claims from the detailed agreement were regularly settled
by Landesbank Berlin AG.
The conditions determined with the State for this finance were agreed within the overall context of the agreements to transfer Real
Estate Services business. Thus, the performance and counter-performance are appropriate to each other.
Proceedings have been instigated against the Holding, LBB and other former Group companies, both individually and jointly in
differing configurations, with regard to the preparation and distribution of allegedly incorrect prospectuses for IBV investment funds. The
funds were initiated by Immobilien Beteiligungs- und Vertriebsgesellschaft der IBAG-Gruppe mbH, now trading as Immobilien Beteiligungsund
Vertriebsgesellschaft der BIH-Gruppe (IBV).
Following so-called conciliatory offers that were made to the subscribers of 15 IBV funds in 2005 and a further five IBV funds in
2007, the majority of subscribers have withdrawn their prospectus liability suits. The settlement claims against the State of Berlin arising
from the acquisition of fund units, the grounds and amounts of which were approved by the BCIA, were acquired by Landesbank Berlin AG.
LBB provided a non-revolving forfaiting line of up to 0 2 billion for this purchase in 2005, 0 944 million of which was still available as at
31 December 2007. The State of Berlin is therefore the debtor for the purchased claims. The purchased receivables bear interest at the reference
interest rate in line with the detailed agreement. Landesbank Berlin AG will also receive an appropriate handling fee. The conditions
at which receivables are settled are in line with the market.
166

As of 30 June 2007, the claims bought by Landesbank Berlin AG as of 31 December 2006 in the amount of 0 768 million were settled
on time. They were settled by way of a receivables purchase by Investitionsbank Berlin. In addition, as at 1 October 2007, the claims
purchased by 30 August 2007 were settled ahead of schedule (0 230 million including interest and processing charges).
Under the agreements relating to the five new funds launched in 2007, Landesbank Berlin AG is under obligation to purchase all
settlement claims arising by 31 December 2009 (settlement of the final tranche by the State of Berlin as of 30 June 2010). However, as the
acceptance period for fund subscribers had since expired, the forfaitiing volume will be restricted to the bearer bond issued in connection
with the subscription of the fund (0 7 million) and individual transactions not yet settled. The forfaiting line can therefore initially be reduced
to 0 20 million.
For fund subscribers who do not accept the offer of sale straight away and instead wish to dispose of their units at a later date,
Landesbank Berlin AG had provided the State with an obligation to launch a trust credit programme exclusively for loans issued in 2005
and 2006. On behalf of the trustor (economically the State of Berlin), it granted a total of 13,200 loans to fund subscribers in 2006 at predetermined
conditions of which 10,658 loans with a nominal volume of 0 312.9 million remained as of 31 July 2007. The loans all bear
interest of 3 %. Fund units were transferred to LBB as collateral. In addition, LBB received a volume-based processing fee for settling the
loans. With regard to the arising expenses and the collateral for the loans, the agreed conditions were appropriate at the time of issue.
Following the spin-off of Real Estate Services, the effects of the detailed agreement on the Group are significantly more straight
forward. The risk shielding is still in place for loans issued by Group banks to specific Real Estate Services borrowers and the associated
rules of procedure to be observed by the Group.
In 2007, Landesbank Berlin AG had a dormant participation of the State of Berlin of 0 700 million that was assumed by S-Erwerbsgesellschaft
in the context of the disposal of shares in Landesbank Berlin Holding AG effective 1 January 2008. In financial year 2007,
compensation of 0 50.5 million (previous year: 0 77.7 million on account the dormant participation in place until 31 December 2006 of
0 1,100 million) was paid to the State of Berlin.
Business and legal relationships between the Landesbank Berlin Holding Group and the State of Berlin and its sphere of interests
existed almost exclusively in the form of business relationships, and in particular credit relationships, with Landesbank Berlin and Berlin-
Hannoversche Hyp. The deposit business was not materially significant for the net assets, financial position and results of operations of
the Group.
Master agreements for financial services transactions exist between the Capital Markets division and the following partners:
Berliner Stadtreinigungsbetriebe AöR (BSR)
WBM Wohnungsbaugesellschaft Berlin-Mitte mbH
WISTA-Management GmbH
Investitionsbank Berlin AöR (IBB)
Stadt und Land Wohnbauten GmbH
On the basis of these agreements, an interest rate swap was concluded with WISTA-Management GmbH in the reporting period with an
initial nominal amount of 0 3.5 million over the period from 2 July 2007 to 1 April 2027. The transaction was concluded within the context
of ordinary operations and no special terms or conditions were granted.
One promissory not loan was acquired by IBB in the reporting period:
1 June 2007; 0 5 million; 4.675 %; due 7 June 2018
The transaction was concluded at market conditions. It is an ordinary business transaction.
Money market business was concluded with IBB within the context of ordinary operations. All these transactions were concluded at
standard market conditions.
State of Berlin and IBB debt instruments were used in interest risk management. The following promissory note loans were acquired directly
from issuers at standard market conditions in the context of ordinary operations in the reporting period:
2 May 2007; 0 100 million; 4.328 %; State of Berlin; due 4 May 2011
2 May 2007; 0 70 million; 4.417 %; IBB; due 4 May 2017
20 June 2007; 0 200 million; 4.630 %; IBB; due 22 June 2009
20 June 2007; 0 45 million; 4.720 %; IBB; due 22 June 2010
Consolidated Financial Statements
Notes
167

