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Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
Neuer Jungfernstieg 20D-20354 HamburgPhone +49 40 350 60 -0Fax +49 40 35 21 32www.berenbergbank.de [email protected]
Hamburg • Bremen • Frankfurt/M. • Luxembourg • Shanghai • Zurich
400 years Experience builds the future
Annual Report2002
Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
1467
1676
13
73
491
659
413
851
56,4%
268
1568
1772
10
77
578
681
440
903
52,6%
260
1571
1802
8
82
537
667
499
841
64,3%
259
1581
1849
9
84
548
673
523
837
70,7%
255
1480
1708
14
87
427
691
398
861
66,9%
252
1515
1684
16
89
419
707
318
914
59,1%
263
1494
1684
18
95
372
751
299
1037
57,5%
280
1623
1800
39
110
419
796
174
1243
42,7%
319
1772
1968
41
118
458
840
161
1377
43,1%
359
1943
2134
41
125
554
796
122
1512
44,7%
365
Summary of Balance Sheet positions (in million EUR)
Balance Sheet total
Business volume total
Retainted profit
Liable equity funds
Claim on
banks
customers
Liabilities
banks
customers
Cost -income ratio
Average numberof Employees
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
Neuer Jungfernstieg 20D-20354 HamburgPhone +49 40 350 60 -0Fax +49 40 35 21 32www.berenbergbank.de [email protected]
Hamburg • Bremen • Frankfurt/M. • Luxembourg • Shanghai • Zurich
400 years Experience builds the future
Annual Report2002
Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
1467
1676
13
73
491
659
413
851
56,4%
268
1568
1772
10
77
578
681
440
903
52,6%
260
1571
1802
8
82
537
667
499
841
64,3%
259
1581
1849
9
84
548
673
523
837
70,7%
255
1480
1708
14
87
427
691
398
861
66,9%
252
1515
1684
16
89
419
707
318
914
59,1%
263
1494
1684
18
95
372
751
299
1037
57,5%
280
1623
1800
39
110
419
796
174
1243
42,7%
319
1772
1968
41
118
458
840
161
1377
43,1%
359
1943
2134
41
125
554
796
122
1512
44,7%
365
Summary of Balance Sheet positions (in million EUR)
Balance Sheet total
Business volume total
Retained profit
Liable equity funds
Claim on
banks
customers
Liabilities
banks
customers
Cost -income ratio
Average numberof Employees
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
2002Report on the 413th Financial Year
“Looking to the past is only wiseif it serves the future.”
Konrad Adenauer
Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
3
Contents
Board of Advisers Page 4
Managing Partners, Executive Managers Page 5
Report of the Managing Partners Page 8
Economic overview Page 8
Commercial banking Page 13
Securities business Page 23
Subsidiaries and locations Page 31
Employees Page 35
Review of the year Page 36
Management report Page 38
Financial statements Page 48
Balance Sheet Page 48
Profit and loss account Page 50
Notes to the accounts Page 52
Auditors’ report Page 60
4
Board of Advisers
Joachim H. Wetzel
Chairman, Hamburg
Dr. h. c. Manfred Bodin
President, Norddeutsche Landesbank Girozentrale, Hanover
Richard Dawids
Member of the Executive Board, Compagnie Mobilière & Foncière du Bois Sauvage, Brussels
Joshua Ruch
Chairman and Chief Executive Officer, Rho Management Company Inc., New York
Dr. Hans-Rüdiger Schewe
President, Fürstlich -Fürstenbergische Gesamtverwaltung, Donaueschingen
Andreas v. Specht
Partner, Egon Zehnder International GmbH, Frankfurt
Dr. Hans Vieregge
Member of the Management Board, Norddeutsche Landesbank Girozentrale, Hanover
Dr. Christian Wilde, LL.M.
Partner, Freshfields, Bruckhaus, Deringer, Hamburg
5
Managing Partners
Joachim v. Berenberg -Consbruch
Claus -G. Budelmann
Dr. Hans -Walter Peters
Executive Managers
Hendrik Riehmer
Wilfried Schnoor
Michael Schramm
Rüdiger K. Schultz
Jürgen Witt
Senior Managers
Lars Andersen (Frankfurt)
Manuel Bally
Dr. Jan Böhm
Jürgen Brockmann
Andreas Brodtmann
Graeme Davies
Beate Gerdes
Managers
Sven Albrecht
Michael Graf zu Dohna
Manfred Dulitz
Erhard Gold
Michael Große Siebenbürgen
Hartmuth Höhn
Klaus -Detlef Holbein
As at: 1 January 2003
Jürgen Hauser
Eberhard Hofmann
Hans-Jürgen Köcher
Hans P. Rajner
Klaus Schröder
Gerd Simon
Dr. Klaus D. Thiedig, General Counsel
Edmund Krug
Dr. Jörg -C. Liesner
Dieter Lügering
Dieter Rusch
Dieter Schlichting
Andreas Schultheis
Uwe Schwedewsky
‘02
‘02
7
Dear customers and business friends,
The changes which have been taking place in the banking landscape
for some years now have continued to gather pace. The main reason
for the structural crisis is the surplus capacity within the banking sec-
tor in Germany. In times like these, more and more customers appre-
ciate the special level of service and the range of services that a pri-
vate bank offers.
Berenberg Bank is a medium-sized company. Smaller companies
have the benefit of flexibility and manoeuvrability. As a “fast mover”,
we are able to adjust more easily to changes in market conditions.
Entrepreneurial thinking dictates the way we carry out our business.
We cultivate the contact between business people, and we have com-
mitted and highly professional employees, who know their customers
and who assist them year - in, year -out.
Thus in 2002, we again succeeded in expanding our business divi-
sions further. The securities business in particular has again recor-
ded an outstanding result, but in commercial banking too, we were
able to display proof of our skills and achieve success.
With a cost - income ratio of 44.7%, another successful annual
result of EUR 41 million was achieved. The balance sheet total rose
by 9.6% to EUR 1,900 million, and the equity capital currently stands
at EUR 125 million.
Balance Sheet total
1515 14941623
1772
‘98 ‘99 ‘00 ‘01
Retained profit
1618
39 41
‘98 ‘99 ‘00 ‘01
Liable equity funds
89 95110 118
‘98 ‘99 ‘00 ‘01
in million EUR
1943
41
125
‘02
Joachim v. Berenberg - Consbruch Claus - G. Budelmann Dr. Hans -Walter Peters
Report of the Managing Partners
Economic overview
The economy is a human creation and economic activity is driven by
humans. It is a generally accepted fact that psychological factors
account for at least 50% of every economic performance. The trans-
fer of national monetary policies to the European Central Bank ECB
and the Maastricht agreements have considerably restricted the free-
dom that countries have to plan their own finances. Consequently, the
possibilities of direct economic management have continued to
decrease throughout almost the whole of Europe. The economy is
therefore more dependent on other factors, such as on the economic
well - being of our trading partners on the one hand and the general
sentiment of business leaders and consumers on the other.
2002 will be remembered above all as the year of deep mistrust,
extremes and crises: debt crises in Argentina and Turkey, the banking
and economic growth crisis in Japan, budget crises in Portugal, Italy,
Germany and France. Then the risk of war in Iraq intensified, followed
by an increase in energy costs by 50% as the year progressed to
crude oil prices of US$ 33/barrel. The capital markets also witnes-
sed a general confidence crisis, fuelled by the aftermath of the spe-
culation bubble bursting, the terrorist attacks and lastly the account-
ing scandals at US companies in particular. Risk aversion became the
name of the game.
Companies were not confident that an economic revival would last.
They reduced their inventory levels. There was hardly any build up of
new capacity. Cost -cutting and debt - reduction took centre stage. Jobs
were cut. In the USA, in excess of another million jobs were cut, while
in Germany the figure totalled roughly 200,000. Consumers reacted
with appropriate caution, at least on this side of the Atlantic. Although
the introduction of euro notes and coins was quickly deemed a tech-
8
Report of the Managing Partners
9
nical success, the public were often annoyed by the perceptible price
rises for services and food especially. „Teuro“ (literally ‘expensive
euro’) became the most unpopular neologism of the year. The result
was a noticeable reluctance to buy. The German retail trade describes
2002 as the worst year since the end of the Second World War.
Sales remained almost 2% down on revenue from the previous year.
Growth in domestic demand was accordingly weak, not just in
Germany but throughout the whole of continental Europe with the
exception of most of the EU entry candidates from central and
eastern Europe and the Baltics. In these countries, the convergence
process had a regenerating effect as a result of falling interest rates
and high direct investment.
Most of the growth areas outside of Europe were to be found in
Asia. From India to China, growth rates of between 4% and 8% were
recorded.
Traditionally, the German export economy is very competitively pla-
ced in this region. The official inauguration, right at the very start of
2003, of the first Transrapid line in Shanghai, will be remembered in
particular. The line has a truly symbolic character.
Despite the weakened trend throughout the year, it was once again
exports which provided the main support to the economy. They again
grew by 1% to EUR 647 billion and, with imports falling, ensured a
record surplus in the trade balance of EUR 127 billion. A slide into
recession was again narrowly averted. However, talk of growth is hard
when gross domestic product increases by barely more than 0.2%.
The economic predictions of all professional forecasters – issued twel-
ve months previously – proved in the event to be far too optimistic.
Official tax estimates were thus also too high. As a result, Germany
has failed to achieve the net debt ceiling of 3% of GDP in 2002.
Against this background, the German government, re -elected to
office by an extremely narrow margin, were forced into implementing
a mixture of tax increases which will restrict growth. More compre-
hensive structural reforms have so far remained in their initial stages.
