Mainz, 16 July 2003

Westdeutsche ImmobilienBank held its own in the past fiscal year despite the difficult market situation. “We are optimally positioned for the future with WestLB as our sole shareholder, as well as our positive rating and strong market position”, said Jürgen Stinner, Chairman of the Managing Board of Westdeutsche ImmobilienBank, presenting the financial statements for 2002.

In future, Westdeutsche ImmobilienBank (WIB) will act as the Centre of Competence for real estate investment banking and finance within the WestLB Group.

In order to improve its refinancing opportunities, WIB applied for a rating for itself and its Pfandbrief products at the beginning of the year. Both its Öffentliche Pfandbriefe (municipal bonds) and its Hypothekenpfandbriefe (mortgage bonds) were awarded the top rating, “AAA”. Equally, Westdeutsche ImmobilienBank’s bank rating of “AA” (long-term debt) and A-1+ (short-term debt) are extremely positive.

Net income for the year increased

Although 2002 was one of the most difficult years in the history of banking, Westdeutsche ImmobilienBank regards its results as satisfactory.

New business declined slightly by € 0.3 billion to € 3.9 billion (-7.1%) as the result of a risk- and yield-driven management approach, among other things. Although the Bank’s operating result after risk provisions and before income taxes declined to € 11.3 million (-24.2%), net income for the year improved significantly to € 7.8 million (previous year: € 1.7 million), due to lower tax charges. Net interest income dropped by 9.4% to € 92.0 million. Net commission income and net income from financial transactions together amounted to € 9.9 million (previous year: € 11.2 million).

Completion of IT restructuring leads to cost savings

In the past fiscal year WIB succeeded in reducing expenditure by concluding its cost-intensive IT projects, although implementation of the regulatory requirements in principle involves an increase in both staff and non-staff expenses. All in all, general administrative expenses decreased 4% to € 62.5 million, while non-staff expenses including depreciation and amortization declined by 10% to € 29.6 million. At € 32.9 million, staff expenses rose only slightly (previous year: € 32.1 million).

Receivables from customers were down 1.6% to € 12.3 billion, mainly due to exchange rate developments (US dollar and GBP). In line with this, total assets declined 1.9% to € 15.9 billion.

Strong international business by Westdeutsche ImmobilienBank

Although the markets as a whole have been hit by the slump in the economy and competition is fierce, Westdeutsche ImmobilienBank is especially strong abroad in particular. The Bank successfully positioned itself as an internationally oriented real estate investment bank at an early stage.

Foreign financing amounted to € 2.1 billion, or approximately 54% of all new business. The main focus, at approximately 22%, was on the USA, followed by the United Kingdom with approximately 10%. The Bank was able to improve its market position in Continental Europe, and particularly in France and Central Europe.

Domestic investment remained almost at last year’s level. Loan commitments were down only slightly by 3.8% to € 1.26 billion.

Real estate investment banking: major transactions completed

WIB has established a strong market position in the real estate investment banking segment. These products comprise structured finance, portfolio finance, speciality finance, syndicated finance and loans, and real estate consulting.

The importance of this range of products for corporate clients in particular can be seen from the example of the aurelis Real Estate GmbH transaction. WIB, together with WestLB and Westfälische Provinzial Lebensversicherung Münster, acquired a majority interest in the company via an equity injection. The overall portfolio, which is valued at approximately € 2.5 billion, comprises approximately 30.4 million m² of property.

Sharp increase in residential finance business

The Bank’s residential finance business, which is run by ImmoBank direkt, developed extremely encouragingly in 2002, in contrast to the general market trend. With an increase of 25% to € 525 million (previous year: € 420 million), this unit now accounts for 14% of total loan commitments, a clear rise year-on-year.

WIB took a number of key steps designed to further expand its residential finance business in 2002. The credit factory has been set up, i.e. loans can be processed extremely efficiently in the name and for the account of other banks using state-of-the-art IT systems. The highly standardised, IT-driven workflows in this area of business allow capacity and productivity to be improved further. In addition, the constant, low-risk income has a positive effect on the Bank’s rating.

Increase in loan commitments in first half of 2003

Westdeutsche ImmobilienBank recorded a positive year-on-year development in the first half of 2003. Total loan commitments amounted to € 2.3 billion, up almost 50% on the first half of 2002. Net interest income declined by 6.4% to € 35.0 million due to the drop in interest rates in particular. However, at € 4.3 million, net commission income was up significantly on the previous year (previous year: € 2.4 million). The operating result before risk provisions decreased to € 7.4 million (previous year: € 13.6 million); this is primarily due to investment income that will not mature until the second half of the year. Total assets increased to approximately € 16.3 billion (previous year: € 15.9 billion).

From Westdeutsche ImmobilienBank’s perspective, 2003 has not yet produced a turnaround in the economy, although there are signs of light at the end of the tunnel. The increase in loan commitments in the first half of 2003 suggests a gradual improvement in the market situation. For 2003, Westdeutsche ImmobilienBank is again forecasting a positive result.

Westdeutsche ImmobilienBank
Press and Public Relations
Große Bleiche 54
55116 Mainz
Germany

presse@westimmobank.com

Telefon: + 49 6131 9280 -7222/7385
Telefax: + 49 6131 9280 - 7209