Other Notes
In August 2004, the Capital Markets credit area concluded an agency agreement with IBB. As part of this agreement, LBB prepares credit
rating analyses for IBB borrowers in the banking and insurance sectors and public-sector companies, votes on business enquiries from this
customer segment and assumes loan processing activities. Remuneration is based on expenses incurred in line with the employee capacity
used within the Group. Around 0 170 thousand (including VAT) was recognised by LBB in the reporting period as an appropriate fee.
In the context of Real Estate Financing, LBB has provided lines of credit to various residential construction companies in the
investment group of the State of Berlin for several years.
Although repayments were initially suspended until 30 June 2008 for WBM Wohnungsbaugesellschaft Berlin-Mitte mbH and its
subsidiaries last year, LBB’s risk provisioning was settled in full as at 30 November 2007 on account of extensive one-off repayments from
property disposals and the agreement of additional collateral. Standard market conditions were provided in both credit business and investment
business.
In addition, LBB approved a loan of 0 2.6 million to Stadt und Land Wohnbauten GmbH at standard market conditions in the
reporting period. There were no reportable changes to existing business relationships with the other residential construction companies
in the investment group of the State of Berlin in the reporting year.
There has been a rental agreement for space in the property Fasanenstrasse 7 – 8 in 10623 Berlin with Berliner Wasserbetriebe AöR
since 1 January 2006. On the basis of the contractual rent of 0 8.95 / m ² for office space and 0 5.00 / m ² of cellar space, payments totalling
0 561 thousand were recognised in the reporting period (including parking charges, advances on operating costs and sales tax). The conditions
are in line with market.
Since 2004, there has been an agreement between LBB and Investitionsbank Berlin regarding the transfer of IBB’s loan agreements
with various residential development companies to LBB against appropriate counterperformance of a 0.63 % effective margin for the entire
term. Article 3 of the agreement provides for the option of retransfer (instead of subsequently adjusting counterperformance) after the end
of the rate lock. IBB will then pay LBB the valid remaining capital of the loan including any outstanding arrears plus any statutory sales tax for
the retransfer. IBB intends to exercise its option at the end of the respective rate lock. As at 30 March 2007, two loans with total remaining
capital of 0 5.6 million were retransferred to IBB.
LBB serves the State of Berlin and a range of private law companies and public law institutions associated with the State as their
principal or secondary with all banking services at standard market conditions. No special conditions were granted on account of the shareholder
relationships. In some cases standard conditions were deviated from in accordance with the size of the company and depending on
the activities performed, as is the practice of other companies operating in this market segment. LBB also conducted service relationships
with these companies, such as agency agreements, rental agreements or advertising agreements only in line with standard market conditions.
In addition to the above legal transactions and measures by LBB, there are also utilities agreements with several subsidiaries of
the State of Berlin, including in particular Berliner Stadtreinigungsbetrieben (BSR) AöR and Berliner Wasserbetrieben (BWB) AöR on the one
hand and rental agreements with a number of residential construction companies on the other. These agreements relate to the ordinary
business activities of these companies and were concluded exclusively under standard market conditions.
As part of the disposal of the RES companies to the State of Berlin (in which BIH GmbH was also disposed of) an agreement was
made between the negotiating parties that 5.1 % of shares in Immobilien- und Baumanagement der BIH-Gruppe GmbH (formerly
Immobilien- und Baumanagement der Bankgesellschaft Berlin GmbH) – a subsidiary of BIH GmbH – remain at Landesbank Berlin Holding AG.
BIH GmbH granted Landesbank Berlin Holding AG an irrevocable put option for the 5.1 % share – which can be exercised from 1 January
2008. LBBH has resolved to exercise the put option in respect of BIH Grundstücksentwicklungsgesellschaft mbH.
In dismantling the so-called shadow group, the investment of LBB, which existed outside the land transfer tax group at the time, was
required to avoid incurring land transfer tax. In this function, IDL Objektbeteiligungsgesellschaft mbH & Co. KG assumed investments
of 6 % in RES property companies Objektgesellschaften. Landesbank Berlin AG holds 100 % of shares in its general partner, IDL Beteiligungsgesellschaft
mbH. IDL KG currently has 15 investments of 6 % each in property companies.
As of 31 July 2007, loans extended by LBB to the sphere of interests of the State of Berlin totalled 0 2.4 billion (31 December 2006:
0 2.6 billion). Those issued by Berlin Hyp amounted to 0 0.7 billion (31 December 2006: 0 0.8 billion).
At LBB, valuation allowances on these amount to 0 2.0 million as at 31 July 2007 (31 December 2006: 0 9.1 million). There were
no valuation allowances at Berlin Hyp, as was the case as at 31 December 2006.
As at 31 July 2007, the sphere of interests of the State had total deposits of 0 0.4 billion (31 December 2006: 0 0.5 billion).
Transactions are carried out with shareholders under normal conditions.
The declaration at the end of this report is as follows: The Board of Management of Landesbank Berlin Holding hereby declares that
the Landesbank Berlin Holding Group companies received appropriate consideration for all legal transactions and other measures with the
State of Berlin and companies affiliated thereto in accordance with the circumstances known at the time of legal transactions or measures
and that these companies were not disadvantaged by the measures taken.
168

Business relationships with S-Erwerbsgesellschaft and RVG for the period from 8 August 2007 to 31 December 2007
The Holding’s related parties as defined by IAS 24 include the managing directors of RVG in addition to S-Erwerbsgesellschaft and RVG.
On 15 June 2007, the Berlin Senate resolved to sell the shares of the State of Berlin in Landesbank Berlin Holding AG effective
8 August 2007 to Erwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG, represented by Deutsche Sparkassen- und Giroverband Körperschaft
des öffentlichen Rechts (DSGV). In addition, the existing dormant participation of the State of Berlin was dissolved by the buyer effective
1 January 2008 and the commission right regulated in Article 60 of the detailed agreement (effective 1 January 2008) and the improvement
right regulated in Article 61 (effective 1 January 2007) were transferred. With the purchase agreement, the State of Berlin ended the nondiscriminatory
and transparent bidding procedure launched in January; the stock exchange placement that was prepared parallel to this
was therefore no longer pursued.
The bidding process began on 19 January 2007 with the invitation to declare an interest. Of the interested parties, (five from the
German savings bank and Landesbank sector, one large German bank, eight international banks, five private equity companies and one
private person) 15 were accepted for the further process on the basis of the selection criteria stated in the invitation to tender. Nine of them
submitted indicative bids by the deadline of 22 March 2007 on the basis of the information memorandum provided to them, seven of these
bidders were selected for the further procedure in line with a pre-determined process model and had access to more extensive information
about the Holding in April and May 2007 (“data room phase”).
Parallel to the bidding process, preparations began for a possible alternative placement of shares on the stock exchange (secondary
public offering, SPO). A stock market prospectus was prepared and submitted to the Federal Financial Supervisory Authority (BaFin) for review.
In the bidding process, three bidders submitted binding offers on time on 1 June 2007. After analysing these, purchase negotiations
were initiated with all three bidders. Negotiations were concluded on 15 June 2007 with the signing of the purchase agreement with
S-Erwerbsgesellschaft, which had made the best offer to the State of Berlin.
Following approval by the House of Representatives of Berlin, the Federal Cartel Office, the Luxemburg Banking Supervisory Authority
and BaFin, the sale agreement concluded on 15 June 2007 was executed on 8 August 2007.
RVG, the general partner of S-Erwerbsgesellschaft, has a standard current account with the Bank, that was previously used to
only a limited extent (0 23 thousand) for deposits. There were no reportable transactions in the reporting period. There was no banking
relationship with S-Erwerbsgesellschaft as of the reporting date.
A managing director of RVG has a standard current account with the Bank, that was previously used to only a limited extent
(0 6 thousand) for deposits.
The members of the management of RVG performed no other reportable transactions.
Business and legal relationships with unconsolidated subsidiaries and companies
over which the Group is able to exercise a significant influence
Related parties are shown in the “List of investment holdings” under “Consolidated and unconsolidated subsidiaries”. The list of shareholdings
also includes companies over which the Group can exercise a significant influence.
The Group had business relationships with unconsolidated subsidiaries as follows:
in u million
31.12.2007 31.12.2006 Change
in %
Loans and advances to customers 209 608 – 66
Amounts due to customers 90 81 11
The Group had business relationships with companies over which it is able to exercise a significant influence as follows:
in u million
Consolidated Financial Statements
31.12.2007 31.12.2006 Change
in %
Loans and advances to customers 1,155 1,277 – 10
of which to associates 1,140 1,262 – 10
of which to joint ventures 15 15 0
Amounts due to customers 189 184 3
of which to associates 189 181 4
of which to joint ventures 0 3 – 100
Notes
169

