Interim Report - DG Hyp

Interim Report
30 June 2005
Member of the
Cooperative Financial
Services Network
Ein Unternehmen Member der of
DG HYP. The innovative real estate bank.

Business development 1.1. to 6/12 6/12
30.6.2005 of 2004 of 2003
€ million € million € million
Real estate lending 1,933 1,667 1,909
(incl. loan extensions)
Public-sector lending 5,898 5,532 3,478
(incl. loan extensions)
MBS-purchases 680 483 466
Pfandbrief sales and other 8,098 6,542 4,940
refinancing resources
Balance sheet 30.6.2005 31.12.2004 31.12.2003
€ million € million € million
Balance sheet total 77,196 73,813 69,097
Mortgage loans 24,628 24,809 24,779
Loans to municipalities 41,430 39,379 37,584
Bonds and other
fixed-income securities
65,263 60,477 55,071
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Overview
Profit and loss account 1.1. to 6/12 6/12
30.6.2005 of 2004 of 2003
€ million € million € million
Gross profit 130.7 166.9 147.6
Administrative expenses 85.5 91.3 94.2
Risk provisions/revaluation results –18.3 –36.2 – 45.4
Operating result 26.9 39.4 8.0
Profit transfer 5.4 8.8 8.8

Ladies and Gentlemen,
dear business associates,
Notwithstanding the difficult economic conditions that
have persisted during this year, in the first half of 2005
DG HYP saw a significant increase in its new business in
residential and commercial real estate financing, as well
as in local authority lending. These notable achievements
were due to intensified marketing efforts, both via the
distribution network within the cooperative banking sector,
and in direct business. This was all the more encouraging
in the absence of a sustained recovery to date of the
domestic real estate financing market. Operating profit
during the period under review amounted to €26.9 million
(6/12 of 2004: €39.4 million) which, taking into consideration
the weak economic environment, was in line with our
expectations.
We placed two very successful jumbo Pfandbrief issues
totalling €4.5 billion on the capital market. Additionally,
we joined forces with DZ BANK and KfW Banking Group
to market an innovative multi-seller securitisation transaction
that was issued under the name PROSCORE-VR 2005-1.
This was the first time that risks related to smaller-sized
commercial real estate loans (totalling €735 million) from
the portfolios of various cooperative banks were aggregated
and offered to domestic and international investors.
Thanks to the favourable development across all areas of
business, DG HYP is well positioned to progress further as
an innovative real estate bank.
Deutsche Genossenschafts-Hypothekenbank AG
The Management Board
Hamburg, August 2005
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Further progress made in Residential Real
Estate Finance
New business and loan extensions in Residential Real Estate
Finance amounted to €875 million during the period
under review; this corresponds to a 24.5% increase over
the pro-rata figure for the previous year (€703 million).
DG HYP offers attractive products in this market, thus
securing its successful position.
Transactions intermediated by cooperative banks, as well
as by Bausparkasse Schwäbisch Hall, also show a positive
trend. This highlights the fact that DG HYP is firmly
enshrined within the cooperative banking sector: it also
demonstrates the successful development of VR-Immobilien
AG’s business model.
Commercial Real Estate Finance continues
to expand
DG HYP’s Commercial Real Estate Finance business
continued to develop positively, leveraging its decentralised
market presence in its core German market as
well as in selected international locations. New business
and loan extensions totalled €1,057 million during the
first half of 2005, which equates to a 9.7% increase over
the pro-rata figure for the previous year (€964 million).
Particularly high growth in new business was recorded by
the domestic direct business originated by our Real Estate
Centres, increasing roughly by 35% over the previous year.
Our international business, which is in the start-up phase
in Paris, London and Amsterdam, is becoming increasingly
important. It accounted for 13.3% of originated new
business, compared with 3.2% the year before.

