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Annual Report 2016
Contents
Strategic Focus� // 7
Management Report // 17
Business Review 2016 and Outlook // 19
Risk Report // 47
Subsidiaries and Holdings // 59
Consolidated Financial Statements for 2016 // 65
Consolidated Balance Sheet // 66
Consolidated Profit and Loss Account // 68 Auditors’ Certificate // 71
Consolidated Financial Statements Annex // 72
The Boards // 92
Addresses // 94
Overview of Business Performance
in million euros 2012 2013 2014 2015 2016
Totalassets 3,132 2,903 2,779 2,658 2,885
Businessvolume 3,329 3,065 2,938 2,796 3,058
Loansandadvancestoclients 1,308 1,324 1,258 1,236 1,393
Loansandadvancestobanks 358 273 317 247 196
Clientdeposits 2,462 2,322 2,196 2,076 2,121
Liabilitiestobanks 212 152 114 99 137
Equity(includinggroupnetincomefortheyear) 239 259 281 304 348
Netinterestincome(includingcurrentincome) 57 56 64 43 49
Netcommissionincome 71 87 92 110 100
Netincomefromproprietarytrading 8 4 8 4 0,3
Administrativeexpenses 117 128 135 143 162
Groupnetincome 21 21 22 23 55
Numberofemployees 650 678 677 675 693
Annual Report 2016
Themegatrendsdigitalisation,demographicchange,globalisationandsustainabilityaresignificantlyinfluencingthescopeofactivitiesofthefinancialindustry.Regulationandtheinterestratepolicyofthecentralbankslimitthedegreeoffreedomofbanks’businessmodels.Ontheotherhand,alternativemarketparticipantssuchasFinTechsareenteringthemarkettakingoverpartsofthetraditionalbankingvaluechaininveryefficientways.
Bankshavetoscrutinisetheirtraditionalapproachtobusinessandrethinktheirbusinessmodels.Masteringthisadjustmentprocesssuccessfullyrequiresasolidfoundationofvalues.Traditionalvaluesandamodernspiritarenotoppositesbutrathersettingthestageforfuturegrowth.
BankhausLampehasbeenactingflexiblyintheserapidlychangingtimes.Asanindependentprivatebank,weconnectpeoplewithinvestmentopportunities.Webuildbridgesbetweenvariousclientgroupsandmarkets.
Responsibility,innovation,qualityandpartnershipareofutmostimportancetoBankhausLampeanditsemployees.Thesevaluesarepre-requisitesforourholisticapproachtoclientadvisory.
TheBank’sequityratiotherebyrepresentsasolidbasisoftrust.Atwellabove15%,itexceedstherequirementslaiddowninBaselIIIconsiderably.Inaddition,ourlongstandinghistoryofover160yearsreflectsreliabilityandcontinuity.
However,wedonotjustrelyonourtradition;wecontinuallyexpandandmoderniseourrangeofservices.Forthebenefitofourclientswecreateinnovativeandtailoredfinancingandinvestmentsolutions.Besidesanintelligentassetmanagementofferingthisalsoincludescorporatefinanceandwealthmanagementservices.Ouraimistoprovideexceptionalsolutionsandservicestoourclients.
Wewouldliketothankourclientsandbusinesspartnersfortheircontinuedconfidenceandsupport.Satisfyingyourneedswillremainourdailychallengeandcontinuetodriveourmotivation.
Yoursfaithfully,
TheGeneralPartnersofBankhausLampeKG
Dear clients and business partners,
(fromrighttoleft)ProfessorDr.StephanSchüller(Spokesman)
Dr.NicolasBlanchard,UteGerbaulet,WernerSchuster
Strategic Focus
9
BankhausLampeisanindependentprivatebankthatwasestablishedinEasternWestphaliain1852.Itserveswealthyprivate,corporateandinstitutionalclients.Theseclientsareofferedholisticadvisoryservicesthatfocusonassetmanagementandcorporatefinance.
TheBankaspirestodeliverthebestperformanceandqualitybydevelopingintelligentandrisk-awaresolutionsthatareindividuallytailoredtomeeteachclient’sneeds.CombiningBankhausLampe’sskilledandmotivatedemployeeswithitscompactstructuresallowittomeettheneedsofeveryclientquicklyandtothehighestpossiblestandard.BankhausLampeaimstobecomethequalityleaderforcomplexfinancialmattersamongGermany’sprivatebanks.
Anindispensablefoundationforthisisaholisticapproachtoadvisoryservice.Thisincludesacomprehensiveexaminationofalltheissuesofrelevancetoclients.Forexample,forsmallandmedium-sizedenterprises,thisanalysiswillalwaysscrutinisethethreeinterlinkedareasofthecorporation,privateassetsandthefamily.
ShareholderbackgroundBankhausLampehasbeenpartoftheOetkerGroupsince1949.Itsindustrialshareholderbackgroundisuniqueinthebankingsectorandstandsforindependence,stabilityandresponsibility.
// ThefactthatitisindependentanddoesnotbelongtoafinancialconglomerategivesBankhausLampetheentrepreneurialfreedomtoreactquicklytomarketconditions.TheBankcanthereforecrediblypromiseeachofitsclientstofindthebestsolutionforthempersonally,freefromcorporateconstraints.
// TheBank‘sverygoodcapitalresourcesandtheshareholder‘sbackingforitsfuturestrategydemonstratethestabilityofourinstitution.
// TheimportanceweattachtoexecutiveaccountabilityisprimarilyshownbythefactthattheBankismanagedbypersonallyliableGeneralPartners.Ratherthanjusttryingtomakeaquickprofit,theBankthereforefocusesonastableperformancethatcreateslong-termvalue.
Strategic Focus
Strategic Focus
10
PersonalityBoththeBank’sGeneralPartnersanditsemployeesarecommittedtoastrongsetofvaluesonwhichreststhefoundationofitsbusiness.Itsemployeesstandfirstandforemostforhonestyandreliabilitytowardsitsclientsandbusinesspartners.Thesefactorsformthebasisforatrustingrelationship.Ourteamofadvisorsalsohasahighdegreeofcontinuity;itisrisk-awareanddeterminedtofindourclientsthebestsolution.
Transparencyisessentialinclientrelationships.Asamatterofcourse,theBankthereforeprovidesinformativereporting,transparentpricingandastatementofportfoliocommissions.Besidesthis,allclientadvisorsarerequiredtosignacomprehensivecodeofconduct.