Other Notes
The loans extended to unconsolidated subsidiaries and companies over which the Group is able to exercise a significant influence were granted
at standard market terms and conditions. The Group’s net interest income includes the interest expenses and income arising from these
business relationships. The net interest income of the Group is affected by its business relationships with unconsolidated subsidiaries
and companies over which it is able to exercise a significant influence in line with the volume of the respective loans and the standard interest
charged thereon. There are allowances for impairment losses on loans and advances of 0 2 million (31 December 2006: 0 21 million),
of which 0 2 million related to unconsolidated subsidiaries (31 December 2006: 0 10 million). Write-downs of 0 14 million were recognised,
0 4 million of which related to non-consolidated companies.
Information on members of the Board of Management and the Supervisory Board
The members of the Board of Management and the Supervisory Board of Landesbank Berlin Holding AG and Landesbank Berlin AG received
the following remuneration:
in u ’000 2007 2006
Total remuneration of the Board of Management of LBB 1) 7,496 6,396
of which total remuneration of the Board of Management of the Holding 2) 2,841 2,331
Total remuneration of the Supervisory Board of the Holding 3) 636 647
Total remuneration of the Supervisory Board of LBB 3) 262 229
Payments to former members of the Board of Management or their surviving dependents 6,160 6,456
Provisions for pension obligations to these persons 90,661 94,397
Provisions for pension obligations to active members of the Board of Management of LBB
as at the end of the year 11,840 14,735 4)
including provisions for pension obligations to active members of the
Board of Management of the Holding as at the end of the year 6,236 5,414
Addition to the pension obligations to active members of the Board of Management of LBB 754 1,981
including additions to the pension obligations to active members of the
Board of Management of the Holding 822 658
1) Consisting of Mr. Vetter, Dr. Veit, Mr. Demolière, Dr. Evers, Mr. Kruschinski (until 30 June 2007), Mr. Kulartz and Mr. Müller
2) Consisting of Mr. Vetter and Dr. Veit
3) Not including sales tax, figure for the previous year has been adjusted
4) Including 0 3,649 thousand for Mr. Kruschinski, who discontinued active duty on the Board of Management as at 30 June 2007
“Total remuneration” means “short-term benefits” in line with the standard; there are no “other long-term benefits”.
There are no additional remuneration components offering a long-term incentive (subscription rights, other share-based payments etc.)
for members of the Board of Management.
In the event that members of the Board of Management are unable to work as a result of accident or illness, they are entitled to their
full remuneration for a specific period: Members of the Board of Management are entitled to receive a pension after the end of their contractual
relationship as a result of reaching their 65th birthday, due to occupational disability, at the end of their appointment or as a result of the
contractual relationship being dissolved by the Bank unless this is triggered by good cause on the part of the Board of Management member
(Article 626 of the German Civil Code). The employment contracts of two members of the Board of Management include provisions relating
to their resignation as part of a change of control. Information on the pension commitments, claims to retirement benefits and other benefits
after or due to the end of the employment relationship for the individual members of the Board of Management are shown in the Group
management report as at 31 December 2007.
Advances and loans granted to members of executive bodies by Landesbank Berlin AG:
in u ’000 2007 2006
to members of the Board of Management of LBB 388 1,186
of which to members of the Board of Management of the Holding 0 20
to members of the Supervisory Board of the Holding 98 123
to members of the Supervisory Board of LBB 98 120
The net amounts include annuity loans granted at market conditions and utilised overdraft facilities and invoice amounts on credit card accounts.
In particular, the change for members of the Board of Management results from the liquidation of two annuity loans of 0 565 thousand; existing
loans were also repaid.
There were no transactions such as land or property sales, services rendered or purchased, leases, loans or other transactions at
non-market conditions with persons in key positions.
170

Close family members of the Board of Management and the Supervisory Board have no influence on business decisions.
The Holding publishes information on share transactions by its Board of Management on its Internet site under “Investor Relations”.
It thereby satisfies the reporting requirements of Article 15a WpHG.
Information for Article 314 (1) no. 6 a) sentence 5 HGB
The members of the Board of Management in office in financial year 2007 received the following remuneration in 2007:
Members of the Board of Management Annual remuneration
in u ’000
Non-performance-related
remuneration
Performancerelated
remuneration
Other
remuneration 1)
Hans Jörg Vetter (Holding, LBB) 1,068 675 26 1,769
of which non-pensionable fixed bonus 521
Dr. Thomas Veit (Holding, LBB) 689 350 33 1,072
of which non-pensionable fixed bonus 300
Total for members of executive bodies of the Holding 1,757 1,025 59 2,841
Serge Demolière (LBB) 986 270 34 1,290
of which non-pensionable fixed bonus 489
Dr. Johannes Evers (LBB) 627 300 46 973
of which non-pensionable fixed bonus 246
Uwe Kruschinski (LBB) 2) 331 185 17 533
of which non-pensionable fixed bonus 150
Hans-Jürgen Kulartz (LBB) 627 245 45 917
of which non-pensionable fixed bonus 246
Martin K. Müller (LBB) 604 300 38 942
of which non-pensionable fixed bonus 290
Remuneration expense 2007 Total (LBB) 4,932 2,325 239 7,496
1) Other remuneration relates to non-cash benefits (non-cash benefit of use of company car) of 0 116 thousand and the so-called employer share of net amount
(assumption of tax of cash benefits by the employer) of 0 119 thousand. Other remuneration also includes payments received by Mr. Müller in the reporting year
as the employer’s subsidy for health and long-term care insurance
2) Mr. Kruschinski left office as at 30 June 2007
The general premium for D&O insurance is not assigned to the individual members of the Board of Management.
The members of the Board of Management in office on 31 December 2006 received the following remuneration in 2006:
Members of the Board of Management Annual remuneration
in u ’000
Non-performance-related
remuneration
Performancerelated
remuneration
Other
remuneration 1)
Hans Jörg Vetter (Holding, LBB) 999 450 25 1,474
of which non-pensionable fixed bonus 460
Dr. Thomas Veit (Holding, LBB) 677 150 30 857
of which non-pensionable fixed bonus 300
Total for members of executive bodies of the Holding 1,676 600 55 2,331
Serge Demolière (LBB) 974 75 32 1,081
of which non-pensionable fixed bonus 489
Dr. Johannes Evers (LBB) 615 120 41 776
of which non-pensionable fixed bonus 246
Uwe Kruschinski (LBB) 662 40 30 732
of which non-pensionable fixed bonus 300
Hans-Jürgen Kulartz (LBB) 615 75 42 732
of which non-pensionable fixed bonus 246
Martin K. Müller (LBB) 590 120 34 744
of which non-pensionable fixed bonus 290
Remuneration expense 2006 Total (LBB) 5,132 1,030 234 6,396
1) Other remuneration relates to non-cash benefits (non-cash benefit of use of company car) of 0 126 thousand and the so-called employer share of net amount
(assumption of tax of cash benefits by the employer) of 0 104 thousand. Other remuneration also includes payments received by Mr. Müller in the reporting year
as the employer’s subsidy for health and long-term care insurance.
The general premium for D&O insurance is not assigned to the individual members of the Board of Management.
Consolidated Financial Statements
Notes
Total
Total
171

Other Notes
Remuneration to be paid to the individual members of the Supervisory Board for financial year 2007 including committee work (not including
sales tax) is:
Members of the Supervisory Board Annual remuneration
Holding LBB
in u ’000 2007 2006 2007 2006
Dr. h. c. Klaus G. Adam 1) 8) 54 91 24 34
Heinrich Haasis 2) 9) 25 – 11 –
Bärbel Wulff 10) 64 57 29 22
Dr. h. c. Axel Berger 1) 8) 27 29 17 14
Dietmar P. Binkowska 2) 9) 11 – 6 –
Gregor Böhmer 2) 9) 13 – 5 –
Dagmar Brose 15 24 – –
Thomas Dobkowitz 1) 10 15 – –
Hans Jörg Duppré 2) 5 – – –
Dr. Michael Endres 1) 8) 22 46 12 18
Claudia Fieber 3) 10) 11) – 21 – 6
Christina Förster 10) 26 24 11 9
Dr. Thomas Guth 1) 8) 17 26 7 11
Sascha Händler 10) 26 24 11 9
Jürgen Hilse 2) 9) 11 – 3 –
Claus Friedrich Holtmann 2) 9) 10 – 5 –
Michael Jänichen 10) 33 37 18 13
Daniel Kasteel 10) 26 24 11 9
Thomas Mang 2) 9) 10 – 5 –
Astrid Maurer 4) 12) 26 – 11 2
Dr. Hannes Rehm 1) 10 15 – –
Heiko Reinhard 5) 10) 11) – 18 – 6
Andreas Rohde 6) 12) 26 4 11 2
Senator Dr. Thilo Sarrazin 7) 13) 27 42 11 17
Peter Schneider 2) 9) 9 – 3 –
Friedrich Schubring-Giese 2) 5 – – –
Dr. Heinz-Gerd Stein 1) 8) 21 40 11 16
Joachim Tonndorf 25 25 – –
Dr. Harald Vogelsang 2) 9) 10 – 5 –
Frank Wolf 10) 34 28 16 13
Senator Harald Wolf 7) 13) 17 27 7 12
Bernd Wrede 1) 8) 21 31 11 16
Total 636 647 262 229
plus sales tax 95 100 40 34
Total expense 731 747 302 263
1) Member of the Supervisory Board of the Holding until 31 August 2007
2) Member of the Supervisory Board of the Holding since 1 September 2007
3) Member of the Supervisory Board of the Holding until 31 December 2006
4) Member of the Supervisory Board of the Holding since 1 January 2007
5) Member of the Supervisory Board of the Holding until 31 October 2006
6) Member of the Supervisory Board of the Holding since 30 November 2006
7) Member of the Supervisory Board of the Holding until 28 August 2007
8) Member of the Supervisory Board of LBB until 31 August 2007
9) Member of the Supervisory Board of LBB since 1 September 2007
10) Member of the Supervisory Board of LBB since 7 March 2006
11) Member of the Supervisory Board of LBB until 30 September 2006
12) Member of the Supervisory Board of LBB since 6 October 2006
13) Member of the Supervisory Board of LBB until 28 August 2007
172

