1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 1 Extract from the Annual Report 2006 1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 2 Foreword Savings Banks. Successful and Socially Responsible. The economic upturn in Germany has This has increased their willingness to gathered full steam. Booming exports change banks and to maintain accounts at are no longer the sole reason for the several banks. Thirdly, competitive press- economic upturn: domestic demand has ure has increased greatly due to the entry also developed into a growth driver. The into the market of new competitors such Germany economy is once again on solid as direct banks and niche financial servi- ground. Other signs are also encouraging ces providers. and point to a sustained positive trend. We are meeting these challenges by fur- In 2006, the economic recovery also ther optimizing our products and services became apparent at our 56 member and their price-performance ratio, seeking savings banks (55 savings banks since out customers more aggressively, and January 1, 2007) in Baden-Württemberg. focusing our sales activities more heavily The portfolio of loans extended to compa- on closing sales. These were the issues nies and the self-employed by the savings addressed by the “Verkaufsoffensive 1 banks in Baden-Württemberg grew by Voraus” nationwide sales initiative, 2.6 percent to €38.8 billion, €5.8 billion launched successfully at Baden-Württem- of which were new loans. Lending to retail berg´s savings banks by the savings bank customers by Baden-Württemberg´s association in 2006. This program repre- savings banks was also up considerably sents the systematic implementation of by around 2.5 percent. Deposits also saw our successful business model of provi- a significant increase compared with ding target group-oriented, active, all- previous years: this figure grew by around services and advising to our 2.2 percent. For the first time, the savings customers while focusing on closing sales. banks´ total assets climbed past the €160 billion mark. Another deciding factor in our continued success is our strong relationship with our However, the economic upswing did not partners Landesbank Baden-Württemberg change the fact that the savings banks will (LBBW), LBS Landesbausparkasse increasingly have to fight harder for busi- Baden-Württemberg (LBS), and SV ness. There are three main reasons for SparkassenVersicherung (SV), as well as this. First of all, growth potential in the our national Association partners banking market is trending downward. DekaBank and Deutsche Leasing. In this The savings rate has dropped in past regard, the Sparkassen-Finanzgruppe decades, and the accumulation of private Baden-Württemberg (Sparkassen wealth has turned away from savings Financial Group Baden-Württemberg) is deposits toward increased investments in positioned extremely well. In the past securities and insurance. The second rea- year, LBBW continued to advance the inte- son is the change in customer behavior. gration of Landesbank Rheinland-Pfalz Customer expectations have risen sharply. (LRP) and BW Bank and set the stage for 2 1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 3 profitable growth in the coming years. The reorganization of the SV Group continued successfully in 2006. Against the backdrop of the consolidation of public-sector insurance companies, a key step for SV was arranging coopera- tion agreements with Provinzial NordWest-Gruppe and Sparkassen- Versicherung Sachsen (Dresden). LBS was able to further reinforce its leader- ship position in the market. With contracts totaling €43 billion, LBS is Germany´s third largest state home savings and loan association (Landesbausparkasse). In the future, LBS will benefit not only from the slightly higher interest rate level, but especially from the introduction of new rates for building loan contracts with particularly low interest on loans. Our Association, the Sparkassen- Finanzgruppe Baden-Württemberg, is positioned well overall and continues to look to the future with confidence and optimism. Peter Schneider Member of the State Parliament of Baden-Württemberg President 3 1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 4 SparkassenVerband Baden-Württemberg The SVBW SparkassenVerband Baden-Württem- 19 Kreissparkassen (county savings banks), berg (Savings Bank Association of one Stadtsparkasse (municipal savings Baden-Württemberg – hereinafter bank), 34 Bezirkssparkassen (district sav- always referred to as “SVBW”) brings ings banks), and two Zweckverbandsspar- together Baden-Württemberg´s 56 kassen (special-purpose association sav- savings banks (55 savings banks since ings banks) – along with their municipal January 1, 2007) with 2,534 branches owners comprise SVBW. (including self-service