ExpertonGermanyThroughitsexperienceandshareholderbackground,theBankhasaspecialunderstandingofGermany’sMittelstand,beitlistedcompaniesorfamily-runenterprises.Foritsclients,BankhausLampeistheexpertinGerman-speakingEuropeandthefirstportofcallforcomplexfinancialmatters.ServedbytheBank’ssubsidiariesinNewYorkandLondon,internationalinvestorsalsoincreasinglyholdtheBank’sclosetieswithGermany’sMittelstandinhighesteem.
TheBankhasanin-depthunderstandingoftheconsumer/retail,industrials/businessservices,realestateandtechnology/digitalsectors.TheBank’snumerousindustrycontactsallowittoengageinstrategicdialoguewithclientsandrelevantbusinesspartners,forexample,viatheEconomicAdvisoryBoarditestablishedin2016.
TheBank’sownEquityResearchteamadditionallyenhancesitsreputationasaspecialistforGermany.Ourresearchcurrentlycoversabout200listedcompanies.
OngoingdevelopmentInachallengingenvironmentwithstill-lowinterestrates,strictregulationandglobalchallenges,BankhausLampehasbeensteadilydevelopingitsbusinessmodelforyears.
Inrecentyears,forinstance,theBankhasopenednewbranches,establishedsubsidiariesbothathomeandabroad,andexpandeditscapitalmarketbusiness.Thisexpansionwasaugmentedbysteadilyenlargingtherangeofproductsandservicesforallclientgroups.TheAssetManagementandCorporateFinancebusinessesarecurrentlyfocusingoninvestment.Inaddition,theBankhassetitselfatargetofmorecloselyinterlinkingtraditionalclientadvisoryservicesintheBranchbusinesswiththeknow-howofitsproductspecialistsforinvestmentandfinancingsolutions.ThisaspectsetstheBankapartfromspecialistprovidersandlaysthefoundationfortheBank’sholisticadvisoryapproach.
Annual Report 2016
11
AssetmanagementAssetmanagementisanessentialelementinBankhausLampe’sholisticapproachtoadvisoryandotherservices.Allclientgroupswillhaveaccesstothegroup’sentireexperienceandexpertiseinfuture.Theseactivitiesincludeliquidandilliquidassetmanagement.
Inordertobeabletoofferclientsattractiveliquidproductalternativesinanenvironmentthatremainsdifficult,theBankhassupplementeditsprovenactiveinvestmentapproachwithrule-basedinvestmentstrategies.
Forexample,theBankisexamininghowprivateclientsandfamilyofficescanbegivenaccesstoinnovativesolutionsthatwerepreviouslythesolepreserveofinstitutionalclients.Thesesolutionsincludequantitative-basedabsolutereturnproductsthataddressafast-growingmarket.
Inthecurrentenvironment,thereisahighpriorityforilliquidalternativeinvestmentsaswell.BankhausLampehasalreadyoffereditsclientsilliquidinvestmentsolutionsatanearlystage,e.g.,inselectinvestmentsectorssuchasenergyinfrastructureorprivateequity/mezzanineforsmallandmedium-sizedGermanenterprises.Therangeofserviceswillbeaugmentedinfuturewithfurtheradvisoryservicesapproachesthatcanextendfromindividualpartialaspectsthroughtotheentireimplementationofatransaction.
CorporatefinanceFinancingandinvestmentmatters,strategicadvisoryservicesandclient-relatedcapitalmarketactivitiesarepartandparcelofcorporatefinancebusiness.
AspartofBankhausLampe’sholisticapproachtoadvisoryservices,thereareveryclosetiesbetweenproductspecialists,suchasEquityDebtCapitalMarkets(EDCM)orMergers&Acquisitions(M&A)andtheBranchbusiness.TheBank’sM&Aexpertsarethepeopletospeaktoaboutcomplexissues,suchaspublicM&Aanddivestmentsfromfamilybusinessundergoingsuccessionphases.OurEDCMemployeesdevelopandmentorcapitalmarketsolutionsforcompaniesthatmaybemid-sizedorevenstock-exchangelisted.Beingaprivatebank,wecanalsoguaranteeahighdegreeofconfidentialityandefficiency.ThismakestheBankverydifferenttocorporatefinanceboutiquesandevenbigbanks.
AsGermanMittelstandcompaniesareincreasinglyfacedwiththegrowingcomplexity,dynamismandglobalisationofthecorporateenvironment,theM&Abusinesswillbecomemoreinternationalinthissegment.ItisveryimportantfortheBank’sclientstohavestrongnetworksandgoodcontactsintheUSAandChina.Wecoverotherrelevantregions(e.g.France,ScandinaviaandtheUK)viaco-operationagreements.
Strategic Focus 13
Annual Report 201614
Strategic Outlook of the Bank
Basedonastablefoundation,BankhausLampeiscontinuingtodevelopitselfsystematically.HavingaclearlydefinedsetofvaluesandpersonallyliableGeneralPartnerssetstheframeworkforitscontinuousfuturedevelopment.ThisisconsistentwiththeBank’srisk-awareandlong-termbusinessmodel.
BankhausLampe’sindependencegivesitthenecessaryflexibilitytobeabletorespondtoalargenumberofexternalfactorsonacase-by-casebasis.Atthesametime,complyingwithalloftheregulatoryrequirementsisamatterofhighestprioritytous.
BankhausLampe’slonghistory,extensiveexperienceandstrongrootsinGermany’sMittelstandsectorprovidegenuineaddedvalueforourbusinesspartnersandclients.Bothouremployees’greatcapacityforinnovationandtheindependenceofourinstitutionpermitustocreateforward-lookinginvestmentandfinancingsolutions.Theyalsorepresentapromisingbasisforasuccessfulfuture.
Management Report
2014 2015 2016 2014 2015 2016 2014 2015 2016
6.0
4.0
2.0
0.0
-2.0
6.0
4.0
2.0
0.0
-2.0
6.0
4.0
2.0
0.0
-2.0
3.23.3
1.6
0.9
3.1
1.9
1.7
1.5
1.6
Global European German
GDP in %
19
General Economic Conditions
GlobalGlobalgrowthmomentumremainedsubduedin2016.EconomicconcernsaboutChinaatthestartoftheyearandtheBrexitvoteinJunecausedhighuncertaintiesattimes.(Geo)politicaltensions,highpublicandprivatedebt,lackofstructuralreforms,andongoingpressureintheEuropeanbankingsectorstillthwartedahighergrowthmomentumoftheworldeconomy.Theexpansionarymonetarypolicy,aboveallinindustrialisednationshelpedtooffsetanevenweakergrowthtrend.Intheemergingmarkets,growthratesstabilisedatalowlevel,althoughRussiaandBrazilremainedinarecession.After3.2%in2015,theglobalgrossdomesticproduct(GDP)increasedataslightlyslowerrateof3.1%in2016.