10
Thus, the growth potential of our economy looks set to remain unex-
hausted for the foreseeable future.
The number of people – especially abroad – drawing parallels to
what happened in Japan following the bursting of the financial market
and property bubble from 1990 onwards is already growing. Even
twelve years later, Japan still shows no signs of escaping the deflation-
ary spiral. Prices are generally falling by approximately 1% p.a. The
banking crisis remains unresolved and national debt is threatening to
get out of hand. The country was again unable to make any contribu-
tion towards a more positive development of the global economy.
The performance of the European Economic Area was also disap-
pointing. Growth slowed from a moderate 1.4% in 2001 to below 1%.
In addition to Germany, Italy in particular performed especially poorly.
What is noticeable is the above -average strength of the Scandi-
navian countries and Great Britain, which have so far remained out-
side of the euro. Here, overall economic performance has expanded
by almost 2%. The same applies to Spain, Ireland and Greece.
In comparison, in view of the chain of detrimental factors, the resist-
ance of the US economy remained highly noteworthy. In the twelve
months following the September attacks, GDP grew by 3% on aver-
age. The slide into a new recession, a topic of intense discussion on
the equity and debt markets, was decisively averted. However, the
recovery was not a straightforward affair. Following six strong
months, there followed a period of weakness in the spring. As the
accelerated nosedive of the capital markets and the growing fear of
war threatened to cripple investor and consumer activity, central
banks again cut their base rates. At 1.25%, base rates in the USA
are at their lowest levels since the Cuban crisis in 1962. In the euro
zone, rates have remained considerably higher than in the USA, most
recently standing at 2.75%. Given the economic weakness in the euro
zone, this appears somewhat astonishing. However, account should
be taken of the very heterogeneous inflation trend in Europe. At the
end of 2002, the rates ranged between less than one percent in
Germany and almost three percent and over in Spain, Italy or the
Netherlands.
Report of the Managing Partners
11
Throughout almost the whole year, the interest rate differential in
favour of the single currency encompassed the entire maturities
range of fixed - income securities. This so -called yield curve remained
at an extremely low level for many months. For example, the yields on
10- year government bonds (deemed to be risk - free) fell to 3.60%
(USA) and 4.20% (euro zone). This resulted in a strong argument in
favour of appreciation of the euro against the US dollar. In the twelve
months to 31 December 2002, the gains totalled a good 17% with
exchange rates well above parity. Substantial gains were also recor-
ded against the yen (+8%) and the pound sterling (+7%).
In light of the monetary and fiscal - policy measures, which under
normal circumstances have a sharply expansive impact, the global
economic trend must be described as extremely unusual. However,
since a further recession was avoided and corporate profit growth
has again shown positive signs since the spring, the renewed slump
in equity markets can be largely attributed to psychological factors.
The confidence lost following the bursting of the speculation bubble
and the September 11 terrorist attacks was just returning to the
markets when the USA witnessed a string of accounting scandals and
spectacular bankruptcies from the spring onwards. This was followed
by increasing concerns in relation to a war in Iraq. Once more,
mistrust and fear began to grip global stock markets. By October,
bourses had seen the heaviest losses since the equity crash of 1987.
Following what now amounts to three consecutive negative years, this
has now developed into the deepest slump since the Great
Depression of 1929-32.
Hope of an economic improvement can be derived from the fun-
damentally different, much more robust condition of the global eco-
nomy. However, much depends on an amicable solution to the com-
plex problem of the Middle East.
Report of the Managing Partners
1.06
1.04
1.02
1.00
0.98
0.96
0.94
0.92
0.90
0.88
0.86
0.841. Quarter 2. Quarter 3. Quarter 4. Quarter
Exchange rate EURO/ US -$ in 2002
The flashpoints must not be allowed to escalate. We might then
see a rapid return to crude oil prices being defined without a war pre-
mium. The future would again appear more secure to business lead-
ers and consumers. Investors would then be more prepared to as-
sume longer - term risks. Economic and capital markets would have a
more solid basis for a lasting upturn.
Quite apart from all this, the need for a move away from situation-
driven short - term policies at federal level in favour of a dedicated
commitment to implement reforms aimed at removing the structural
imbalances within our society remains desirable.
Report of the Managing Partners
12
Commercial banking
The structural changes within the German banking sector have con-
tinued at an accelerated pace. Completed or planned mergers or
takeovers, together with the decision of a few banks to give up or
reduce corporate banking activity mean that there is a reduced choice
of banks, particularly for medium-sized companies.
Against this background we have clearly stated that corporate
banking activity continues to be one of the fundamental pillars of
Berenberg Bank, and this has been to our advantage, working close-
ly with many contacts and gaining a large number of new customers.
Lending activities
Foreign trade The financing and processing of foreign trading trans-
actions continues to be of particular significance for us, for example
letters of credit, short - term bridging finance and hedging of currency
risks.
While the demand for import letters of credit has fallen, interna-
tional payments have risen sharply. This is reflected by the increased
level of trust between foreign manufacturers and domestic impor-
ters, resulting from many years of business relations. We see a grow-
ing wave of mergers/cooperation among importers, since industrial
processors and retailers are focusing their purchases on importers
who meet the high demands with regard to quality and punctuality
of delivery.
One focal point of import activity continues to be in commodities,
i.e. crude oil products, coffee, wood products, chemicals, pharma-
ceutical products. Our know -how both of the products and also the
markets makes us an expert partner for these demanding import
customers . By granting special finance facilities, we are able to react
quickly and with flexibility to our customers’ requirements.
13
Consumer demand for so -called special offer goods has increased.
In this area non - food items are imported from all over the world in
large volumes and sold onward across Europe to chain retailers with
good credit ratings. Despite the general reluctance to buy, technical
goods and textiles in particular are in increasing demand from con-
sumers as a substantial price -benefit ratio has been built in this area.
Funding these transactions has become one of our core areas.
Working capital finance Traditional working capital finance facilities
for national and international groups and corporate customers are of
less significance for us because of the expected levels of lending and
the narrow interest margins, and have reduced in volume. We provi-
de these customers not only with integral solutions as part of short-
term financing, including off - balance -sheet structures, but also with
a complex range of products for investing any available short, medium
and long - term liquidity in various currencies, securities and with inno-
vative instruments.
Our customer base among medium-sized industrial companies has
shown pleasing growth. With domestic demand either stagnating or
falling sharply, many of these old-established companies are looking
for new sales channels abroad for their often technically pioneering
products. The main focus of interest is Asia, and in particular China.
Our experience in the export business means that we are able to pro-
vide these companies with useful addresses of both foreign buyers
and banks in the export country. In this respect, our representative
office in Shanghai has proven to be particularly useful.
Shipping Another encouraging increase in the number of our custo-
mers has been recorded in the domestic and international shipping
sector. The high level of employee expertise and a rapid international
payments service are convincing factors for our customers. In addi-
tion to prefinancing freight revenue and working capital, we have also
provided medium and long - term loans in cooperation with institutes
Report of the Managing Partners
14
specialising in such funding, and, in exceptional cases, even granted
funds directly. These funds are collateralised with ship mortgages.
Construction finance This area has continued to record good growth
despite the stagnating economic climate. Along with traditional lend-
ing activities, it forms an established part of our business, making a
stable contribution to the results. For a few selected property devel-
opers and construction companies, we provide loans for property
purchases and bridging finance for the construction of housing and
commercial properties in north Germany (mainly Hamburg) and
Berlin. We accept only good and very good residential, office or busi-
ness sites which are divided equally between residential and commer-
cial areas. At the start of the construction phase, the properties have
generally either been pre - let on a long - term basis, or even pre -sold,
thus restricting our risk. The construction project and its progress are
closely monitored by an experienced team.
Stock market lending Working closely with the Private Banking
department, securities lending granted to selected customers pro-
vides a good opportunity to exploit the volatility of share prices with
short - term transactions. With markets remaining volatile throughout
2002, and significant losses proving to be a trend, a specially devel-
oped computer program designed to identify risks at an early stage,
has proved itself through intensive and timely monitoring of risks.
Volume of lending We have maintained our deliberate policy of pru-
dent lending. As planned, this has led to a slight decline (- 4.7%) in
the volume of lending, with falling cash advances (- 5.2%) contrasting
with an increase in the number of guarantees furnished.
The quality of the loan book remains satisfactory.
Report of the Managing Partners
15
Lending activities once again made an encouraging contribution to
results.
Credit rating As a result of an improved information policy by all
banks – especially via the Association of German Banks – it has been
possible to convince most medium-sized companies of the necessary
introduction of credit ratings, in accordance with legal provisions. The
impression sometimes gained by the public that credit ratings could
spell an end to lending to medium-sized companies, was thus effec-
tively countered.
In explanatory discussions with our customers, they have shown
particular interest in how they can improve their own rating assess-
ment through financial and structural measures.
In a circular issued in December 2002, the Federal Financial
Supervisory Authority laid down the “Minimum Requirements for Bank
Lending Activities” (MAK) to limit the risks from lending activities
taking account of the respective type and scope of business. All banks
need to have complied with these requirements by 30.6.2004 at the
latest. Standards in line with banking practice for loan processing,
loan processing monitoring, intensive support, problem loan proces-
sing and risk provision procedures are being laid down. In addition,
there is a framework for structuring procedures aimed at identifying,
Report of the Managing Partners
16
31.12.2002 31.12.2001EUR’000 % EUR’000 %
Cash advances 796,029 80.5 839,930 81.0
Bills and acceptance 998 0.1 1,020 0.1credits
Guarantees and 191,593 19.4 195,993 18.9letters of credit
988,620 100 1,036,943 100
controlling and monitoring risks arising from lending activities and
which, in this respect, requires banks’ internal control systems in par-
ticular to meet certain standards.
