Tài liệu Finanzgruppe Deutscher Sparkassen- und Giroverband: Financial Report 2010 pptx

S
Financial Report 2010
Financial Report 2010
Finanzgruppe
Deutscher Sparkassen- und Giroverband
S
www.dsgv.de
KEY FINANCIALS
of the Savings Banks Finance Group
Selected balance sheet items
As of
31 Dec. 2010
in EUR billion
As of
31 Dec. 2009
in EURbillion
Change

in EURbillion
Change
in %
Loans to banks (MFIs
1
) 544.9 615.9 −71.0 −11.5
Loans to non-banks (non-MFIs
1
) 1,214.3 1,200.5 +13.8 +1.2
Liabilities to banks (MFIs
1
) 598.5 649.5 −51.0 −7.9
Liabilities to non-banks (non-MFIs

1
) 1,164.7 1,160.1 +4.6 +0.4
Balance sheet total
2
2,601.7 2,582.8 +18.9 +0.7
for information: total assets (excluding trading derivatives) 2,455.7 2,582.8 −127.1 −4.9
Selected income statement items
2010

3
in EUR billion
2009
in EURbillion
Change

in EURbillion
Change

in %
Net interest income 34.843 35.045 −0.202 −0.6
Net commission income 7.357 6.948 +0.409 +5.9
Net earnings from fi nancial transactions 0.517 1.079 −0.562 −52.1
Administrative expenses 26.022 26.936 −0.914 −3.4
Earnings before valuation 17.025 16.767 +0.258 +1.5
Valuation result (excluding equity interests) −6.172 −10.592 +4.420 –
5
Earnings after valuation 10.853 6.175 +4.678 +75.8
Balance of other and extraordinary income/expenses
4
−2.157 −6.463 +4.306 +66.6

Net income / loss for the year before taxes 8.696 −0.289 +8.985 –
5
Taxes on income 2.665 2.571 +0.094 +3.7
Net income / loss for the year after taxes 6.031 −2.860 +8.891 –
5
of which net income of Savings Banks after taxes 4.099 2.463 +1.636 +66.4
of which net income / loss of Landesbanken after taxes 1.810 −5.457 +7.267 –
5
of which net income of Landesbausparkassen after taxes 0.122 0.134 −0.012 −9.0
1
Monetary fi nancial institutions.
2
Total assets as at the end of December 2010 included derivative fi nancial
instruments held in the trading portfolio (trading derivatives), due to
the fi rst-time application of the German Accounting Modernisation Act
(“ BilMoG”). Trading derivatives of EUR 146.0 billion were carried by
Landesbanken and reported under “Other liabilities”.
3
Provisional data from partly non-audited annual fi nancial statements
prepared in accordance with German GAAP (converted to conform with the
system of the German Bundesbank).
4
Including the balance of gains on the sale of fi nancial investments and
investments held as fi xed assets as well as write-downs/write-ups on
fi nancial investments and investments held as fi xed assets.
5
Calculation is immaterial.
IMPRINT
Publisher
Deutscher Sparkassen- und Giroverband

Charlottenstrasse 47
10117 Berlin
Germany
Phone: +49-30-20225-0
Fax: +49-30-20225-250
www.dsgv.de
Contact
Financial Market Relations
Dr Thomas Keidel
Phone: +49-30-20225-5281
Fax: +49-30-20225-5285
Conception and design
Kirchhoff Consult AG, Hamburg
www.kirchhoff.de
Photography
Steffen Jänicke, Berlin
Translation
Ralf Lemster, Financial Translations GmbH
Printing
DCM Druck Center Meckenheim
Copy deadline
20 June 2011
You can fi nd the online version of our Annual Report on:
www.annualreport2010.dsgv.de
60 Savings Banks Finance Group market set-up
|
Financial Report 2010
SAVINGS BANKS FINANCE GROUP MARKET SET-UP
As of 31.12.2010
Savings Banks Finance Group

No. of companies 610
1
No. of branch offi ces
2
20,920
5
Employees
3
363,000
5, 6
Business volume
4
EUR 3,300bn
5
20,850
7
348,500
6, 7
EUR 3,080bn
7
4 Other leasing
companies
8
Cost value EUR 49.9bn
Employees
9
545
7 Investment companies
of the Landesbanken
Employees 250

DSV-Group
(Deutscher
Sparkassenverlag)
Income EUR 0.87bn
Employees 1,731
Finanz Informatik
Employees 5,237
SIZ Informatikzentrum der
Sparkassenorganisation
Employees 87
429 Savings Banks
Balance sheet total EUR 1,084bn
No. of branch offi ces
(incl. self-service) 15,626 Employees 248,137
Additional staff
at directly held
Savings Banks
subsidiaries 9,239
75 Equity investment
companies
Equity interests 1,412
Total volume EUR 1.7bn
Employees 230
3 Factoring companies
Annual turnover EUR 16.5bn
Employees 211
8 Consultancies
advising corporate and
municipal clients
Employees 70

10 LBS property
companies
Property volume EUR 4.6bn
Employees 450
Deutsche Leasing Group

No. of contracts 363,000
Cost value EUR 26.8bn
Employees 1,923
11 Public Primary
Insurance Groups
Gross premium income EUR 19.7bn
Employees 30,000
1
0 Landesbausparkassen (LBS)
(regional building societies)
Balance sheet total EUR 54bn
Employees 9,004
8 Landesbank Groups
LBBW, BayernLB, LBB, HSH Nordbank, Helaba,
NORD/LB (with Bremer Landesbank), SaarLB, WestLB
Balance sheet total EUR 1,546bn
Employees 48,925
DekaBank
Deutsche Girozentrale
Balance sheet total
EUR 130bn
Employees
3,683
No hierarchical presentation/no indication of

shareholding/shareholder structure.
1
Including associations and other institutions; numbers rounded.
2
Branches/advice centres.
3
Number of staff employed in internal functions/in the mobile
sales force, excluding part-time sales staff; numbers rounded.
4
Business volume, defi ned as: total assets/aggregate holdings/
fund assets/volume of shareholdings; numbers rounded.
5
Including international branches, plus domestic and
international subsidiaries of Landesbank Groups.
6
Including 3,434 employees of associations, related
institutions and other institutions.
7
Excluding international branches, as well as domestic and
international subsidiaries of Landesbank Groups.
8
Including three companies which form a group.
9
Excluding staff numbers included in Landesbanken
consolidated fi gures.
PRESIDENT’S REPORT
THE SAVINGS BANKS FINANCE GROUP
The Savings Banks Finance Group
Our business model
Our mission

Our partners within the Group
The Joint Liability Scheme
Marketable ratings
2010 IN REVIEW
MANAGEMENT REPORT
Economic environment
Major markets and positioning
Business development and fi nancial position
Staff report
Social involvement report
Risk report
Outlook
2
5
5
6
8
9
10
11
12
15
15
17
21
34
36
38
48
CONTENTS