EurozoneThemoderateeconomicupswingcontinuedintheeurozone.TheEuropeaneconomygrewat1.6%in2016.Themostimportantpillarofgrowthisprivateconsumption,whichbenefitedfromlowerenergypricesandbetterlabourmarketconditions.Furtherpositiveimpetuscamefromthestrengthoftheeuroagainstothercurrencies.However,structuralproblemspersisted.
GermanySupportedbysoliddomesticdemand,theGermaneconomygrewat1.9%in2016.Theimprovedsituationonthelabourmarket,higherrealwagesandtheoverallpositiveeconomicoutlookfuelledprivateconsumption.Inaddition,public-sectorconsumptionalsocontributedstrongertogrowththaninthepastfewyears.Afterverystrongmomentumofbusinessactivityinthefirsthalfoftheyearandaslightlyweakerthirdquarter,theGermaneconomyreturnedtoarobustgrowthtrajectoryinQ42016.
ConsumerpricesTheaverageinflationratesinmostcountriesremainedatverylowlevelsordeclinedevenfurtherinsomecountries.Thiswasmostlyduetothehighcrudeoilprices.Althoughitpickedupfromitslowinearly2016,itdidnotoncesurpassthepreviousyear’sleveluntilautumn.Sincethenhigherenergypriceshaveincreasinglytranslatedintohigherconsumerpricesthanlastyear.Theinflationrateintheeurozoneslowlycreptupfromitsannuallowof-0.2%inAprilto1.1%inDecember.TopushtheinflationrateinthemediumtermbacktowardstheECB’stargetofclosetobutbelow2.0%,theECBapprovedthefurtherexpansionandextensionofitsassetpurchasinginMarchandDecemberaswellasanotherbaseratecutinMarch.
Business Review 2016 and Outlook
Business Review 2016 and Outlook
Annual Report 201620
GovernmentbondsBesidessubduedglobaleconomicgrowthandpartlydeclininginflationrates,theliquiditymeasuresoftheECBalsocontributedtothepersistentlow-interestenvironmentin2016.Asaresult,governmentbondyieldsdroppedtonewhistoricallowsattimes.InGermany,the10YBundyieldsdroppedbelowzeroinJuneforthefirsttime,downfrom0.63%atthestartoftheyear,andreachedalowof-0.22%attheendofSeptember.DuetotheprospectofaratehikebytheFed,increasingtreasuryyieldsandthedebateaboutareductionoftheECBassetpurchasing,yieldsimprovedto0.30%inmid-December.Treasuryyieldsincreasedby120basispointsfromtheirannuallowof1.4%inJulytonearly2.6%inmid-December2016.
CurrenciesUntiltheendoftheyear,thedivergenceofthemonetarypolicyofECBandFedresultedinstrongvolatilityoftheEUR/USDexchangerate.InglobalenvironmentcharacterisedbyhighuncertaintiesandtheabsenceofaUSratehike,theeurorecoveredto1.16inMayfrom1.09atthestartoftheyear.Throughthesummer,itremainedstableinarangeof1.10to1.12.However,aftertheUSelectionatthestartofNovemberandthegoodprospectofaratehikebytheFed,theratefellto1.04bytheendoftheyear.
EquitymarketsTheDAXended2016at11,481points,6.9%higherthanatthebeginningoftheyear.Whileeconomicconcernsdominatedthefirsthalfoftheyear,thepositivegrowthtrendwasachievedwithasignificantyear-endrallytriggeredbyhopesofastrongUSstimulusprogramme.
Annual performance of key stock market indices in %
2014 2015 2016
30
20
10 2.7 9.
6DAX
40
30
20
10
2014 2015 2016
2.2
22.7
MDAX
20
10
2014 2015 2016
4.0
6.4
EURO STOXX 50*
*Performanceindexwithdividends
6.9
6.8
3.7
Annual Report 201622
Market and Sector Environment
Thechangesintheenvironmentfollowingtheemergenceofthefinancialcrisisandthesubsequentsovereigndebtcrisisarestillhavingvariousconsequenceswithregardtobanks’businessmodels.Inparticular,thepersistentlow-interestratepolicyinconjunctionwiththeECB’sexpansivemonetarypolicyandtheevertighterregulatoryregimecharacterisethedifficultenvironmentforfinancialinstitutions.Inaddition,therearetheeffectsfrommegatrendssuchasdigitalisation,demographicchange,globalisationandsustainability.
TraditionalsourcesofinterestincomearedisappearingTheongoinglow-interestenvironmenthampersthegeneratingofincomeviamaturitytransformation.First,clientdepositscannolongerbeinvestedprofitablybecausetheECBdepositratehasdroppedbelowzero.Second,investmentsandloanswithhigherinterestratesaregraduallymaturingandcannotbereplacedatcomparableterms.Theresultisthepermanenterosionofinterestincome.
Thishasledtoawiderangeofassetandliability-relatedeffectsandadjustmentstothebusinessmodels.Whilesomefinancialinstitutionshaveexpandedtheirmaturitytransformation,extendingloantermsandtherebybearingahigherriskwheninterestlevelsriseagain,othershaveloosenedtheirlendingpolicy,inparticularinthecorporateclientbusiness.Ontheliabilitiesside,financialinstitutionsareincreasinglyintroducingnegativeinterestrates,therebypassingontheongoingnegativeinterestratesontheECB’sdepositfacilitytotheirclients.
InparticularthelendingbusinesswiththelargegroupofcreditworthyMittelstandclientshasbecomehighlycompetitive.ThisisfurtherexacerbatedbythegenerallyhighcashpositionsofMittelstandcompanies,whichlimitstheirdemandforloans.Furthermore,thetraditionalcorporateclientbusinessisalsochanging.Companiesareabandoningtheirtraditionalprincipalbankrelationshipsdiversifyingtheirfinancingacrossseveral–includingalternative–lenders.
Whiletheaforementionedlow-interestenvironmenthassignificantlynegativeeffectsonthematuritytransformationresultoflargeretailbanks,theeffectonprivatebanksisrathersmall.Thisisbecauseprivatebanksaremostlyactiveintheshort-termlendingbusinesswiththecorrespondingshort-termrefinancing.Duetothecongruentbalancesheetstructure,maturitytransformationisofminorimportance.However,privatebanksaretraditionallystronglyengagedintheinvestmentbusinessforbothprivateandinstitutionalclients.Here,ongoinglowinterestratesleadtosignificantproblemsininvesting.Theserviceofferingofassetmanagementsolutionsneedstobedevelopedfurther.