We have already arranged for the way in which lending activities
are processed and controlled to be restructured. This will be carried
out within a strict timeframe.
Outlook Given that economic trends remain uncertain, a fact which
is also reflected in the high number of corporate bankruptcies, we
have made provisional plans to reduce lending volumes further for the
current financial year. Our criteria for creditworthiness remain strict
and we are focusing on gaining new clients by targeting medium-sized
firms to which we can offer a flexible and comprehensive service
through our core expertise.
International activities
In a world where banking products are becoming increasingly stand-
ardised, our corporate approach of combining customer proximity
and the personal advice that this requires together with special coun-
try know -how has met with a very pleasing level of acceptance both
among our established relationships and also with new customers. In
this respect, international activities have made a highly satisfactory
contribution to the company’s overall success, despite the cooling off
in the import and export markets.
International payments By making distinctly greater use of electro-
nic systems and continually enhancing these systems, it has been
possible to cope with unit figures and volumes in payment processing,
which up until recently would have been unimaginable for a private
banking organisation.
Report of the Managing Partners
17
Both our domestic and international customers make very active
use of the Multi Cash banking system. The increasing automation for
payments from correspondent banks has impacted very positively on
commission income as well as the increase in productivity.
In view of the increasingly more stringent requirements in relation
to money laundering and anti - terrorism measures, we have intro-
duced computerised safeguards, which enable relevant transactions
to be recognised automatically.
Documentary business We can also report continued pleasing growth
in our documentary business, thanks principally to export letters of
credit in the buoyant correspondent banking business in key regions.
Furthermore, we have become increasingly involved in the collection
business, particularly for our overseas customers. Only the import
letter of credit business failed to meet our expectations, due to the
generally modest situation in the area of consumer goods.
Country activities In connection with processing and financing
export transactions, we were again able to provide a large number of
our customers with the opportunity to hedge the associated risks of
undertaking commercial activity abroad. This is principally through
disclosed and undisclosed confirmation of letters of credit and for-
feiting transactions. It should be stated here that we are for the most
part involved in this segment on a short - term basis.
Our principal involvement is with countries within western Europe
and Asia – particularly China – as well as countries in the Gulf region.
We do not establish a general limit for a particular country but, rath-
er, evaluate the relevant risks of an individual transaction. Conse-
quently, when carrying out customer transactions, for us it is not just
a question of whether we can take the associated risks onto our own
books. We also consider the option of placing risk on international
secondary markets.
Report of the Managing Partners
18
Therefore, we are once again able to report this year that we have
no ongoing business on our books in countries which are currently in
default or engaged in rescheduling negotiations.
The objective for our business with commercial customers abroad
focuses on traditional international trade business as well as cooper-
ation with international shipping companies. However, our relation-
ships with our international correspondent banks in key countries are
also important. Thanks to more extensive travel on the part of our
employees, we endeavour to maintain and increase our close person-
al contacts abroad with individual country desks.
The countries forming our principal focus include those in western,
central and eastern Europe, North and Latin America, the Middle and
Far East as well as Australia and New Zealand.
The numerous contacts in the commercial sector create addition-
al wide - ranging opportunities for business on the investment side,
with private individuals and institutional investors making considerable
use of our Private Banking and Asset Management services.
China Although business at our representative office in Shanghai
started in mid -2001, the official opening celebrations in the pres-
ence of the mayor of Hamburg and high - ranking representatives of
Shanghai’s city government took place in May 2002. Our aim is to
use our presence in Shanghai to further develop our interests in
trading - related activities in this important future market, through
close collaboration with the China Desk in Hamburg.
In this respect, we can report that the representative office has
enjoyed a very pleasing start and has made a considerable contrib-
ution to increasing our documentary business in China.
However, by increasing our country expertise, it is also our wish to
assist our medium-sized customers in their activities in China, and to
support and facilitate their entry into this particular market. Taking
our European tradition as a basis, we would also like to bridge the gap
between these two different cultures. Our Chinese employees in
Shanghai and Hamburg feel a strong obligation to perform this role.
Report of the Managing Partners
19
Since the country continued to prove in 2002 that it is one of the
global economy’s few growth engines, and its entry to the World
Trade Organisation and the staging of EXPO 2010 in Shanghai are
expected to provide further economic impetus, we believe that China
will in future be one of the countries with the greatest potential for
growth. The decisions taken at the 16 th Party Congress appear to
have created the political prerequisites for stable growth. Yet at the
same time, we are all too aware that the country faces decisions
regarding its future direction, in order to maintain control over the
social problems and economic frictions that are becoming apparent.
Shipping activities The shipping sector, traditionally important for us,
has again made a substantial contribution to results in the past finan-
cial year. Our internal structure and the experience and knowledge of
our specialist department enable us to provide our customers both in
Germany and abroad with a tailored range of services, together with
a very flexible and rapid service.
Alongside our commercial settlement banking products, we offer
these customers short - term finance for working capital require-
ments. In exceptional cases we grant medium- term loans for ship
purchases, in which case we obtain a mortgage on the ship as secu-
rity. We are also very active in providing this clientele, which is made
up of shipping companies, ship management companies, shipping
agents and shipbrokers, bunkering firms etc., with foreign currency
hedging products.
Inter -bank business Our company’s inter -bank business on the
money and currency markets is largely based on the commercial trans-
actions of our corporate customers and the general controlling of
liquidity from customer funds. Dealing with foreign banks is restricted
Report of the Managing Partners
20
almost exclusively to institutions in OECD countries. Our applicable
limits are geared very closely to dealing requirements and are regu-
larly adjusted to the level of activity. Because of the short - term nature
of this area of activity, we are able to react very promptly to possible
changes in risk.
Outlook
For the future too, international business is rated as a significant core
element of the Bank’s expertise. In international business, we believe
that it is imperative to guarantee our customers the continuity and
professionalism of a personal service. Even with a constantly growing
volume of business, this requirement will determine our employment
policy.
Deposits
Customer deposits increased by EUR 135,522 million to EUR 1,512
millon, thus representing 92.5% of total deposits.
Treasury/Derivatives
The marketing of equity - linked, structured products has remained
the focal point of activities. Despite the difficult market conditions,
the volume of business in the area of structured equity products
increased.
The level of activity in trading OTC share options for the account of
a public fund for our subsidiary Berenberg Lux Invest S.A. has risen
thanks to a high inflow of funds.
The investment strategy in the Bank’s own portfolio continued to
focus primarily on government bonds and mortgage bonds. The inter-
est rate trend in the last financial year led to an increase in hidden
reserves.
Report of the Managing Partners
21
At the end of the year, the Treasury and Derivatives Departments
were separated for strategic reasons.
Foreign exchange trading
The euro moved in a very narrow band during the first quarter of the
year. The long -awaited turnaround came in May and the price rose
sharply against the US dollar until it reached parity. The accounting
irregularities which were uncovered in the United States, and a global
economy that continued to weaken provided the backdrop for this
turnaround. These facts, together with developments in Iraq, caused
securities markets to weaken considerably, which in turn took its toll
on the US exchange rate.
Under these difficult circumstances, we more than justified our
position. Although the level of business in commercial foreign curren-
cy trading was down as a result of the economic situation, we never-
theless generated very pleasing levels of income and were thus able
to achieve the previous year’s result.
Report of the Managing Partners
22
Securities business
Private Banking
Private Banking Germany This year too saw extreme upheaval
dominate the international capital markets. In spite of the difficult
market conditions, Private Banking can look back on an extremely suc-
cessful financial year. There was a further considerable increase in
the inflow of new customer money, with results even clearly exceeding
the record levels of 2000. With company disposals especially, we
were able to convince business leaders in their new financial situa-
tion, of our discrete, personal and professional service.
It is clear to us that Private Banking does not just comprise invest-
ment consulting. Instead, it is much more about providing a compre-
hensive advisory and support service to high net -worth private inves-
tors. The difficult market conditions directly revealed the importance
of an adequate level of risk diversification. That is why we have contin-
ued to widen our approach to integral investment consulting.
- Participating interests: Based on a comprehensive analysis of the
investment market carried out by Berenberg Finanzanlagen GmbH,
we have added international commercial real estate and private equi-
ty investments in particular to our customers portfolios.
- Real estate: Real estate forms a stabilising and significant compo-
nent of our strategic portfolio allocation. By carrying out an individual
analysis of real estate holdings, we have also strengthened our con-
sulting activities in this area in order to optimise the real estate struc-
ture of our customers in terms of expected yields and tax efficiency.
- Life insurance: Our life insurance policies include arranging tax -effi-
cient portfolio management for our investors.
23
In addition, our customers were able to benefit from individual
attention which underpins our approach to consulting. Our advisory
teams have been structured according to customer requirements. In
this way, the interests of business leaders, wealthy individuals, sports-
men and women or artists are served by teams possessing the very
highest degree of specialist know -how. Accordingly, our financial stra-
tegies are prepared exactly in line with our customers’ needs and per-
sonal circumstances. This approach to consulting takes account of
the increasing complexity involved in integral investment consulting.
We are convinced that, by adopting this approach, we will continue to
be able to provide our customers with added value in the future.
In the area of portfolio management too, we succeeded in extend-
ing the successful trend of the previous year. The volume of customers
we advise saw another substantial rise. Thanks to our disciplined in-
vestment approach and our consistent controlling of performance, we
were able to at least cushion the poor performance of the international
equity markets. A competence centre has been created by integrating
secondary research into portfolio management. In future, this will en-
able significant improvements in efficiency to be made, both in terms
of quality and quantity. The successful cooperation strategy, which
includes acquiring portfolio management mandates from other banks
and savings banks, has been further expanded.
