Die norddeutsche Art. Stability – the best link to the future Annual Report 2009 NORD/LB Annual Report 2009 Erweiterter Konzernvorstand (extended Group Managing Board) left to right: Dr. Johannes-Jörg Riegler, Harry Rosenbaum, Dr. Jürgen Allerkamp, Dr. Gunter Dunkel, Christoph Schulz, Dr. Stephan-Andreas Kaulvers, Dr. Hinrich Holm, Eckhard Forst These are our figures 1 Jan.–31 Dec. 1 Jan.–31 Dec. Change 2009 2008 (in %) In € million Net interest income 1,366 1,462 – 7 Loan loss provisions – 1,042 – 266 > 100 Net commission income 177 180 – 2 ProÞ t/loss from Þ nancial instruments at fair value through proÞ t or loss including hedge accounting 589 – 308 > 100 Other operating proÞ t/loss 144 96 50 Administrative expenses 986 898 10 ProÞ t/loss from Þ nancial assets – 140 – 250 44 ProÞ t/loss from investments accounted – 200 6 > 100 for using the equity method Earnings before taxes – 92 22 > 100 Income taxes 49 – 129 > 100 Consolidated proÞ t – 141 151 > 100 Key Þ gures in % Cost-Income-Ratio (CIR) 47.5 62.5 Return on Equity (RoE) – 2.7 – 31 Dec. 31 Dec. Change 2009 2008 (in %) Balance Þ gures in € million Total assets 238,688 244,329 – 2 Customer deposits 61,306 61,998 – 1 Customer loans 112,083 112,172 – Equity 5,842 5,695 3 Regulatory key Þ gures (acc. to BIZ) Core capital in € million 8,051 7,235 11 Regulatory equity in € million 8,976 8,999 – Risk-weighted assets in € million 92,575 89,825 3 BIZ total capital ratio in % 9.7 10.0 BIZ core capital ratio in % 8.7 8.1 NORD/LB ratings (long-term / short-term / individual) Moody’s Aa2 / P-1 / C – Standard & Poor’s A– / A-2 / – Fitch Ratings A / F1 / C / D Our holdings Our subsidiaries and holding companies are an important element of our corporate strategy. Thanks to these we have extended our business base and strengthened our position as a universal bank. Stable connections and short paths within the group allow us to have a direct link to our customers on the ground. Together we can offer our customers a wide range of high-quality products and bespoke services within an integrated customer care approach. 100 % 92.5 % 100 % 75 % 100 % 49 % 100 % 49 % 100 % 44 % 100 % 40 % Asset Management Dear customers, associates and friends of NORD/LB You hold in your hands the Annual Report of NORD/LB Norddeutsche Landesbank for 2009. As usual, you will find many pages that contain figures upon figures, facts upon facts. These may well constitute the essence of our financial year – but they cannot provide a complete overview of all that has happened in our bank on every one of the 365 days in 2009. In fact, NORD/LB has just experienced a lively and challenging year in which we have asserted our position in the market on our own merits, despite the difficult climate. During the past business year, the financial crisis has further permeated into the real economy. NORD/LB This has greatly challenged NORD/LB as a bank that is deeply rooted in the real economy, with its customer-oriented business model. Our employees have demonstrated that they are up to the task of responding to these demanding times and that they are capable of bearing the responsibility of NORD/LB for the people and companies of our business region. During the past year, we paid particu- larly close attention to connections – connections between the bank and its customers, between the real economy and the financial markets, between revenues and risks – and to the connections between the individual components of our Group. We have further reinforced these connections, bundling expertise and creating networks to make the Group even more stable, to put it on a sustain- Substainability able, stronger footing for the years to come. Therefore, the rows and rows of figures in this Annual Report do not simply reflect a strong NORD/LB Group, but also tell the story of the many thousands of customers and partners who were able to rely on NORD/LB in 2009, and whom we will be pleased to assist in the realisation of their plans in the future, with our expertise, sound judgement and many good ideas. We owe a debt of gratitude to our customers, our owners and our employees, all of whom have Group Management Report Group helped over the years to make NORD/LB what it is today – the strong bank in Northern Germany. Consolidated Financial Statements Consolidated Dr. Gunter Dunkel Chairman of the Managing Board Data/Glossary Reports 2 NORD/LB Annual Report 2009 04 10 History 2009 The NORD/LB Group 12 28 Our business areas Sustainability – within the Group our 2009 profile 75 Explanation of the Corporate Governance Code The most important We introduce ourselves For us, stable relationships dates of the eventful 2009 – who we are, where we with our customers and financial year – from come from, what we do our partners represent the presentation of our and how we do it as a a vital cornerstone of our new chairman to the early universal bank in the heart business, on which we launch of our GMTN of North Germany, with consistently orientate our programme. a special focus on this strategy. The members region. of our managing board explain how we achieve this. Good corporate govern- ance based on trust is an essential prerequisite for economic success and underpins nationally and internationally recognised standards. We implement these, as far as possible, both in the context of our legal form and in our supporting structure. 