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Sectorconsolidationencumberedbylow-interestratepolicyThecombinationofongoinglowECBrefinancingratesandtheexpansionarymonetarypolicysuchastheassetpurchasingaspartofquantitativeeasingpermitlendingactivitieswhichmaynotbeviableinthelongterm.Thus,anecessaryconsolidationofthesectorisartificiallyprotracted.Insteadofgivingthefinancialsectorapositiveimpetus,themonetarypolicymeasureshavecausedvarious,counter-productiveinteractions.
RegulatorymeasuresstillaffectingbankingbusinessmodelsDuetotheevertighteningregulation,i.e.increasingrequirementsandlawsinthebankingsector,financialinstitutionsareforcedtoimplementextensivechangestotheirsystemsandprocesses.TheincreasingrequirementsnotonlyresultinrisingexpensesfortheITinfrastructurebutalsogreatercomplexityoftheorganisationalstructureofthebusinessoperations.Especiallysmallerbanksarefacingchallengesastheycannotdistributethesefixedcostswellacrosstheirsmallerclientbaseandthus,thelackofeconomiesofscaleisfurtherexacerbatedbyincreasingsupervisoryrequirements.Inparticularbyinternationalstandards,thesesupervisoryrequirementsmayrepresentacompetitivedisadvantage.
ThecurrentregulatorytopicsincludethepreparationforBaselIV,MRELandTLAC(resolutionandrestructuringofbanks),EMIR,MiFIDII,AnaCredit,thenewversionoftheRemunerationOrdinanceforInstitutions(InstitutsVergV)andtheautomaticexchangeofinformation(AIA).
Besidesthelow-interestenvironment,theregulatorymeasurescanaffectnotonlyabank’sprofitabilitybutalsoitscapitalisationrateorequityratio.Thestrengtheningofthelatterhasbeenandwillcontinuetobeakeyobjectiveoftheregulationtomakebanksmoreresilientagainstlosses.Incontrast,thehigherequitycapitalrequirementsalsocutintothebanks’profitability.
TheprincipleofdoubleproportionalitynolongerholdstrueTheincreasingregulationofthebankingsectoraswellasnewinternationalstandardsandregulationsareweighingontheparticipantsinthefinancialindustry.Theprincipleofdoubleproportionalityensuresthecompetitivenessofsmallerfinancialinstitutions.Itaimstobalancebothgenerallyregulatoryrequirementsandtheintensitytheoperatingsupervisionwithrespecttothesize,businessactivitiesandriskprofileoftherespectivefinancialinstitution.However,inthelastfewyears,smallandmid-sizedbankshavebeendisproportionallyweigheddownbyregulations.Thisisincreasinglydistortingthecompetition.Theeconomicimpactofthemorestringentrequirementsforthevariousbusinessmodelsofbanksismuchlesspredictable.Furthermore,specificnationalaspects,suchasthethree-pillarsysteminGermany,orotherlegalformsofbanksotherthanapubliclimitedcompany,arenotadequatelytakenintoaccount,especiallyinviewoftheregulatoryharmonisationefforts.Thus,theprincipleofdoubleproportionalityappearstonolongerholdtrue.
Business Review 2016 and Outlook
Annual Report 201624
DigitalisationThedigitalisationmegatrendcoversvariouskeytopicsforbanksandgreatlyinfluencesthedifferentbusinesssegmentsoffinancialinstitutions.Customersincreasinglyexpecttobeabletomanagealloftheirbankingactivitiesanytimeandanywhere.Meanwhile,digitalchannelsandonlinebankinghavebecometheminimumstandardandessentialtostaycompetitive.FinTechsaretakingadvantageofthistrend,increasinglyattackingspecificpartsofthebanks’value-addedchain.
Traditionalfinancialinstitutionsareverymuchawareofhowimportantimplementinganddevelopingnewtechnologiesis.Yetsomebanksarestillbehindwithrespecttosystematicdigitalisationoftheirsalesandcommunicationchannelsaswellastheirbusinessprocesses.Capacityshortagesduetopersistentregulatorypressureandpartlydecliningprofitabilityareencumberingtechnologicaladvancement.Thus,thefocusissettoremainonsecuringandoptimisingexistingbusinessoperations.However,itisnotpossibletocopewiththeregulatoryregimeandtheconsequencesofthelow-interestphasewithoutafunctioningandsophisticatedITarchitecture.Afteracostlyimplementationprocess,banksshouldbeabletoreapsignificantcostsavingsthroughefficienttechnologiesandprocessesandtosecuretheirprofitabilityinthelongterm.
DemographicchangeTheneedsandrequirementsoftheprivatebanks’ageingclientelearechangingandfinancialinstitutionshavetorespondaccordingly.Inparticular,thereisagreaterneedforadviceoncompanysuccessionduetolongerlifeexpectancyandenvironmentalcomplexity.Thesuccessfulhandoverofacompanytothenextgenerationisoftentheprimarygoalforafamilybusiness.However,theprobabilityoffailureincreasesdisproportionatelyfromonegenerationtothenext.Asaresult,85%ofsuccessionsfailinthefourthgeneration.
Moreover,financialinstitutionsarenotonlyfacingthechallengetofulfiltheneedsoftheirolderclientelebutalsotocatertotheyoungergeneration.YoungcustomersareincreasinglyturningtodigitalchannelsofinformationandcommunicationaswellasalternativesupplierssuchasFinTechs,disbandingtraditionalprivatebankingrelationships.
Inthecourseofthedemographicchange,theproblemoftheshortageofskilledprofessionalsduetotheageingpopulationisalsosteadilyincreasing.Banksareunderimmensepressuretoconvincehigh-potentialsfromanevershrinkingpoolofcandidatestojointheirinstitution.
GlobalisationTheneedforgloballyorientedservicesisincreasingamongallcustomergroups.Investorsareincreasinglylookingforopportunitiesabroad,particularlyintheUSdollarregion.GermancompaniesseekingcapitalarebenefitingfromtherisinginterestofforeigninvestorsofbuyingstakesintheGermanMittelstand.
25
SustainabilityInaddition,customersareincreasinglymakinginvestmentdecisionstakingintoaccountecologicalandethicalcriteria.Thus,thebankingsectorisencouragedtooffertransparent,ethicallyresponsibleproductsandservicesinordertocapitaliseonthegrowingtrendofsustainableinvesting.Here,businesspartnersandcustomersaretobeselectedaccordingtoethicalminimumstandards.Themandatoryreportingofnon-financialkeyfiguresinthefinancialstatementsfrom2017onwardsisputtingthespotlightonsustainability.