66 Number of employees
Average number of employees in the financial year by group:
2007 2006
Full-time 5,117 6,066
Part-time 1,348 1,648
Trainees and apprentices 208 262
Total 6,673 7,976
67 Events after 31 December 2007
Consolidated Financial Statements
Effective 2 January 2008, LBB acquired the sales financing division of BHW Bank Aktiengesellschaft. The acquisition includes a customer
base of 179,000 customers with private loans and 125,000 credit cards and around 8,300 active dealer relationships. The credit volume
amounts to around 0 485 million.
In connection with the sale of Berliner Bank, outstanding issues relating to the final purchase price were settled with the buyer on
4 February 2008.
The Board of Management and the Supervisory Board will propose to the Annual General Meeting a dividend of 0 0.10 per share.
Notes
173

Other Notes
68 List of investment holdings
Company, registered office
Total share
held by
the Group
in %
of which
indirectly
in %
Voting rights
held by
the Group
in %
Equity 2)
in u ’000
Result 2)
in u ’000
Landesbank Berlin Holding AG
Consolidated subsidiaries (IAS 27))
BankenService GmbH Unternehmensgruppe Landesbank Berlin,
Berlin 5) 100.0 100.0 100.0 – 3,608 – 1,433
Berlin Hyp Immobilien GmbH, Berlin 1) 5) 100.0 100.0 100.0 705 – 1,638
Berlin-Hannoversche Hypothekenbank Aktiengesellschaft, Berlin 5) BSI Immobilien-Beteiligung GmbH & Co. Objekt Wilmersdorf
90.4 90.4 90.4 623,093 53,579
oHG, Pöcking 5) 94.9 94.9 67.8 290 115
Crown Court I LLC, Wilmington, Delaware 5) 19) 100.0 100.0 100.0 – 13,645 – 13,933
Crown Court Property London Ltd., London 5) 20) Gartenstadt Stahnsdorf GmbH & Co. Projektentwicklungs KG,
100.0 100.0 100.0 20,217 2,753
Berlin 5) 6) GfBI Gesellschaft für Beteiligungen und Immobilien mbH,
48.5 48.5 48.5 – 50,415 1,707
Berlin 1) 5) 100.0 100.0 100.0 33,912 – 3,722
GfBI Immobilien Solutions GmbH, Berlin 5) Grundstücksgesellschaft „Berlin“ mit beschränkter Haftung,
100.0 100.0 100.0 4,939 4,942
Berlin 1) 5) Grundstücksgesellschaft Bad Freienwalde / Gardelegen GbR,
100.0 94.9 100.0 6,570 2,611
Berlin 5) 76.1 76.1 76.1 – 20,163 461
Grundstücksgesellschaft Lehrter Straße GbR, Berlin 5) 99.9 99.9 99.9 – 7,790 – 25
HILOG Beteiligungs GmbH & Co. Mobilienleasing KG, Pöcking 5) 92.5 92.5 92.5 3,903 1,510
Hohenzollerndamm 134 GbR, Berlin 5) 100.0 95.0 100.0 16,510 – 4
Landesbank Berlin AG, Berlin 1) 5) 100.0 0.0 100.0 1,879,806 – 42,296
Landesbank Berlin International S.A., Luxemburg 5) 100.0 100.0 100.0 168,972 – 9,851
Landesbank Berlin Investment GmbH, Berlin 1) 5) 100.0 100.0 100.0 10,321 – 510
LBB Finance (Ireland) plc, Dublin 5) LBB Grundstücks-Gesellschaft mbH der Landesbank Berlin AG,
100.0 100.0 100.0 1,747 160
Berlin 1) 5) 100.0 100.0 100.0 6,024 829
LBB-Immobilien-Service GmbH, Berlin 1) 5) 100.0 100.0 100.0 1,103 181
LBB Reinsurance Ltd., Dublin 5) 100.0 100.0 100.0 12,175 3,139
netbank Aktiengesellschaft, Hamburg 5) Versicherungsservice GmbH Unternehmensgruppe Landesbank
75.0 75.0 75.0 27,484 – 853
Berlin, Berlin 1) 5) 100.0 100.0 100.0 962 – 54
Wilkendorf Golf Betriebsgesellschaft mbH, Altlandsberg 3) 5) 100.0 100.0 100.0 – 1 – 288
Special purpose entities / special funds – consolidated –
(IAS 27 in conjunction with SIC 12)
Albatros Select Fund, Luxemburg 5) 0.0 0.0 0.0 188,509 1,320
Check Point Charlie Inc., London 5) 0.0 0.0 0.0 0 0
Check Point Charlie Ltd., London 5) 0.0 0.0 0.0 509 511
Portfolio Purchasing Company 1 Ltd., London 5) 0.0 0.0 0.0 – 2,088 – 2,214
Portfolio Purchasing Company 2 Ltd., London 5) 0.0 0.0 0.0 – 3,434 – 3,380
Portfolio Purchasing Company 3 Ltd., London 5) 0.0 0.0 0.0 – 169 – 175
Portfolio Purchasing Company 4 Ltd., London 5) 0.0 0.0 0.0 – 1,683 – 1,742
RR II R-11004, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11014, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11017, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11056, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11057, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11063, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11064, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11066, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11072, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
174
Date of annual
financial
statements
if not
31 Dec. 2007

Company, registered office
Total share
held by
the Group
in %
of which
indirectly
in %
Voting rights
held by
the Group
in %
Equity 2)
in u ’000
Consolidated Financial Statements
Result 2)
in u ’000
RR II R-11075, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11077, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11080, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11082, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11085, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11087, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11133, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11140, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11144, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11145, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11148, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11157, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11161, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11163, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11172, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11176, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11184, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11189, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11227, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11231, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11232, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11247, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11249, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11251, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11253, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11254, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11262, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11263, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11264, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11265, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11266, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11270, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11277, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11280, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11281, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11282, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11285, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11288, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11289, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11290, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11291, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11292, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11295, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11297, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11298, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11300, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11301, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11302, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11303, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11304, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-11306, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-817, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
RR II R-846, City of Wilmington / Delaware 5) 17) 0.0 0.0 0.0 – –
Notes
Date of annual
financial
statements
if not
31 Dec. 2007
175

