• 2007 pre-tax result up €65.5m to €101.5m
• Cost/income ratio and return on equity improved
• Surge in new business
• Further expansion of capital market business
• Savings bank business intensified

Frankfurt, 6 March 2008 – Westdeutsche ImmobilienBank (WIB) has improved its pre-tax result for the 2007 financial year to €101.5m, €65.5m up on the figure for the previous year (€36.0m).

“WIB has performed well in its first year as an AG and exceeded its earnings forecasts. As we are neither directly nor indirectly invested in the subprime market, the crisis has affected us only in terms of a general deterioration in conditions on the financial markets; overall it has not been able to deflect us from our path. We are set fair for the future and are implementing our business model consistently”, said Hubert Beckmann, Chairman of the Managing Board of WIB.

The very positive trend was critically determined both by the sharp rise in net interest income, which climbed 35% on the previous year to reach €177.9m (previous year: €131.7m), and by the development of net fee and commission income, which rose to €9.4m (PY: €0.4m) due to an increase in income from investor business combined with lower expenses in brokering business for private construction financing. The trading result of €19.9m (PY: -€2.4m) includes all IFRS valuation effects from the derivatives concluded for the purposes of controlling the bank’s interest book.

The bank also profited from the success of business with the interest rate and currency derivatives increasingly concluded with real estate customers within the framework of individually structured financing solutions.

Pure credit risk provisions produced a slightly higher net result of €0.3m (PY: -€20.7m). As the bank is not invested in the subprime market, the crisis on the international financial markets did not have any effect here. Risk provisions for investments are reported under net income from non-current financial assets, which fell to -€18.5m (PY: -€1.8m). Overall, the provision for risks (credit and investment risks) is at roughly the same level that it was in the previous year.

General administrative expenses came to €91.1m (PY: €84.2m). They include a special factor for depreciation for an old project of €3.9m.

Strict cost management alongside higher income is also reflected in the cost/income ratio of 40.2%, a sharp improvement on the previous year (59.8%). The return on equity rose to 11.6% (PY: 4.2%).

The increase in lendings to customers resulted in net assets rising to €23.8bn (PY: €23.2bn).

To strengthen the bank’s capital base, €40m was allocated to the reserve for general bank risks required under § 340g HGB [German Commercial Code].

At the end of the financial year the group had 528 employees (PY: 523).

Surge in new business

In 2007 the bank committed €9.6bn (PY: €8.1bn) in new business, exceeding the figure for the previous year by 18%. Of this total, €3.4bn went on commercial financing in Germany, which rose sharply (+21%, PY: €2.8bn).
Private construction financing business stood at €0.6bn (PY: €1.1bn). The decline is due to weaker demand and increased competition bringing considerable pressure on margins, to which the bank did not want to respond with further concessions.

WIB recorded a surge in its international commercial business, committing some €5.6bn in new business (+33%, PY: €4.2bn). Growth in the USA and in southeast Europe was particularly strong. With the expansion of international lending, derivatives business was also intensified to a volume of €1.7bn (PY: €0.7bn).

The bank is also scaling up its presence in strategically important core and growth markets. Following the opening of its first central European representative office in Warsaw, it established another in Prague and a subsidiary, WIB Real Estate Finance Japan K.K., in Tokyo. Business in its domestic market has also been expanded with the opening of an office in Berlin.

Beckmann said: “The success of our sales activities in all target countries has exceeded our expectations. WIB has been able to strengthen its market position in Europe, the USA and Asia considerably by expanding its financing activities.”

Further expansion in capital market business

WIB continued the expansion of its capital market business in the second half of 2007. Syndication and securitisation are key components for the bank both for controlling risk and for delivering further improvements in profitability.
Despite the difficult climate on the capital markets, the bank was able to place credit risks amounting to some €1.3bn with third parties in 2007. Beckmann: “Apart from securitisation which cannot be realised immediately, we are confident that we will continue to find partners for reasonable risks in the future. However, we expect 2008 to see the situation on capital markets remaining difficult and we will keep the situation under intensive observation.”

Refinancing was guaranteed at all times by the sale of funding means such as the issuance of mortgage bonds. Given the security and high market penetration of mortgage bonds, the bank thus has a stable refinancing source even in a difficult market environment.

Business with savings banks intensified

WIB was also able to use the expired financial year to strengthen its strategic significance in the Sparkassenverbund [savings bank association] and to step up co-operation with individual institutions. The number of savings banks in North Rhine-Westphalia and Brandenburg with whom the bank maintains close business relations has increased sharply. The volume of new business in commercial real estate financing climbed to about €190m. Intra-association business in private construction financing is also coming increasingly into focus and, along with traditional broker business, is becoming another key pillar. The importance of WIB for the savings bank association was emphasised by its inclusion in the reserve fund of the Rheinische Sparkassen- und Giroverband (RSGV) and the Westfälisch-Lippischer Sparkassen- und Giroverband (WLSGV). This was a key reason why rating agency Standard & Poor’s (S&P) raised the long-term rating of WIB from BBB+ to A-.

Outlook for 2008

“By successfully increasing its new business WIB has demonstrated that it is well positioned on the markets as a financing partner and mortgage bond issuer. At the same time, the further development of our capital market business has equipped us to meet the requirements of the future as well. Assuming that the situation on the financial markets will return to normal in the course of 2008, we anticipate that our results will continue to be satisfactory”, said Beckmann.

About the IFRS consolidated financial statements:
To increase transparency and reflects its status as a non-trading book institution, WIB decided to report interest-driven profit contributions generally in the net interest income from the 2007 financial year. This led to significant item reclassifications compared with the previous year. To improve comparability, the figures for the previous year have been adapted accordingly in the comparison. The figures are subject to the audit certificate and approval by the Supervisory Board.