230967 com titel gb 02 e

10 MANAGEMENT REPORT
Mortgage banks
2002
Equity tied-up (7m) 1,931
Operative
return on equity 14.6%
Cost/income ratio
in operating
business 22.4%
Segment reporting with profit split for first time
In our 2002 financial statements, we present segment reporting in a new form.
We no longer show a “profit contribution from business passed on” for individual
business lines; rather, we directly divide up earnings, thus ensuring that they
are not shown twice over. The year-ago figures have been adjusted accordingly.
The performance of a segment is measured on the basis of its operating result
(before extraordinary factors, regular amortization of goodwill and restructuring
expenses), its pre-tax profit and the figures for its return on equity and
cost/income ratio.
Retail banking has returned to the black after a distinct loss of 7243m in 2001.
Last year, its operating profit was raised to a plus of 753m, giving it a return on
equity of 3.2%. However, we had to take into consideration restructuring expenses
of 797m here.
In Asset management, we just managed to achieve a profit on business operations;
but sizeable extraordinary charges of 7247m had to be shouldered. With
regular amortization of goodwill and restructuring expenses of 710m, a pre-tax
result of minus 7330m was registered.
The Corporate customers and institutions segment was adversely affected
last year by almost 7450m higher provisioning costs, which practically halved its
operating result. Only to a minor extent did extraordinary factors have to be
taken into account that reduced earnings.
Securities, which now includes foreign-exchange dealing as well, clearly
reflects the depressed state of the equity markets. After a plus of 7256m in the
previous year, the operating result dropped to a minus of 7296m in 2002. In
addition, restructuring expenses of 752m were incurred for the new strategic
orientation in investment banking.
Group Treasury, comprising liquidity management and capital-structure
management, achieved 7169m compared with 7199m in 2001. It did not have
any extraordinary charges to bear.
Up to July, the Mortgage banks segment included Rheinhyp – in addition to
Hypothekenbank in Essen and Erste Europäische Pfandbrief- und Kommunalkreditbank
Luxemburg. Since August, EUROHYPO AG, in which we hold a
34.6% interest through the integration of our subsidiary Rheinhyp Rheinische
Hypothekenbank AG, has been consolidated at equity. The operating profit
reached 7281m, as against 7439m a year earlier.
Within the Group as a whole, we achieved – before extraordinary factors of
minus 7247m, regular goodwill amortization of 7108m and restructuring
expenses of 7209m – an operating result of 7192m. This translates into a return
on equity of 1.6% and a cost/income ratio of 77.3%, marking a slight improvement
on 2001.