Other Notes
Company, registered office
Special purpose entities / special funds – consolidated –
(IAS 27 in conjunction with SIC 12)
Total share
held by
the Group
in %
of which
indirectly
in %
Voting rights
held by
the Group
in %
Equity 2)
in u ’000
Result 2)
in u ’000
ABN AMRO EMMA INKA, Düsseldorf 5) 100.0 100.0 0.0 35,782 2,032
BB TBG Fonds, Berlin 5) 100.0 100.0 0.0 78,600 1,379
BG-Asset-Fonds, Berlin 5) 100.0 100.0 0.0 18,637 604
dbi Pimco Global Corporate Bond Fonds, Frankfurt am Main 5) 100.0 100.0 0.0 99,713 4,801
DeAM EICO Fonds, Frankfurt am Main 5) 100.0 100.0 0.0 101,331 382
DEKA - ABS Europe-Fonds, Frankfurt am Main 5) 100.0 100.0 0.0 76,909 236
GSIM Global Corporate Bond Fonds, Frankfurt am Main 5) 100.0 100.0 0.0 100,408 3,927
LBB INKA Credit Plus, Düsseldorf 5) 100.0 100.0 0.0 96,602 – 5,390
LBB Prisma Unit Trust, Georgetown / Kaiman-Inseln 5) 100.0 100.0 0.0 85,616 4,069
LBB-Spezialsituationen-Fonds, Berlin 5) 100.0 100.0 0.0 6,898 2,718
LBB-TopPick-Fonds, Berlin 5) 100.0 100.0 0.0 79,456 6,497
UNIQA GLOBAL ABS INCOME FUND, Vienna, Austria 5) 100.0 100.0 0.0 32,239 – 5,773
WAMCO INKA Global Corporate Bond Fonds, Düsseldorf 5) 100.0 100.0 0.0 99,819 4,711
Holdings in mutual funds – consolidated –
(IAS 27 in conjunction with SIC 12)
ConvertibleBond-INVEST, Berlin 5) 92.4 92.4 0.0 31,651 – 572
Keppler-Global Alpha-LBB-INVEST, Berlin 5) 98.0 98.0 0.0 50,244 – 732
Keppler-Global Value-LBB-INVEST, Berlin 5) 61.9 61.9 0.0 175,850 – 2,815
LINGOHR-ALPHA-SYSTEMATIC-LBB-INVEST, Berlin 5) 55.5 55.5 0.0 271,578 11,649
Non­consolidated subsidiaries (IAS 27)
Date of annual
financial
statements
if not
31 Dec. 2007
Babefi-Holding GmbH i. L., Berlin 100.0 100.0 100.0 72 6 29.06.2007
Bankenservice AO i. L., Moscow 100.0 100.0 100.0 n /a n /a
BB-Grundstücksgesellschaft mit beschränkter Haftung, Berlin 1) 100.0 94.9 100.0 51 0 31.12.2006
BB-Leasing GmbH, Berlin 100.0 100.0 100.0 1,892 359 31.12.2006
Berlin Hyp Projekt GmbH i. L., Berlin 100.0 100.0 100.0 250 0 31.12.2006
DEFAS Beteiligungs GmbH & Co. Objekt Neukölln KG, Munich 6) 94.0 94.0 47.0 26 398 31.05.2007
DEFAS Beteiligungs GmbH & Co. Vermietungs-KG, Munich 6) 94.0 94.0 47.0 – 2,687 75 31.12.2006
DELTAG Aktiengesellschaft für Investitionen, Berlin 100.0 100.0 100.0 142 – 28 31.12.2006
DirektBankService GmbH Unternehmensgruppe Bankgesellschaft
Berlin, Berlin 100.0 100.0 100.0 103 1 30.09.2007
egs Entwicklungsgesellschaft Südhorn mbH, Berlin 94.0 94.0 94.0 – 1,677 – 500 31.12.2006
Eurospeedway Lausitz Entwicklungs GmbH, Berlin 100.0 100.0 100.0 425 – 2 31.12.2006
FAKT Immobilien Management-Verwaltungs GmbH, Berlin 100.0 100.0 100.0 25 0 31.12.2005
FinTech Dreiundzwanzigste Beteiligungs- und Management
GmbH, Berlin 100.0 100.0 100.0 47 – 35 31.12.2006
FURIS Verwaltung GmbH & Co. Vermietungs-KG, Pöcking 6) 94.0 94.0 50.0 14 1 31.12.2006
Gartenstadt Stahnsdorf GmbH, Berlin 6) 49.0 49.0 49.0 3 – 1 31.12.2006
GfBI Beteiligungsmanagement GmbH
(formerly: Bavaria Vertriebs GmbH), Berlin 100.0 100.0 100.0 100 0
GfBI Group Services GmbH, Berlin 100.0 100.0 100.0 272 17
Grundstücksgesellschaft Weichselstraße GbR
– STADT UND LAND-Fonds 1 –, Berlin 60.2 60.2 60.2 3,833 129 31.12.2006
Harpalus Verwaltungsgesellschaft mbH & Co. Vermietungs KG i. L.,
Munich 78.1 78.1 78.1 611 11,471 31.12.2005
HaWe Verwaltungsgesellschaft mbH, Berlin 1) 100.0 100.0 100.0 6,136 0 31.12.2006
IDL Beteiligungsgesellschaft mbH, Berlin 100.0 100.0 100.0 20 0 31.12.2006
IDL Objektbeteiligungsgesellschaft mbH & Co. KG, Berlin 100.0 100.0 100.0 156 – 6 31.12.2006
IDLG Immobiliendienstleistungen GmbH, Berlin 1) 100.0 100.0 100.0 2,275 460 31.12.2006
INKUR Verwaltung GmbH & Co. Vermietungs-KG, Munich 6) 94.0 94.0 47.0 – 2,530 99 31.12.2006
Klinikzentrum Lindenallee GmbH, Bad Schwalbach 100.0 100.0 100.0 – 4,461 971 31.12.2006
MIKOS Verwaltungs GmbH & Co. Vermietungs KG, Munich 94.0 94.0 55.3 25 0 31.12.2006
SDZ Ostbrandenburg GmbH, Berlin 100.0 100.0 100.0 42 – 3 31.12.2006
Wilkendorf Bau- und Projektentwicklungsgesellschaft mbH,
Berlin 100.0 100.0 100.0 43 – 58 31.12.2006
176