This year, we continued to build on our expertise in managing the
assets of foundations. We provide our customers with a comprehen-
sive, made - to -measure advisory service on forming, managing, analy-
sing and organising a foundation. Working in tandem with the cus-
tomers’ lawyers and tax consultants, we consider any tax or legal
details. As far as we are concerned, responsible management of a
foundation’s assets includes innovative investment strategies and real
estate investments. For this reason, we were able to fulfil our cus-
tomers’ objectives – namely the maintenance of the foundation’s
assets and high, continuous dividends – with particular success this
year. The further considerable rise in volumes may be seen as proof
of the professional nature in which we manage foundation assets.
24
Report of the Managing Partners
Given our clear strategic positioning and our individual approach to
consulting, we believe that we have positioned ourselves very well in
the market. Which is why we are looking to the next financial year with
optimism.
Publicly offered investment funds returned a pleasing performance
last year. The number of funds we manage increased by two to 17.
In particular, the collaboration with portfolio managers and financial
service providers had a stabilising effect on the business division amid
difficult market conditions in 2002.
Within the equity funds sector, we continue to pursue the strategy
of being a specialist provider. As a result, as part of the Berenberg
Concept Portfolio, we have been one of the first German banks to
develop an investment fund in discount certificates.
In the area of fund -of - fund activities we have acquired new con-
sulting mandates from reputable insurance companies. In addition, by
the end of the year we had received a considerable inflow of funds in
the special funds managed by us, which are based on fund -of - funds.
As a result of the outperformance and the above -average place-
ment of our investment funds -of - funds, we are confident that we will
be able to acquire a further inflow of funds and more consulting man-
dates next year.
International Private Banking Despite continuing difficult market
circumstances, International Private Banking recorded an extraordi-
narily pleasing performance. Our company benefited from various
strategic restructuring on the part of our competitors, some of
whom even exited the market. Besides Greece and Great Britain, the
regional focus of growth was once again Latin America and the
Middle East. Working together with select local partners has proved
to be the right move and something we will build on.
With a personal service geared towards providing continuity, indi-
vidual advice and product independence, assets under management
have been increased by more than 30%. In this respect, the invest-
Report of the Managing Partners
25
ment philosophy behind Berenberg Bank’s international private bank-
ing activities is drawn from Anglo -Saxon and Swiss investment philos-
ophies in equal measure. By making use of alternative investment pro-
ducts, our conservative portfolio managers were largely able to achie-
ve satisfactory results. On the other hand, the comprehensive con-
sulting service to our customers in all asset classes, markets and
individual securities took on an important role.
The clear strategic positioning and the continued performance of
our services should also strengthen our market position in 2003 in
the regions we manage.
Institutional customers
• Capital markets
Institutional Sales Irrespective of the difficult sector environment,
Institutional Sales again strengthened its marketing activities last year.
More than 30 road shows with the directors of renowned German
companies enabled those institutional investors under our manage-
ment to engage in individual talks or round table discussions, and
thereby find out information regarding the business prospects for
these companies.
The road shows, which were held in the financial centres listed below,
Frankfurt London Vienna
Hamburg Paris Stockholm
Cologne Copenhagen Gothenburg
Munich Zurich Brussels
Stuttgart Geneva Luxembourg
were an interesting bonus for our customers, giving them the chan-
ce to very quickly find out about the outlook for the companies con-
cerned. In addition to the company road shows, we staged over 20
road shows with our sector analysts.
This active customer support has enabled our employees to gain
30 institutional investors as new customers in 2002, and this despite
the very volatile capital markets.
Report of the Managing Partners
26
Our success in acquiring new customers is based not least on the
many years of market experience and the high level of training that we
give our sales employees. Despite sharp price falls – the most impor-
tant German stock market indices fell in value by between 35 and
80% over the course of the year – the success in acquiring new cus-
tomers and expanding our market presence among mid -cap companies
partly compensated for the drop in volumes. Nevertheless, sales with
institutional investors were down on the previous year.
Thanks to the very stringent customer focus, results reached the
previous year’s level.
As was the case in the previous financial year, we aim to specifi-
cally strengthen Institutional Sales, so as to continue to exploit the ex-
isting competitive opportunities in a targeted manner.
Research The expansion of the Research Department, begun in
1999, was largely completed during the last financial year, by improv-
ing the quality of the analyst team. With a team of twelve analysts at
present, we cover all the major sectors of the German equity market.
By combining a sectoral approach with sector -wide analysis of mid-
cap companies, we have successfully positioned ourselves as special-
ists in German equities.
An assessment carried out by the independent British ratings
agency AQ Publications into the accuracy of results forecasting re-
vealed Berenberg Bank’s team of analysts to be one of the leaders
in this field.
Working in conjunction with the members of the institutional sales
team, the analysts support selected institutional buy side analysts and
fund managers and achieve considerable success in customer service
and acquisition. With its role in helping to arrange the two investor
conferences held annually in Hamburg, the Research Department
makes an important contribution to overall success.
At the Mid -Cap Conference in March 2002, the management
boards of the following companies AWD Holding AG, Tecis Holding AG,
Singulus AG, Aixtron AG and Rhön Klinikum AG gave a presentation
to a select number of institutional customers on the prospects for
their companies.
Report of the Managing Partners
27
Then in September, the management boards of the DAX- listed com-
panies Volkswagen AG, E.ON AG, MLP AG, DaimlerChrysler AG, SAP
AG and Deutsche Telekom AG provided institutional investors with an
insight into why their respective business models enjoy lasting success.
The Special Issues publications devoted to the problems of valua-
tion and accounting were the subject of particular interest and cov-
ered the following topics:
- Valuation methods – practical approaches
- Hocus Pocus Accounting – accounting in the grey area
- Show us your options!
All of this helped convince our customers of the capabilities of our
Research Department.
Proprietary trading Over the last few years, the Bank’s proprietary
trading activities have been extremely limited. The income from equi-
ty trading contributed to the overall result, despite the difficult condi-
tions. Own -account trading in bonds and convertible bonds performed
particularly well. Here there was a sharp increase in earnings. The
Designated Sponsor department has two accounts, as was the case
last year. We do not plan to expand our activity in this area.
Syndicate business: In the syndicate business, two mandates are
currently under management, to structure and improve the capital
market communications of those companies concerned.
The Special Issues publications on various capital market problems:
- Duties of listed companies
- Industrial and convertible bonds – a brief introduction
- Squeeze -out – compensation for minority shareholders
- German stock market sectors
- Directors Dealings – legal duty to provide notification
and publication since 1 July 2002
were extremely popular with our customers.
Report of the Managing Partners
28
29
• Asset Management
The Asset Management department comprises our institutional
portfolio management activities and offers institutional customers in
Germany and abroad bespoke investment solutions in the form of spe-
cialist funds, securities portfolios and publicly offered investment
funds. Institutional customers’ take -up of these strategies remained
high in 2002.
The dynamic rate of growth in fund volumes continues undimin-
ished, as has been the case in recent years. Again, we were able to
improve the result year on year in spite of the difficult trend in the
capital markets.
In view of persistently high levels of volatility in the equity markets
and weak economic data, institutional investors have been particular-
ly interested in hedging strategies. Therefore, in March 2002, we
launched Berenberg - Institutional Euro Challenge -Universal, a publicly
offered investment fund especially for institutional investors. The hedg-
ing strategy is also offered to institutional investors as part of a direct
transaction or specialist fund mandate. Depending on the investor’s
risk tolerance level, up to 100% of the equity investments in the
specialist and publicly offered funds are hedged through the use of
futures.
All in all, the Asset Management team is responsible for the spe-
cialist funds, the securities portfolios and seven publicly offered invest-
ment funds. In addition to traditional bond fund investments – nation-
al, international and near -money market funds – we also offer themed
funds. These include two funds which focus on euro - convergence
countries and corporate bonds.
Two European equity funds with different investment styles round
off the product range. The equities for the Berenberg -Universal - Euro
equity fund, for example, are selected based on a quantitative model
and a combination of growth and value criteria.
Report of the Managing Partners
The Berenberg - Institutional Euro Challenge -Universal fund adopts
a different investment style: the sector weighting is calculated by
means of a top -down approach which analyses national economic
data and corporate ratios. Stocks are picked from within the individu-
al sectors using a bottom-up approach and based on the results of
technical and fundamental analyses. So that the funds also grow at
as stable a rate as possible during difficult periods in the market,
financial derivatives are deliberately used to hedge the fund assets.
The funds are launched together with Universal - Investment -
Gesellschaft mbH in Frankfurt or at Berenberg Lux Invest S.A. in
Luxembourg.
30
Report of the Managing Partners
31
Subsidiaries and locations
Berenberg Bank (Schweiz) AG Our Swiss subsidiary, which is active
in international portfolio management and investment advice, success-
fully concluded its fourteenth financial year. Amid difficult market
conditions, it was able to further increase the volume of customers
served.
As in previous years, the entire net profit for the year has been
transferred to reserves.
Berenberg Capital Management G.m.b.H. This subsidiary is respon-
sible for acquiring institutional business customers and for customer
service for all the Bank’s asset management mandates. With this in
mind, it has further extended its cooperation with the Asset
Management division.
2002 saw another successful series of forums and conferences
organised especially for institutional investors. Capital market issues
and current investment strategies met with a great deal of interest
among the participants, as did health as an economic factor.
The subsidiary was able to further improve its result in spite of dif-
ficult market conditions.
