Die norddeutsche Art. Our customers Page 12 New energies Page 24 Inside NORD/LB Page 30 Annual Report 2011 NORD / LB Annual Report 2011 NORD/LB Group at a glance 1 Jan. – 31 Dec. 1 Jan. – 31 Dec. Change 2011 2010*) (in %) In € million Net interest income 1 763 1 662 6 Loan loss provisions – 205 – 642 – 68 Net commission income 166 197 – 16 Profi t/loss from fi nancial instruments at fair value 69 115 – 40 through profi t or loss including hedge accounting Profi t/loss from fi nancial assets – 41 82 > 100 Profi t/loss from investments accounted – – 73 100 for using the equity method Administrative expenses 1 091 1 070 2 Other operating profi t/loss 69 48 44 Earnings before taxes 730 319 > 100 Income taxes 194 5 > 100 Consolidated profi t 536 314 71 Key fi gures in % Cost-Income-Ratio (CIR) 52.8 54.9 Return-on-Equity (RoE) 10.6 5.6 31 Dec. 31 Dec. Change 2011 2010*) (in %) Balance fi gures in € million Total assets 227 630 228 524 – Customer deposits 63 322 60 742 4 Customer loans 116 404 113 605 2 Equity 6 543 5 801 13 Regulatory key fi gures Core capital for solvency reasons in € million 8 005 6 829 17 Regulatory equity in € million 10 727 9 599 12 Risk-weighted assets in € million 84 800 86 850 – 2 Total capital ratio in % 12.6 11.1 Core capital ratio in % 9.4 7.9 NORD/LB ratings (long-term/short-term/individual) Moody’s A2 / P-1 / D+ – Fitch Ratings A / F1 / bbb- *) Some previous year‘s fi gures were adjusted as you can see at note (2) adjustment of fi gures for the previous year. Total differences are rounding differences and may cause minor deviations in the calculation of percentages. Die norddeutsche Art. NORD / LB Annual Report 2011 NORD/LB – roles and responsibilities As a fi nancial institution, NORD/LB fulfi ls a total of four responsibilities: it is a commercial bank, a Landesbank, a central savings bank and a parent company. As a commercial bank, our aim is to offer a comprehensive range of attractive fi nancial services to private, commercial and institutional customers and the public sector in Northern Germany. However, we also operate well beyond this core region. We are involved in structured fi nancing for international projects in selected locations – particularly where energy, infrastructure, industry and real estate are involved. Worldwide, we are represented in ship and aircraft fi nancing and at all the world’s major trading centres, in London and New York as well as in Moscow, Mumbai, Beijing, Shanghai and Singapore. In the federal states of Lower Saxony and Saxony-Anhalt, however, we act as a Landesbank, supporting the states as our owners in their banking business and remaining available to them in regional economic development. Moreover, we advise the government of Mecklenburg-Western Pomerania as a partner of the Landesförderinstitut (State Institute for the Advancement of the Economy) and the government of Saxony-Anhalt as a partner of Investitionsbank Sachsen-Anhalt. In these two federal states as well as in Lower Saxony, we are also a partner to all savings banks in our role as the central savings bank. In addition, we offer individual services to other savings banks outside our core region, for example in Schleswig-Holstein. As a clearing bank (Girozentrale), we are there to offer them all the services that they require for their activities. Our goal is to create optimum solutions for customers in the savings bank fi nancial group at all times by exploiting our national and international network within the NORD/LB Group. Finally, all of these areas of business can be found within the NORD/LB Group. As such, we function as a parent company that manages all parts of the group in accordance with our strategic goals, achieves synergies, strengthens our customer divisions and pools our services, both in the Financial Markets division and in fi nancing, in risk management and in organisation and information technology. Our subsidiaries and holdings NORD/LB’s strategic subsidiaries and holdings are a material part of our business model. All business segments are managed in close cooperation throughout the Group. Financial calendar Release of results as at 31 December 2011 19 April 2012 Release of results as at 31 March 2012 31 May 2012 Release of results as at 30 June 2012 29 August 2012 Release of results as at 30 September 2012 29 November 2012 Die norddeutsche Art. Annual Report 2011 2 NORD / LB Annual Report 2011 17 On the rough seas: Transport shipping 8 10 36 History 2011 NORD/LB Group Interview 2011 Sustainability with our Experts Report A year that brought many In this year’s magazine, steffen mollnau, Designed as a progress challenges, but also much you will read about how we Head of Equity Manage- report, this year’s sustain- success. In our history of entered the market for ment at the Group (page 22) ability report gives you an 2011, we present the most renewable energies and