branches), 36,324 employees, and total assets of Legal Supervision €161.8 billion and their municipal Baden-Württemberg´s savings banks and owners. the SVBW are subject to the legal super- vision of the State of Baden-Württemberg. The head of SVBW is Association Pre- The supervisory authority responsible for sident Peter Schneider, a member of the the SVBW is the Ministry of the Interior of State Parliament of Baden-Württemberg. Baden-Württemberg. The savings banks He represents and leads the Group in are subject to the supervision of the re- SVBW´s governing bodies. His full-time sponsible Regierungspräsidium deputy is Association Director Tilmann (Regional Council). Hesselbarth. The head of the Association is the Supervisory Board Chairman of Ownership and Membership Landesbank Baden-Württemberg (LBBW) The guarantors of Landesbank Baden- and of LBS Landesbausparkasse Baden- Württemberg (LBBW), which was founded Württemberg. SVBW´s president is also on January 1, 1999, are the SVBW along Supervisory Board Chairman of Spar- with the State of Baden-Württemberg kassenVersicherung Holding AG and (35.611 percent interest each), the state deputy Supervisory Board Chairman of capital Stuttgart (18.932 percent), the SV SparkassenVersicherung Gebäude- Savings Bank Association of Rhineland- versicherung AG and SV Sparkassen- Palatinate (4.923 percent), and Landes- Versicherung Lebensversicherung AG. kreditbank (4.923 percent). Legal Form The owners of LBS Landesbausparkasse SVBW is a public-law institution with Baden-Württemberg are the SVBW headquarters in Stuttgart and another (93.33 percent) and LBBW (6.67 percent). office in Mannheim. In addition, the SVBW is also one of the owners of LBS Landesbausparkasse Members Rheinland-Pfalz (20 percent interest held). SVBW´s members are Baden- Württemberg´s 56 (January 1, 2007: 55) The SVBW is a member of Deutscher legally independent savings banks. Sparkassen- und Giroverband e.V. These savings banks – comprising (DSGV—the German Savings Bank Asso- 4 1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 5 ciation), as well as Deutscher Sparkassen- und Giroverband Körperschaft des öffent- Key Equity Investments lichen Rechts, both based in Berlin. – Beteiligungsgesellschaft des In addition to being a co-owner of the SparkassenVerbands Baden-Württemberg mbH & Co.KG Association partners LBBW and LBS, the – Geschäftsführungsgesellschaft mbH des shares in SV Holding AG are combined SparkassenVerbands Baden-Württemberg via investment companies, which are managed by SVBW. – Deutscher Sparkassen Verlag GmbH, Stuttgart – EURO Kartensysteme GmbH, Frankfurt Employees At the end of 2006, the SVBW employed – ConCardis GmbH, Frankfurt 344 staff, including 49 part-time – GZS Gesellschaft für Zahlungssysteme mbH, Frankfurt 1) employees, most of whom work at the Sparkassenakademie (Savings Bank – Innovationsförderungs-Gesellschaft der Academy). The 295 full-time employees Badischen Sparkassenorganisation mbH, Mannheim are divided among the individual depart- ments as follows: – DS Zahlungsverkehrsgesellschaft mbH, Karlsruhe – Kommunalentwicklung LEG Baden-Württemberg GmbH, Association Management and 61 Stuttgart Department 1 Policy/Legal Affairs/Human – Landsiedlung Baden-Württemberg GmbH, Stuttgart Resources and Administration – SI-BW Geschäftsführungsgesellschaft mbH, Karlsruhe Department 2 57 – SIZ-Informatik-Zentrum der Sparkassenorganisation GmbH, Sparkassenakademie Bonn (Savings Bank Academy) – Solidarpakt Grundstücksgesellschaft des Badischen Department 3 57 Sparkassen- und Giroverbandes KG, Mannheim Market and Operations – Sparkassen-Beteiligungen Baden-Württemberg GmbH Department 4 17 Information Technology – Sparkassen Informatik Verwaltungsgesellschaft mbH, Department 5 103 Frankfurt Auditing – “WIRTSCHAFTSPRÜFUNG” Treuhand-, Revisions- und Unternehmensberatungs-Gesellschaft mbH, Wirtschafts- prüfungsgesellschaft und Steuerberatungsgesellschaft, Ditzingen near Stuttgart – WSV Württembergische Sparkassen 1) Sale to First Data Corporation by way of a Beteiligungsverwaltungsgesellschaft mbH, Stuttgart purchase agreement dated December 30, 2005. 5 1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 6 SparkassenVerband Baden-Württemberg In the year under review, one employee of the Auditing department successfully passed the Association’s audit examina- tion, and one employee passed the tax advisor examination. In addition, two employees passed the examination to become certified public accountants (Wirtschaftsprüfer), and one employee completed a bachelor´s degree in finance. 6 1171_GB_2006_Auszug.qxd 19.07.2007 11:48 Uhr Seite 7 Activities of the Executive Bodies and Committees The executive bodies of SVBW make Landesbank Baden-Württemberg, key decisions relating to the future LBS Landesbausparkasse