Berenberg Consult G.m.b.H. 2002, like the year before it, was domi-
nated by considerable uncertainty among market participants. With
the world economy in a subdued state and political conditions difficult
to predict, M&A activity continued to drop off sharply. Against this
backdrop, we were particularly pleased to have successfully con-
cluded seven transactions during 2002, the majority of which involved
US buyers.
In the course of last year, we advised on transactions in the mer-
gers & acquisitions, privatisation and buyout segments. 2002 was
the first year in which no transaction was concluded in the buyout
segment.
For 2003, we will strengthen our team by adding staff with exper-
tise in derivative financing instruments. We look to the coming finan-
cial year with confidence even though economic conditions do not sig-
nal an easier year for the dwindling M&A market.
Berenberg Finanzanlagen Beratungs- und Vermittlungsgesell-
schaft m.b.H. We continued to broaden our activities by successful-
ly placing Berenberg Private Capital No.1, a fund -of - funds for priva-
te equity investment programs. A significant increase in the volume of
investment products also contributed to the good result for the year.
Aware of the tax changes and focusing on “safe” capital investments,
investors turned to real estate funds, particularly foreign funds.
Furthermore, we were able to meet requirements with regard to
inheritance/gifts and address problems resulting from company sales
by offering our customers individual solutions.
The range of services offered by the Financial Planning department
was significantly extended. The knowledge gained from the analysis of
closed real estate funds was used to develop a real estate tool with
a view to advising on rental properties. As well as offering tax optimis-
ation processes, this company is able to calculate financing alternati-
ves and illustrate different scenarios for the letting and sale of pro-
perties. It has also been possible to evaluate the remuneration con-
sulting service on the basis of the analysis and assessment of existing
holdings.
Due to the findings of a number of interviews between customers
and advisors and the results from the Financial Planning division, the
issue of asset structuring is being more closely examined. Customers
increasingly seek competent, product - independent advice that goes
beyond investment advice to include aspects such as securing their
standard of living and preserving their assets. This has resulted in the
newly developed SIGMA asset model, which is based on Markowitz’s
modern portfolio theory. The analysis now includes not only the com-
mon asset classes, i.e. equities, bonds and cash, but also shipping
Report of the Managing Partners
32
investments, commercial real estate, residential real estate, priva-
te equity and insurance. This model helps us to identify the weak-
nesses in a portfolio and put forward suggestions for the portfolio’s
optimisation.
Berenberg Lux Invest S.A. This investment company, a subsidiary of
our Bank, issues public funds under Luxembourg law. We have now
issued a series of speciality funds for institutional customers and
wealthy private individuals.
Berenberg Real Estate Services G.m.b.H. This company achieved
a satisfactory result in a weak economic environment. The Brokerage
department’s transaction with an American fund management com-
pany that purchased a logistics portfolio in Germany is worth high-
lighting in this report. Taking this successfully concluded transaction
as an example, the company intends to win American pension funds
for further and larger investments in Germany. Meanwhile, talks are
being held with German sales companies with the aim of placing US
real estate funds in the multi - family segment in Germany.
In 2002, a link with the Private Banking department was formal-
ised – in conjunction with an increase in headcount – in an effort to
firmly establish real estate investments as a component of financial
planning for private customers. Last year, the cooperation generated
four transactions. In 2003, the emphasis will be placed on rental pro-
perty investments.
The other areas of activity, such as asset management and invest-
ments, developed according to plan.
Report of the Managing Partners
33
Branches and representative offices
Our branches and representative offices in Germany, which are active
in regional portfolio management and investment advice, experienced
different business trends. We have therefore concentrated our
resources on those regions which we believe harbour promising mar-
ket potential.
Frankfurt Amid difficult conditions, the Frankfurt branch achieved a
result on a par with the previous year. The number of staff was increased
in order to strengthen customer service and business development
activities. We will continue to pursue our strategy of targeting both
wealthy private customers and independent portfolio managers in
central and southern Germany.
Bremen Once again, our representative office in Bremen achieved
pleasing results in each of its business divisions. The office was able
to build up relationships with new customers and thereby significant-
ly increase the volume of customers it serves. Consequently, we have
further increased the number of staff at this representative office.
Luxembourg Our branch in Luxembourg was able to maintain its
position in a worsening business environment. The focus remains on
our internationally - orientated and increasingly institutional clientele.
In future, the branch will also focus on the “large region” beyond
Luxembourg’s borders.
Shanghai Hamburg’s First Mayor, Ole von Beust, officially opened our
representative office in Shanghai during a state visit to China in May.
We will continue to attach particular importance to China as a main
market in future (see also commentary on page 19).
Report of the Managing Partners
34
Employees
It is thanks to our employees in particular that our business is an
ongoing success. Through their specialist expertise, dedication and
flexibility, they achieved another good result in the year under review.
As at the reporting date, the number of employees had risen by
four year on year to 391.
Due to the ever - faster development of information technology and
the accelerating pace of change in the markets, our employees need
to receive retraining at ever - shorter intervals. We therefore continu-
ed to expand internal staff training, focusing on department - specific
measures.
So that we are able to meet future requirements for qualified jun-
ior staff from within our own ranks, we have again increased the num-
ber of places available for traineeships – contrary to the general trend
in the banking sector. We currently have ten junior people in the
training program for banking qualifications. All trainees whose trainee-
ship came to an end during the year under review were taken on as
employees.
We would like to thank the Staff Council for its trust and cooper-
ation. All personnel and welfare issues were discussed openly and
constructively.
35
2002 2001
Average number of
• employees 365 359
of which female 151 152
of which male 214 207
• apprentices 11 9
‘98
Employees as at 31 December
288309
358387 391
‘99 ‘00 ‘01 ‘02
Report of the Managing Partners
36
Review of the year
Companies are increasingly required to show their social commit-
ment. In 2002 we again organised or took part in numerous public
events and activities. A selection:
Prof. Dr. Thomas Straubhaar, President of the Hamburg Institute
of International Economics (HWWA), gave a talk on economic and
interest - rate developments in 2002.
Markus Koch, n - tv correspondent in New York, reported on his expe-
riences and adventures on Wall Street.
“Bremen Chair” visits Berenberg Bank 60 members of “The 1801
Union”, an association for the Bremen business community, made their
annual trip to Berenberg Bank in Hamburg. It is traditional for someone
to sit in the “Bremen Chair” – brought along especially for the occa-
sion – and answer the questions put by the Bremen entrepreneurs.
Berenberg Bank Foundation awards the Culture Prize 1990
Dedicated in particular to promoting young artistic talent, this
foundation was set up in our 400 th year. The Culture Prize 2002
went to cellist Niklas Eppinger (pictured with Joachim v. Berenberg -
Consbruch).
EUR 150,000 for disabled children A princely sum of money was
raised at the charity golf tournament organised in Bad Griesbach by
the Franz Beckenbauer Foundation and the Kids Care Foundation with
the support of Berenberg Bank. Joachim v. Berenberg -Consbruch
presents the cheque to Franz Beckenbauer and Edmund Krix.
Official opening of the representative office in Shanghai Ham-
burg’s First Mayor, Ole von Beust, opened our representative office
during a visit to China. The ceremony was attended by high - ranking
representatives of the city’s government and business community.
Report of the Managing Partners
37
Berenberg Polo Derby Spectators flocked to the Hamburg Polo
Club’s ground in Klein Flottbek for the Berenberg Polo Derby. With the
sun shining overhead, the Berenberg team won the derby cup in what
was the 100 th year of the competition.
Berenberg and n - tv run stock market game for university stu-
dents In cooperation with the news channel n - tv, we run a stock mar-
ket game in which economics students from five universities take
part. n - tv reports each Friday.
Investors conference Representatives of 60 institutional investors
were invited by Berenberg Bank to meet directors of DAX companies
to discuss their strategy and development. Dr. Hans -Walter Peters
with Deutsche Telekom’s finance director, Dr. Karl - Gerhard Eick.
China Weeks Hamburg’s citizens were given the opportunity to learn
more about China at around 100 events organised by the Chinese -
German Society and the East Asian Association. As the main sponsor
of the China Weeks, we exhibited a collection of Chinese snuffboxes
at the Bank.
“A Winter on Majorca” Hannelore Elsner and Sebastian Knauer
(first person to receive a scholarship grant from the Berenberg Bank
Foundation; pictured with Claus -G. Budelmann) presented their new
CD at two events held in Hamburg and Frankfurt. We supported the
CD’s release as part of our cultural support program.
A Thank You to our customers
Our thanks go to our customers and business friends for their trust
and successful cooperation. We will continue to strive to meet their
individual wishes and to be a reliable service - orientated partner.
Management Report
Overview Berenberg Bank was successful in further expanding its
business activities in 2002 – contrary to the general market trend.
More specifically, investment advisory activities and portfolio manage-
ment generated another noteworthy result, reflecting an increase in
commissions. The Bank was able once again to prove its particular-
ly strong expertise in the areas of lending, international business,
securities and foreign currency trading, and derivatives.
Although the expansion of the Bank’s business activities enabled it
to post a good result, this expansion also led to a further increase in
costs, as the average number of employees rose slightly. The Frank-
furt and Luxembourg branches and the representative offices in
Bremen and Shanghai also contributed to this success.
Equity The issued capital was increased by EUR 7.5 million. The reve-
nue reserves of EUR 10 million were, in addition, converted into issued
capital, as a result of which the Bank’s total capital stands at EUR 117.5
million at year -end. Liable equity stands at EUR 125,169,000.
With this equity available to us, we are able to continue fulfilling all
legal requirements with regard to the Bank’s capital. The ratio accord-
ing to Principle I stood at 10.8% at year -end.