The Savings Banks Finance Group unites around
610enter prises, collaborating closely in order to pro vide
fi nancial services and support to all sections of society.
We apply the profi ts not required to strengthen our
reserves to our varied commitment in the regions in
which we operate
AGGREGATED FINANCIAL STATEMENTS
EXPLANATORY NOTES ON AGGREGATION
DEUTSCHER SPARKASSEN- UND
GIROVERBAND (DSGV)
SAVINGS BANKS FINANCE GROUP
MARKET SET-UP
51
54
55
60
2
With a successful year behind it, the Savings Banks Finance
Group proved in no uncertain terms that it had done more
than successfully weather the fi nancial markets crisis during
2010. In fact, the 429 Savings Banks were able to signifi cantly
increase their operating profi ts – once again posting notable
growth in their capital bases, and reaffi rming the value of
their principles of decentralisation with a business focus on
local regions and the real needs of the local population, even
in diffi cult times.
Throughout the most challenging economic crisis in Ger-
many’s post-war period, the Savings Banks held true to their
roots – a sustainable business philosophy oriented towards
the common good. Working together with fellow Group mem-

bers, they consistently provided SMEs with suffi cient capital,
thereby playing a pivotal role in Germany’s rapid and unparal-
leled recovery.
The Savings Banks did not retreat when the storm raged –
quite the contrary. They once again extended signifi cantly
more new loans to companies and the self-employed – total-
ling EUR64.2 billion – and strengthened regional structures
with uninterrupted funding, to the benefi t and welfare of the
people living there.
As such, it comes as no surprise that numerous surveys high-
light the considerable trust that is placed in the Savings
Banks, and that their value for economic and social develop-
ment is widely – and increasingly – recognised. The fi nancial
markets crisis made the general public and decision-makers
alike aware of the importance of acting according to sound
principles, and it also led to a marked realignment in social
values. The concept of maximising profi ts without taking
account of people’s needs, desires and concerns is now seen
to have been an expensive error of judgement. Customer
orientation, social responsibility, security and sustainability
are once again in demand. These core values have held true
for the Savings Banks for more than 200 years.
The present and profound resonance of the values by which
we have lived, and the wider acceptance of our business mod-
el, motivate the Savings Banks to steadfastly and effi ciently
meet the diverse challenges that our Group currently faces.
This applies fi rst and foremost to a new and effi cient Landes-
bank structure. The capacity of the Landesbanken must be
reduced to a size that can be fully utilised by stable business
segments. This should also alleviate the pressure to venture

into overly risky business segments due to excess capacity.
PRESIDENT’S REPORT
President’s report
|
Financial Report 2010 59Financial Report 2010
|
Deutscher Sparkassen- und Giroverband
Members of the Board of Managing Directors
DekaBank Deutsche Girozentrale
Franz S. Waas, PhD
Chairman of the Management Board of DekaBank Deutsche
Girozentrale, Berlin and Frankfurt/Main
Bundesverband öffentlicher Banken Deutschlands e. V.
(Association of German Public Sector Banks)
Dr Gunter Dunkel
Chairman of the Management Board of Norddeutsche Landesbank
Girozentrale, Hanover/Braunschweig/Magdeburg
Deutscher Sparkassen- und Giroverband e. V.
(German Savings Banks Association)
Dr Karl-Peter Schackmann-Fallis
Executive member of the Board of Management of
Deutscher Sparkassen- und Giroverband, Berlin
Werner Netzel
Executive member of the Board of Management of
Deutscher Sparkassen- und Giroverband, Berlin
Bernd M. Fieseler
Executive member of the Board of Management of
Deutscher Sparkassen- und Giroverband, Berlin
Elected members of the Board
Dr Christian Badde

Chairman of the Management Board of
LBS Westdeutsche Landesbausparkasse, Münster
Michael Breuer
President of Rheinischer Sparkassen- und Giroverband, Düsseldorf
Carsten Claus
Chairman of the Management Board of Kreissparkasse Böblingen
Gerhard Grandke
Executive President of Sparkassen- und Giroverband
Hessen-Thüringen, Frankfurt/Main and Erfurt
Claus Friedrich Holtmann
Executive President of Ostdeutscher Sparkassenverband, Berlin
Dr Heinz-Werner Schulte
Chairman of the Management Board of Kreissparkasse Ludwigsburg
Georg Sellner
Chairman of the Management Board of Stadt- und
Kreis-Sparkasse Darmstadt
Beate Läsch-Weber
President of Sparkassenverband Rheinland-Pfalz, Budenheim
Hans-Jörg Vetter
Chairman of the Management Board of Landesbank
Baden-Württemberg, Stuttgart/Karlsruhe/Mannheim
Dietrich Voigtländer
Chairman of the Management Board of WestLB AG, Düsseldorf
Alexander Wüerst
Chairman of the Management Board of Kreissparkasse Köln
3
This process is underway. The total assets of the Landesbanken,
as well as their risk-weighted assets and number of employ-
ees, have already been reduced considerably. The objective of
the Savings Banks is to decrease the number of their associ-

ated Landesbanken, and ultimately to reduce risk-weighted
assets signifi cantly through mergers.
Similarly, the current discussions regarding tighter fi nancial
market regulation, or changes to the banking supervision
regime, are of fundamental importance to the Savings Banks
Finance Group. It would be a fatal economic error to hold
the institutions that contributed greatly to quickly overcom-
ing the crisis fi nancially liable – such as the Savings Banks –
whilst those who caused the crisis get off lightly and return to
testing the limits of the fi nancial markets.
It falls to us to continue actively shaping the Group’s continued
viability. The changing needs of a digital society demand
intelligent answers – from regionally anchored Savings Banks
in particular. Without relinquishing the benefi ts offered by
local decision-making, we will take advantage of the synergy
potential afforded by a stronger network to further unleash
the combined strength of the Savings Banks Finance Group in
the interest of our customers.
The past few years have borne witness to the fact that the
Savings Banks are highly effi cient pillars of economic and
social responsibility. In 2010, they laid a solid foundation
for continued success for 2011. These are excellent reasons
to greet the challenges that confront us with optimism and
determination.
With kind regards,
Berlin, June 2011
Heinrich Haasis
President of the German Savings Banks Association
Heinrich Haasis, President
of the German Savings Banks

Association (DSGV)
Financial Report 2010
|
President’s report
by the Savings Banks in 2010. EUR2.5 billion of this was in the form of income tax
and around EUR500 million from funding and sponsorships within the framework of
their social commitment. This tangible contribution to German society is higher than
for any other segment of the German fi nancial services sector. It provides concrete
support towards improving living conditions in municipalities and regions. Moreover,
Savings Banks are the largest employer in the German banking sector, and the largest
non-government sponsor of culture and sports in Germany. We are where life happens –
close to the people.
WERE RAISED FOR SOCIETY
5Financial Report 2010
|
The Savings Banks Finance Group
THE SAVINGS BANKS FINANCE GROUP
Joint strength
The business model of the Savings Banks Finance Group once
again demonstrated its solid reliability in 2010. With approxi-
mately 363,000 employees, 610 independent enterprises and
a business volume of roughly EUR3,300 billion, the Savings
Banks Finance Group is one of the largest fi nancial services
groups in the world.
For more than 200 years, the 429 Savings Banks – the heart
of the Group – have been active in the German market and
rooted in small communities. As at 31 December 2010, the
Savings Banks had total assets of roughly EUR1,084 billion.
With 15,626 branch offi ces, they are present throughout Ger-
many to provide local service to their 50 million customers.

