PRESS RELEASES 2009
DZ BANK: as a result of the escalation of the crisis in the financial markets in the fourth quarter of last year, the DZ Group reported a negative result after tax of a good EUR 1 billion for fiscal year 2008
– shareholders signal their readiness to furnish capital totalling up to EUR 1 billion.
The escalation of the crisis in the financial markets, especially following the insolvency of the investment bank Lehman Brothers, led the DZ BANK Group to expect a negative result after tax according to IFRS of a good EUR 1 billion for fiscal year 2008. In the annual accounts of DZ BANK AG prepared according to German Commercial Code (HGB), the bank expects on an interim basis to report a positive result. Accordingly, the bank intends to service its tier-1 bonds as scheduled.
Besides the negative effects of exposures to Lehman Brothers (EUR 360 million), Icelandic banks (EUR 449 million) and the participation in Natixis (EUR 269 million), the bank was also obliged to make temporary write-downs on a volume of around EUR 1.5 billion of bank and government bonds and ABS. Write-downs of around EUR 1.2 billion were also carried out on securities positions at DZ BANK and R+V Versicherung. The write-downs were taken to the revaluation reserve.
“The DZ BANK Group was also not left unscathed by the exacerbation of the financial markets crisis. Thanks to its good cooperation with the local cooperative banks, DZ BANK continues to have a very good liquidity position. We also assume that the bulk of the write-downs on securities will be temporary,” said Wolfgang Kirsch, Chief Executive Officer at DZ BANK. ”The DZ BANK Group’s business model remains intact and in the future we shall tailor it even more to the cooperative financial services network. The regional nature and customer proximity that are typical of our sector are experiencing a renaissance. We shall benefit from the markets’ recovery.”
Against this background, at the beginning of the week the shareholders of DZ BANK declared that they were willing to increase the bank’s capital. At the Supervisory Board meeting to be held on 18 February 2009 DZ Bank’s Board of Managing Directors will propose providing capital of up to EUR 1 billion within the cooperative financial services network. “We regard the fact that our owners are prepared to furnish us with capital as an expression of the cooperative principle to meet challenges as far as possible under our own steam,” said Kirsch. In the light of the unprecedented systemic turmoil, this step is being taken in the expectation that the market environment will stabilise. Other alternative flanking measures are also been looked at. The merger with WGZ BANK is to be implemented as planned.
Ilja-Kristin Seewald, Head of Department, Press, Internal Communication and Public Affairs
Tel.: +49 (0) 69-7447-42894
Silvia Conesa, Spokesperson
Tel.: +49 (0) 69-7447-90568