Net profit for the year The net profit for the year rose from EUR
40,763,000 to EUR 41,179,000. However, it must be remembered
that approx. EUR 5 million were transferred to revenue reserves in
2001. Rising staff costs and higher operating expenditure have
caused the ratio of income to costs to fall from 231% to 224%. This
equates to a cost/income ratio of 45% (previous year: 43%). The
ratio of net interest income to net commission income remains
unchanged at 30:70 (30:70).
38
Management report
39
Notes on the income statement
Net interest income Falling interest rates in the money and capital
markets meant deposit operations and investments of equity capital
generated lower margins. This was offset by a further rise in cus-
tomer deposits. The generally gratifying income posted by the Bank’s
subsidiaries has been fully retained. As a result, net interest income
fell 7.8% to EUR 30,153,000.
Net commission income Net commission income rose 5.8% in the
year under review, from EUR 77,220,000 to EUR 81,691,000.
Although conditions in the stock markets remained adverse in 2002,
the large volume of new business in each of the securities depart-
ments was more than enough to offset the negative volume effects of
falling stock prices and therefore made a substantial contribution to
the rise in net commission income. The Bank was also able to in-
crease commissions from international business and foreign curren-
cy dealing.
Trading income Again, the low value -at - risk limits were success-
fully applied in each of the trading departments. Consequently, net
income from financial transactions rose from EUR 6,226,000 to
EUR 7,239,000. Although the departments responsible for foreign
currency and derivatives trading improved on their results, the Bank
felt the effects of the principle of imparity, just as it did the year befo-
re. Securities trading also generated a gratifying result in spite of the
conditions in the stock markets.
Administrative expenses Administrative expenses including depre-
ciation and amortisation rose by EUR 3,112,000 to EUR 53,733,000.
Staff costs account for EUR 35,411,000 of the total, an increase of
EUR 1,421,000 or 4.2%. The rise in staff costs is principally a result
of the slight increase in the average number of staff, but there is also
increased remuneration on account of the good results for the year.
The constantly increasing demands on the information systems and
the need for more office space pushed operating expenditure higher.
Provision for risks Sufficient amounts have been added to provisions
and write -downs on loan balances to cover exposure to risk. Specific
tax allowable provisions (§ 340f German Commercial Code) were
again increased at year -end.
We have made adequate provision for all known lending risks using
prudent valuation measures.
Notes on the financial position
Balance sheet total and volume of business The balance sheet
total rose 9.6% in the year under review, from EUR 1,772 million to
EUR 1,943 million. On the assets side, claims on banks rose 21.0%
to EUR 554 million (EUR 458 million), while customer borrowings fell
5.2% to EUR 796 million (EUR 840 million). On the liabilities side,
there was a renewed reduction in liabilities to banks and a further
increase in customer deposits. Thus bank deposits were reduced by
24.1% to EUR 122 million (EUR 161 million), while customer deposits
rose 9.8% to EUR 1,512 million (EUR 1,377 million).
The portfolio of bonds and other fixed - interest securities was
increased by EUR 119.3 million to EUR 357.9 million. Securities which
matured in 2001 were replaced and transactions aimed at replac-
ing loans were conducted in a conscious effort to reduce claims on
customers.
Equities and other variable - rate securities fell by EUR 87.2 million
to EUR 64 million, as special trades were completed as planned. At
year -end, the portfolio contained EUR 30.7 million of equities, but, as
there are pledged deposits and option arrangements (purchase of put
options) in place and given the good standing of the other parties
involved, we do not see any risk associated with these equities.
Management report
40
As part of its liquidity reserves, the Bank also holds EUR 9.7 milli-
on (EUR 9.8 million) in participation certificates issued by German
banks and insurance companies.
The bearer bonds issued in 2001 matured during the year under
review and were duly wound up.
The volume of business increased by 8.4% from EUR 1,968 mil-
lion to EUR 2,134 million, in line with the increase in the balance
sheet.
Volume of lending The Bank’s total volume of lending fell by EUR 48
million during the year under review to EUR 989 million. The principal
lending balances were claims on customers (EUR 796 million) and, to
a lesser extent, securities. Off - balance sheet amounts primarily inclu-
de loan facilities not yet drawn down and contingent claims on guar-
antees and other indemnity commitments. Derivatives business requi-
res relatively small levels of capital maintenance, as the Bank applies
the “internal model”.
Risk monitoring
When conditions in our markets are deteriorating, it is extremely
important to accurately identify, measure and manage each of the
risks associated with the Bank’s business. Only if we adequately meas-
ure our risk exposure in relation to our returns can we operate suc-
cessfully as a business.
For several years now, the Bank has been using a risk -adjusted
system of bank management, which was further refined during the
course of the last financial year. As well as market price, customer
default, liquidity and operational risks, the Bank’s risk management
system also analyses profitability risks.
Management report
41
The risk -based capital (economic capital) available to the Bank is
quantified as part of the annual budgeting process. The exposure of
the Bank’s various business divisions to potential losses is quantified
in respect of each risk category separately according to the value -at -
risk principle.
The Management Board sets out the principles of risk policy. A
central controlling department acting independently of the various
market divisions is responsible for the systems for bank and risk
management. The success of the business divisions is monitored by
means of a monthly overall calculation and analysed by means of vari-
ance analyses.
The risks entered into by the business divisions are quantified by
the Risk Control department. This department is responsible in parti-
cular for monitoring market price risks, which arise from both short-
term positions in the trading book and strategic positions in the
investment book.
- A credit risk management team, independent of the lending
department, monitors exposure to loan default risks.
- The Treasury department is responsible for monitoring and
managing liquidity risks together with the money market desk.
Operational risks are minimised through the use of a comprehensive
procedures manual and through contingency plans.
- The Bank’s internal auditors carry out regular checks to ensure
adherence to the individual organisational procedures.
The Bank’s existing risk management systems are constantly
being enhanced and refined in order to accommodate the imminent
changes to the general requirements set out by industry regulators.
The “Minimum requirements for the lending activities of banks” (MAK),
which are likely to come into force from 2004, and “The new Basel
capital accord” (Basel II) will have a particularly marked impact on the
risk management of lending activities. During the last financial year,
the necessary measures were taken to ensure that, by the time they
finally come into force, we are able to implement the regulations in a
way that accommodates our needs.
Management report
42
Management report
Market price risks Market price risks result from fluctuations in
interest rates, quoted share prices and foreign exchange rates.
The Bank uses its internally - developed risk measurement system
to manage market price risks arising from proprietary trading posi-
tions. This system is recognised by the banking supervisory authori-
ties as an internal risk model in accordance with Principle I for quan-
tifying market price risks from open trading positions.
A Monte Carlo simulation is used to calculate a daily value -at - risk
measure for all positions subject to market price risks. For a particu-
lar level of probability, the value -at - risk calculation indicates the
maximum loss on a portfolio. In accordance with the stipulations of
Principle I, a 99% confidence interval and ten -day holding period are
assumed for these value -at - risk calculations. Risk factors are analy-
sed historically: discount rates for interest calculations, share indices
for the equity element and currency exchange rates for foreign cur-
rency positions.
The quality of the value -at - risk forecasts is checked back against
actual daily outcomes and analysed over time. On the following trading
day, the forecast is compared with the changes in value that would
have occurred assuming the positions were unchanged. Assuming a
confidence level of 99%, the value -at - risk forecast should only be
exceeded by a higher hypothetical loss on 1% of all trading days ana-
lysed. In fiscal 2002, back - testing revealed only one such instance.
This is below what can statistically be expected and therefore meets
the regulator’s requirements.
As the value -at - risk method only indicates the risk status of posi-
tions in “normal” market conditions and fails to take into account
extreme market situations, the analyses are supplemented with daily
worst - case analyses.
43
Every dealing section has worst - case limits in addition to the
value -at - risk limits and these must be adhered to daily. The Risk
Control department, which is separate from the trading divisions right
up to the top management board level, provides a summary of the
risk positions in a single risk report and ensures the appropriate infor-
mation is available to the Management Board daily.
Loan default risks Loan default risks result both from traditional
lending activity as well as from derivative trading.
A credit risk management team, independent of the lending
department, is responsible for overseeing credit risks, although it
does not just carry out regular controlling activities but also casts a
second vote on lending decisions in addition to that cast by the mar-
ket division. As a result, the Bank already fulfils the majority of the
“MAK” requirements with regard to the separation of market divisions
and divisions carrying out subsequent activities. The lending depart-
ment and the credit risk management team are also supported by an
independent financial analysis unit, which carries out regular checks
on the creditworthiness and financial standing. In addition, the Risk
Control department is responsible for analysing entire portfolios.
A rating system, developed by ourselves based on expert know-
ledge and taking into account both financial and qualitative factors, is
used to calculate standard risk costs.
In addition to the statistically expected credit risks, which are taken
into account in the customer’s terms and conditions in the form of
standard risk costs, our system of managing loan default risks also
quantifies the unexpected credit risk (unexpected loss). This approach
is based on the idea that the standard risk costs only represent the
long - term average value of loan defaults. The actual loan defaults
during any given financial year may deviate from this average value,
representing a particular danger if they then exceed the expected
Management report
44
value. As is the case with the value-at-risk concept and market price
risks, the Bank’s economic capital serves as potential cover for unex-
pected credit risks.
The detailed method by which we ensure loan default risks are
adequately analysed is constantly being refined, not least due to the
changes to the legal framework in connection with “Basel II”.
Liquidity risks In order to ensure appropriate liquidity levels at all
times, the Treasury department works together with the money market
desk to analyse cash flow streams on a daily basis. Thus the effects
of different interest rate scenarios on the present value of these cash
flows can be assessed and necessary measures introduced.