Significant increase in local authority lending
New business and loan extensions in originated local
authority lending reached €1,615 million during the
period under review, which corresponds to a 56.4%
increase over the pro-rata figure for the previous year
(€1,033 million). This progress is defined on the one
hand by the continuing rise in the local authority finance
requirements. On the other hand, DG HYP has successfully
expanded its position in the market for local authority
finance, in cooperation with local cooperative banks.
Real Estate Credit Treasury expands with
product innovations
The Real Estate Credit Treasury division continues to
expand, supported by product innovations such as
investments in structured high-margin credit products.
New business in MBS purchases totalling €680 million
was up significantly on the amount of €483 million
(6/12 of 2004).
Furthermore, DG HYP and DZ BANK once again positioned
themselves as pioneers in multi-seller securitisations,
with the first small-size commercial MBS transaction
PROSCORE-VR 2005-1. The transaction comprises 3,072
small commercial real estate loans with a total volume of
€735 million, 94% of which originate from DG HYP’s
portfolio and 6% from the portfolios of six cooperative
banks.
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A positive trend was also reported in Structured Finance
activities. During the period under review, DG HYP
successfully arranged the placement of a large commercial
non-performing loan portfolio on behalf of DZ BANK.
Once again, DG HYP demonstrated its leading role within
the cooperative banking sector, as an active manager of
real estate loan portfolios.
Successful international jumbo issues
DG HYP kick-started the market in January 2005 with the
first jumbo Pfandbrief of the year, a seven-year, €2 billion
issue. Another jumbo issue followed in June 2005 –
accompanied by a major international roadshow. This
€2.5 billion issue, which included an innovative 5-year/
10-year split-maturity feature, commanded considerable
interest. Both issues were oversubscribed, with over 50%
being placed with international investors. This allowed
DG HYP to proceed successfully with its strategy of
internationalisation in its refinancing activities.
During the period under review, DG HYP’s new issues
totalled €8.1 billion, of which public-sector covered
securities (öffentliche Pfandbriefe) accounted for €6.3
billion, mortgage bonds (Hypothekenpfandbriefe) for
€1.1 billion and unsecured refinancing for €0.7 billion.

Income statement
DG HYP’s operating profit was €26.9 million in the first
half of 2005 (6/12 of 2004: €39.4 million), which is in
line with our expectations.
Within this context, the development in net interest
income showed the impact of maturities of existing highmargin
exposures. Naturally, the positive effects of new
business development will not be felt in full for some
years yet. The decline in the net commission result, to
€27.2 million in expenditure (6/12 of 2004: expenditure
of €20,0 million) was due to the increase in new business
intermediated by the cooperative banking sector, and
to considerably higher new Jumbo Pfandbrief issuance.
Other operating income was down to €4.8 million; the
previous year’s level of €20.3 million had been due
primarily to capital gains on the sale of the bank's office
buildings in Hamburg and Berlin.
The consistent restructuring of the IT systems, and
further cost reductions, have allowed DG HYP to reduce
administrative expenses further, to €85.5 million
(6/12 of 2004: €91.3 million). Risk provisioning/revaluation
results amounted to €–18.3 million (6/12 of 2004:
€–36.2 million).
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Balance sheet development
DG HYP’s total assets rose by €3.4 billion during the
period under review, to €77.2 billion.
This development is marked by the expansion of the
securities portfolio, by €2.9 billion to €28.2 billion.
At €24.4 billion, the volume of mortgage loans has
remained virtually constant compared with the figure
as at 31 December 2004. Loans to local authorities
increased by 2.4% to €17.2 billion.
Developments on the liabilities side of the balance sheet
were driven by the large supply of new issues during
the period under review. Accordingly, the volume of
securitised liabilities rose by €4.6 billion compared with
the figure as at 31 December 2004, to €52.1 billion.

Business progress figures
New business 1.1. to 6/12 Change
30.6.2005 of 2004
Real estate lending
€ million € million %
incl. loan extensions 1,933 1,667 15.9
Division of real estate lending
between areas of business
– Private customers 875 703 24.5
– Investors 1,057 964 9.7
MBS-purchases 680 483 40.9
Public-sector lending
incl. loan extensions 5,898 5,532 6.6
thereof
loans to municipalities 1,615 1,033 56.4
promissory note loans 1,377 352 291.4
public-issue securities 2,907 4,148 –29.9
Pfandbrief sales and others 8,098 6,542 23.8
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Balance sheet as at 30 June 2005
Assets
30.6.2005 31.12.2004 Change
€ million € million %
Receivables from banks 5,772 5,628 2.6
thereof
mortgage loans 248 224 10.7
loans to municipalities 4,710 4,843 –2.7
Receivables from non-bank customers 42,317 42,006 0.7
thereof
mortgage loans 24,380 24,585 –0.8
loans to municipalities 17,211 16,800 2.4
Bonds and other
fixed-income securities 28,222 25,294 11.6
Other assets 885 885 0.0
Balance sheet total 77,196 73,813 4.6

