ANNUAL REPORT 2006 - DG Hyp
ANNUAL REPORT 2006 - DG Hyp
ANNUAL REPORT 2006 - DG Hyp
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Management Report<br />
Costs development<br />
Administrative expenses in the <strong>2006</strong> financial<br />
year were up year on year at € 191.4 million (2005:<br />
€ 178.1 million). This increase is primarily due to a one-off<br />
factor of € 11.3 million in connection with increasing provisions<br />
for pensions and other personnel provisions. We<br />
reduced the discount factor used to calculate all personnel<br />
provisions, to 4.5 per cent as a result of ongoing low<br />
interest rates. Further increases in personnel expenses were<br />
due to the new sales structure for the German cooperative<br />
banking sector, as well as re-integrating specific IT<br />
application developers from VR Kreditwerk. However, we<br />
were able to further reduce the other administrative<br />
expenses, so that material costs were down € 2.5 million<br />
year-on-year.<br />
The increase in other operating expenses is attributable<br />
to one-off costs incurred in the course of the re-orientation<br />
of VR-Immobilien AG.<br />
Risk provisioning<br />
We were able to record a scheduled reduction in<br />
provisions for loan losses to € 84.1 million (2005:<br />
€ 98.0 million). Following the sale of part of our nonperforming<br />
loans at the end of 2005, together with further<br />
portfolio adjustments our provisions for loan losses<br />
declined in <strong>2006</strong>.<br />
Revaluation gains totalled € 24.2 million in the <strong>2006</strong><br />
financial year. The prior year’s figure of € 42.1 million was<br />
impacted by the sale of securities as part of management<br />
of the cover assets pool and the sale of our equity participation<br />
in VR Kreditwerk to DZ BANK.<br />
Net income<br />
The total operating result for the financial year <strong>2006</strong><br />
was € 32.6 million. The improvement in core capital from<br />
perpetual silent contributions, which were newly concluded<br />
at the end of 2005 and start of <strong>2006</strong>, led to an increase<br />
in the partial profits transferred to the silent partners in the<br />
amount of € 59.1 million. After the fund for general banking<br />
risks was reversed within the meaning of Section 340g<br />
of the Handelsgesetzbuch (HGB – German Commercial<br />
Code) in the amount of € 24.1 million, we recorded balanced<br />
net income.<br />
VALUE GENERATED AND BREAKDOWN<br />
OF CONTRIBUTIONS <strong>2006</strong><br />
Silent partnerships<br />
(cooperative<br />
banking sector)<br />
German<br />
cooperative<br />
banking sector<br />
Deutsche Genossenschafts-<strong>Hyp</strong>othekenbank AG | Annual Report <strong>2006</strong><br />
Employees<br />
€ mn %<br />
Employees 67.8 39.0<br />
German cooperative banking sector* 47.1 27.1<br />
Silent partnerships (cooperative banking sector) 40.6 23.3<br />
Silent partnerships (other) 18.4 10.6<br />
TOTAL 173.9 100.0<br />
* Levies paid to associations plus commissions paid<br />
Silent partnerships<br />
(other)<br />
33