The institutions within the Savings Banks Finance Group work
together with combined strength. They act as independent
institutions, but jointly coordinate their range of services. This
enables a single Savings Bank to offer lending, investment,
building society and retirement provision services to meet
virtually all the needs of every demographic group, without
having to organise and furnish every aspect of the service
itself. This network of different partners makes it possible for
us to offer integrated advisory and fi nancing solutions for
start-ups, cross-border support for export-oriented com-
panies, and assistance in complex municipal development
projects. Unlocking these synergies is at the heart of the
Group’s focus, effi ciency and strength.
The integrated Group comprises
 Savings Banks,
 Landesbanken and the DekaBank Group,
 Landesbausparkassen (regional building societies),
 public primary insurance groups, as well as
 leasing and factoring companies, equity capital
providers and consultancies.
In 2009, the Savings Banks ensured the provision of fi nancing
despite the crisis in the fi nancial sector and the real economy,
and thus successfully prevented a credit crunch in Germany.
In 2010, they worked with their partners to fi nance the eco-
nomic recovery, while further expanding their market lead in
fi nancing businesses. The Savings Banks and Landesbanken
provided the German economy with aggregate new loans in
excess of EUR64 billion in 2010 – 3.4% more than in 2009.
6 The Savings Banks Finance Group
|

Financial Report 2010
Regional focus, retail orientation and solidarity are the core
values underpinning the Savings Banks Finance Group’s
business model. A business model that has endured for more
than 200 years, not only on the market but also as the very
fi bre that binds our Group. It defi nes our structure and how
we see ourselves and also, increasingly, what people have
come to expect from our institutions.
Savings Banks are, by nature, decentralised institutions.
Decisions are made locally and thus close at hand to our
customers. Their local nature makes it possible for quick deci-
sions to be reached in the best interests of their respective
business area; decisions that take into account their know-
ledge of the political, economic and social issues of their
differ ent regions. It is a union of customer proximity, effi -
ciency and a high level of expertise.
Within the defi ned business area of each Savings Bank, their
specifi c and legally defi ned task is to provide every demo-
graphic group and all businesses with the services of a uni-
versal bank, and to offer them fi nancial planning options. The
mission of the Savings Banks also encompasses contributing
to the economy and overall prosperity of their region.
Savings Banks compete with other German credit institu-
tions on a daily basis. They are also subject to a tremendous
amount of public attention – not only from their 50 million
customers. Their business model therefore brings high re-
quirements with regard to customer orientation and effi -
ciency. Both are shaped by a commitment to sustainability:
 Savings Banks refi nance themselves predominantly with
their customers’ deposits; they must therefore earn their

trust on an ongoing basis. They succeeded in doing so
impressively in 2010: customer deposits increased by
EUR15.6 billion to a total of nearly EUR768 billion.
 Savings Banks are members of a community of solidarity,
as are Landesbanken and Landesbausparkassen, namely
the Joint Liability Scheme of the Savings Banks Finance
Group. The Joint Liability Scheme assures the continued
existence of our institutions and ensures that they will
always be able to meet their commitments.
 Their regional roots make Savings Banks effi cient; they
afford a keen insight into their customers’ needs and risk
situations. This local effi ciency also makes it possible to
optimally tailor products and react swiftly.
 Their ties to a specifi c business community means that
Savings Banks have a personal stake in its future wel-
fare. This makes them committed supporters of structural
change, cultural and social projects, and underpins their
commitment as “the provider of fi nance to German SMEs”.
Broad business support geared towards abiding
long-term values
Savings Banks are catalysers of “regional economic cycles”.
They transform locally generated customer deposits into
loans to fi nance housing construction and corporate invest-
ments within their business area. The returns generated are
ultimately put towards enhancing their capital base, and
public welfare-oriented projects. As one of Germany’s largest
taxpayers, the Savings Banks and Landesbanken also make an
important contribution to municipal budgets. Savings Banks’
funds remain in their regions, securing the foundation of their
business.

OUR BUSINESS MODEL
Regional focus, retail orientation and solidarity
7Financial Report 2010
|
The Savings Banks Finance Group
Importantly, Savings Banks can be found everywhere in Ger-
many – not merely in strong economic regions, but nation-
wide. They function according to the principle that what is
good for the region is good for the Savings Bank. This is why
it is in Savings Banks’ own best interests to aim their business
activities towards the common good, as their mission state-
ment makes clear.
The steadily rising esteem that the Savings Banks have
enjoyed in the wake of the fi nancial crisis testifi es to how
strongly they are anchored in the minds of the German pub-
lic. According to a recent survey,
1
Savings Banks are seen as
especially trustworthy partners compared with other bank-
ing service providers.
2
Whilst the reputation of private banks
suffered greatly as a result of the fi nancial crisis, Savings
Banks were held in signifi cantly higher regard in 2010;
68%of the German public believe that the Savings Banks
are “important” or “very important” for the stability and
future viability of the German economy.
3

In order to remain reliable, long-term partners, Savings Banks

are profi t-oriented institutions. Their objective is to gener-
ate stable returns with a moderate risk profi le. Savings Banks
believe in profi tability, dependability and reliability. They offer
customer proximity and secure customer confi dence. The
results of the 2010 business year attest to the success of the
unwavering pursuit of this strategy.
1
Source: Forsa survey commissioned by stern magazine, January 2011.
2
With a score of 49%, they enjoy signifi cantly higher approval than private
banks with 26%.
3
Source: Forsa survey commissioned by DSGV, June 2010.
Our sustainable business model
The Savings Banks Finance Group
Employer Taxpayer Sponsor and supporter Partner of business
Public legal structure Municipal trusteeship Public service obligation Regional principle
8
The widespread attention currently devoted to the redis-
covered importance of conducting business according to
“sustainability” and “values” affi rms our strategic orientation.
Both principles are at the very heart of our success and are
part of the Savings Banks Finance Group’s long tradition.
The root of the Savings Bank philosophy lies in the desire
to put fi nancial planning and independence within reach of
people without large incomes, whilst providing them with
secure interest rates on their deposits. The Savings Bank
philosophy focuses on people and their needs. In an age
where globalisation and extreme fl uctuations on the money
and capital markets are shaking people’s sense of security,

many of these old, yet still salient ideas are undergoing a
renaissance. The Savings Bank philosophy has proved over
the last two centuries that it not only carries with it the power
of social cohesion, but that it also adds economic value.
Once formed by citizens and founded as “banks of the com-
mon man”, Savings Banks have always been more than mere
credit institutions. In many communities, they have remained
important institutions in public life to this day. Back in the
19th century, the Savings Banks helped to cushion the
industrial revolution socially and improve living standards
signifi cantly for the individual and for society as a whole.
Products such as the bank book made it possible to make the
saver’s “small money” grow.
Providing affordable, nationwide fi nancial services and meet-
ing the needs of SMEs is and remains our core duty. Respon-
sible lending and growing deposits are central elements of
this. Savings Banks are also committed to training the next
generation of the workforce. They offer skilled jobs, even in
regions where they are hard to come by.
Economic success is essential for the companies within the
Savings Banks Finance Group, also in terms of achieving their
greater goal: to preserve the future prospects of coming gen-
erations. First and foremost, this includes concentrating on a
sound and sustainable business model. Our clear objective is
to foster growth and prosperity in society in an economically,
ecologically and socially viable way. One consequence that
is already visible can be seen in our increased range of sus-
tainable and “green” products that add ecological and social
value, in both execution and design.
OUR MISSION