BankingbusinessmodelsareinfluencedbyglobalmegatrendsThemegatrendsdigitalisation,demographicchange,globalisationandsustainabilityaresignificantlyinfluencingthescopeofactivitiesofthefinancialindustry.Althoughnoteverytrendisequallyrelevanttothedifferentbankingbusinessmodels,anintensiveassessmentofalltopicsisnecessaryforfinancialinstitutionstomaintaintheirfuturecompetitiveness.Themegatrendsandthustherapidlychangingenvironmentrequiregreatflexibilityandwillingnesstoadaptfromtheparticipantsinthebankingsector.
IncreasingcompetitionduetoexternalinfluencesThecompetitiveenvironmentinthebankingsectorischaracterisedbychangingconditions.Inthewakeofglobalisation,moreandmoreforeignfinancialserviceprovidersareenteringthemarketincreasingthecompetitivepressureinthebusinesswithwealthyprivatecustomers,corporateclientsandinstitutionalinvestors.Inthebusinesswithwealthyprivateclients,independentassetmanagersarealsoenteringthemarket,targetingpartsoftheserviceofferingoftraditionalfinancialinstitutions.
Companiesareincreasinglytappingthecapitalmarkettobothraiseandinvestcapitalandthusbecomemoreindependentofbanks.Besidesprivateinvestors,large,regionalandprivatebanksarealsocompetingforcorporatecustomerbusiness.
Inthebusinesswithinstitutionalinvestors,fundandassetmanagersarealsoofferingtheirservices,whichputsgreatercompetitivepressureontraditionalbanks.
Duetotheincreasingcompetition,variousbanksalreadyhadtoslimdownbusinessunitsorgivethemupentirelyinordertoremainprofitable.Apermanentcriticalevaluationofthevaluechainwithrespecttoriskandprofitabilitywillremainanimportanttasktosecurethesustainabilityofthebank.Somebankingbusinessmodelswillnolongerbeviableonthemarket.Thetransformationofthebankingsectorissettoaccelerate.Afocusedbusinessmodel,asolidbalancesheetandasustainablestrategyarenecessarytoprevailinthecurrentmarketenvironment.
Business Review 2016 and Outlook
Annual Report 201626
Business Review of Bankhaus Lampe Group in 2016
InGermany,theBankhausLampeGrouphasofficesinBerlin,Bielefeld,Bonn,Bremen,Dresden,Dusseldorf,Frankfurt/Main,Hamburg,Munich,Münster,OsnabruckandStuttgart.Withitssubsidiariesandco-operationarrangementsabroad,theBankisalsorepresentedinLondon,NewYorkandVienna.Asexpected,BankhausLampecontinuedtoholditsgroundin2016inwhatonceagainprovedtobeachallengingfinancialmarketenvironment.Inviewofone-offeffects,theoverallbusinessperformancecanberegardedassatisfactory.
BankhausLampeoffersitsclientsnotonlytraditionalservicesbutalsomodernandalternativeservicesthattakeaccountofthecurrentfinancialmarketconditionsandmeaningfullybringtogethervariousclientgroups.
TheBankcontinuestofocusitsbusinessactivitiesonclientadvisoryandsupportservicesforitsthreeclientgroups,i.e.wealthyprivateclients,corporateclientsandinstitutionalclients.TheBankpursuesacloserelationshipandcross-clientco-operationofitsbranchesandcapitalmarket-orientedbusinessunits.
Changesinthecompetitivelandscape,regulatorychallenges,theongoinglowinterestratephaseinconnectionwithextensivemonetarymeasuresofthecentralbanks,andtheresultingseriouschangesonthemarketcallforregular,criticalreviewsofthebusinessmodel.BankhausLampeworkscontinuouslytowardsaddressingthesechallengeswhilefocusingatalltimesonitsclients’interests,theBank’seconomicviabilityandtheinterestsofitsshareholderpartners.Againstthisbackdrop–asoutlinedinthepreviousannualreports–theBankhasbeenactivelytacklingthefollowingchallengesforanumberofyears:
// Corecapitalratio// Refinancing// Companysize
ForaprivatebankthatpreparesitsaccountsinaccordancewiththeGermanCommercialCode(HGB)andthereforehasnoexternalrating,ahighcorecapitalratioservesasanindicatorofitsfinancialreputation.DespiteBaselIII,BankhausLampehasaccordinglyimproveditscorecapitalratioinrecentyears,from10.2%in2010tomorethan15.0%in2016.TheBankhasthusmetalloftheregulatoryrequirementsbymorethanacomfortablemargin.
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BankhausLampe’straditionallyhighclientdepositsonceagainensuredasolidrefinancingbaseagainin2016;however,thenegativeECBdepositrateweighedonearnings.
Toensureadequacyintermsofsize,theBankcontinuestopursueanorganicgrowthstrategythatmeetsitsclients’needsbest,albeitwithoutexpandingitsrisk-weightedassetsandhencetotalassets.Principally,BankhausLampeKGputsthefocusofitsbusinessactivitiesonadvisoryservicesratherthanbalancesheetoperations.Asaprivatebank,BankhausLampeKGstrivestobuildanindependent,robustanddiversifiedearningsbase,especiallyinviewoftheongoinglow-interestratephase.Thisincludesthegradualincreaseoftheshareofnetcommissionincomevs.netinterestincome.
However,individualplanningcomponentsdidnotperformaswellasexpectedduetothecurrentmarketenvironment.Tostrengthenitsearningsmomentum,theBankinitiatedthefollowingthreestrategicinitiativesin2016,whichyieldedthefirstsuccessesinthesecondhalfoftheyear:
// Strategicdevelopmentoftheassetmanagementbusiness(expansionofthescopeofassetmanagement;tobeabletooffermorealternativesinadifficultenvironment,theBankisalsosettinguparangeofquantitative-basedabsolute-returnproducts,inadditiontoitsprovenactiveapproach)
// Strategicdevelopmentofthebranchbusiness(strongerfocusontheproductofferingandconsequentinterlinkingofclientadvisoryservicesandproductspecialists)
// Sharpeningofthebrandimage
ThegrowingbaseofactivelymanagedassetsinthepastfewyearsshowsthehightrustintheBank’scompetency.Asper31December2016,theBank’sassetsundermanagementcameto€18.6billion.
