Company Profile of Cooperative Banks

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Financial Statements

           2    Company Information

           5    Company Profile, Summary Directors’ Report and Business Review 2009

           10   Independent Auditors’ Statement to the Members of DZ BANK Ireland plc

           13   Summary Financial Statement 2009
Company Information
Company Information

Directors                                    Managing Directors
Frank Westhoff, Chairman                     Dr Tilmann Gerhards
Member of the Board of Managing Directors,   Mark Jacob
DZ BANK AG, Frankfurt am Main

Walter Brazil
                                             Company Secretary
Finance Director of AIB Capital Markets
                                             AIB International Financial Services Ltd.
Dr Tilmann Gerhards                          International Centre
Managing Director,                           I.F.S.C.
DZ BANK Ireland plc                          Dublin 1

Mark Jacob
Managing Director,                           Registered Office
DZ BANK Ireland plc                          Guild House
                                             Guild Street
Thomas Kaltwasser                            I.F.S.C.
Head of Treasury,                            Dublin 1
DZ BANK AG, Frankfurt am Main

John McCloskey                               Solicitors
Former Chief Executive of ACCBank plc
                                             Arthur Cox
Carl O'Sullivan                              Earlsfort Centre
Partner                                      Earlsfort Terrace
Arthur Cox                                   Dublin 2

Audit Committee                              Auditors
Walter Brazil, Chairman                      Ernst & Young
John McCloskey                               Chartered Accountants & Registered Auditors
Carl O’Sullivan (as of 14th February 2010)   Harcourt Street
                                             Dublin 2

Company Profile, Summary Directors' Report
and Business Review 2009
    Company Profile

    DZ BANK Ireland plc is a wholly owned subsidiary of
    DZ BANK AG Deutsche Zentral-Genossenschaftsbank,
    Frankfurt am Main (DZ BANK AG).

    The Parent Company                                      DZ BANK Ireland plc
    DZ BANK AG is the central bank, corporate bank          DZ BANK Ireland plc (‘’the Bank” or “the Company”)
    and parent holding company for the DZ BANK Group.       has been in operation in Dublin’s International Financial
    It was established in September 2001 by the merger      Services Centre (I.F.S.C.) since its incorporation as SGZ
    of DG BANK and GZ-Bank and is one of the largest        (Ireland) plc in November 1994. The Bank received a
    banking groups in Germany.                              full banking licence from the Central Bank of Ireland in
                                                            April 1995.
    As a central bank, DZ BANK AG is responsible for
    servicing 940 out of 1,156 local cooperative banks      DZ BANK Ireland is positioned within the investment
    with aggregate assets of EUR 690 billion as at          bank function of the DZ BANK Group. It is focused on
    December 2009. The cooperative banks have a             high grade credit products including floating rate notes,
    significant share of the fragmented German market       asset swaps, syndicated and bilateral loans to a range
    with approximately 14% of loans. DZ BANK AG acts        of parties such as financial institutions, Asset Backed
    as a liquidity manager for, and supports, the local     Securities (ABS) issuers, corporations, sovereign and
    cooperative banks with transactions such as brokerage   sub-sovereign entities in Europe and North America.
    and securities processing, international business and   Furthermore it provides medium and long-term fixed
    the development of retail products and individual       rate loans for refinancing purposes to the local
    customer solutions.                                     cooperative banks in Germany.

    As an internationally oriented corporate bank,          DZ BANK AG has issued a “Patronatserklärung”
    DZ BANK AG provides the full range of corporate         (“strong letter of comfort”) in favour of DZ BANK
    banking services to its predominantly SME customers     Ireland to the effect that DZ BANK Ireland will always
    and also provides investment banking services in the    be in a position to meet its liabilities. The debt ratings
    areas of fixed income and private, customer oriented    of the Bank are A2/P1 (Moody’s) and A+/A1 (S&P).
    securities services. DZ BANK AG is represented in all
    key financial centres in Europe, the United States of
    America (U.S.A.) and Asia.

    As a holding company, DZ BANK AG coordinates
    the efforts of the cooperative sector’s wide range
    of specialist product and service providers which
    includes activities such as asset management
    (Union Investment), insurance (R+V Versicherung),
    real estate and mortgages (Bausparkasse Schwäbisch
    Hall, DG HYP) and leasing (VR LEASING).

    DZ BANK AG’s debt ratings are Aa3/P1 (Moody’s),
    A+/A1 (S&P) and A+/F1+ (Fitch).