The Bank’s Finance department monitors daily compliance with
liquidity level requirements and provides an additional overview of how
the liquidity position looks over time by preparing an interest -gap
balance sheet.
Operational risks Operational risk is defined as the risk of losses
resulting from the inadequacy or failure of internal processes, people
and systems or from external events. This definition also includes
legal risks.
Operational risks are limited through the use of a comprehensive
manual covering procedures, employment guidelines and rules on
qualifications.
A significant element of operational risk is covered by the function-
ality and security of the IT systems in place. Alongside constant tech-
nological development and market information, measures include a
firewall structure against viruses and external hacking attempts as
well as a separate emergency planning and backup system, ensuring
that the Bank is able to conduct its business uninterrupted in the
event of a system failure.
Management report
45
The Bank limits legal risks through ongoing cooperation between
the legal department and operational departments, appropriately
worded forms and contracts, and standardised input and settlement
processes for data processing. Furthermore, all contracts concluded
by the Bank are subject to prior examination by the legal department.
In view of the changes to the legal framework as a result of “Basel
II”, we are constantly working to develop the risk management pro-
cess for this risk category. The statistical measurement methods
associated with this risk category are highly complex. Based on the
“Basel II” regulations set out to date, we have begun to build up a
database of operational risk losses.
Profitability risks Profitability risks arise from uncertain income
trends within individual market sectors. Severe fluctuations in indivi-
dual elements of income over the course of time can potentially lead
to a department’s total costs not being covered by income. By mea-
suring and controlling profitability risks, we are able to identify this
kind of undesirable development at an early stage and introduce the
measures necessary to secure the profitability of the entire bank.
Together with return requirements for the controlled economic
capital arising from market price risks, unexpected credit risks, oper-
ational risks and profitability risks, each market division is set a tar-
get that includes all controlled risks.
As the total income and the interest requirements of all the risk
categories are measured in relation to the departments’ costs, the
Bank is able to measure the extent to which a profit centre has
met its target using a single factor: return on costs. This profitability
measure is analysed in detail in the monthly profit centre manage-
ment accounts.
Due to the information and control systems in place, we believe
that, overall, we have not entered into any risks above and beyond the
Bank’s tolerable risk level.
Management report
46
Outlook
We will continue to concentrate on our core expertise in future. Our
focus will again be on investment advice and portfolio management,
lending activities and international business, off - balance sheet finan-
cial products, dealing in shares and foreign currency, derivatives and
special services conducted through our subsidiaries. However, there
will be no further increase in headcount associated with this. IT
systems will be constantly upgraded to accommodate necessary
enhancements.
We firmly believe that we are well - positioned in the market and
expect to post another satisfactory annual result – albeit reduced by
general conditions – as a result of the hard work of our dedicated and
experienced staff.
Management report
47
48
Balance Sheet as per 31 December 2002
Assets
Cash reserveCash on handBalances with central banks
thereof: with Deutsche Bundesbank:EUR 32,970,710
Debt instruments of public -sector entitis and billsof exchange eligible for refinancing at central banks Bills of exchange
thereof: eligible for refinancing at
Deutsche Bundesbank EUR 998,125
Claims on banks• repayable on demand• other claims
Claims on customersthereof: Municipal Ioans EUR 20,000,000
Bonds and other fixed- income securitiesBonds and notes• of public -sector issuers • of other issuers thereof: eligible as collateral for Deutsche Bundesbank advances EUR 320,384,682
Equity shares and other variable-yield securities
Participating intereststhereof: • in banks • in other financial institutions
Shares in associated companiesthereof: • in banks• in other financial institutions
Assets held on a trust basisthereof: loans on a trust basis
Tangible assets
Other assets
Deferred items
EUR
1,406,39338,564,023
143,643,530410,345,741
11,061,499346,817,699
2,311,914 0
2,665,7710
5,074,260
Total assets
Previous yearEUR’000
27939,85240,131
1,020
37,578420,186457,764
839,930
32,808205,808238,616
151,170
2,009
3,150
6,629
3,836
27,929
5
1,772,189
EUR
39,970,416
998,125
553,989,271
796,028,642
357,879,198
64,003,995
2,970,325
3,150,370
80,141,362
3,734,619
39,680,157
4,933
1,942,551,413
49
Liabilities EUR EUR
Liabilities to banks• repayable on demand• with agreed period or period of notice
Liabilities to customerssaving deposits with agreed period of notice of• three months• of more than three monthsother liabilities• repayable on demand• with agreed period or
period of notice
Bonds issued
Liabilities held on trust basisthereof: loans on a trust basis
Other liabilities
Deferred items
ProvisionsProvisions for pensions and similar obligations• provisions for taxes• other provisions
Special reserves (Quasi Equity)per para section 52 ss 16 Income Tax LawSubordinated LiabilitiesParticipatory capitalthereof: due within two year
Capital• subscribed capital• revenue reserves• profit
Contingent liabilitiesLiabilities from guarantees and indemnitiy agreements
Other obligationsirrevocable loan commitments
70,247,22252,243,965
1,383,672
1,511,029,302
17,664,313651,311
19,837,094
117,500,0000
41,178,889
1,073,457310,215
996,420,129
514,609,173
5,074,260
0
Total Liabilities
EUR
122,491,187
1,512,412,974
0
80,141,362
22,566,526
274,379
38,152,718
164,0005,112,9192,556,459
158,678,889
1,942.551,413
191,592,690
9,629,134
Previous yearEUR’000
82,01979,302
161,321
1,049251
835,956
539,6351,376,891
10,000
6,629
17,588
150
17,1211,654
16,89035,665
4005,1137,669
100,00010,00040,763
150,763
1,772,189
195,993
56,361
50
Profit and Loss Account for the period from 1 January to 31 December 2002
Expenses EUR EUR
Interest expenses
Commission expenses
Administrative expensesStaff expenses• Wages and salaries• Compulsory social security contributions
and expenses for pensions and otherthereof: for pensions EUR 2,133,838
other administrative expenses
Write-downs, depreciation of andvalue adjustments to tangible assets
Other operating expenses
Write-downs of and value adjustments toclaims and certain securities as wellas additions to provisions for possibleloan losses
Income taxes
Other taxesunless reported under”Other operating expenses”
Net income for the year
35,410,613
16,649,373
Total Expenses
Previous yearEUR’000
54,900
8,855
28,009
5,980
14,89248,881
1,780
752
11,877
9,552
24
45,650
182,271
29,879,818
5,530,795
EUR
42,415,446
18,440,744
52,059,986
1,713,332
1,365,164
15,627,851
9,842,914
237,913
41,178,889
182,882,239
51
Income
Interest income from• lending and money market business• fixed- income securities
and government- inscribed debt
Current income from• equity shares and
other variable-yield securities• participating interests• shares in affiliated companies
Commission income
Net income from financial transactions
Other operating income
Income from Special Reserve (Quasi Equity)
Net IncomeNet income for the year
Transfer torevenue reserves
Retained Profit
EUR
56,601,512
14,878,224
800,475287,984
0
Total Income
Previous yearEUR’000
71,579
13,74385,322
1021,286
9082,296
86,075
6,226
2,034
318
182,271
45,650
4,887
40,763
EUR
71,479,736
1,088,459
100,131,418
7,239,359
2,707,267
236,000
182,882,239
41,178,889
0
41,178,889
Notes to the accounts
General
The financial statements as at 31 December 2002 have been pre-
pared in accordance with the provisions of the commercial code and
accounting regulations for banks.
We have taken advantage of the exemption from preparing con-
solidated accounts in accordance with section 296 s.s. 2 HGB, as the
subsidiaries are of immaterial significance.
Unless otherwise stated, prior year figures are given in brackets.
Accounting policies and valuation methods Claims on customers
and banks are stated at nominal value. Deferred interest is taken into
account in the appropriate balance sheet position. Discounts on loans
and the purchase of claims are deferred in liabilities.
Specific write -downs have been made against claims to cover suf-
ficiently all known risks in the loan book. General provisions have been
made to cover inherent risks. The provisions are offset against the
relevant asset.
Securities are treated as liquid assets and dealing stock and have
been valued at the lower of cost and market value in accordance with
regulatory requirements.
Shares in group companies and related undertakings are stated at
cost of acquisition.
Tangible fixed assets are stated at purchase cost reduced by
depreciation charged on a straight line basis. Additions to fixtures, fit-
tings and equipment bear a full year’s depreciation charge if acquired
in the first half of the year, and a half - year charge if acquired in the
second half of the year. Low value assets are written off in full in the
year of acquisition. In the fixed assets table they are shown as addi-
tions and included within the total depreciation charge for the year.
52
Other assets including purchased option rights are stated at cost
of acquisition or net realisable value, if lower. Option premiums received
and paid are recognised/expensed only when the option lapses or is
exercised.
Liabilities are stated at the payable amount, plus accumulated
interest.
Adequate provisions have been made to cover all known risks and
uncertain obligations, even those arising from off balance sheet trans-
actions, in accordance with the concept of prudence.
The provision for pension obligations is assessed under the bio-
metric method of computation.
Foreign currency assets and liabilities are stated at the official
exchange rates issued by the European Central Bank at the year end
date; forward currency deals are valued at the forward rates.
Trading gains from customers’ foreign currency and securities
trades are included within net commission income.