Business Review 2016 and Outlook
Annual Report 201628
Business Review by Segment
WealthyprivateclientsInanongoingdifficultenvironment,dominatedbyvolatilecapitalmarketsandpersistentlyloworevennegativeinterestrates,BankhausLampeachievedasatisfactoryperformanceinitsassetmanagementbusiness.Inahighlycompetitivemarketenvironment,theBankwasabletokeepitsactivelymanagedassetsbasestablein2016.
Intheongoinglow-interestenvironment,alternativeinvestmentsarebecomingmoreimportant.BankhausLamperespondstocontinuinghighlevelofinterestbyconsistentlyadjustingandexpandingitsindividualinvestmentstrategies.Forinstance,thealternativeinvestmentsstrategywasimplementedintheassetmanagementunit.Theequitystrategywasparticularlysuccessfulwithitsfocusonhigh-dividendstocks.
OtherinvestmentalternativesdevelopedbyBankhausLampein2016includedprovidingaccesstoentrepreneurialinvestments.TheBankalsocomplementeditsofferingwithalternativeinvestmentopportunitiesparticipatinginglobalmegatrendssuchasdigitalisation.Thisincludedinvestmentsolutionsthatarebasedoninternettechnology-relatedbusinessmodels.WealthyprivateclientswerealsoofferedattractiverealestateinvestmentsinGermanyandtheUS.
CorporateclientsIn2016,thecorporateclientbusinessfocusedonholisticadvisoryservicesandcloseco-operationwiththecapitalmarketbusiness.Forinstance,numerousentrepreneurstowhomBankhausLampealreadyprovidedadvisoryservicesatthecorporatelevelalsodecidedtoappointtheBanktolookaftertheirprivateassets.Equityanddebttransactionscarriedoutforcompaniesin2016significantlyenhancedtheBank’sperceptionasastrategicpartnerforcorporateclients.Aspartofthecloseco-operationofitsbranchesandcapitalmarket-orientedbusinessunits,BankhausLampefilledvariousmanagerialpositions.
Besidessolutionsinthelendingandcorporatefinancebusiness,theBankconsistentlyexpandeditsassetmanagementconceptsforcompanieswithhighcashpositions.
Despiteachallengingmarketenvironment,theBankwasabletoslightlyincreaselendingvolumesandkeepmarginsstable.Thus,theBankremainsaproviderofshort-termloansforGermany’sMittelstand.Thankstoitshigh-qualitycreditportfolio,BankhausLampedidnotrequiretheplannedriskcostsforFY2016.
29
InstitutionalclientsForinstitutionalinvestors,BankhausLampeexpandeditsportfolioofservicesandintensifieditssupportapproachin2016.
TherapidlygrowingequityandbondissuancebusinessisbasedonprofoundexpertiseintheGermanmarket.Thisisalsoshownbyranking4thintheBrokerExtelRankinginGermany.BankhausLampeadvisesinstitutionalinvestorsonGermanstocksinGermany,inLondonthroughitsLampeCapitalUK,andinNewYorkthroughLampeCapitalNorthAmerica.
Inaddition,theBankcontinuestoofferitsinvestorsinterestingalternativeinvestmentssolutions.BankhausLampe’sbroadinvestorbaseisakeyargumentinfavourofacquisitionsintheprimarymarket.
Asaresultofthemassivepressureonearningsexertedbythelow-interestenvironment,alternativeinvestmentsarestillveryimportantforinstitutionalinvestorstoo.TheBankmeetstheseneeds,forinstance,withequityinvestmentsinrenewablesourcesofenergyandinGermanMittelstandcompaniesthroughitsLampeEquityManagementsubsidiary.ThroughLampeCapitalFinance,theBankfacilitatestheinvestmentofmezzaninecapitalinfast-growingGermanMittelstandcompanies.SinceissuingtheLampeMezzanineFundI,fiveinvestmentshavetakenplace.Furtherengagementsareonthecardsfor2017.
InadditiontoBankhausLampe’sexcellenteconomicresearch,itsequitystrategygivesitsinstitutionalclientsasolidbasisfortheirinvestmentdecisions.
TheBank’sanalystscovermostoftheDAXandMDAXcompaniesinadditiontoanalysingalargenumberofSDAX,TecDAXandPrimeStandardstocks,aswellasanumberofEuropeanbluechips.Ourresearchcoveragecurrentlycomprisesabout200listedcompanies.Regularscheduledcontactswithcompaniesinadditiontovisitsatthetopmanagementlevelensureanin-depthunderstandingofcompanies’businessperformancewhileguaranteeingthatouranalysesareup-to-date,forwhichBankhausLampeResearchagainreceivedseveralawards.
Business Review 2016 and Outlook
Annual Report 201630
Management System of Bankhaus Lampe KG
BankhausLampeKGismanagedbasedonfinancialperformanceindicators,whichindicatetheBank’sprofitabilitytakingaccountofitsrisk-bearingcapacity.Thethreekeyobjectives,returnonequity(RoE),asolidcorecapitalratioand–basedonthefirsttwoobjectives–anadequatedistribution,aredesignedtodemonstratetheBank’sprofitability.
Themanagementsystemisbasedonanannualstrategicplan,whichcontainsgrowthtargetsthatarecontinuouslyevaluatedasregardstheachievementofthesetargets.Theplanningusesbothatop-downandabottom-upapproachandissupportedbytheriskcontrollingandregulatoryaffairsdepartments.First,thetargetsaswellasmeasurestoreachthemaredefinedforthegeneralpartnersincloseco-operationwiththeextendedmanagementboard.Second,thesettargetsarealignedwiththeforecastsoftheindividualdepartmentstoaccuratelydeterminethefinalplanningfigures.
Toachievethegroup-widetargets,definingandreachinggrowthandstructuraltargetsiskey.BankhausLampeisaimingtoexpandbothitsclientbaseanditsassetsundermanagementtomakeitsbusinessoperationsevermoreefficientandmaintainthehighqualityofservice.Thetargetedorganicgrowthandtheresultingefficiencygainsshouldbereflectedinrisingcommissionincome,whichisthethirdgrowthtarget.
Thesestructuralgoalsshouldhelptosecuretheindependencefromsinglesourcesofearningsandclientsegments.Theobjectiveistodeveloparobustanddiversifiedearningsbasethatisindependentoftheinterest-rateenvironment.Thisincludesgraduallyincreasingtheshareofcommissionincomevs.netinterestincome,diversifyingthecommissionincomeandbalancingthedistributionofearningsacrossallclientsegments.Abalanceddistributionoftheearningsacrossallclientsegmentsisessentialtoavoidbecomingdependentonasinglesegmentwhilethebusinessriskisdiversifiedandtheinterlinkingofthesegmentsisensured.