3 79 143 Contents Group Management Consolidated Financial Report Statements Our figures Our holdings NORD/LB Managing Board Foreword History 2009 The NORD/LB Group Our roles and responsibilities Substainability Our business areas within the Group Sustainability – our 2009 profile 1. Business Activities 1. Income Statement Explanation of the and the General 2. Statement of Compre- Corporate Governance Code Environment hensive Income 2. NORD/LB 3. Consolidated Group Management Report Management Report Group 3. Personnel Report Balance Sheet 4. Results of Operations 4. Statement of Changes Consolidated Financial Statements 5. Net Assets and in Equity Financial Position 5. Cash Flow Statement Reports 6. Subsequent Events 6. Notes to the 7. Development of the Consolidated Financial Data/Glossary Business Segments Statements 8. Risk Report 7. Segment Reporting Financial Statements Consolidated 9. Forecast Report 8. Responsibility 10. Statements Relating Statement to the Future 9. Auditor’s Report Data/Glossary Reports 4 NORD/LB Annual Report 2009 News from 2009 – timeline Dr. Hannes Rehm, Dr. Gunter Dunkel 2 January Dr. Gunter Dunkel becomes new Chairman of the Managing Board of NORD/LB. Dr. Gunter Dunkel has taken over as Chairman of the Managing Board of NORD/LB, with effect from the beginning of the year. He has therefore assumed the office vacated by Dr. Hannes Rehm on his retirement at the end of 2008. Dr. Dunkel has been a member of the Managing Board since the beginning of 1997, and Deputy Chairman of the bank’s Managing Board since 2007. History 2009 NORD/LB Group Our business areas within the Group Sustainability 5 6 January and 8 October Landessparkasse the victor in multiple tests. In the context of the WISO economics magazine programme broadcast by the ZDF television channel, Braunschweigische Landessparkasse was pronounced the best advisory bank in Braunschweig following a random survey on bank advisory services. A former board member of a co-operative bank went undercover to test the services of the branches of five renowned banks in Braunschweig. The results were clear – the advice provided by Braunschweigische Landessparkasse was “expert, NORD/LB friendly and above all in the interests of the customer – just the kind of advice that bank staff should be giving.” At the beginning of October, the Landesspar- kasse was once again the subject of a comparison test, conducted by manage- ment consultants Nielsen + Partner Unternehmensberater GmbH and the Institute for Wealth Accumulation (Institut für Vermögensaufbau) into banking advice, and was the clear winner. The bank’s final rating of 1.4 (on a scale of 1 to 6, where 1 is excellent and 6 is very poor) was the best result achieved by any institution so far, throughout Germany. The Landessparkasse is now entitled to Substainability show off the seal “Winner – Braunschweig Regional Bank Test” for a period of one year. 11 February and 12 May NORD/LB with two successful G-MTN benchmark bond issues. The G-MTN (Guaranteed Medium Term Note) programme is an issue in which NORD/LB places secured short and medium-term bonds in the capital markets. These issues are secured to 150 per cent via uncommitted assets of the bank, and Group Management Report Group are guaranteed by the federal states of Lower Saxony and Saxony-Anhalt. In this way, the Landesbank will help even out the current market distortions in relation to the financial crisis, and will continue to pursue its proven refinancing strategy to take on covered funds independently, with matched maturi- ties and without suffering competitive disadvantage. The first benchmark bond was issued with a total placement volume of € 2 billion. With high demand from investors, this placement was heavily oversub- scribed when the order books were closed. The subscription volume for the second bond issue amount- ed to around € 2.5 billion, with around a third of the orders for which were submitted from outside Germany. Ultimately, € 1.5 billion were allocated. Financial Statements Consolidated 24 March NORD/LB reinforces reserves and pays out dividend. NORD/LB has paid its owners a dividend of 7 per cent of its share capital for 2008, disbursing around € 76 million to the federal states of Lower Saxony and Saxony-Anhalt and the savings banks in Lower Saxony, Saxony-Anhalt and Mecklenburg-Western Pomerania.