Balance sheet as at 30 June 2005
Liabilities and equity
30.6.2005 31.12.2004 Change
€ million € million %
Liabilities to banks 10,360 11,567 –10.4
thereof
registered bonds (Pfandbriefe) 4,008 3,965 1.1
Liabilities to non-bank customers 11,912 11,924 – 0.1
thereof
registered bonds (Pfandbriefe) 9,155 8,989 1.8
Certificated liabilities 52,100 47,523 9.6
thereof
mortgage bonds (Pfandbriefe) 14,334 14,502 –1.2
public bonds (Pfandbriefe) 33,174 28,151 17.8
Subordinated liabilities 593 620 – 4.4
Capital with participation rights 154 154 0.0
Fund for general banking risks 13 13 0.0
Equity 1,306 1,271 2.8
Other liabilities 758 741 2.3
Balance sheet total 77,196 73,813 4.6
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Profit and loss account
1.1. to 6/12 Change
30.6.2005 of 2004
€ million € million %
Net interest income 153.1 166.6 – 8.1
Net commission income –27.2 –20.0 –36.0
Other operating income 4.8 20.3 –76.4
Gross profit 130.7 166.9 –21.7
Administrative expenses 85.5 91.3 –6.4
Operating result before provisions
for risks 45.2 75.6 – 40.2
Provisions for risks/revaluation results –18.3 –36.2 49.4
Operating result 26.9 39.4 –31.7
Extraordinary profit –1.0 –2.2 54.5
Taxes 0.2 9.2 –97.8
Partial profit transfer 20.3 19.2 5.7
Profit transfer 5.4 8.8 –38.6

Employee figures*
1.1. to 1.1. to
30.6.2005 30.6.2004
Average number of staff 631 629
thereof
(600) (598)
part-time 66 64
trainees 21 18
* Numbers in brackets are weighted according to hours worked
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Board of Management
Friedrich Piaskowski
Harald Pohl
Christian Sewing
Chairman of the Supervisory Board
Dr Alexander Erdland
Deutsche Genossenschafts-Hypothekenbank AG
20095 Hamburg 10117 Berlin
Rosenstrasse 2 Pariser Platz 3
PO Box 10 14 46 PO Box 08 01 62
20009 Hamburg 10001 Berlin
Tel. +49 (0)40 3334-0 Tel. +49 (0)30 31993-0
Fax +49 (0)40 3334-1111 Fax +49 (0)30 31993-5010
Internet: www.dghyp.de
If you have questions, please contact
our Investor-Relations-Team:
Tel. +49 (0)40 3334-2944
Fax +49 (0)40 3334-7822944
email: ir@dghyp.de

Addresses of DG HYP
Real Estate Centres for commercial investors
DG HYP Real Estate Centre
North Germany
20095 Hamburg
Rosenstrasse 2
Tel. +49 (0)40 3334-3778
Fax +49 (0)40 3334-1102
DG HYP Real Estate Centre
Central Germany
60325 Frankfurt am Main
Friedr.-Ebert-Anlage 2–14 (City-Haus)
Tel. +49 (0)69 750676-21
Fax +49 (0)69 750676-99
DG HYP Real Estate Centre
East Germany
Berlin Main Branch
10117 Berlin
Pariser Platz 3
Tel. +49 (0)30 31993-5101
Fax +49 (0)30 31993-5060
Representative Offices
Bureau de Représentation Paris
75008 Paris, France
120, avenue des Champs-Elysées
Tel. +33 (0)156 8812-90
Fax +33 (0)156 8812-91
Amsterdam Representative Office
1075 AB Amsterdam,
The Netherlands
Koningslaan 35
Tel. +31 (0)20 57115-55
Fax +31 (0)20 57115-50
DG HYP Real Estate Centre
West Germany
40227 Dusseldorf
Ludwig-Erhard-Allee 9
Tel. +49 (0)211 220499-10
Fax +49 (0)211 220499-40
DG HYP Real Estate Centre
South Germany
80333 Munich
Türkenstrasse 16
Tel. +49 (0)89 512676-10
Fax +49 (0)89 512676-30
DG HYP Real Estate Centre
Southwest Germany
70191 Stuttgart
Vordernbergstrasse 16
Tel. +49 (0)711 26376-39
Fax +49 (0)711 26376-47
London Representative Office
London EC1A 4HJ, UK
10, Aldersgate Street
Tel. +44 (0)20 777676-12
Fax +44 (0)20 777676-19
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Member of the
Cooperative Financial
Services Network
DG HYP. The innovative real estate bank.