Summary Directors’ Report and
Business Review 2009

Summary Directors' Report for 2009                         The Bank’s capitalisation remained well above
                                                           minimum requirements, with a Tier 1 ratio of 10.6%
After a weak first quarter in 2009, conditions improved
                                                           and the total capital ratio of 12.9%. The Bank
in the major economies and some stability returned
                                                           redeemed EUR 40 million of Lower Tier 2 debt during
to the financial markets following the unprecedented
                                                           the year.
stress of the previous year. The combined effects of
aggressive interest rate cuts, quantitative easing
                                                            Asset Profile
measures and systemic support for the banking
sector in most of the western economies underpinned                                 Loans 7.6%
                                                           Debt Securities 92.4%
a nascent recovery in economic growth in the U.S.A.,
Germany, France and elsewhere and a slowdown in
the rate of decline in house prices in most markets.
The extent and sustainability of economic recovery
remains unclear in the short-term given the potential
for withdrawal of policy support, potential changes to
the global financial services regulatory systems and the
vulnerability to exogenous shocks. In the medium-term      Investment Assets
economies will be faced with the need to eventually        Approximately 8% of the balance sheet consists of
reduce high government deficits and likely structural      loans to banks and corporates, in line with the
decline in GDP growth potential.                           previous year, most of which is accounted for by loans
                                                           to local cooperative banks. By the very nature of the
As a member of the DZ BANK Group with access               cooperative banking model in Germany and its
to strong liquidity and capital resources, the Bank’s      underlying support mechanism, the credit worthiness
business developed satisfactorily in 2009. Overall,        of these banks is considered to be synonymous with
DZ BANK Ireland’s relative strength remained stable        DZ BANK Group. Member Banks of the Federal
in 2009 and there were no changes to the Bank’s            Association of Cooperative Banks (“BVR”) participate
long- or short-term debt ratings. Asset quality remained   automatically in a protection system centrally
satisfactory and sound liquidity and capital ratios were   administered and controlled by the BVR and funded
maintained.                                                by the sector’s banks as stipulated in the BVR statutes.
                                                           These statutes provide extensive opportunities for
Business Review 2009                                       preventive intervention and rehabilitation of troubled
Statement of Financial Position                            member banks. Consequently, no member bank has
Total assets decreased by 12% due to asset maturities,     failed and no creditor or customer has suffered a loss
consistent with a policy to reduce risk-weighted           since the cooperative sector scheme was established in
assets. Risk-weighted assets decreased by 29% to           1932.
EUR 1.4 billion.
                                                           The majority of the remaining credit exposure in
Capitalisation                                             DZ BANK Ireland’s balance sheet relates to fixed income
 EUR million                            2009     2008      debt securities. Bonds issued by financial institutions,
 Total Assets                           6,243    7,108     corporates and sovereigns account for 60% of all debt
 Risk-Weighted Assets                   1,360    1,905     securities. The remaining fixed income exposure relates
 Regulatory Capital                      275       320     primarily to Residential Mortgage Backed Securities
 Tier 1 Ratio                          10.6%     8.3%      (RMBS) as well as to Asset Backed Securities and
 Total Ratio                           12.9%    11.6%      Collateralised Debt/Loan Obligations (CDO).

    Summary Directors’ Report and
    Business Review 2009

    Exposure to the U.S.A. is limited (see geographical          of domicile of the borrower or guarantor of ultimate
    information below) and exposure to sub-prime assets          risk. 82% of the total international credit portfolio
    is negligible.                                               consists of exposures in the western economies of
                                                                 Germany, the Netherlands, Italy, the U.S.A., Britain,
     Analysis of Debt Securities                                 Spain, Ireland and France.

                          Other ABS       Corporate               Geographical Breakdown of International
            CDO 5.1%      9.4%              2.6%                  Credit Portfolio
                                                  Bank 56.3%
 RMBS 25.5%
                                                                  %                                    2009           2008

                                                                  Spain                                 17.4           17.8
                                                                  Germany                               13.8           12.9
                                                                  Italy                                 11.4           13.1
 Sovereign 1.1%
                                                                  France                                 9.6            9.1
                                                                  Britain                                9.5            9.5
                                                                  Netherlands                            7.9            7.3
    DZ BANK Ireland continued to maintain a cautious
                                                                  Ireland                                6.7            6.6
    investment policy in 2009 with no new investment
    during the year. The international credit portfolio           U.S.A.                                 5.6            5.2

    consists of debt securities and loans, excluding loans        Rest of Europe                        14.5           14.6

    to cooperative banks. 98% of the international credit         Rest of World                          3.6            3.9