Sustainability from the very start
The Savings Banks Finance Group
|
Financial Report 2010
9
Landesbausparkassen – number one in home loan savings
The total assets of the ten Landesbausparkassen amount to
approximately EUR54.3 billion. Together, these regional build-
ing societies account for 816 branches and employ around
9,000 in-house employees and fi eld staff. As the market leader
in their segment in Germany, the Landesbausparkassen hold
a market share of 39.5% in terms of the number of new home
loan and savings contracts, and of 34.3% in terms of portfolio
(total savings).
DekaBank
DekaBank is the central asset manager of the Savings Banks
Finance Group. The bank is active in the business segments
of Capital Markets Asset Management, Real Estate Asset Man-
agement and Corporates & Markets. With an aggregate fund
volume of approx. EUR181 billion – according to the Bun-
desverband Investment und Asset Management e.V. (“BVI”),
the German investment management association, including
ETFlab Investment GmbH – DekaBank is one of the major Ger-
man fi nancial institutions. It offers a wide range of investment
funds for private and institutional investors alike. DekaBank is
a market leader in open-ended real estate funds, and in struc-
tured investment products (such as funds of funds or fund-
linked asset management).
Deutsche Leasing – one of Europe’s biggest leasing
companies

Deutsche Leasing Group reported total assets of approximately
EUR15 billion for its annual year 2009/10
1
with a workforce of
some 2,000 employees. With product and real estate leasing
business of EUR7.8 billion, Deutsche Leasing is Europe’s
third-largest leasing company. As the German pioneer in the
leasing business and Germany’s number one leasing company,
Deutsche Leasing Group can look back on almost 50 years of
experience in the fi eld of fi nancial services and investment.
Public insurers – market leaders in their region
The eleven public primary insurance groups increased
their gross premium income by almost 11% in 2010 to
EUR19.7billion
2
. Thereby the group has consolidated its rank
as Germany’s second-largest insurance group. The regional
savings banks and giro associations are the main owners of
nearly all public insurance companies.
Other fi nancial services providers
The range of fi nancial service providers within the Savings
Banks Finance Group is supplemented by numerous partner
companies and establishments. These include seven Landes-
bank investment companies, three factoring companies, ten
real estate companies owned by the Landesbausparkassen,
75 equity investment companies and other fi nancial services
companies, as well as eight management/local government
consultancy fi rms.
Through all of its institutions and partners, the Savings Banks
Finance Group can meet all of the fi nancial requirements of its

private and corporate customers in Germany.
OUR PARTNERS WITHIN THE GROUP
Strong specialist entities forming part of the Group
1
As of 30 September 2010.
2
Provisional gross premium income.
Financial Report 2010
|
The Savings Banks Finance Group
10
The portfolios of institutions within the Savings Banks
Finance Group are secured by the Group’s Joint Liability
Scheme, which guarantees all customer deposits held at
member institutions. In 2010, these included 429 Savings
Banks, eight Landesbank Groups, the DekaBank, the ten
Landesbausparkassen and S Broker.
The Joint Liability Scheme encompasses thirteen guaran-
tee funds: eleven regional Savings Bank guarantee funds,
the guarantee fund of the Landesbanken and Girozentralen
and the guarantee fund of the Landesbausparkassen. Each
guarantee fund is interlinked with the others. Should a fund
lack suffi cient resources to cover its particular institution, it is
supplemented by other guarantee funds.
This Joint Liability Scheme has proved its worth for more
than thirty years and provides customers of the Savings
Banks Finance Group with the utmost fi nancial security.
Since the scheme’s inception in 1973,
 not a single customer of any Savings Bank, Landesbank or
Landesbausparkasse has lost any deposits or savings;

 no compensation has ever had to be paid to depositors,
 and no member institution has failed to honour its fi nan-
cial obligations. Nor has there been a single insolvency.
Banking supervisors and the fi nancial markets recognise the
assurance of the Joint Liability Scheme. Three international
credit rating agencies – Moody’s Investors Service, Fitch Rat-
ings and DBRS – expressly cite the scheme in justifying their
very good assessments of the Savings Banks Finance Group’s
creditworthiness and ratings.
Further information on the Joint Liability Scheme can be
found in the risk report on pages 45–47.
THE JOINT LIABILITY SCHEME
The Savings Banks Finance Group’s guarantee scheme
The Savings Banks Finance Group
|
Financial Report 2010
11
The Savings Banks Finance Group has a total of three inde-
pendent marketable ratings – issued by Moody’s Investors
Service, Fitch Ratings and DBRS. For both long-term and
short-term liabilities, all three agencies awarded comparable
ratings in 2010.

By issuing a corporate family rating of Aa2 for long-term li-
abilities, Moody’s once again endorsed the high credit qual-
ity of the Savings Banks Finance Group in 2010. The rating
relates to the creditworthiness of the Group as a whole. As in
the previous year, for 2010 Moody’s has assigned the Savings
Banks Finance Group a Bank Financial Strength Rating (BFSR)
of C+.

The Canadian agency DBRS once again gave the members
of the Joint Liability Scheme a so-called fl oor rating for the
Group. The rating of A (high) for long-term liabilities and the
R-1 rating (middle) for short-term liabilities were confi rmed.
The fl oor rating refl ects the minimum credit quality of the
members of the Joint Liability Scheme.
We are delighted that the internationally well-regarded agency
Fitch Ratings has for the fi rst time also assessed the minimum
credit quality of the Savings Banks with a fl oor rating of A+ for
long-term liabilities and F1+ for short-term liabilities.

Key aspects that factored into all three agencies’ positive
ratings included
 the sound business model,
 the high creditworthiness – particularly of the Savings
Banks,
 the cooperation and solidarity within the Savings Banks
Finance Group,
 the effi cient business performance and
 the Savings Banks’ risk management and the diversifi ca-
tion of their risk positions.
This view remains unchanged in 2011, with an Aa2 rating
from Moody’s and an A+ from Fitch.
1
Fitch and DBRS ratings may also be awarded on an individ-
ual basis to Group members. The vast majority of Savings
Banks took advantage of this option in 2010, putting them
in a strong position for refi nancing activities and servicing
internationally active corporate clients, since both functions
increasingly require internationally recognised credit ratings.