ByreachingvariousmilestonesBankhausLampeisaimingtoachievethesekeyobjectives.Besidesconsistentlyhighcustomersatisfaction,abalancedfinancingstructureandamanageablebaseofrisk-weightedassetsareofgreatimportance.
Definition of key performance indicators
Return on equity (RoE) Net profit before taxes / average balance sheet equity
Core capital ratio Core capital / risk-weighted assets
Payout ratio Payout / net profit
Assets under management Value of assets that Bankhaus Lampe Group manages on behalf of its clients
Commission ratio Commission income / (commission income + interest income)
(excl. income from shareholdings/associated companies)
Cost-income ratio Administrative expenses / earnings (minus annual net profit)
Annual Report 201632
Notes on Net Assets and the Financial Situation
Thetotal assetsofBankhausLampeKGasperthebalancesheetdateof31December2016stoodat€2,885millioncomparedwith€2,658millionlastyear.
Loans and advances to banks declinedby€52millionto€196millionintheyearunderreview.
At€1,393million,loans and advances to clientswereslightlyabovetheprior-yearlevelof€1,236millionasper31December2016.Themagnitudeofthecreditportfoliofacilitatesanadequatediversificationofrisksontheonehandandisalsocommensuratewiththerisk-bearingcapacityofaprivatebankontheother.
Debentures and other fixed income securitiesincreasedslightlyfrom€148millionto€161million.
Thetrading portfolioasperthebalancesheetdatestoodat€453million(previousyear:€441million)andessentiallycomprisesbondsandequities.
Liabilities to banksrosefrom€99millionto€137million.
Client depositsasperthebalancesheetdateof31December2016roseby€45millionto€2,121million(previousyear:€2,076million).Accountingfor74%oftotalassets(previousyear:78%),clientdepositsrepresentthemostimportantsourceofrefinancingandsubstantiallyexceedtheBank’screditbusiness.Thisunderscoresthesolidityofthebalancesheetstructure.
Intheyearunderreview,€20millionwereallocatedtofunds for general banking riskspursuanttoSection340goftheGermanCommercialCode(HGB).Aspertheendoftheyear,fundsforgeneralbankingrisksamountedto€57million.
TheBankenjoyedacomfortableliquidity positionthroughoutFY2016.Asat31December2016,theliquidityratiopursuanttotheGermanLiquidityRegulationcameto5.4(previousyear:6.1).ItwasthereforewellabovetherequirementslaiddownbyGermany’sFederalFinancialSupervisoryAuthority(BaFin),whichdemandsaminimumco-efficientofmorethan1.0.
Duetotheallocationfromshareholderfundsof€11.5million,theBank’sreported equityroseto€293millionandmadeup10.2%oftotalassetsasat31December2016(previousyear:10.6%).
Onthebalancesheetdate,the irrevocable lending commitmentsamountto€98million(previousyear:€57million).
Balance sheet structure in 2016 in %
Loans and advances to clients 48.2 %
Loans and advances to banks 6.8 %
Securities 21.3 %
Other items 23.7 %
Assets
Liabilities to clients 73.5 %
Liabilities to banks 4.8 %
Other items 11.6 %
Balance sheet equity 10.1 %
Liabilities
20162014 2015
9080706050403020100
93.3
84.6
81.2
62.5
54.7
50.2
Personnel and material expenses in million euros
Personnelexpenses
Materialexpenses
2014 2015 2016
1101009080706050403020100
48.5
43.1
64.4
100.
0110.
3
91.5
0.34.37.8
Components of results in million euros
Netinterestincome
includingcurrentincome
Netcommissionincome
Netincomefrom
proprietarytrading
35
Notes on the Income Situation
TheBankendedFY2016withagroup net income for the year of€55.0million(lastyear€23.0million).TheBankthussignificantlyexceededthesteadyresultpredictedinthe2015managementreport.However,theresultwaspositivelyaffectedbythesaleofthe47.5%stakeinUniversal-Investment-GesellschaftmbHandpartlynegativelyaffectedbydeclinesintheoperatingbusiness.Theproceedsfromthesaleofthisnon-strategicassetarebalancedbymaximumprovisionsforallpossibleobligationsresultingfromcontractofsale.BankhausLampebelievesthatthetransformationprocessesimplementedintheyearunderreviewwillhelptoboosttheearningsmomentum.However,thesetransformationprocessesareassociatedwithprojectandup-frontcostsnotonlyin2016butalsoin2017.
Net commission income declinedinFY2016duetothedifficultmarketenvironment,butitstilldocumentstheBank’sgoodpositionintheservicebusiness,whichisofparticularimportanceforthebusinessmodel.Netcommissionincome,whichisdominatedbysecuritiestrading,totalled€100.0million,down9.3%fromthepreviousyear’slevelof€110.3million.
Net interest incomeasbalanceofinterestincomeandinterestexpenses–includingongoingincomefromequityandothervariable-yieldsecuritiesaswellasshareholdings–rosefrom€5.4millionto€48.5millionduetotransactions.Thecurrentnetinterestincomedecreasedfrom€32.2millionto€28.3million,essentiallyduetothehistoricallylowlevelofinterestrates.Ongoingincomefromequityandothervariable-yieldsecuritiesaswellasshareholdingsroseby€9.0millionto€20.2million.
The ratio of net commission income to current net interest income(excl.incomefromshareholdingsandassociatedcompanies)hascontinuedtodeveloppositivelyin2016andstoodat78/22(previousyear:77/23).ThisratiounderlineshowimportantthecommissionbusinessisforBankhausLampeKGandconfirmedhowsuccessfulthefocusoncommissionincomehasbeenaspartofthere-orientationofthebusinessmodel.
Onbalance,net income from proprietary tradingwasdown€4.0millionto€0.3million,stillcontributingpositivelyandinlinewithourforecast.StatutoryreservesderivedfromnetincomefromtradingactivitieswerealsoallocatedinFY2016(asinthepreviousyear)pursuanttoSection340goftheGermanCommercialCode(HGB)inconjunctionwithSection340eParagraph4HGBandwillbeavailableasadditionalriskcoverinthefuture.
TheBankreportedanet valuation resultof€-12.2millionasper31December2016(previousyear:€9.2million).Thisincludesavaluationresultfromthelendingbusinessof€-16.6million(previousyear:€6.2million),whichcomprisesnetadditionsofspecificvaluationadjustments,provisions,depreciationandcontingencyreservespursuanttoSection340fHGBaswellaschangesingeneralvaluationadjustments.Allrecognisableriskswereprovidedforthroughadequatevalueallowancesandprovisions.