    portfolio is rated the equivalent of investment grade
                                                                 Liquidity and Refinancing
    using the Group’s internal rating system, with 40%
    rated 1A the highest possible rating and 76% rated           Following the collapse of Lehman Brothers in
    2B or higher, the equivalent of single A or better.          September 2008, wholesale funding markets continued
                                                                 to operate under challenging conditions, particularly
    The portfolio is well diversified by borrower and by         in the first half of 2009. As the year progressed,
    geography. The ten largest credit exposures at               conditions began to stabilise and in some sectors
    31 December 2009 accounted for approximately                 improve, following the unprecedented levels of
    14% of the portfolio.                                        liquidity injected by the monetary authorities. The Bank
                                                                 benefited from its position within the DZ BANK Group,
     Ratings Profile of International Credit Portfolio           successfully managed its liability profile and adapted
                                   2E                            its structure to take advantage of improved conditions
                                           3A   3B
                   2C          2D 1.6%                           where they existed.
                                          2.6% 0.7%
      2B          13.4%       4.8%
     9.2%                                              3C 1.0%
                                                      5B 0.3%
                                                                  Liquidity Profile
11.4%                                                                                      French CD
                                                                                             11.1%     Subordinated
                                                                           ECP 13.5%                    Debt 0.8%
            1D                                   1A
           3.8%     1C          1B              39.7%                                                                 Money
                   4.5%        2.6%                                                                                   Market
    DZ BANK Ireland’s principal geographic focus is
    on Europe. The Bank monitors the geographical
                                                                                                          Repo - ECB
    breakdown of its exposures based on the country               Repo - Bilateral 33.5%                    6.6%

Summary Directors’ Report and
Business Review 2009

Repo activity with the ECB was significantly reduced          Return on Equity
towards the year-end in anticipation of the beginning
of the withdrawal of the monetary stimulus in 2010,           %                                             2009      2008
while interbank outstandings were increased.                  Return on Equity (before tax)                  8.0       -8.6

DZ BANK Ireland continues to have a well diversified          Return on Equity (after tax)                   7.0       -7.5

funding base and enjoys access to various wholesale           Cost / Income Ratio excl. unrealised Losses
                                                              and Impairments                               15.3      16.9
funding sources from a wide range of counterparties
and markets supported by the "Patronatserklärung"
("strong letter of comfort") from DZ BANK AG.
                                                             Risk Management

Income Statement                                             Please refer to the Financial Statements of DZ BANK
                                                             Ireland plc as of 31 December 2009 for full disclosure
Net interest income was 22% lower at EUR 26.2 million,
                                                             with respect to Risk Management.
which reflects reduced earning assets, tighter net
interest margins and a lower effective interest rate on
certain assets. Other income was EUR 5.2 million,             Directors’ Emoluments
                                                              Directors’ Emoluments
comprised primarily of a net increase of EUR 2.8 million
in the fair value of certain assets and EUR 3.8 million       EUR ’000                                      2009      2008
related to the recognition into income of unamortised         Compensation to the Board of Directors
                                                              and other key management personnel*
discounts on assets classified as loans and receivables.
                                                              Directors’ fees                                    17      13
Total administrative expenses were EUR 5.0 million,
                                                              Directors’ salaries                            500       548
down 7.1% year-on-year. Profit before tax and
                                                              Directors’ pensions                                51      50
impairment amounted to EUR 26.3 million compared to
                                                              Directors’ fees and emoluments paid
EUR 11.9 million in 2008 due to the above factors and         to DZ BANK Group employees -
lower trading markdowns and expenses. The Bank                all short term benefits                        568       611

recorded a net profit after tax of EUR 17.1 million           *Key management personnel of DZ BANK Ireland plc
                                                              are Board Directors and Managing Directors
after the recognition of impairments in certain available
for sale and loans and receivables assets amounting to
EUR 6.8 million.

Net Profit/(Loss)
Net Profit Analysis

 EUR ’000                                2009       2008

 Net Interest Income                    26,194     33,502
 Net Other Operating Income              5,173    (16,181)
 Administrative Expenses                (5,044)    (5,429)
 Profit before Tax & Impairment         26,323     11,892
 Impairment Charge                      (6,762)   (31,272)

 Profit / (Loss) before Tax             19,561    (19,380)
 Tax                                    (2,475)     2,395

 Profit / (Loss)                        17,086 (16,985)

Independent Auditors’ Statement to the Members
of DZ BANK Ireland plc
Independent Auditors’ Statement to the Members
of DZ BANK Ireland plc

We have examined the summary financial statements
for the year ended 31 December 2009, which comprise
the summary Income Statement and summary
Statement of Financial Position.

Respective responsibilities of Directors and
The Directors are responsible for the preparation of
the summary financial statements for the purposes
of compliance with Section 20 of the Central Bank Act,
1971. We have agreed to report to you our opinion
on the consistency of the summary financial statements
with the statutory financial statements, on which we
reported on 1 March 2010. We also read the other
information contained in the summary annual report
and consider the implications for our report if we
become aware of any apparent misstatements within it.

Basis of Opinion
In our opinion the summary financial statements are
consistent with the statutory financial statements for
the year ended 31st December 2009.

This report is made solely to the Company's members,
as a body. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other
than the Company and the Company's members as a
body, for our work, for this report, or for the opinion
we have formed.