This applies in particular to issuing guarantees for corporate
customers. The ratings facilitate the assessment of the
creditworthiness or transactions (such as guarantees or letters
of credit) of Savings Banks and Landesbanken for institutional
partners such as insurance companies or pension funds, as
well as on the interbank market.
In short, the consistently very good capital market ratings
constitute a great success for the Savings Banks Finance
Group. They attest to the high performance of its members
aswell as the high credit quality of the Savings Banks Finance
Group on an international level.
2010 2009
Moody’s Group Rating
long-term Aa2 Aa2
BFSR C+ C+
Fitch Floor Rating *
long-term A+ –
short-term F1+ –
DBRS Floor Rating
long-term A (high) A (high)
short-term R-1 (middle) R-1 (middle)
* Newly introduced in 2010.
MARKETABLE RATINGS
Strong creditworthiness of the Savings Banks Finance Group
acknowledged internationally
1
The Fitch and Moody’s ratings were awarded in May 2011. At the submis-
sion deadline for this report, the DBRS rating for 2011 had not yet been
published.
Financial Report 2010

|
The Savings Banks Finance Group
12 2010 in review
|
Financial Report 2010
IN REVIEW
The review of a diffi cult 2009 dominated the picture at the start of
the year. Discussions about a credit crunch have not yet abated in
Germany. Nonetheless, the Savings Banks have signifi cantly expanded
their corporate lending business and continue to show undiminished
commitment to small and medium-sized companies.
With regard to social commitment, the fi rst quarter marked the fi rst high
for the Savings Banks Finance Group: as Germany’s Olympic partner,
the Savings Banks Finance Group accompanies the German athletes to
the Winter Olympics in Vancouver. Every second German participant is
enrolled at one of the 40 elite sports schools that are supported by the
Savings Banks Finance Group.
The 2010 Diagnose Mittelstand (SME-Check-up), a comprehensive report
on the position of SMEs published every year by the German Savings Banks
Association, determined that 35% of German companies are not affected
by the crisis. A further 45% indicate that although they are affected, they
are in a position to deal with the consequences on the basis of their own
strengths and abilities. The International Monetary Fund (IMF) believes
that the German economy is growing cautiously and is forecasting growth
of 1.5% for 2010.
The full extent of the Greek crisis becomes evident in April – yields on Greek
sovereign bonds climb to over 10% on some maturities. The EU states, together
with the IMF, put together a EUR750 billion bailout package: such a volume has
never been seen before. The European Central Bank buys government bonds
from eurozone countries for the fi rst time in order to stabilise the bond markets.

In June, the euro falls to its annual low of EUR/USD1.19. At the same time, new
rules and regulations for the banking markets are being worked on intensively.
Financial markets react strongly to these developments. Despite this turbulence,
the German economy recovers– gross domestic product (GDP) has been rising
sharply, by 2.2%.
The Savings Banks also set the tone for stability. In the Stuttgarter Erklärung
(“Stuttgart Declaration”), presented at the 2010 German Savings Banks’ Day,
the Group warns about the threat of over-sized banks and refers to its retail-
based business model that generates stable returns with manageable risks.
Rating agency Moody’s affi rms the Aa2 rating for the Savings Banks Finance
Group, while DBRS confi rms the fl oor rating of A (high).
13Financial Report 2010
|
2010 in review
It is a “Summer of Innovation” in the Savings Banks Finance Group.
The Savings Banks offer the fi rst mobile fi nancial portal, so that
customers have their fi nances under control at all times and anywhere.
Various apps for smartphones, such as a free “S-budget planner” for
the iPhone, are offered during the year.
The third quarter starts with the results of the fi rst EU-wide bank
stress test. All members of the Savings Banks Finance Group pass this
test. The Group’s high level of creditworthiness is affi rmed in July by
the rating agency Fitch, which rates the Savings Banks Finance Group
for the fi rst time (A+). A new fund is created in Germany alongside the
draft of the Banking Restructuring Act, which should reduce the costs
of future state bailouts.
The G20 convene in Seoul and agree on the framework for Basel III, where
the focus is on higher capital backing requirements. The members of the
Savings Banks Finance Group are well prepared for this. However, the DSGV
sounds a warning about unwanted disincentives under the new rules and

regulations, which could particularly burden stable retail banks.
The Savings Banks Finance Group ends 2010 with two awards for its
sustained commitment. It receives the “GreenIT Best Practice Award
2010”. Additionally, “Planspiel Börse”, the Savings Banks’ stock market
simula tion game, has been acknowledged by the German UNESCO
Commission as a project for the UN decade campaign on “Learning
Sustainability”. From an economic perspective, the trend at the end of
2010 for the German economy and the Savings Banks Finance Group is
heading in the same direction: upwards.
In the US, the Federal Reserve Bank (Fed) tries to stimulate the still-
weak domestic economy by means of a USD 600 billion quantitative
easing programme. Together with the major divergences in the
eurozone and speculation about the future dollar pegging of the
yuan, this leads to intense debate about a “currency war”. Infl ation
fears in Germany are fanned by the high volume of liquidity provided
by the central banks.
OF NEW LOANS
were extended by Savings Banks to enterprises and self-employed per-
sons during 2010. The market share held by the Landesbanken alone in
this segment has exceeded the market share of private banks for years.
This economic performance is our contribution to the success of the
German economy – today, tomorrow and beyond.
15Financial Report 2010
|
Management report
MANAGEMENT REPORT
Economic environment
Macro-economic situation
The German economy grew by 3.6% in 2010, posting the
strongest increase in twenty years. A good portion of this

remarkable fi gure should be interpreted as a rebound from
the recession at the end of 2008 and the beginning of 2009.
However, it is still very positive that recovery has set in so
quickly and so robustly.
Germany’s swift economic recovery was spurred by the mo-
mentum of the global economy, spearheaded by the impor-
tant developing countries. Global industrial production in 2010
grew by 5% overall, and global trade volumes were up by
12.4% – more than offsetting the 2009 downturn. According-
ly, the German export sector in particular was able to profi t –
with an upward trend that began to take hold in summer
2009. Businesses also began to re-stock their inventories; at
the height of the crisis, many companies had allowed their
stocks to dwindle. In summer 2010, positive development ac-
celerated and spread to reach more of the domestic economy.
Private consumption, which had been stagnating for years,
began to rise slightly at this point.
The upturn in investment, however, was considerably stronger
from the outset of 2010. For the full-year 2010, there was a
10.9% year-on-year increase (adjusted for infl ation) in equip-
ment and facilities investment, for example. This, too, was a
distinct countermovement to the declines of previous reces-
sion years. There was also greater occasion for maintaining
and expanding capacity: this type of expansion investment
started to grow towards the end of 2010. Although internal fi -
nancing continued to play a signifi cant role, rising investment
activity in Germany generated increased credit demands.
Developments in the employment market were especially
positive in 2010. The jobless rate declined from its 2009 level
of 8.1% to 7.7% in 2010. The number of employed individ-

uals increased by more than 200,000, with the number of
employees making social security contributions rising even
more strongly. At nearly 40.5 million, 2010 marked an all-time
high in the number of people employed in Germany. The vol-
ume of work based on hours showed even greater growth
than the increase in headcount would imply. Short-time work,
a widespread instrument that offered greater fl exibility in the
last recession, was largely done away with and regular work-
ing hours were resumed.
Developments on the money and capital markets
Throughout the course of 2010, the key interest rates of the
European Central Bank (ECB) remained at the low level of
1% set during the recession and fi nancial crisis. The special
instruments implemented during the crisis to stabilise the
fi nancial markets were, however, allowed to expire by the ECB.
The twelve-month tenders, introduced in three rounds during
2009, were no longer offered after their expiry in 2010. The
covered bonds purchase programme, for example, was also
terminated. Yet a number of other stabilisation measures,
such as full-allocation tenders, continued. This ensured that
there continued to be ample liquidity available, although it
also increased certain fi nancial sectors’ dependency on the
ECB in peripheral eurozone countries.
Furthermore, the ECB made a series of government bond
purchases from EU member states whose credit quality was
increasingly coming under scrutiny on the markets. Greece’s
budgetary problems, which by the end of 2009 had become
impossible to overlook, continued to escalate. The support
measures required by Irish banks weakened Ireland’s solvency.
Ultimately Portugal reported both a budget and trade defi cit,