Notes to the balance sheet
Claims on and liabilities to banks and customers
53
Claims
Customer
thereof on demand
Banks
Liabilities
Customers
Banks
Savings Deposits
673,653
441,177
379,042
481,573
48,705
1,073
less than 3 months
744,013
449,135
381,052
511,486
74,198
1,049
111,899
31,304
32,014
2,425
135
at least months up to 1 year
81,623
34,021
28,149
3,080
144
Previousyear
8,073
0
1,022
1,114
175
at least 1 year up to 5 year
12,074
5,113
0
2,024
107
Previousyear
2,404
0
0
0
0
over5 years
2,220
0
0
0
0
Previousyear
Previousyear
• Maturity analysis according to term (in EUR’000)
Financial statements
54
Equity shares and other variable - yield securities Included in the
total are subordinated assets – participatory shares – amounting to
EUR 9,716,000 (EUR 9,802,000). Quoted shares amounting to
EUR 30,7 million were acquired on a short - term basis – due to pledg-
ed deposits, option arrangements (purchase of put options) and the
high credit - status of the counterparty, it is considered there is no risk.
• Bonds and other fixed - income securities (in EUR’000)
(previous year)
of witch:
• due in 2003
• associated companies
Otherissuers
TotalPublic sectorissuers
11,061
(32,808)
5,761
0
346,818
(205,808)
86,174
15,275
357,879
(238,616)
91,935
15,275
• Disclosure of balances with group companies and related undertakings
� Related undertakings
� Group companies
Claims
Customers
Banks
Liabilities
Customers
Banks
Previous year EUR’000EUR’000
2,599
307
14,026
45,624
1,750
399
2,741
44,391
Claims
Customers
Banks
Liabilities
Customers
Banks
Previous year EUR’000EUR’000
958
1,997
347
500
105
2,253
1,185
800
Financial statements
55
Other assets Included within other assets are collectable instru-
ments (cheques, matured bonds, interest coupons and dividend
warrants) totalling EUR 9,000,000 (EUR 7,080,000) and accrued
interest and fees amounting to EUR 5,074,000 (EUR 6,084,000).
Receivables from current trading transactions are also included in
this heading.
1,196
0
1,629
2,825
Zugänge Abgänge Zugänge Abgänge 2002 Previous year
235
0
387
622
0
0
1,713
1,713
0
0
370
370
367
0
13,109
13,476
2,970
3,150
3,735
9,855
2,009
3,150
3,836
8,995
• Fixed assets (in EUR’000)
Depreciation charges 2002 Net book values
kumuliert
2,376
3,150
15,602
21,128
Participating Interests
Investments in
group companies
Fixtures, fittings
and equipment
Shareholding interests The list of participating interests is filed at
the Hamburg Registrar of Companies.
Listed securities All bonds and loan notes, together with equity
shares and other variable yield securities are listed, as in the prior
year. Participating interests include EUR 195,000 (EUR 195,000)
which are listed and EUR 2,666,000 (EUR 2,666,000) which have
listing potential. The remaining participating interests and all the
shares in associated companies cannot be listed.
Assets held on a trust basis Assets held on a trust basis and the
corresponding liabilities held on a trust basis comprise EUR 5,074,000
(EUR 6,601,000) of on -demand lending to non -bank customers and
EUR 75,067 (EUR 28,000) of other short - term assets or other liabili-
ties acquired on a trust basis.
Financial statements
Cost of Acquisition
56
Financial statements
Other liabilities In addition to current liabilities in respect of taxation
payments (tax assessed), other liabilities include deferred interest
rate swaps and foreign currency option premiums.
Additional notes to the balance sheet Security has been given over
receivables in respect of syndicated KfW reconstruction loans amo-
unting to EUR 89,000 (EUR 115,000). Various securities have been
placed with other banks as security deposit for the performance of
Eurex and lending trades. There were no open market positions at the
year end.
Assets amounting to EUR 454,159,000 (EUR 452,552,000) and
liabilities of EUR 409,512,000 (EUR 476,076,000) are in foreign cur-
rency.
Contingent liabilities Contingent liabilities from guarantees and
other indemnity contracts include guarantees of EUR 144,897,000
(EUR 131,806.000) and letters of credit of EUR 46,696,000
(EUR 64,187,000).
Notes to the profit and loss account
Segmental analysis of income by geographical region Income
recorded within the profit and loss account for interest, income from
equity shares and other variable yield securities, participating interests
and shares in related companies, commission income, net income
from financial transactions, amounts released from special reserves
(write back of provisions against securities) and other operating inco-
me is split 95% (93%) domestic and 5% (7%) from abroad.
Service activities We provided services for our customers, particu-
larly in portfolio management, selling securities and also in respect of
international documentary business.
57
Financial statements
Other operating income This item comprises principally cost
reimbursements for the provision of services and the release of
provisions.
Other information
Other financial obligations There are obligations arising from rental
and leasing contracts amounting to EUR 2.544 million (EUR 2.3 million)
in each of the next three financial years.
Futures contracts In the course of the year, futures contracts fal-
ling into the following categories were entered into:
- Futures in foreign currencies, in particular forward foreign exchange
contracts, obligations from foreign exchange options and currency
option exercise rights;
- Forward interest rate contracts, in particular related to fixed income
securities, obligations and exercise rights from interest rate options
and interest rate swaps;
- Futures related to other price risks, in particular share price relat-
ed forward contracts, index futures, obligations and exercise rights
from share options and index options.
58
Financial statements
Investment book
Interest rate contracts
Currency contracts
Share related business
Total
Trading book
Interest rate contracts
Currency contracts
Share related business
Loan default risk
Model level
Total
Total investment and trading
Market Risks Capital Requirement2002
Capital Requirement 2001
42
0
0
42
1,066
8
297
1,645
8,492
11,508
11,550
49
0
12
61
236
33
260
1,277
9,436
11,242
11,303
• The capital adequacy requirement (in EUR’000) is analysed as follows:
The Bank assesses the potential market risk exposure on its open
interest -bearing positions and trades affected by movements in
share prices and exchange rates (the trading book) using an internal
model which has been checked and approved by the Federal Banking
Supervisory Board. Applying the multiplier factor 3.0 to these risks,
and adding forward derivative positions held in the investment
book, the capital adequacy requirement amounts to EUR 11,550,000
(EUR 11,303,000).
As a matter of policy, contracts on behalf of our customers have
matched positions. The Bank only enters into positions in its own right
in order to cover interest rate risk from other positions either direct-
ly (microhedge), or in general (macrohedge).
59
Financial statements
Board of Management The Board of Management comprised the
following personally liable partners during 2002:
Joachim v. Berenberg - Consbruch
Claus - G. Budelmann
Dr. Hans -Walter Peters
Management Board remuneration and loans Disclosure of the re-
muneration of the members of the Management Board is not required
because we consider the requirements of section 286 s.s. 4 HGB, giving
exemption, are met.
After taking account of the allocation of the distributable profit for
2002, as in the previous year there were no loans made to members
of the Management Board in 2002.
60
Financial statements
Auditors’ Report
The full financial statements and management report received the following unqualified
audit opinion:
“We have audited the financial statements, the accounting records and the management
report of Joh. Berenberg, Gossler & Co. for the financial year 1st January 2002 to 31st
December 2002. The management of the company is responsible for maintaining the
accounting records and preparing the financial statements and management report in
accordance with German Commercial Law. It is our responsibility to form an opinion based
on our audit procedures on the financial statements, the accounting records and the
management report.
We have carried out our annual audit under Section 317 German Commercial Code in
accordance with the guidelines and auditing standards issued by the German Institute of
Auditors. An audit is planned and carried out in order to have reasonable certainty of
detecting irregularities and errors which have a material impact on the presentation in the
financial statements and management report of the company’s assets, liabilities, financial
position and earnings, prepared in accordance with applicable accounting principles. The
nature and extent of audit procedures take into account the knowledge of the company’s
activity and the legal and commercial environment, together with the expectation of poten-
tial error. In the cause of the audit the effectiveness of the internal control system and evi-
dence for items in the accounting records, balance sheet and management report are
primarily tested on a sample basis. An audit includes an assessment of the accounting
policies and the significant estimates made by management, together with a review of the
overall presentation of the information in the financial statements and the management
report. We are of the opinion that our audit provides a suitable basis on which to form
our opinion.
Our audit has not identified any reportable matters.
In our opinion the financial statements which have been prepared according to applicable
accounting principles give a true and fair view of the company’s state of affairs and its earn-
ings. The management report presents the company’s position in a consistent manner and
assesses the company’s risk exposure appropriately.“
Hamburg, 7 February 2003
BDO Deutsche WarentreuhandAktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
Neuer Jungfernstieg 20D-20354 HamburgPhone +49 40 350 60 -0Fax +49 40 35 21 32www.berenbergbank.de [email protected]
Hamburg • Bremen • Frankfurt/M. • Luxembourg • Shanghai • Zurich
400 years Experience builds the future
Annual Report2002
Joh. Berenberg, Gossler & Co.
BERENBERG BANK
founded 1590Private Bankers
1467
1676
13
73
491
659
413
851
56,4%
268
1568
1772
10
77
578
681
440
903
52,6%
260
1571
1802
8
82
537
667
499
841
64,3%
259
1581
1849
9
84
548
673
523
837
70,7%
255
1480
1708
14
87
427
691
398
861
66,9%
252
1515
1684
16
89
419
707
318
914
59,1%
263
1494
1684
18
95
372
751
299
1037
57,5%
280
1623
1800
39
110
419
796
174
1243
42,7%
319
1772
1968
41
118
458
840
161
1377
43,1%
359
1943
2134
41
125
554
796
122
1512
44,7%
365
Summary of Balance Sheet positions (in million EUR)
Balance Sheet total
Business volume total
Retainted profit
Liable equity funds
Claim on
banks
customers
Liabilities
banks
customers
Cost -income ratio
Average numberof Employees
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002