Ernst & Young
Chartered Accountants & Registered Auditors

Date 1 March 2010

Summary Financial Statement 2009
      Income Statement
      for the Year Ended 31 December 2009

        EUR ’000                                                                                                         2009        2008

        Interest receivable and similar income                                                                        208,923     442,482
        Less: interest payable and similar charges                                                                   (182,729)   (408,980)
        Net interest income                                                                                            26,194      33,502

        Other income
        Fees and commissions income                                                                                       260         284
        Fees and commissions expense                                                                                     (666)       (697)
        Net trading expense                                                                                              (987)    (29,891)
        Net gain or loss on financial assets and liabilities designated at fair value through profit or loss            2,782      14,747
        Other operating income / (expense)                                                                              3,784        (624)

        Total income                                                                                                   31,367      17,321

        Operating expenses
        Administrative expenses                                                                                        (4,779)     (5,187)
        Depreciation of property and equipment                                                                            (45)        (78)
        Amortisation of intangible assets                                                                                (220)       (164)

        Profit before impairment                                                                                       26,323      11,892

        Impairment losses on financial investments                                                                     (6,762)    (31,272)

        Profit / (loss) before taxation                                                                               19,561     (19,380)

        Taxation                                                                                                           (7)         (7)
        Deferred taxation                                                                                              (2,468)      2,402

        Profit / (loss) for the period                                                                                 17,086    (16,985)

      Directors                 Frank Westhoff                  Dr Tilmann Gerhards                     Mark Jacob
      On behalf of AIB International Financial Services Ltd (Company Secretary)

Statement of Financial Position
as at 31 December 2009

  EUR ’000                                                                                                  2009        2008

  Cash and balances at Central Bank                                                                        54,740      38,337
  Loans and advances to banks                                                                            406,516     553,211
  Financial assets held for trading                                                                             -    806,313

  Financial assets held for trading pledged as collateral                                                       -   1,152,903
  Derivative financial instruments                                                                         15,240       2,576
  Financial assets designated at fair value through profit or loss                                       164,856     320,129
  Financial assets designated at fair value through profit or loss pledged as collateral                 222,102     239,199
  Loans and advances to customers                                                                       2,054,038    318,953
  Loans and advances to customers pledged as collateral                                                         -    115,118
  Financial investments – available-for-sale                                                            1,102,428    667,733
  Financial investments – available-for-sale pledged as collateral                                      2,222,581   2,893,156
  Current income tax assets                                                                                     -       2,863

  Deferred income tax assets                                                                               13,469      26,219
  Other assets                                                                                                 7          88
  Intangible assets – software                                                                               401         621
  Property, plant & equipment                                                                                 34          86

  Total assets                                                                                          6,256,412   7,137,505

  Deposits from banks                                                                                   3,630,668   5,107,464
  Derivative financial liabilities                                                                       122,477     143,551
  Financial liabilities designated at fair value through profit or loss                                  725,046     406,992
  Due to customers                                                                                       747,181     132,786
  Debt securities in issue                                                                               826,503    1,189,866

  Other liabilities                                                                                         1,070       1,288
  Subordinated liabilities                                                                                 50,047      91,195
  Total liabilities                                                                                     6,102,992   7,073,142

  Called up share capital                                                                                   6,500       6,500
  Capital contribution                                                                                   246,888     246,888
  Retained earnings                                                                                       (9,652)    (26,739)
  Other reserves                                                                                         (90,316)   (162,286)
  Total equity                                                                                           153,420      64,363

  Total equity and liabilities                                                                          6,256,412   7,137,505

  Memorandum items

  Commitments                                                                                                   -     37,648

Directors                    Frank Westhoff                 Dr Tilmann Gerhards            Mark Jacob
On behalf of AIB International Financial Services Ltd (Company Secretary)

     Notes to the Summary Financial Statements
     for the Year Ended 31 December 2009

     Summary Financial Statements

     The summary financial statements are not the financial
     statements which are required to be filed with the
     annual returns to the Companies Registration Office.
     However, copies of the financial statements will be filed
     with the 2009 Annual Return.

     The auditors have made a report under Section 163 of
     the Companies Act, 1963, in respect of the financial
     statements of the Company which relate to the year
     ended 31 December 2009 and with which the
     summary financial statements purport to deal.
     The auditors’ report was unqualified.

     Availability of Financial Statements

     Copies of the full financial statements are available from:

     DZ BANK Ireland plc
     Guild House
     Guild Street
     Dublin 1

     And via the following website:

DZ BANK Ireland plc
Guild House
Guild Street
Dublin 1
Republic of Ireland

Tel.: 00353 1 670 0715
Fax: 00353 1 829 0298

DZ BANK Ireland plc is a wholly
owned subsidiary of DZ BANK AG,
Frankfurt am Main.

Photography by Graham Gosling

Designed and produced by alphabet graphics

Description: Company Profile of Cooperative Banks document sample