which was exacerbated by the negative economic develop-
ments within the EU. In spring 2010, EU member countries
put together a rescue package for Greece. The European
Financial Stability Facility (EFSF) was then incepted to address
other crises potentially arising through 2013. However, dra-
matically widening risk premiums in the eurozone have not
yet been contained.
16 Management report
|
Financial Report 2010
German government bonds were initially able to benefi t
from the shift from high-risk to low-risk investments. Yields
on bonds outstanding in August hovered at record lows of
1.8%. However, concerns about the budgetary burdens of
other EU member nations impacting on Germany caused
yields to rise again. Yields on outstanding exchange- listed
federal secur ities climbed to roughly 2.5% by year-end
2010, approximately 0.6 percentage points over yields at
the beginning of the year.
1
2011 forecast for global industrial production taken from the International
Monetary Fund’s World Economic Outlook of April 2011.
2
2011 forecasts for Germany from the Spring Forecast of the Economic
Research Institutes, 7 April 2011.
World Germany
Growth of real gross domestic
product (GDP) in %
2008 2009 2010 2011
1

2008 2009 2010 2011
2
2008 2009 2010 2011
2
2008 2009 2010 2011
2
Growth of real gross domestic
product (GDP) in %
Unemployment rate as a % of
the entire German labour force
Change in the average
cost of living in %
Economic growth –
review and outlook 2008–2011
7.8
8.1
6.9
7.7
+2.6
+0.4
+2.4
+1.1
+1.0
+2.8
+3.6
−4.7
+3.0
+4.4
+5.0
−0.5

6
4
2
0
8
10
−2
−4
−6
6
4
2
0
8
10
−2
−4
−6
6
4
2
0
8
10
−2
−4
−6
6
4
2

0
8
10
−2
−4
−6
The value of the euro was only temporarily shaken by the
turbulence on the government bond markets in spring 2010.
Recovery then took hold as the most important alternative
currencies (US dollar, British pound sterling and Japanese
yen) failed to demonstrate that they offered more solid state
fi nances than the eurozone.
The equity market refl ected improved corporate results in
the wake of more robust general economic recovery. The DAX
rose from just under 6,000 over the course of 2010 to close
with nearly 7,000 points.
17Financial Report 2010
|
Management report
Major markets and positioning
General overview
The combined business volume of the member institu-
tions of the Savings Banks Finance Group* amounted to
EUR2,398.7 billion as at the 2010 year-end. With a total
German market volume of EUR7,185.5 billion, this equates
to a market share of 33.4%. Consequently, the Savings Banks
Finance Group has reduced its market share compared with
the previous year by 1.2 percentage points. This is due to
the sharp decline of EUR140.4 billion (–9.6%) in the volume
of business at the Landesbanken to EUR1,317.5 billion,

refl ecting the implementation of strategic re-dimensioning
measures in the balance sheets. The commercial banks follow
with a market share of 31.0% (with the big banks accounting
for 18.0%, and regional/other commercial banks/foreign bank
branch networks for 13.0%). The cooperative sector accounts
for 13.1% of total market volume and “other banks” for 22.5%
(including special-purpose banks with 12.5% and mortgage
banks with 10.0%).
During the 2010 fi nancial year, credit business with German
customers was defi ned by a slight decline in corporate lend-
ing and deposits taken from companies on the one hand, as
well as increases in private housing construction loans, con-
sumer credit and deposits taken from private individuals on
the other.
In relation to customer lending, the Savings Banks Finance
Group further increased its market share in the area of cor-
porate loans during the 2010 fi nancial year. The Group also
maintained its strong market position with regard to private
housing construction loans. It once again shed market share
in the consumer credit business. In the fi ercely competitive
private customer deposit-taking business, the Savings Banks
Finance Group once again had to incur a slight loss in market
share in 2010 in the face of strong pressure from its com-
petitors. However, measured in terms of market share in this
business segment, it remains signifi cantly ahead of the other
banking groups. In relation to deposits from domestic enter-
prises, the Savings Banks Finance Group lost market share
here, too.
Customer lending business
The total market volume of corporate loans in the 2010 fi nan-

cial year fell by EUR10.6 billion or 0.8% to EUR1,305.7 billion.
With portfolio growth of EUR1.5 billion (+0.3%), the Savings
Banks Finance Group once again bucked the trend and record-
ed further growth. The volume of corporate loans extended
totalled EUR550.2 billion at year-end 2010. This equates to a
market share of 42.2%, with the Savings Banks accounting for
24.3% and the Landesbanken for 17.9%. The Savings Banks
Finance Group has therefore further expanded and under-
pinned the strong position it has built up with domestic busi-
nesses and the self-employed, making it the most important
fi nancial partner for small and medium-sized enterprises in
the German lending industry. Providing a reliable supply of
credit and dependable service and advice to the SME sector
has always been one of the core elements of the commercial
strategy pursued by the Savings Banks Finance Group.
Having endured three years of slightly weaker portfolio de-
velopment, fi nancing of private housing construction post-
ed a strong recovery again in the year under review. The total
market volume of private housing construction loans rose by
EUR5.1billion (0.7%) in 2010 to EUR697.1 billion.
18.0%
Big banks
13.0%
Regional banks/other
credit banks/branches
of foreign banks
15.0%
Savings Banks
18.4%
Landesbanken

13.1%
Cooperative
banking sector
22.5%
Special-purpose
banks
As of 31.12.2010
1
Excluding derivative fi nancial instruments held in the trading portfolio.
Market shares by business volume
Total market volume: EUR 7,185.5billion

1
* In this chapter, “Savings Banks Finance Group” relates to Savings Banks
and Landesbanken.
18 Management report
|
Financial Report 2010
The Savings Banks Finance Group posted above-average port-
folio growth here of +1.5%. This increased their loan port folio
by EUR3.7billion to EUR257.2 billion. The Savings Banks
accounted for EUR232.6 billion thereof, which equates to a
market share of 33.4%. They were followed by the second-
strongest banking group, namely the cooperative banking
sector, with a market share of 23.8%. Together, the Savings
Banks and Landesbanken account for a market share of 36.9%.
The consumer credit portfolio (overall market) performed
favourably in 2010 and slightly exceeded last year’s level. The
market volume increased by EUR2.0 billion or by 0.9%, to
EUR228.6 billion as at 31 December 2010. The members of

the Savings Banks Finance Group recorded another slight fall
in their portfolio during the year under review. The reduction
of EUR0.8 billion or 1.1% resulted in a slight fall again in
market share. With a portfolio volume of EUR68.0 billion and
a market share of 29.8%, the Savings Banks Finance Group
lies in se cond place, behind the group of regional and other
commercial banks (market share: 36.1%). This banking group
is comprised almost entirely of specialised fi nanciers. For the
fi rst time since the end of the 90s, it recorded a fall in port-
folio volume in consumer credit business and therefore a loss
of market share in 2010. The cooperative sector was the only
banking group to have reported portfolio growth in the area of
consumer credit during 2009 and the year under review. This
had the effect of raising its market share to 22.2%.
12.9%
Big banks
12.7%
Regional banks/other
credit banks/branches
of foreign banks
24.3%
Savings Banks
17.9%
Landesbanken
15.2%
Cooperative
banking sector
17.0%
Special-purpose
banks

