Dekabank Annual Report 2012

DekaBank Group Annual Report 2012 In financial year 2012, we launched the process for developing DekaBank from being the central asset manager to becoming the fully-fledged securities service provider of the savings banks. Our intention is to be a full-service provider for all securities-related business, which will strengthen the range of products and services of the Sparkassen-Finanz gruppe in this key segment. Together we will achieve more – enhanced quality, higher performance and a better service for our customers. DekaBank Group Annual Report 2012 DekaBank Group at a glance Business development indicators 31.12.2012 31.12.2011 Change % Total assets €m 129,744 133,738 – 3.0 Assets under Management (AMK and AMI) €m 158,339 150,995 4.9 of which: Asset Management Capital Markets (AMK) €m 133,101 126,895 4.9 of which: Asset Management Property (AMI) €m 25,238 24,100 4.7 Number of securities accounts thousand 4,149 4,382 – 5.3 1.1. – 31.12.2012 1.1. – 31.12.2011 Net sales (AMK and AMI) €m – 231 – 5,861 96.1 of which: Asset Management Capital Markets (AMK) €m – 1,815 – 6,826 73.4 of which: Asset Management Property (AMI) €m 1,584 965 64.1 Performance indicators Total income €m 1,434.4 1,301.6 10.2 of which: Net interest income €m 431.1 371.1 16.2 of which: Net commission income €m 946.1 976.7 – 3.1 Total expenses €m 915.1 918.5 – 0.4 of which: Administrative expenses (incl. depreciation) €m 906.5 917.7 – 1.2 Economic result €m 519.3 383.1 35.6 Net income before tax €m 442.9 376.6 17.6 Key ratios Return on equity 1) % 15.6 9.3 6.3%-points Cost/income ratio 2) % 55.6 64.7 – 9.1%-points Key regulatory figures 31.12.2012 31.12.2011 Capital and reserves €m 3,836 3,923 – 2.2 Core capital ratio % 14.0 11.6 2.4%-points Core tier 1 capital ratio 3) % 11.6 9.4 2.2%-points Equity ratio % 16.2 15.6 0.6%-points Risk ratios Total risk-bearing capacity €m 5,118 4,694 9.0 Group risk (value-at-risk) 4) €m 2,345 2,660 – 11.8 Utilisation of risk-bearing capacity % 45.8 56.7 – 10.9%-points Non-guaranteed rating (short-term/long-term) Moody‘s P-1/A1 P-1/Aa3 Standard & Poor‘s A-1/A A-1/A Key employee figures Number of employees 4,040 3,957 2.1 Average number of positions occupied 3,541 3,431 3.2 1) Return on equity (RoE before tax) corresponds to the economic result divided by equity at the start of the financial year. Including atypical silent capital contributions. 2) Cost/income ratio (CIR) corresponds to the ratio resulting from total expenses (excluding restructuring expenses) and total income (before provisions for loan losses). 3) The core tier 1 capital ratio takes not account of silent capital contributions of €552m. 4) Confidence level: 99.9%. holding period: 1 year. Konzernlagebericht Only those who evolve can make a difference. For DekaBank, this means that we all need to be willing to adopt changes and show determination in implementing them. To achieve this, we will consistently expand the services we provide in sales, capital market business and asset management. In this, our activities always centre on the savings banks and their customers. Content Foreword of the Board of Management 4 Group management report 13 At a glance 14 Profile and strategy of the DekaBank Group 15 Economic environment 24 Business development and profit performance in the DekaBank Group 28 Group management report management Group Financial position and assets and liabilities 39 Employees 41 Post balance sheet events 42 Forecast report 43 Risk report 46 Report of the Administrative Board 80 Sustainability report 89 Communication on progress 90 Sustainable corporate governance 91 Environmental management/sustainable banking 94 Sustainable HR management 97 Sustainable banking products 101 Social responsibility 104 Communications 106 Consolidated financial statements 115 Statement of comprehensive income 116 Balance sheet 117 Statement of changes in equity 118 Cash flow statement 120 Notes 122 Auditor’s Report 183 Other information 188 Shareholders, associated companies and committees 188 Glossary 200 Headquarters and addresses 205 4 | Foreword of the Board of Management Dr. Matthias Danne Oliver Behrens Dr. h. c. Friedrich Oelrich Michael Rüdiger Dr. Georg Stocker | 5 Group management report management Group Dear Shareholders and Investors, 2012 was a successful year for DekaBank, and an extraordinary one as well. It was successful, because the Bank increased its economic result by more than a third to almost €520m under difficult market con- ditions. And it was extraordinary, because we started the strategic development process for evolving from asset manager into the fully-fledged securities service provider of the savings banks. The goal is clearly defined: At the end of this fundamental transformation process, DekaBank will be the full-service provider for all securities-related