Reliable Performance. the Annual Report 2015
Total Page：16
File Type：pdf, Size：1020Kb
Reliable performance. The annual report 2015. Landesbank Baden-Württemberg 1 Key figures of the LBBW Group. Income statement (EUR million) 1 Jan. – 31 Dec. 2015 1 Jan. – 31 Dec. 20141) Net interest income 1 654 1 878 Allowances for losses on loans and advances – 55 – 104 Net fee and commission income 498 518 Net gains/losses from financial instruments measured at fair value through profit or loss 226 – 120 Net gains/losses from financial investments and net income/expenses from investments accounted for using the equity method 94 263 Other operating income/expenses 134 101 Total operating income/expenses (after allowances for losses on loans and advances) 2 551 2 536 Administrative expenses – 1 782 – 1 770 Guarantee commission for the State of Baden-Württemberg – 121 – 191 Expenses for bank levy and deposit guarantee system – 73 – 82 Impairment of goodwill 0 – 16 Net income/expenses from restructuring – 44 1 Consolidated profit/loss before tax 531 477 Income taxes – 109 – 39 Net consolidated profit/loss 422 438 1) Key figures in % 1 Jan. – 31 Dec. 2015 1 Jan. – 31 Dec. 2014 Return on equity (RoE) 4.1 3.7 Cost/income ratio (CIR) 70.9 74.5 Balance sheet figures (EUR billion) 31 Dec. 2015 31 Dec. 2014 Total assets 234.0 266.3 Equity 13.6 13.2 Ratios in accordance with CRR/CRD IV (with transitional rules) 31 Dec. 2015 31 Dec. 2014 Risk weighted assets (EUR billion) 74.5 82.2 Common equity Tier 1 (CET 1) capital ratio (in %) 16.4 14.6 Total capital ratio (in %) 21.9 19.9 Ratios in accordance with CRR/CRD IV (Basel III after full implementation) 31 Dec. 2015 31 Dec. 2014 Risk weighted assets (EUR billion) 74.5 82.2 Common equity Tier 1 (CET 1) capital ratio (in %) 15.6 13.6 Total capital ratio (in %) 21.4 18.9 Employees 31 Dec. 2015 31 Dec. 2014 Group 11 120 11 117 Rating (4 March 2016) Moody’s Investors Fitch Rating Service Rating Ratings Long-term rating (non-guaranteed obligations) Long-term rating (non-guaranteed obligations) A–, stable Long-term bank deposits Aa3, stable Senior unsecured and long-term issuer ratings A1, stable Short-term rating P–1 Short-term rating F1 Financial strength baa3 Financial strength bbb Public-sector covered bonds Aaa Public-sector covered bonds AAA Mortgage-backed covered bonds Aaa Mortgage-backed covered bonds – 1) After taking into account adjustments pursuant to IAS 8 and IFRS 10. Figures may be subject to rounding differences. 2015 FOREWORD AND REPORTS REPORTS AND FOREWORD Foreword and Reports 2 Foreword by the Board of Managing Directors. ......................................................... 3 Report of the Supervisory Board. .............................................................................. 7 Corporate governance at LBBW. .............................................................................. 19 Remuneration report. ............................................................................................. 28 Compliance. ........................................................................................................... 31 Combined Managment Report 34 Group overview. ..................................................................................................... 36 Business report for the Group. ............................................................................... 49 Risk and opportunity report. .................................................................................. 62 Events after the reporting date. ............................................................................ 109 ICS with regard to the accounting process. .......................................................... 110 REPORT MANAGEMENT COMBINED Outlook. ............................................................................................................... 114 Explanatory notes on the annual financial statements of LBBW (Bank). ................. 120 Consolidated Financial Statements 130 Income statement ................................................................................................ 133 Total comprehensive income ................................................................................ 134 Balance sheet ....................................................................................................... 136 Statement of changes in equity ............................................................................ 138 Cash flow statement ............................................................................................ 140 Notes ................................................................................................................... 143 Basis of group accounting. ............................................................................... 143 Accounting policies. ......................................................................................... 143 Segment reporting. .......................................................................................... 167 Notes to the income statement......................................................................... 174 Notes to the balance sheet. .............................................................................. 182 STATEMENTS FINANCIAL CONSOLIDATED Notes on financial instruments. ........................................................................ 201 Other notes. ..................................................................................................... 229 Additional disclosures in accordance with Section 315a HGB. ........................... 245 Further Information 257 Responsibility statement. ..................................................................................... 258 Auditor’s report. .................................................................................................. 259 Note regarding forward-looking statements. ........................................................ 260 Advisory Board of LBBW/BW-Bank. ........................................................................ 261 Customer Advisory Board of LBBW Rheinland-Pfalz Bank. ..................................... 264 Customer Advisory Board of LBBW Sachsen Bank. ................................................. 265 Glossary. .............................................................................................................. 266 FURHTER INFORMATION Foreword and Reports. 2 FOREWORD AND REPORTS — FOREWORD BY THE BOARD OF MANAGING DIRECTORS Foreword by the Board of Managing Directors. FOREWORD AND REPORTS REPORTS AND FOREWORD Dear customers, dear business partners of the LBBW Group, In the past year we continued delivering good results despite challenging conditions. In 2015, we once again increased our consolidated profit before tax to EUR 531 million, an improvement on the previous year and a pleasing achievement, especially as the underlying conditions in the banking sector have remained tough. Net consolidated profit after tax totaled EUR 422 million, slightly below the prior year's figure, when we reported an exceptionally low tax rate, as previously reported. In 2015 net profit before tax amounted to EUR 385 million for LBBW (Bank). Once again, the defining features of the year 2015 were increasing regulation, historically low interest rates and intense competition. In particular, the implementation of ever more complex regulatory and supervisory requirements by a range of players on the national, European and international level is having a major impact on cost development in the banking sector. Accordingly, costs attributable to regulatory issues rose to more than EUR 200 million for our Company in the year under review. The digitalization process is a further challenge to the capacity of our sector to adapt and be innovative. LBBW is well-equipped to tackle the necessary changes. We have a balanced business model that has enabled us to generate reliable income for years, supported by economic stability in our core markets. With our long-term oriented business approach and our performance capacity in numerous sectors, we have carved ourselves a strong position in the markets, once again convincing many customers in the year under review. This applies for instance to bespoke financial solutions for corporate customers. We were able to successfully support a whole range of major transactions and again confirmed our leading position with debt certificates, which are being utilized more frequently. 3 FOREWORD AND REPORTS — FOREWORD BY THE BOARD OF MANAGING DIRECTORS Building on this solid basis, we have launched numerous initiatives and projects within the Bank aimed at sustainably securing the future of our Company in an environment undergoing dynamic change. One such measure is investing in a new core banking system that we plan to implement in 2017. It will create the foundation for greater digitalization, standardization and optimization of our business processes. Furthermore, we plan to realign our capital markets business activities to shift our customer advisory services to an over again stronger solution- oriented than product-oriented approach. We will also continue to develop our private customer business to take changes in customer behavior into account. Digital offerings will be expanded and our branch network will be adjusted. We expect these programs to yield cost savings and also sustainably strengthen our profitability and competitive position. In view of stricter capitalization rules we continued to consolidate our capital resources in 2015. One of the measures was raising additional subordinated capital amounting