thomas bürkle, overview of how we important events at the agricultural banking in Expert in Risk-Weighted developed the individual NORD/LB Group in the last 2011 and which projects Assets (page 28) focal points in the various fi nancial year. we implemented for our dirk bollmann, Head of fi elds of action in the 2011 customers and within the Treasury (page 34) and fi nancial year. Group. uwe loof, Head of the Human Resources division (page 58) 2727 Farmers,Farmers, bbanksanks anandd bbiogas Managing Board & History 2011 NORD/LB Group Sustainability Corporate Governance Code 3 Introduction 79 155 Contents Group Management Consolidated 04 Responsibilities of the Report Financial Statements Group Managing Board 1. NORD / LB 1. Income Statement 06 Introduction by the Die NORD/LB 2. Personnel Report 2. Statement Chairman of the Managing Board 3. Report on the Earnings of Comprehensive 4. Assets and Financial Income 07 Introduction by the Position 3. Balance Sheet Chairman of the Supervisory Board 5. Summary 4. Statement of Changes 6. Supplementary Report in Equity 08 History 2011 7. Development of the 5. Cash Flow Statement Business Segments 6. Notes to the 10 NORD/LB Group 8. Business Activities Consolidated Financial 12 Our customers Nachhaltigkeit Substainability and the General Statements 22 Interview: Steffen Mollnau Environment 7. Segment Reporting 24 New energies 9. Forecasts and Other 8. Responsibility 28 Interview: Thomas Bürkle Information on Statement 30 Inside NORD/LB Anticipated 9. Auditor’s Report 34 Interview: Dirk Bollmann Development 10. Statements Relating 10. Risk Report to the Future 36 Sustainability 38 Why we operate the way we do Group Management Report Konzernlagebericht Group 40 For our customers 50 For our employees 58 Interview: Uwe Loof 60 For society 68 For the environment 74 Declaration on the German Corporate Governance Code Consolidated Financial Statements Consolidated Konzernabschluss 79 Group Management Report 155 Consolidated Financial Statements 261 Reports 265 Data / Glossary Reports 24 New paths with new energies Data/Glossary Daten/Glossar Berichte 4 NORD / LB Annual Report 2011 The team of the Erweiterter Konzernvorstand A B EFG A B DR. JOHANNES-JÖRG RIEGLER DR. STEPHAN-ANDREAS Born 1964 KAULVERS Chief Risk Offi cer (CRO); Born 1956 Credit Risk Management, Central Chairman of the Managing Board Risk Management, Special Credit of Bremer Landesbank Management, Research/Economy and Relationship with the Savings Bank Network E F G CHRISTOPH SCHULZ HARRY ROSENBAUM ECKHARD FORST Born 1960 Born 1958 Born 1959 Private and Commercial Customers; Chairman of the Managing Board Corporate Customer Business Chairman of the Managing Board of of NORD/LB Luxembourg S.A. including Housing and Agricultural Braunschweigische Landessparkasse Banking, Commercial Real Estate Finance, Ship and Aircraft Financing, Corporate Finance, Structured Finance and Corporate Sales Managing Board & History 2011 NORD/LB Group Sustainability Corporate Governance Code 5 Introduction (extended Group Managing Board) NORD/LB C D Substainability Group Management Report Group H I C D ULRIKE BROUZI DR. GUNTER DUNKEL Born 1965 Born 1953 Chief Operating Offi cer (COO); Chairman of the Managing Board (CEO); Organisation and IT, Corporate Managing Board Offi ce/Legal/ Compliance, Services, Group Security, Risk Control Human Resources, Group Development, Consolidated Financial Statements Consolidated and Controlling, Cost/Effi ciency Auditing, Corporate Communications and Management, Landesförderinstitut Finance/Tax and Relationship with Mecklenburg- Western Pomerania H I DR. HINRICH HOLM DR. JÜRGEN ALLERKAMP Born 1965 Born 1956 Treasury, Markets, Portfolio Invest- Chairman of the Managing Board Reports ments, Investitionsbank Sachsen- of Deutsche Hypo Anhalt and relationship with Saxony-Anhalt and foreign branches Data/Glossary 6 NORD / LB Annual Report 2011 “We have received a clear signal from our customers and partners: they trust us and rely on us.” Only in turbulent times does it become clear who has built his house on solid foundations. In the last few years, customers have increasingly begun to refl ect again on what their bank’s most important asset is: reliability, trustworthiness and stability. Here in Lower Saxony, we also like to think that we are storm-proof and have our feet planted fi rmly on the ground. We are proud that, despite the crisis that ravaged the markets in 2011, we received a clear signal from you as our customers and business partners: you trust us and rely on us. Our owners also sent out a strong signal of solidarity with the capital measures required by regulatory provisions. And, not least, our employees demonstrated once again with their expertise, loyalty and sound judgement that they will provide reliable support for our customers even in turbulent times. We would like to thank you for this.