Company, registered office
Special purpose entities / special purpose and publicly issued
funds – non­consolidated – (IAS 27 in conjunction with SIC 12)
Total share
held by
the Group
in %
of which
indirectly
in %
Voting rights
held by
the Group
in %
Equity 2)
in u ’000
Result 2)
in u ’000
Date of annual
financial
statements
if not
31 Dec. 2007
Bavaria Immobilien Development GmbH & Co. Public Golf
Wilkendorf KG, Berlin 0.0 0.0 0.0 0 – 33 31.12.2006
Bavaria Immobilien Development GmbH & Co. Sandy-Lyle
Wilkendorf KG, Berlin 0.0 0.0 0.0 0 – 212 31.12.2006
Portfolio Purchasing Company RT1 Ltd., London 0.0 0.0 0.0 0 – 1 31.12.2006
Portfolio Purchasing Company RT2 Ltd., London 0.0 0.0 0.0 0 – 1 31.12.2006
Portfolio Purchasing Company RT3 Ltd., London 0.0 0.0 0.0 0 0 31.12.2006
Portfolio Purchasing Company RT4 Ltd., London 0.0 0.0 0.0 0 0 31.12.2006
PPC Holdings Ltd., London 0.0 0.0 0.0 6 0 31.12.2006
Joint ventures (IAS 31) – valued –
BerlinOnline Stadtportal GmbH & Co. KG, Berlin 45.0 45.0 45.0 2,542 265 31.12.2006
Joint ventures (IAS 31) – not valued –
BerlinOnline Stadtportalbeteiligungsgesellschaft mbH, Berlin 45.0 45.0 45.0 27 1 31.12.2006
BHS Berliner Hannoversche Software GmbH, Hanover 50.0 50.0 50.0 1,152 5 31.12.2006
CidS! Computer in die Schulen gemeinnützige Gesellschaft mbH,
Berlin 50.0 50.0 50.0 123 – 29 31.12.2006
GbR TOCOTAX 0.0 0.0 20.0 0 – 146 31.12.2006
Gesellschaft bürgerlichen Rechts Möllendorffstraße / Parkaue,
Berlin 50.0 50.0 50.0 – 2,379 – 297 31.12.2006
KARUS Beteiligungs GmbH & Co. Grundbesitz KG, Munich 33.0 33.0 33.0 26 1 31.12.2006
NORD EK Norddeutsche Einkaufskoordination der Landesbank
Berlin AG und der Norddeutsche Landesbank Girozentrale GbR,
Berlin / Hanover 0.0 0.0 50.0 192 36 31.12.2006
Associated companies (IAS 28) – valued –
Atos Worldline Processing GmbH, Frankfurt am Main 16) 25.1 25.1 25.1 9,889 0 31.12.2006
LBS Norddeutsche Landesbausparkasse Berlin-Hannover,
Berlin / Hanover 7) 12.0 12.0 12.0 310,770 13,600 31.12.2006
PEB Capital B. V. in liquidation, Hilversum 42.4 42.4 42.4 664 – 12,929 31.12.2006
Special purpose entities / special purpose and publicly
issued funds – associated (IAS 28) – valued –
FlexBond-Plus-INVEST, Berlin 12) 41.6 41.6 30,785 515 31.12.2006
Keppler-Emerging Markets-LBB-INVEST, Berlin 11) 32.6 32.6 98,710 368 31.03.2007
Special purpose entities / special purpose and publicly
issued funds – associated (IAS 28) – not valued –
Stratego Offensiv, Berlin 12) 13) 21.1 21.1 6,444 55 31.03.2007
Associated companies (IAS 28) – not valued –
Consolidated Financial Statements
Apollon Immobilien Verwaltungs GmbH & Co. KG
– Vierter IBV-Immobilienfonds für Deutschland –, Berlin 42.4 42.4 42.4 36,123 1,794 31.12.2006
Apollon Immobilien Verwaltungsgesellschaft mbH, Berlin 30.0 30.0 30.0 63 4 31.12.2006
B + S Card Service GmbH, Frankfurt am Main 25.1 25.1 25.1 12,435 3,630 30.09.2007
BBB Bürgschaftsbank zu Berlin-Brandenburg GmbH, Berlin 21.8 21.8 21.8 7,786 297 31.12.2006
Gaia Immobilien Verwaltungs GmbH & Co. KG
– Dritter IBV-Immobilienfonds International –, Berlin 8 ) 100.0 100.0 100.0 – 1 – 64 31.12.2006
Gaia Immobilien Verwaltungs GmbH & Co. Objekt Bautzener
Gesundbrunnen KG, Berlin 49.0 49.0 49.0 – 2,029 2,531 31.12.2006
Gumes Verwaltung GmbH & Co. Objekt Rostock KG, Munich 39.6 39.6 20.0 26 0 31.12.2006
InvestitionsBank des Landes Brandenburg, Potsdam 3) 7) 18) 25.0 25.0 14.3 183,820 5,328 31.12.2006
Modernisierungsgesellschaft “Wohnen in Berlin-Charlottenburg,
Fritschestraße 67” GbR, Berlin 30.9 30.9 30.9 n /a n /a
Projektgesellschaft Forum Neukölln GbR mit auf das
Gesellschaftsvermögen beschränkter Haftung, Berlin 40.0 40.0 40.0 0 0 31.12.2003
Theseus Immobilien Management GmbH & Co. KG
– Zweiter IBV-Immobilienfonds International –, Berlin 3) 26.8 26.8 26.8 78,943 – 14,663 31.12.2005
WISUS Beteiligungs GmbH & Co. Zweite Vermietungs KG,
Munich 49.0 49.0 36.3 – 3,346 140
Notes
177

Notes to the Financial Statements
Company, registered office
Minimum holding of 20 %
Total share
held by
the Group
in %
of which
indirectly
in %
Voting rights
held by
the Group
in %
Equity 2)
in u ’000
Result 2)
in u ’000
Date of annual
financial
statements
if not
31 Dec. 2007
Aufbau- und Dienstleistungsgesellschaft mbH Objekt- und
Baubetreuung Mecklenburg-Vorpommern, Berlin 8) 9) 94.0 94.0 94.0 1,889 202 31.12.2006
Bavaria Immobilien Projektsteuerungs GmbH & Co.
Objekt Berlin-Mitte Leipziger Straße KG, Berlin 8) 9) 94.0 94.0 94.0 – 2,494 2,030 31.12.2005
Lausitzring Eurodrom Verwaltungs-GmbH, Klettwitz 10) 60.0 60.0 60.0 – 8 0 31.12.2006
Lausitzring GmbH & Co. KG, Klettwitz 10) 70.0 70.0 70.0 – 84,326 – 11 31.12.2006
Theseus Immobilien Management GmbH & Co.
Objekt Leipziger Straße KG, Berlin 8) 9) 100.0 100.0 100.0 – 852 – 181 31.12.2006
Wohnbau Tafelgelände Beteiligungs GmbH, Nuremberg 8) 9) 75.0 75.0 75.0 33 2 31.12.2006
Wohnbau Tafelgelände GmbH & Co. KG, Nuremberg 8) 9) 75.0 75.0 75.0 602 – 597 31.12.2006
Special purpose entities / special purpose and publicly
offered funds with minimum holding of 20 %
ACATIS Modul.Colleg.Fds.-Nr.1, Luxemburg 12) 14) 15) 32.2 32.2 3,709 35 30.06.2007
E.I. Cap.-Welt-Kasko 100 PlusZins, Luxemburg 12) 13) 15) 68.8 68.8 39,868 2,265 31.07.2007
E.I. Cap.-Welt-Kasko 100 PlusZins II, Luxemburg 12) 13) 15) 55.2 55.2 38,968 2,054 31.07.2007
E.I. Cap.-Welt-Kasko 95 Top Level, Luxemburg 12) 13) 15) 38.6 38.6 16,170 929 31.07.2007
Europa Aktien-Kasko 04/2008, Luxemburg 12) 13) 15) 52.1 52.1 17,519 1,797 30.04.2007
HSBC GIF Euro Strategic Credit Bond
(formerly: HSBC GIF Euro Corporate Bond), Luxemburg 12) 13) 15) 40.4 40.4 59,079 1,533 31.03.2007
S.A.M. Global II Miteig.ant. Inh.-Thesaurierungs-A,
Graz, Austria 12) 13) 15) 77.1 77.1 29,922 2,711 30.09.2006
Holdings in large corporations (Article 285 no. 11, clause 4 HGB
in conjunction with Article 340a (4) no. 2 HGB)
FinanzIT GmbH, Hanover 15.0 15.0 15.0 29,448 210 31.12.2006
Immobilien- und Baumanagement der BIH-Gruppe GmbH, Berlin 3) 5.1 0.0 5.1 33,165 – 5,109 31.12.2006
MLP AG, Wiesloch 4) 6.1 6.1 6.1 323,439 64,642 31.12.2006
1) A control and / or profit and loss transfer agreement has been entered into with this company
2) Financial statement data in accordance with the German Commercial Code unless otherwise stated
3) Held for sale in accordance with IFRS 5
4) IFRS financial statements
5) IFRS consolidation data
6) Classified as subsidiaries due to power to govern financial and operating policies and / or
appoint members of governing bodies (IAS 27.13) or beneficial ownership of majority of risks and rewards (SIC 12.10)
7) Classified as associates due to significant influence in the form of representation on governing bodies or participation
in determining financial and operating policies (IAS 28.7)
8) Not a subsidiary due to lack of control (protected under detailed agreement)
9) Not an associate due to lack of significant influence (venture capital, no constructive influence rebuttal of IAS 28.7) or through non-consolidated subsidiary
10) Not classified as a subsidiary or associated company as insolvency administrators have been appointed
11) Equity is the fund volume. Information from annual report published as at 31 March 2007
12) Equity is the fund volume, result is the total ordinary net income, net result of realised gains and losses and the net change in unrealised gains and losses
13) Figures from audited annual report / accounting report
14) Information from half-year report
15) Publicly offered fund; the issuing company is not part of the Group and the Group does not exercise control or a material influence over it
16) The company has a profit transfer agreement with a majority third party
17) Individual tranches of the „Tender Option Bonds“ programme of Crown Court I LLC;
TOB total in 0 thousand: equity: – 713; net profit / loss for the period: 14,266
18) The investment was cancelled as at 31 December 2005; an action for declaratory judgment is pending
ECB rates on 31 December 2007
19) 0 1 = USD 1.47210
20) 0 1 = GBP 0.73335
178

