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EXTRACT FROM THE CURRENT ANNUAL REPORT
Report of the Partners
The last fiscal year was an eventful one. The first six months were dominated by
the escalating debt crisis in Europe. The markets did not settle until the unprecedented
announcement by the European Central Bank (ECB) that it would purchase government bonds issued by
countries that have applied for aid from the European Stability Mechanism (ESM) bailout fund on the
secondary market. The ECB also cut its key rate to a historically low level. The resulting low
interest rate environment posed special challenges for all investors.
Although the German economy was unable to escape the debt crisis
completey unscathed, gross domestic product grew by 0.7 %. In addition to foreign trade, our
economy was mainly supported by domestic demand.
In this economic environment, M.M.Warburg & CO KGaA (Warburg Bank)
and its subsidiary institutions in Germany, Luxembourg, and Switzerland (the Warburg Banking Group)
generated aggregate income before taxes of EUR 39.8 million (previous year: EUR 43.6 million).
Warburg Bank transferred a profit of EUR 35.6 million (previous year: EUR 40.7 million) to
M.M.Warburg & CO Gruppe (GmbH & Co.) KGaA.
Aggregate net interest income in the Warburg Banking Group amounted to
EUR 88.9 million in the year under review (previous year: EUR 86.6 million); aggregate net fee and
commission income was EUR 132.3 million (previous year: EUR 138.0 million). The Warburg Banking
Group thus proved that it can remain solidly profitable without deviating from its conservative
risk policy, even in times of uncertainty. A portion of earnings were set aside as provisions for
risks arising from the lending business in particular.
The Warburg Banking Group does not aim to maximize profits in the
short term; rather, this owner-managed enterprise pursues long-term objectives. This is why it
avoided potentially profitable, but speculative investments in southern European government bonds
in the year under review. The diversification of the loan portfolio across different segments has
paid off. The Group continues to consider the lending business, with its consistent interest
income, as a core business area, since this is also one of the functions that a bank serves in the
ANNUAL REPORTS OF PREVIOUS YEARS
The essays entitled “Current developments”, which are published annually with the annual report,
are available here for download.
Essay No 14 „Bankenkrise – Siechtum mit System“ von Dr. Christian Olearius und
Dr. Bernd Thiemann