As of 31.12.2010
* Loans to enterprises and self-employed persons
(including commercial housing loans).
Market shares in loans to enterprises *
Total market volume: EUR 1,305.7billion
13.3%
Big banks
16.3%
Regional banks/other
credit banks/branches
of foreign banks
33.4%
Savings Banks
3.5%
Landesbanken
23.8%
Cooperative
banking sector
9.7%
Special-purpose
banks
As of 31.12.2010
Market shares in housing loans to households
Total market volume: EUR 697.1billion
7.5%
Big banks
36.1%
Regional banks/other
credit banks/branches
of foreign banks

25.4%
Savings Banks
4.4%
Landesbanken
22.2%
Cooperative
banking sector
4.4%
Special-purpose
banks
As of 31.12.2010
Market shares in consumer credits
Total market volume: EUR 228.6billion
19Financial Report 2010
|
Management report
Deposits from private individuals
Last year, the market volume of deposits from private persons
(excluding term deposits for a period of more than two years)
increased by 3.8% to EUR1,522.3 billion as at year-end 2010.
With absolute growth of EUR55.2 billion, the previous year’s
growth of EUR43.9 billion was clearly exceeded. However, the
very high growth levels recorded in 2007 (EUR71.9 billion)
and 2008 (EUR89.6 billion) could not be matched. Further
huge shifts were observed within the individual investment
categories: growth in current account balances and savings
deposits, and lower volumes in fi xed-term deposits and sav-
ings bonds. However, these shifts were not as pronounced as
in the previous year, as a consequence of the sharp decline in
interest rates on the term deposit market, which reduced pri-

vate term deposit volumes by almost half, while the private
current account balances posted growth of almost one-third.
The Savings Banks recorded an increase of EUR17.8 billion
or 3.0% in deposits from private individuals during the year
under review. Although this meant that they clearly exceeded
the result achieved in the previous year (+1.9%), during 2010
the Savings Banks once again participated disproportionately
in the overall increase in market volume, and lost additional
market share – albeit to a lesser extent than in previous years.
With a portfolio volume of EUR611.0 billion as at 31 Decem-
ber 2011, and a market share of 40.1% of the deposit-taking
business with private customers, the Savings Banks Finance
Group remains ahead of the cooperative banking sector
banks that are also heavily involved in retail business: their
portfolio volume amounts to EUR409.6 billion, which rep-
resents a market share of 26.9%. The group of regional and
other commercial banks (portfolio volume: EUR278.1 billion,
market share: 18.3%) is in third place. Together with the Lan-
desbanken, for which private deposit-taking business is only
of minor importance, the Savings Banks hold a market share
of 42.7%.
Deposits from domestic enterprises
Deposits from domestic enterprises totalled EUR1,121.3bil-
lion at year-end 2010. After private deposits, this is the second-
largest segment in the entire deposit-taking business of
the German banking sector. During the 2010 fi nancial year,
deposits from domestic enterprises recorded a slight decline
of 1.0%, after some sharp increases in previous years (for
example more than 11% in both 2007 and 2008). This was
due to the performance of the Landesbanken, where deposits

from domestic enterprises fell by a total of EUR22.0billion
or 7.5% to EUR271.5 billion during the year under review.
As of 31.12.2010
Market shares in deposits from households
Total market volume: EUR 1,522.3billion
11.9%
Big banks
18.3%
Regional banks/other
credit banks/branches
of foreign banks
40.1%
Savings Banks
2.5%
Landesbanken
26.9%
Cooperative
banking sector
0.3%
Special-purpose
banks
20 Management report
|
Financial Report 2010
This decline is attributable solely to the sharp reduction in
the term deposits of insurance companies that resulted from
the implementation of strategic measures taken to reduce
the volume of total assets, and the Landesbanken’s resulting
lower refi nancing requirements. Despite the sharp decline
in portfolio volume and market share (–1.7%) last year, at

24.2%, the Landesbanken still commanded the highest mar-
ket share of deposits from domestic enterprises. Together
with the Savings Banks, the Landesbanken hold a combined
market share of 34.9% in this deposit-taking segment.
Savings Banks strengthen international business
support
The German economy has staged a solid recovery from the
global economic crisis. The recovery has been driven by
German exports, which were up by more than 14% year on
year, and are expected to exceed the one trillion euro mark in
2011.
Meanwhile, German small to medium-sized enterprises – the
Mittelstand – or “SMEs” – account for around a quarter of this
success in international trade. As the most important pro vider
of fi nance to German SMEs, Savings Banks have pursued a
comprehensive approach in advising their business custom-
ers for many years – an approach that takes into account the
customers’ manifold cross-border business relationships.
Recognising the increasingly international profi le of German
SMEs, Savings Banks continued to enhance their advisory
capacity to this sector during 2010: for instance, by bundling
advisory services across multiple Savings Banks, in so-called
“Centres of Competence for International Business”. In this
way, Savings Banks combine their extensive advisory skills
with regional responsibility.
During 2010, additional Savings Banks have embarked upon
this development. Almost one quarter of German Savings
Banks are now working with such Centres of Competence,
leveraging these skills for their corporate customers who
conduct business abroad.

20.8%
Big banks
14.7%
Regional banks/other
credit banks/branches
of foreign banks
10.7%
Savings Banks
24.2%
Landesbanken
9.4%
Cooperative
banking sector
20.2%
Special-purpose
banks
As of 31.12.2010
Market shares in deposits from domestic enterprises
Total market volume: EUR 1,121.3billion
21Financial Report 2010
|
Management report
Business development and fi nancial position
Performance of the member institutions of the
Joint Liability Scheme – an aggregated view
The Savings Banks Finance Group saw a marked improvement
in results for the 2010 fi nancial year. Two aspects in particular
were signifi cant for the Group’s fi nancial perform ance: on the
one hand, write-downs were considerably lower compared
with the previous year, whilst on the other hand, the burdens

on earnings from net extraordinary income/expenses as well
as from the investment business were signifi cantly reduced.
This was largely attributable to the fi nancial performance of
the Landesbanken. However, the Group could only increase
operating profi t slightly, even though the Savings Banks
managed to improve upon what was already a good fi gure
the previous year.
The Savings Banks Finance Group concluded its operative
business in 2010 with an operating result of EUR17.0 billion
(excluding revaluation results). This represents an improve-
ment of 1.5% over the previous year (EUR16.8 billion). Net
commission income rose by 5.9% to EUR7.4billion, while at
EUR34.8 billion, net interest income was marginally lower
than the fi gure for the previous year. Net earnings from
fi nancial transactions contracted to EUR0.5 billion. Admin is-
trative expenses were reduced by 3.4% to EUR26.0billion.
Within this fi gure, EUR11.0 billion of material expenses
represented a practically unchanged fi gure, while personnel
expenses fell by 5.6% to EUR15.0 billion. The only relief
provided in this context was the reclassifi cation of interest
cost for pension provisions into net interest income, pursuant
to the fi rst-time application of the German Accounting
Moder nisation Act (“BilMoG”).
The cost-income ratio for the entire Savings Banks Finance
Group improved to 61.7% during the 2010 fi nancial year
(previous year: 64.1%). This was largely attributable to the
rise in net commission income and to the decline in adminis-
trative expenses.
After the two previous years, which were largely defi ned by
the fi nancial markets crisis, the Savings Banks Finance Group

