ANNUAL REPORT 2006 - DG Hyp

Management Report
Costs development
Administrative expenses in the 2006 financial
year were up year on year at € 191.4 million (2005:
€ 178.1 million). This increase is primarily due to a one-off
factor of € 11.3 million in connection with increasing provisions
for pensions and other personnel provisions. We
reduced the discount factor used to calculate all personnel
provisions, to 4.5 per cent as a result of ongoing low
interest rates. Further increases in personnel expenses were
due to the new sales structure for the German cooperative
banking sector, as well as re-integrating specific IT
application developers from VR Kreditwerk. However, we
were able to further reduce the other administrative
expenses, so that material costs were down € 2.5 million
year-on-year.
The increase in other operating expenses is attributable
to one-off costs incurred in the course of the re-orientation
of VR-Immobilien AG.
Risk provisioning
We were able to record a scheduled reduction in
provisions for loan losses to € 84.1 million (2005:
€ 98.0 million). Following the sale of part of our nonperforming
loans at the end of 2005, together with further
portfolio adjustments our provisions for loan losses
declined in 2006.
Revaluation gains totalled € 24.2 million in the 2006
financial year. The prior year’s figure of € 42.1 million was
impacted by the sale of securities as part of management
of the cover assets pool and the sale of our equity participation
in VR Kreditwerk to DZ BANK.
Net income
The total operating result for the financial year 2006
was € 32.6 million. The improvement in core capital from
perpetual silent contributions, which were newly concluded
at the end of 2005 and start of 2006, led to an increase
in the partial profits transferred to the silent partners in the
amount of € 59.1 million. After the fund for general banking
risks was reversed within the meaning of Section 340g
of the Handelsgesetzbuch (HGB – German Commercial
Code) in the amount of € 24.1 million, we recorded balanced
net income.
VALUE GENERATED AND BREAKDOWN
OF CONTRIBUTIONS 2006
Silent partnerships
(cooperative
banking sector)
German
cooperative
banking sector
Deutsche Genossenschafts-Hypothekenbank AG | Annual Report 2006
Employees
€ mn %
Employees 67.8 39.0
German cooperative banking sector* 47.1 27.1
Silent partnerships (cooperative banking sector) 40.6 23.3
Silent partnerships (other) 18.4 10.6
TOTAL 173.9 100.0
* Levies paid to associations plus commissions paid
Silent partnerships
(other)
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