List of companies with a control and / or profit transfer agreement with Landesbank Berlin Holding Group
Company Parent company
Result
before profit
transfer
in u ’000
Landesbank Berlin AG, Berlin Landesbank Berlin Holding AG 49,471
69 Corporate governance
Consolidated Financial Statements
Date of annual
financial
statements
if not
31 Dec. 2007
The declarations of conformity from the Board of Management and the Supervisory Board required in accordance with Article 161 of the
German Stock Corporation Act relating to the German Corporate Governance Code were, and will continue to be, published by the Group’s
listed public limited companies (Landesbank Berlin Holding AG, Berlin-Hannoversche Hypothekenbank AG) on their respective websites.
Notes
179

Executive Bodies of Landesbank Berlin Holding AG
Board of Management
Hans-Jörg Vetter
Chairman
Dr. Thomas Veit
180
Supervisory Board
Heinrich Haasis
since 1 September 2007
Chairman (since 13 September 2007)
President of the German Savings Banks’ and Giro Association
(DSGV)
Dr. h. c. Klaus G. Adam
until 31 August 2007
Chairman
Auditor
Bärbel Wulff *
Deputy Chairwoman
Chair of the Works Council of Landesbank Berlin AG
Dr. h. c. Axel Berger
until 31 August 2007
Vice President of the German Financial Reporting Investment Panel,
Berlin; Auditor, tax consultant
Dietmar P. Binkowska
since 1 September 2007
Chairman of the Board of Management of Sparkasse KölnBonn
Gregor Böhmer
since 1 September 2007
Managing President of the German Savings Banks’ and
Giro Association of Hesse-Thuringia
Dagmar Brose *
Finance consultant, Landesbank Berlin AG
Thomas Dobkowitz
until 31 August 2007
Management consultant
Hans Jörg Duppré
since 1 September 2007
Commissioner of the district of Südwestpfalz
Dr. Michael Endres
until 31 August 2007
Former member of the Board of Directors of Deutsche Bank AG
Chairman of the Board of Directors of Gemeinnützige Hertie-Stiftung

Christina Förster *
Financial Services Secretary,
ver.di Berlin-Brandenburg region
Dr. Thomas Guth
until 31 August 2007
Chairman of the Management Board of
SALOMON OPPENHEIM GmbH
Sascha Händler *
Member of the Works Council of Landesbank Berlin AG
Export finance customer adviser at Landesbank Berlin AG
Jürgen Hilse
since 1 September 2007
Chairman of the Management Board of Kreissparkasse Göppingen
Claus Friedrich Holtmann
since 1 September 2007
Managing President of the East German
Savings Bank Association
Michael Jänichen *
Divisional Manager of Regional Corporate Banking at
Landesbank Berlin AG
Daniel Kasteel *
Member of the Works Council of Landesbank Berlin AG
Thomas Mang
since 1 September 2007
President of the Savings Bank Association of Lower Saxony
Astrid Maurer *
Member of the Works Council at Landesbank Berlin AG
Women’s Officer, Landesbank Berlin AG
Dr. Hannes Rehm
until 31 August 2007
Chairman of the Board of Management of
Norddeutsche Landesbank Girozentrale
Andreas Rohde *
Member of the Works Council of Landesbank Berlin AG
Senator Dr. Thilo Sarrazin
until 28 August 2007
Finance Senator of the State of Berlin
Peter Schneider
since 1 September 2007
President of the Savings Bank Association of Baden-Württemberg
Friedrich Schubring-Giese
since 1 September 2007
Chairman of the Management Board of Versicherungskammer Bayern
Dr. Heinz-Gerd Stein
until 31 August 2007
Former member of the Executive Board of ThyssenKrupp AG
Joachim Tonndorf *
Former Financial Services Secretary,
ver.di Berlin-Brandenburg region
Dr. Harald Vogelsang
since 1 September 2007
Chairman of the Management Board of Haspa Finanzholding and of
Hamburger Sparkasse AG
Frank Wolf *
Head of Financial Services Department,
ver.di Berlin-Brandenburg region
Senator Harald Wolf
until 28 August 2007
Senator for Economic Affairs, Technology and
Women of the State of Berlin
Bernd Wrede
until 31 August 2007
Former Chairman of the Executive Board of Hapag-Lloyd AG
* Employee representatives
Executive Bodies
181

Responsibility Statement
To the best of our knowledge and in accordance with the applicable reporting principles, the consolidated financial statements give a true
and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the management report of the Group includes a
fair review of the development and performance of the business and the position of the Group, together with a description of the principal
opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Berlin, 2 April 2008
The Board of Management
Hans-Jörg Vetter Dr. Thomas Veit
182

Auditors’ report
We have audited the consolidated financial statements – consisting of the balance sheet, the income statement, the presentation of recognised
income and expenses, the cash flow statement and the notes to the consolidated financial statements – and the Group management report
prepared by Landesbank Berlin Holding AG, Berlin, for the financial year from 1 January to 31 December 2007. The preparation of the
consolidated financial statements and the Group management report in accordance with IFRS as adopted by the EU and the supplementary
provisions of Article 315a (1) of the German Commercial Code is the responsibility of the Company’s Board of Management. Our
responsibility is to express an opinion on the consolidated financial statements and the Group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Article 317 of the German Commercial Code
and the generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those
standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial
position and results of operations in the consolidated financial statements prepared in accordance with the applicable accounting standards
and in the Group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and
legal environment of the Group, as well as evaluations of possible misstatements, are taken into account in the determination of audit procedures.
The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated
financial statements and the Group management report are examined primarily on a test basis within the framework of the audit. The audit
includes assessing the annual financial statements of those entities included in consolidation, the definition of the entities to be included in
consolidation and the accounting and consolidation principles used and significant estimates made by the Board of Management, as well
as evaluating the overall presentation of the consolidated financial statements and the Group management report. We believe that our audit
provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS as adopted by the EU
and the supplementary provisions of Article 315a (1) of the German Commercial Code and give a true and fair view of the net assets,
financial position and results of operations of the Group in accordance with these principles. On the whole, the Group management report,
which is consistent with the consolidated financial statements, provides a suitable understanding of the Group’s position and suitably
presents the opportunities and risks of future development.
Berlin, 3 April 2008
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
(Borgel) (ppa. Maternus)
Auditor Auditor
Responsibility Statement | Auditors’ report
183

