ANNUAL REPORT 2008 - DG Hyp

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ECONOMIC ENVIRONMENT A financial markets crisis on a global scale The international financial markets crisis has taken everyone by surprise in terms of its sheer scale. The crisis was triggered in mid-2007 when problems with sub/prime loans arose in the USA against the background of rising interest rate levels there. The intensity of international links among banks meant that the crisis expanded across the world in the course of the reporting year, impeding the ability of the international financial markets to function properly. Europe was increasingly hard hit by the impact of the financial crisis from the middle of 2008 onwards. In order to stabilise the financial system, the international central banks injected the markets with substantial quantities of liquidity and reduced key interest rates over a series of rate cuts. In Germany, the Federal Government, in conjunction with the other European governments, agreed on a rescue package worth € 480 billion in the form of the German Financial Market Stabilisation Fund („SoFFin“) in mid-October. This Fund can extend guarantees of up to € 400 billion and can provide banks with equity capital support of up to € 80 billion. In taking this step, the German government is attempting to restore market participants’ confidence in each other. Banks will be able to receive guarantees for liabilities and equity capital allocations, and to have their risk positions assumed by SoFFin in exchange for debt instruments of the Federal Republic. During the year under review, fifteen banks availed themselves of this rescue package. It is our estimate that stabilising the capital markets and enabling them to function properly again are tasks that will take until well into 2009. 6 Deutsche Genossenschafts-Hypothekenbank AG | Annual Report 2008 Management Report Economic downturn in the second half of 2008 During the second half of 2008 the financial markets crisis picked up speed, spreading beyond the confines of the banking sector and hitting the economy as a whole. After two strong years, there was a clear dip in the state of the economy during the reporting year. As a result, leading economic researchers began, one after the other, to revise their GDP forecasts for 2008 downwards. Whilst the growth rate in 2007 was still 2.6%, the figure for 2008 was just a mere 1.3% despite getting off to a good start in the first quarter due to the favourable weather conditions. A further fall in overall economic output is expected for 2009. Against this background, in early November 2008 the Federal Government introduced a package of measures worth up to € 12 billion designed to strengthen the economy and safeguard jobs, stimulating investment of € 50 billion over the next two years. This economic package is limited to fifteen specific measures that can be implemented in the short term but that will have a sound long-term impact. These include improved write-down conditions for companies, tax benefits for craft professions and the limited waiver of motor vehicle tax. The EU heads of government also agreed on a comprehensive package of economic measures in December with a view to harmonising the national programmes in the member states so as to avoid unfair competition. The overriding aim is to prevent Europe from sliding into a long and difficult recession as a result of the crisis on the financial markets. The highest level of employment since reunification was recorded on the German labour market during the year under review. It was only towards the year-end that signs of a fall began to emerge, with the cooling of the economy sparking a turnaround on the labour market too. The unemployment rate is expected to rise in 2009.
Management Report COMMERCIAL REAL ESTATE FINANCE Deutsche Genossenschafts-Hypothekenbank AG | Annual Report 2008 7
Page 1 and 2: Deutsche Genossenschafts-Hypotheken
Page 3 and 4: CONTENTS Letter from the Management
Page 5 and 6: We successfully implemented our str
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Page 11 and 12: Management Report Differing market
Page 13 and 14: Management Report With regard to re
Page 15 and 16: Management Report Products tailored
Page 17 and 18: Management Report LOANS TO LOCAL AU
Page 19 and 20: Management Report SPECIAL PORTFOLIO
Page 21 and 22: Management Report STRATEGIC REALIGN
Page 23 and 24: Management Report FINANCIAL SITUATI
Page 25 and 26: Management Report OWN FUNDS FOR SOL
Page 27 and 28: Management Report Net income During
Page 29 and 30: Management Report RISK REPORT I) Ri
Page 31 and 32: Management Report Furthermore, Risk
Page 33 and 34: Management Report prehensive restru
Page 35 and 36: Management Report From an organisat
Page 37 and 38: Management Report OUR STAFF Job and
Page 39 and 40: Management Report REPORT ON EVENTS
Page 41 and 42: FINANCIAL STATEMENTS Financial Stat
Page 43 and 44: ASSETS BALANCE SHEET 31 Dec 2007
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RESPONSIBILITY STATEMENT To the bes
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REPORT OF THE SUPERVISORY BOARD Dr.
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Corporate Bodies And Committees; Ex
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Corporate Bodies And Committees; Ex
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DG HYP ADDRESSES Deutsche Genossens
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ANNUAL REPORT 2008 - DG Hyp

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