saw a marked relief in revaluation results in the 2010 fi nan-
cial year. Net write-downs were reduced from EUR10.6 billion
in 2009 to EUR6.2 billion. This is primarily attributable to
the sharp economic recovery in the previous year and the
resulting opportunity in 2010 to reverse loan loss provisions
from previous years. The “extraordinary result”
1
that was
largely determined in the previous year by non-recurring
effects within the Landesbanken burdened the Savings Banks
Finance Group’s total income by only EUR2.2 billion in the
2010 fi nancial year – down from EUR6.5 billion in 2009.
Overall, the member institutions of the Savings Banks Finance
Group achieved net income before taxes of EUR8.7 billion in
2010. This is in sharp contrast with the previous year, which
the Savings Banks Finance Group concluded with a negative
result before taxes (EUR–0.3 billion). After taxes, the Savings
Banks Finance Group recorded net profi t of EUR6.0 billion in
the 2010 fi nancial year, compared with a loss of EUR2.9 bil-
lion the year before.
In the 2010 fi nancial year, aggregated total assets for the
Savings Banks Finance Group (Savings Banks, Landesbanken
2

and Landesbausparkassen) fell once again. Total assets de-
clined by 4.9% (2009: –3.8%) to EUR2,455.7 billion.
3
How-
ever – as in the previous year – this renewed decline was not
the result of weak growth but was a consequence of strategic

realignment/redimensioning measures implemented at the
Landesbanken. They continued to consistently reduce the
volume of their interbank business, their securities treasury
portfolio and, owing to the drop in refi nancing requirements,
their securitised liabilities (in the latter case, signifi cantly).
1
Balance of other and extraordinary income and expenses
(according to the German Bundesbank).
2
Landesbanken with no foreign branches, no domestic and foreign group
companies and without Landesbausparkassen.
3
Not taking into account the trading portfolio derivatives that were consoli-
dated for the fi rst time as at the balance sheet date of 31 December 2010.
22 Management report
|
Financial Report 2010
Selected balance sheet and income statement items
of the Savings Banks Finance Group
Selected balance sheet items
As of
31 Dec. 2010
in EUR billion
As of
31 Dec. 2009
in EURbillion
Change

in EURbillion
Change

in %
Loans to banks (MFIs
1
) 544.9 615.9 −71.0 −11.5
Loans to non-banks (non-MFIs
1
) 1,214.3 1,200.5 +13.8 +1.2
Liabilities to banks (MFIs
1
) 598.5 649.5 −51.0 −7.9
Liabilities to non-banks (non-MFIs
1
) 1,164.7 1,160.1 +4.6 +0.4
Balance sheet total
2
2,601.7 2,582.8 +18.9 +0.7
for information: total assets (excluding trading derivatives) 2,455.7 2,582.8 −127.1 −4.9
Selected income statement items
2010

3
in EUR billion
2009
in EURbillion
Change
in EURbillion
Change
in %
Net interest income 34.843 35.045 −0.202 −0.6
Net commission income 7.357 6.948 +0.409 +5.9

Net earnings from fi nancial transactions 0.517 1.079 −0.562 −52.1
Administrative expenses 26.022 26.936 −0.914 −3.4
Earnings before valuation 17.025 16.767 +0.258 +1.5
Valuation result (excluding equity interests) −6.172 −10.592 +4.420 –
5
Earnings after valuation 10.853 6.175 +4.678 +75.8
Balance of other and extraordinary income/expenses
4
−2.157 −6.463 +4.306 +66.6
Net income / loss for the year before taxes 8.696 −0.289 +8.985 –
5
Taxes on income 2.665 2.571 +0.094 +3.7
Net income / loss for the year after taxes 6.031 −2.860 +8.891 –
5
of which net income of Savings Banks after taxes 4.099 2.463 +1.636 +66.4
of which net income / loss of Landesbanken after taxes 1.810 −5.457 +7.267 –
5
of which net income of Landesbausparkassen after taxes 0.122 0.134 −0.012 −9.0
1
Monetary fi nancial institutions.
2
Total assets as at the end of December included derivative fi nancial instru-
ments held in the trading portfolio (trading derivatives), due to the fi rst-
time application of the German Accounting Modernisation Act (“BilMoG”).
Trading derivatives of EUR 146.0 billion were carried by Landesbanken,
and reported under “Other liabilities”.
3
Provisional data from partly non-audited annual fi nancial statements
prepared in accordance with German GAAP (converted to conform with the
system of the German Bundesbank).

4
Including the balance of gains on the sale of fi nancial investments and
investments held as fi xed assets as well as write-downs/write-ups on
fi nancial investments and investments held as fi xed assets.
5
Calculation is immaterial.
23Financial Report 2010
|
Management report
In the customer lending business, the Savings Banks
Finance Group reported growth again within the scope of a
signifi cantly better environment in 2010, following a mar-
ginal decline the year before. Claims due from non-banks
increased by 1.2% to EUR1,214.3 billion. The customer de-
posits business also posted slight growth. Liabilities owed
to non-banks were up 0.4% to EUR1,164.7 billion.
The Savings Banks Finance Group’s equity declined slightly
by 3.5%, to EUR122.2 billion. This decline is solely attribut-
able to developments at the Landesbanken, and is primar-
ily explained by the processing of losses from the 2009 fi -
nancial year incurred by some Landesbanken during the
year under review. Nonetheless, the Savings Banks Finance
Group’s capitalisation remains comfortable. This meant that
the Savings Banks Finance Group was able to continue to
make a key contribution, providing (in particular) German
SMEs with credit, as it had done in the previous year.
Business development of the Savings Banks
The 429 Savings Banks in Germany saw sound business
development in the 2010 fi nancial year. Despite the further
reduction of interbank business, their total assets rose by

EUR11.0 billion or 1.0% to EUR1,084 billion. At 429 (previ-
ous year: 431), the number of Savings Banks continues to fall
slightly as smaller units are successfully consolidated.
Customer lending increased by 2.8%; loans to enterprises
and self-employed persons, as in the previous year, were the
main drivers of growth (+3.3%). New business expanded,
too: at EUR64.2 billion, loans granted to enterprises and
self- employed persons rose by 3.4% compared to 2009.
With regard to customer deposits, the Savings Banks were
able to signifi cantly exceed the weaker previous year’s growth
of EUR9.6 billion and achieve an increase of EUR15.6 billion
(+2.1%). There were further shifts between the individual
investment categories, albeit signifi cantly less than in 2009.
Term deposits (–10.0%) and own bond issues (–12.2%)
continued to decline, while growth was reported for savings
deposits (+4.3%) and current account balances (+6.6%).
2010 2009 Change Change
in %
Number of Savings Banks 429 431 −2 −0.5
Balance sheet total (in EURbillion) 1,084 1,073 +11.0 +1.0
Business performance of Savings Banks