businesses of the savings banks. The path to accomplishing this transformation requires a willingness to change – and determination in its implementation. With a new membership structure, the Board of Management is committed to this transformation, as are the managers and employees at all levels within DekaBank. The following applies to us all: Transformation implies motion – in sales as well as in product development, fund management, trading and lending. We will act as one team and together build the securities service provider of the savings banks – always bearing in mind the requirements of our customers. To achieve this, we rely on close cooperation with our shareholders and exclusive sales partners, the savings banks. We are an integral member of the Sparkassen-Finanzgruppe and fully identify with its aims and values. The process to become a fully-fledged securities service provider, which was defined last year, is the logical consequence of the change in our shareholder structure. At the same time, it reflects our chosen role of being “100% savings bank” and it is fully supported by the Administrative Board and the Sparkassen-Finanzgruppe. As a fully-fledged securities service provider, we intend to help expand the savings banks’ strong market position on the basis of a comprehensive repositioning in securities business. The overriding aim is to provide the required individual advice to savings bank customers and offer precisely tailored products for their investments. This includes high-yield and property-oriented securities investments – particularly in an environment of historically low interest rates. We are the savings banks’ partner in retail business, offering a selected product range, targeted on-site sales support, a comprehensive service spectrum and excellent research, tailored to the needs of the decision-makers in the individual financial institutions. All of these services are seamlessly integrated into the reorganised advisory process of the Sparkassen-Finanzgruppe. We are confident that after the few years in which fund sales were weak and net commission income declined, we will reverse the negative trend. On the product side, our approach is based on two aspects. The aim is to further enhance product quality and provide an even wider choice by enlarging the product range to include retail certificates, which were launched as scheduled in January 2013. Investors value the quality and high rating of DekaBank as an issuer and the savings banks appreciate the added value. With the planned acquisition of the customer-focused capital market business of Landesbank Berlin and of LBB Invest, we are pooling an even broader array of products under the roof of the fully-fledged securities service provider. 6 | We will also be expanding our services for the savings banks as institutional customers. DekaBank is enlarging its range of Depot-A (A securities account) products and acts as a highly efficient liquidity centre with links to clearing houses. This helps institutional investors comply fully with both currently applicable and imminent new regulatory requirements. We see the fact that many savings banks were already using our clearing services by the end of 2012 as confirmation that we are on the right track. The Bank’s transformation to becoming a fully-fledged securities service provider did not start from scratch, neither in retail nor in institutional business. In the almost two years which have passed since the full trans- fer of ownership to the savings banks, DekaBank has sharpened its profile and further developed its business model. The integration of investment fund business and customer-oriented capital market activities remains a key strength of the Bank, and one on which we will continue to rely in the future. On the basis of this integration, DekaBank generated a 12% increase in its added value contribution to the savings banks in the reporting year. In addition, DekaBank achieved the first solid increase in net sales for a long time in the fourth quarter of 2012. The core tier 1 capital ratio climbed to 11.6% while the utilisation rate of the risk-bearing capacity dropped considerably. In 2013 and in the subsequent financial years, the further development and movement will be the dominant factors. Our intention is to accomplish the transformation process using our own resources. This requires stringent cost management, with every euro we invest in our positioning as a fully-fledged securities service provider saved elsewhere. The securities service provider of the savings banks will increasingly take shape in the coming months and years. It will be a stable, modern and transparent financial institution built on the soundest foundation imaginable – our firm anchoring in the Sparkassen-Finanzgruppe.

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