Important addresses
184
Landesbank Berlin Holding AG
Alexanderplatz 2
D-10178 Berlin
Telephone: +49 30 86 95 00
Fax: +49 30 86 95 09
www.lbb-holding.de
Landesbank Berlin AG
Alexanderplatz 2
D-10178 Berlin
Telephone: +49 30 86 98 01
Fax: +49 30 86 98 30 74
www.lbb.de
London branch
LBB Landesbank Berlin London Branch
1 Crown Court, Cheapside
GB-London EC2V 6 LR
Telephone: +44 20 75 72 62 00
Fax: +44 20 75 72 62 99
Luxembourg branch
LBB Landesbank Berlin
30, Boulevard Royal
L-2449 Luxemburg
Telephone: +352 46 89 39 0
Fax: +352 46 89 39 20 19
Berliner Sparkasse
Niederlassung der Landesbank Berlin AG
Alexanderplatz 2
D-10178 Berlin
Telephone: +49 30 86 98 01
Fax: +49 30 86 98 30 74
www.berliner-sparkasse.de
A current list of Retail Banking, Regional
Cor porate Banking, Investment and Real
Estate Centres can be found on the Internet
at www.berliner-sparkasse.de/Standorte.

Retail Banking
Important addresses
Private Banking Bundesallee 171 D-10715 Berlin +49 30 86 98 40 70
Sales division south
Retail Banking
Investments Uhlandstrasse 97 D-10715 Berlin +49 30 86 97 47 62 4
Districts: Neukölln, Schöneberg,
Steglitz, Tempelhof, Zehlendorf
Sales division east
Retail Banking
Investments
Districts: Hellersdorf, Köpenick,
Lichtenberg, Marzahn, Treptow
Frankfurter Allee 147 D-10365 Berlin +49 30 86 97 42 69 4
Sales division central
Retail Banking
Investments
Districts: Friedrichshain, Kreuzberg,
Mitte, Prenzlauer Berg
Friedrichstrasse 185 –190 D-10117 Berlin +49 30 86 97 46 54 7
Sales division north
Retail Banking
Investments
Districts: Hohenschönhausen, Pankow,
Reinickendorf, Wedding, Weißensee
Scharnweberstrasse 14 D-13405 Berlin +49 30 86 97 47 86 5
Sales division west
Retail Banking
Investments
Districts: Charlottenburg, Spandau,
Tiergarten, Wilmersdorf
Berliner Strasse 40 – 41 D-10715 Berlin +49 30 86 97 37 79 6
Sales division Real Estate Centres Badensche Strasse 23 D-10715 Berlin +49 30 86 98 40 51
Regional Corporate Banking
Head Regional Corporate Banking division Badensche Strasse 23 D-10715 Berlin +49 30 86 98 43 89
North Regional Corporate Banking division Berliner Strasse 40 – 41 D-10715 Berlin +49 30 86 97 37 77 7
South Regional Corporate Banking division /
Brandenburg division
Central Berlin Regional Corporate Banking
division
Badensche Strasse 23 D-10715 Berlin +49 30 86 97 47 67 1
+49 30 86 97 47 48 5
Badensche Strasse 23 D-10715 Berlin +49 30 86 97 46 57 5
Regional Corporate Banking Centre division Badensche Strasse 23 D-10715 Berlin +49 30 86 98 30 23
BusinessLine division Brunnenstrasse 111 D-13355 Berlin +49 30 86 98 24 40
185

Important addresses
Real Estate Financing
Berlin office
Former West German states
Berlin and Former East German States
Investors
Housing Companies
Consortium Financing / Syndication
Foreign Investors
186
Corneliusstrasse 7 D-10787 Berlin
+49 30 25 99 57 90
+49 30 25 99 55 80
+49 30 25 99 55 82
+49 30 25 99 56 88
+49 30 25 99 55 95
+49 30 25 99 96 65
Dusseldorf office Königsallee 60 G D-40212 Dusseldorf +49 211 83 92 35 0
Frankfurt / Main office Bockenheimer Anlage 2 D-60322 Frankfurt / Main +49 69 15 06 61 1
Hamburg office Neuer Wall 19 D-20354 Hamburg +49 40 28 66 58 92 1
Munich office Perusastrasse 7 D-80333 Munich +49 89 29 19 49 10
Amsterdam office Schouwweg 13 A NL-2243 BB Wassenaar +31 70 51 45 99 9
London office Crown Court, Cheapside GB-London EC2V6LR +44 20 75 72 64 93
Prague office Meteor Centre Office Park
Sokolovská 100/94
CZ-18000 Prague 8 +420 2 36 08 01 50
Warsaw office ul. Widok 8 PL-00-023 Warsaw +48 22 69 06 56 6

Capital Markets
Business Management
Relationship Management
Client Business
Savings Banks and Genobanks
Banks and Investment Managers
Institutional Customers
Credit
Retail Banking
Important addresses
Alexanderplatz 2 D-10178 Berlin +49 30 24 56 25 65
+49 30 24 59 29 03
Alexanderplatz 2 D-10178 Berlin +49 30 86 96 29 18
+49 30 86 96 24 30
+49 30 86 96 19 01
+49 30 86 96 20 00
+49 30 86 96 25 51
+49 30 86 96 29 00
Treasury und Trading Alexanderplatz 2 D-10178 Berlin +49 30 24 56 24 07
+49 30 24 56 65 01
International business Alexanderplatz 2 D-10178 Berlin +49 30 24 59 25 70
187

Berlin-Hannoversche
Hypothekenbank AG
Landesbank Berlin International S.A.,
Luxemburg
LBB Finance
(Ireland) plc, Dublin
LBS Norddeutsche Landesbausparkasse
Berlin-Hannover AöR,
Berlin / Hanover
Landesbank Berlin Holding AG
Landesbank Berlin AG
Berliner Sparkasse *
90.4 % Landesbank Berlin
Investment GmbH
25.1 % Atos Worldline Processing GmbH,
Frankfurt am Main
25.1 % B + S Card Service GmbH,
Frankfurt am Main
12.0 % 75.0 % --1 share netbank Aktiengesellschaft,
Hamburg
IDLG Immobiliendienstleistungen GmbH LBB-Immobilien-Service GmbH
LBB Grundstücks-Gesellschaft mbH
der Landesbank Berlin AG
BankenService GmbH
Unternehmensgruppe Landesbank Berlin
BerlinOnline Stadtportal GmbH & Co. KG
GfBI Gesellschaft für Beteiligungen
und Immobilien mbH
15.0 % FinanzIT GmbH,
Hanover
45.0 % Versicherungsservice GmbH
Unternehmensgruppe Landesbank Berlin
Major investments are shown.
Investments of which no percentage is shown are wholly owned and
based in Berlin, unless otherwise stated.
* A branch of Landesbank Berlin AG Status: April 2008
188
Banks and Finance Companies Real Estate Other Services

Imprint
Published by
Landesbank Berlin Holding AG
Corporate Communications
Alexanderplatz 2
D-10178 Berlin
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HGB Hamburger Geschäftsberichte GmbH & Co. KG
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The German version of this report is definitive.

Landesbank Berlin Holding AG
Alexanderplatz 2
D-10178 Berlin
P.O: Box 110801
D-10838 Berlin
Telephone: +49 30 86 95 00
Fax: +49 30 86 95 09
Should you have any questions regar ding
the Annual Report, please contact:
Corporate Communications
Christina Pries
Telephone: +49 30 86 96 63 89
Fax: +49 30 86 96 63 93
E-mail: ir@lbb.de
www.lbb-holding.de
www.lbb.de
AnnuAl RepoRt 2007
Landesbank Berlin Holding