Geschäftsbericht 2008 - NordFinanz Bank AG

significant risks, an overall risk report is prepared on
a quarterly basis. This report contains analyses and
calculations of interest rate risk (gap analysis and
interest income statements), value-at-risk in the lending
business, as well as analyses and comments on
risk cover, liquidity and solvency ratios, market price
risk, and operational risk.
Only by taking into account the capital increases
implemented at the parent company in 2008 and the
full shareholder contribution to offset losses is there
risk cover at the balance sheet date in almost all
calculation scenarios.
With full recognition of the shareholder contribution
as of December 31, 2008, the Group’s solvency ratio
in accordance with the Solvency Regulation is 10.1%.
During the past fiscal year, the existing methods and
instruments for risk measurement and risk management
continued to be enhanced on an ongoing basis.
Substantial improvements were made especially in
terms of identifying and managing interest rate risk,
allowing better identification of future risks. Based
on the modified programs, the active risk management
process was further enhanced and the development
of measuring instruments was continued and
brought into line with regulatory requirements.
Opportunities and Risks of Future
Development/Outlook for 2009
In recent years, the base for the Group’s business
has been enlarged. New business risk has been minimized.
Due to equity restrictions, business in recent years
has been characterized by consolidation in the
lending business. Profitable growth has not been
possible to date. Furthermore, in 2008 the planned
integration of the E-Clear (UK) PLC group into the
Group’s business activities did not take place on
account of the owner control proceedings. The shareholder
contribution described was therefore necessary
to report a break-even result.
The shareholder of the parent company E-Clear (UK)
PLC and the Bank have jointly prepared a business
plan aimed at expanding E-Clear into a fully integrated
payment service provider. This should give a significant
boost to the Group’s net assets and results
of operations in the future by improving profitability
and strengthening the Bank’s capital resources. On
account of the negative outcome of the owner control
proceedings, the business plan has not yet been
implemented.
For this reason, and because the business volume
is limited due to the parent company’s inadequate
capital resources, a negative operating result is also
expected in 2009. The Bank is therefore unable to
continue as a going concern on the basis of its own
resources.
To safeguard the Group’s continued existence, it is
necessary to implement a reliable investor concept
in conjunction with the implementation of a viable
business model. In view of talks held to date, the
Management Board assumes that it will be possible
to implement such a concept by the end of 2009.
An assessment of the Group’s future business success
must therefore take general economic developments
into account, especially the constant pressure
on credit margins.
NF-Bank