PROSPECTS ANNUAL REPORT 2015 Your success is : our benchmark DEUTSCHE HYPO AT A GLANCE 01.01.- 01.01.- Change in € millions 31.12.2015 31.12.2014 (in %) New business figures Commercial real estate finance business 3,710.7 3,610.3 2.8 Domestic finance 2,183.1 2,117.5 3.1 Foreign finance 1,527.6 1,492.8 2.3 Funding volume 3,571.5 2,852.2 25.2 Mortgage Pfandbriefe 1,601.5 1,613.7 – 0.8 Unsecured 1,970.0 1,238.5 59.1 Change in € millions 31.12.2015 31.12.2014 (in %) Portfolio figures Commercial real estate finance business 11,953.6 12,409.8 – 3.7 Domestic finance 7,380.3 7,811.0 – 5.5 Foreign finance 4,573.2 4,598.8 – 0.6 Loans to local authorities 5,588.6 6,362.2 – 12.2 Securities 7,038.0 9,254.4 – 23.9 Funding capital 25,243.7 28,306.4 – 10.8 Mortgage Pfandbriefe 8,486.5 8,834.8 – 3.9 Public Pfandbriefe 7,028.5 8,807.3 – 20.2 Unsecured 2,606.9 2,172.1 20.0 Other liabilities 7,121.8 8,492.2 – 16.1 Equity **) 1,330.6 1,336.6 – 0.4 Balance sheet total 26,943.7 30,054.9 – 10.4 01.01.- 01.01.- Change in € millions 31.12.2015 31.12.2014*) (in %) Income figures Net interest income 224.5 222.3 1.0 Net commission income 0.5 4.5 – 88.9 Administrative expenses ***) 77.8 75.6 2.9 Risk result – 41.3 – 62.2 33.6 Income from securities and participatory interest – 29.4 – 42.5 30.8 Result from normal operations 70.3 41.4 69.8 Extraordinary result – 0.1 – 1.4 92.9 Interest on investments by silent partners 8.4 8.4 0.0 Profit before taxes and profit and loss transfer agreement 61.8 31.6 95.6 in % 31.12.2015 31.12.2014*) Other information Cost-income ratio 35.6 34.1 *) the amounts from the previous years were partly corrected. Reference is made to the information in the notes in the financial statements with regards to this. **) including funds for general banking risks, jouissance right capital and subordinated liabilities ***) including write-downs and value adjustments of intangible assets and tangible fixed assets The annual report of Deutsche Hypo is also available in German. In the event of any descrepancy, the German version shall prevail. ANNUAL REPORT 2015 2 DEUTSCHE HYPO ANNUAL REPORT 2015 ENGLISH TRANSLATION WE HAVE A CENTRE OF COMPETENCE: Benedikt von Abendroth, Carolin Albers, Ingo Albert, Alois Algermissen, Antje Amelsberg, Anne-Kathrin Apel, Elena Argun, Daniela Assing, Jens Assmann, Hans-Hermann Baltz, Angela Bank, Philipp Bank, Nicole Barnert, Sabine Barthauer, Susie Bassett, Isabel Bauke, Jürgen Becksvoort, Michaela Behnsen, Ulrike Behnsen, Andrea Behre, Dana Beitz, Lara Bengsch, Nadja Bengsch, Alica Bergmann, Andreas Bergmeier, Marco Bertram, Olaf Beuleke, Wouter de Bever, Sebastian Biel, Heike Bien, Kathrin Biering, Petra Biering, Carsten Bläck, Markus Block, Ann-Christin Bloß, Martina Blum, Cornelia Bock, Marianne Böx, Stefanie Bojahr, Ines Bornemann, Oliver Boser, Lisa Bosetzky, Jasmin Bothe, Michael Brämer, Kirsten Brandt, Alexander Braun, Jens Breithecker, Brigitte Brenning, Iris Brünau, Marc Brune, Volker Brunner, Jochen Bucek, Carsten Bühring, Holger Busch, Lars Busch, José Luis Calderón Martínez, Anne-Isabelle Carbonnières, Juan Manuel Casas Guillen, Yvonne Coppel-Tamms, Claus-Halvard Cors, Bettina Cramer, Ursula Czech, Sandra