The FINANCIAL — Faced with the ongoing turmoil on international financial markets, BayernLB’s shareholders and Board of Management took the decision to rethink the Bank’s current business model and reposition the Bank.
Consequently, the key points of a business model that make the Bank a strong competitor and future player were discussed at great length and approved by the Board of Administration in a meeting held on 29 November 2008. In parallel, BayernLB will be extensively restructured and downsized. The core elements of BayernLB’s new strategic direction are:
· To focus on Bavaria, Germany and selected regions of Europe
· To focus specifically on the core customer segments: Middle Market, Major Customers including institutional clients and Savings Banks, Commercial Real Estate and Retail Customers
· To decouple systematically from activities that are non-profitable in long-term
· To make significant cost savings and efficiency improvements
The shareholders have cleared the path to this shift in direction through measures to recapitalise the Bank by EUR 10 billion and ringfence the ABS investment portfolio by EUR 6 billion and by applying for a EUR 15 billion
guarantee from the German Financial Market Stabilisation Fund (SoFFin).