Debbrecht, Katrin- Genevieve Deitermann, Ulrich Deppe, Carsten Dickhut, Andrea Dietsch, Frank Dittmann, Beate Droste, Jürgen Eckert, Nicole Edle von Wölfel, Ernst- August Endrulat, Carina Engelbrecht, Tobias Faust, Matthias Feifer, Raimund Ferley, Christian Fischer, Kai Fischer, Arabell Foth, Eric Mark Fowell, Jörg Franz, Michael Frech, Christine Frenzen, Oliver Frerking, Chiquita Sandra Freudel, Andreas Froebus, Björn Fuhr, Britta Gabriel, Christian Gail, Nikola Gaulke, Michael Gehrig, Melanie Geldmacher, Christoph Gennrich, Maria Germann, Annett Gierschner, Larissa Gieselmann, Michael Glatzer, Melanie Glende, Kristoffer Globig, Rüdiger Göricke, Sabine Gößmann, Silvia Golbeck, Claudia Grau, Georg Greive, William Groen, Elke Großer, Detlev Grote, Christian Gudat, Cristina Guilherme, Petra-Ingeborg Haake, Christina Haendel, Lars Haftmann, Ralf Hagendorff, James Robert Aikman Hall, Christian Hansel, Thomas Hansen, Kevin Harmer, Axel Harms, Jan Hartmann, Tina Hartmann, Iris Hauser, Albrecht Heinecke, Stefan Heinitz, Markus Heinzel, Christian Hellwinkel, Birger Helm, Heini Katariina Hemminki, Janina Herrmann, Miriam Herzog, Janos Hielscher, Ralf Hinrichs, Dr. Peter Hinze, René Hodko, Achim von Hoegen, Anne- Kathrin Hoepfner, Raimo Höpfner, Christoph Hötzel, Nils Hoffmann, Monika Hofschulte, Marcel Holk, Karin Hornbostel, Simone Huch, Klaudia Hüskes, Thomas Hundertmark, Dirk Hunger, Tanja Hußmann, Malte Ilginnis, Axel Intemann, Peter Jabs, Anna-Dorothea Jäger, Amely Jessop, Thorsteinn Jonsson, Ute Jürges, Frank Junge, Georg Kaisler, Dirk Kallikat, Christina Kanning, Gudrun Karges, Brit Kaufmann, Melanie Kautzner, Kerstin Kelm, Cezary Kempisty, Kristina Kirchner, Andreas Kirschner, Til Kittkowske, Jürgen Klebe, Peter Kleinhütten, Lutz Klinkmann, Florian Knaul, Tobias Knoche, Detlef Koch, Dieter Koch, Gerald Kölle, Heiko Kollmann, Jörg Kopp, Jutta Carola Kopp, Renate Koppitz, Gabriele Kornweih, Stefanie Kortmann, Anna Carina Kostrzewa, Janina Krapp, Stefan Kriegs, Ulrich Krogmeier, Sarah Krüger, Regina Kubina, Elke Kücken, Frank Kühne, Silke Kues, Marcel Kujawski, Andrea Kuschel, Ralph Kutschki, Eike Oliver Laase, Bernd Lademann, Thomas Lang, Cornelia Lange, Sascha Langeheine, Katrin Langer, Beata Latoszek, Annika Leenen, INTRODUCTION MANAGEMENT REPORT ANNUAL FINANCIAL STATEMENTS 0PINIONS ORGANISATION 3 OUR STAFF Annemarie Leeuwen, Dr. Pia Leipertz, Stefan Leise, Claudia Leu, Maria Teresa Linares Fernández, Antje Loof, Veit Look, Walter Love, Alexander Ludwig, Dörte Mamber, Ingo Martin, Gianluca Martinelli, Edgard Maurette, Desiree McKay, Andreas Meiser, Uwe Menninger, Kevin-York Merchel, José Ignacio Merinero Muñoz, Michael Mesenbrink, Dirk Metzner, Björn Meyer, Jens Meyer, Andreas Michel, Stefan Mikus, Sonja Misch, Christina Möllendorf, Irina Monsler, Marlis Mügge, Claudia Müller, Frank Müller, Brigitte Müller-Bühren, Thomas Müser, Simon Munaretto, Jürgen Munke, Marion Muth, Claudia Nacke, Andreas Nagel, Dirk Neugebauer, Evelin Neuhäuser, Uwe Niemann, Michael Niemeyer, Rebecca Nienhaus, Markus Nitsche, Matthias Nittscher, Rico Noack, Harald Nolterieke, Ralf Obst, Jennifer Oehlmann, Jana Oliver, Jan Christoph Paape, Christopher Peel, Kornelia Penker, Andreas Peter, Meike Peter, Anja Philipps, Sandra Piehl, Liane Pilz, Andreas Pohl, Nina Poletschny, Arne Preuß, Martin Pries- nitz, Torben Pschunder, Timothy Pygott, Tam Tran Quan, Claudia Radack, Uwe Radloff, Horst Reffke, Andreas Rehfus, Julia Reich, Andrea Reinecke, Frank Rekowski, Tanja Riesenbeck, Fabian Ritter, Stefan Roggelin, Anja Rosenhagen, Gabriele Rotzien, Vera Ruck-Bekedorf, Christin Rudolph, Sebastian Rudolph, Jens-Oliver Ruff, Petra Ruff, Annemarie Rumke, Katja Runge, Monika Rust, Stefan Ryll, Amir Saleem, Renate Sasse, Sebastian Schab, Anja Schad, Katharina Schauer-Stach, Jan Schaumburg, Frank Scherr, Alexandra Schild, Adrian Schleffler, Christian Schlenker, Uwe Schliephacke, Andreas Schlüter, Hans-Jörg Schmallen- berg, Melanie Schmidt, Peter Schmidt, Stefanie Schmidt, Christof Schönefeld, Dirk Schönfeld, Stefan Schrader, Erik Schramm, Wiebke Schramm, Yannick Schreiber, Karsten Schröter, Stefan Schröter, Matthias Schroff, Heike Schünemann, Heike Schütte, Sandra Schuler, Manuela Schult, Frank Schulte, Larissa Mareike Schultze, Karsten Schulz-Porth, Ralph Schumann, Sabine Schwarz-Möbius, Hans-Werner Seidel, Fredrik Serck, Phil Shackleton, Kristof Sidorowicz, Anke Sieber, Cnut Siebert, Irina Siebert, Britta Siedentopf, Marc Simon, Sandra Simon, Fabian Socha, Petra Söfker, Christian Sommer, Mirko Sommer, Kerstin Sonntag, Sascha Sonntag, Thomas Staats, Dr. Carsten Steinhoff, Jana Stephani, Thomas Stoklas, Mathias Stolte, Axel Stoppel, Bianca Ströhla, Paul Sutcliffe, Tobias Talke, Marc Techtmann, Maren Tegtmeier, Leyla Tekkal, Martina Teutloff, Bettina Thiedtke, André Thürmer, Dirk Töteberg, Stefan Treptow, Stefan Ullmann, Manja Unger, Martin Vila Kues, Manja Vogel, Ralf Vogel, Carsten Vogt, Nicole Voigt, Jürgen Volkers, Ina Volkmann, Prof. Dr. Günter Vornholz, Dr. Wulfgar Wagener, Sabine Watermann, Marion Weber, Hans-Georg Wehrhahn, Julia Weiß, Renate Wels, Aenne Wendeling, Anika Wermter, Ansgar Werner, Ralf Westermann, Sophie White, Torsten Wickert, Inge Wieggrebe, Simone Wilhelms, Dirk Wilke, Ulrich Wilkens, Holger Wille, Bärbel Willert, Immo Willner, Tanja Willruth, Thomas Winkler, Bernd Wiss- mach, Ulrike Witte, Markus Wittenberg, Dirk Wömpner, Christopher J. Woodard, Michael Woodgate, Stefanie Wünsch, Martina Wulschläger, Heike Wuttke, Özlem Yüksel-Kaban, Nadine Zapf, Olivier Zapf, Sebastian Ziegler, Frank Zimmermann, Nicole Zimmermann. 4 DEUTSCHE HYPO ANNUAL REPORT 2015 ENGLISH TRANSLATION CONTENT FOREWORD BY THE CHAIRMAN OF THE SUPERVISORY BOARD 6 MESSAGE FROM THE BOARD OF MANAGING DIRECTORS 8 SUSTAINABILITY 12 MANAGEMENT REPORT 17 Fundamentals of the Bank 17 Deutsche Hypo's business model 17 Group affiliation 18 Deutsche Hypo's goals and strategies 18 Controlling system 19 Corporate Governance Statement 19 Economic report 20 Macroeconomic and sector environment 20 Course of business at a glance 23 Net assets, financial and income position 26 Comparison of the developments with the forecast from last year 32 Overall statement on the course of business and the Bank's situation 33 Report on subsequent events 36 Forecast, opportunity and risk report 36 Forecast report 36 Opportunities and risks of future business development 39 Overall