Therewasanetvaluationgainonsecuritiesheldintheliquidityreserveof€4.4millionasper31December2016(previousyear:€3.0million).
Business Review 2016 and Outlook
Personnel and material expenses,includingdepreciationandvaluationadjustmentsonintangibleassetsandproperty,plantandequipment,roseby12.9%inFY2016duetoone-offeffects,upfrom€143.2millionto€161.6million.Thisisessentiallyduetoincreasedmaterialexpensesof€62.5million(previousyear:€54.7million)andhigherpersonnelexpensesof€93.3million(previousyear:€84.6million).
Thenet valuation resultfrom shareholdingsasbalanceoftheitems“Earningsfromwrite-upstoshareholdings,shareholdingsinaffiliatedcompaniesandsecuritiestreatedasfixedassets”and“Depreciationandvaluationallowancestoshareholdings,shareholdingsinaffiliatedcompaniesandsecuritiestreatedasfixedassets”cameto€108.4million.
Thecost-income ratioshowstheadministrationcostsinrelationthenetresultfromnetinterestincome,netcommissionincome,netincomefromproprietarytradingandotheroperatingearnings.Asper31December2016,itstoodat106.5vs.88.4lastyear,primarilyduetotheaforementionedprojectandup-frontcosts.
Other comprehensive incomeinFY2016declinedby€1.4millionto€2.8million.Otheroperatingincomeroseto€8.4million(previousyear:€6.7million)primarilyduetoreversalofprovisions.Otheroperatingexpensesincreasedto€5.5million(previousyear:€2.4million).
Corporate Responsibility
Asaprivatebankwithastrongfocusonquality,BankhausLampeassignsahighprioritytoitsemployees.Inadditiontoitsclients,theyareacompany’smostimportantandvaluableresource.
Asat31December2016,693staffwereemployedatBankhausLampeGroup(previousyear:675).Theiraveragelengthofservicewasmorethan10years.Thestaffturnoverrate–i.e.theratioofthoseleavingtheBanktothetotalnumberofstaff–was4.1%(previousyear:6.9%)andthusmarkedlybelowthesectoraverageof6.7%.
Intimesofskillsshortageandthedecliningreputationofthebankingsectorasemployer,humanresourcesmanagementhasbeenfacingmajorchallenges.Onceagainin2016,BankhausLampeinvestedgreateffortintotherecruitment,supportandsustainabledevelopmentofitsemployees.
Annual Report 201636
2011 2012 2013 2014 2015 2016
800
750
700
650
600
550
500
677
675 69
3
Number of employees
678
650
625
Annual Report 201638
BankhausLampeattachesgreatimportancetoahighlevelofprofessionaldevelopmentofitsemployees.BankhausLampe’sdeclaredaimistoretainstaffattheBankforaslongaspossible.TheBank’scoursesandtrainingactivitiesin2016focusedonleadershipandmotivating,developingandretainingemployees.OtherkeyaspectsincludedtrainingrelatedtoregulatoryandlegalrequirementsandEnglishlanguagecourses.BankhausLampealsosupportsitsemployees’continuingeducationandcertificationtrainingcourses,forexampleasfinancialplannerorCharteredFinancialAnalyst.Inaddition,theBankalsosupportsselectedemployeesintheirendeavoursofpursuingamaster’sdegreeinparallelwiththeirprofessionalcareer.In2016,employeesenrolledindegreeprogrammessuchasinheritanceandestatelaw,facilitymanagement,financialservices,realestatelawandcompanysuccession.
Since2014,anoccupationalhealthmanagementprogrammeispartoftheBank’sbusinessguidelines.Variousmeasureswithrespecttoprevention,exercise,nutritionandstressmanagementareofferedthroughthisprogramme.Thegoaloftheprogrammeistomaintainandpromotethehealth,well-beingandperformanceoftheBank’semployees.
TheBank’sin-housetraineeprogrammeisdesignedtotrainqualifieduniversitygraduatesspecificallywithrespecttotherequirementsofBankhausLampe,andtoprovideanopportunityfortheirfurtherprofessionalandpersonaldevelopment.Since2012,14traineeshavesuccessfullycompletedthisambitiousprogrammewithafocusontheprivateandcorporateclientaswellasthecapitalmarketbusiness.Twonewtraineeshavejoinedtheprogrammesincetheautumnof2016.TheintegrationofselectjuniorstaffattheBankintotheinterdisciplinarytraineeworkshopshasalsobornefruit.
Asinpastyears,BankhausLampecontinuedtopromoteyoungacademictalentthroughthesupportoftheUniversityofDuisburg-Essenscholarshipprogramme.Togetherwithothercompanies,theUDEscholarshipprogrammeprovidesfinancialsupporttotalentedandtop-performingstudents.Inaddition,closeco-operationwithselecteduniversitieshasaffordedmanystudentstheopportunitytocompletetheirinternshipsatBankhausLampe.
39
Relatedtotheirmajorfieldsofstudy,29studenttraineesand41internswereabletoapplytheirtheoreticalknowledgeinpracticein2016.Moreover,theindividualdepartmentsgainedtheopportunitytobecomebetteracquaintedwithpotentialcandidatesforfuturepositionsattheBank.TheOetkerGroup’s“StayinTouch”programmealsoprovidesBankhausLampewithaninterestingapproachtoremainingincontactwithhigh-potential,motivatedtraineesinthefuture.Currently,32formerinternsandstudenttraineestakepartinthisprogrammeontherecommendationofthedifferentdepartments.
BankhausLampewasactivelyinvolvedincultural,socialandcommunityprojectsthroughpersonalinvolvementofitsemployeesaswellasdonations.Forexample,inco-operationwithSteinwayGermanytheBankawardedregionalsponsorshipstotalentedyoungpianists.TheBankalsocontinueditssuccessfulcollaborationwithKunstmuseumBonnandZeit-StiftungEbelin&GerdBuceriusfoundationinHamburg.Numerousconferencesandsymposiumsoncurrentfinancial,politicalandinter-generationaltopicsofthefuturewereheldattheBank’sbranches.
ManyemployeesalsoactivelyengagedoutsidetheiractivitiesattheBank,e.g.asspeakers,visitinglecturers,associationboardmembersorassociationtreasurers.
Forexample,intheareaofsocialandhealthcareservices,ourstaffwereinvolvedwithKinderschutzbund(associationfortheprotectionofchildren)inBielefeldandDeutscheMultipleSkleroseGesellschaft(Germanmultiplesclerosissociety).
Theaspectsofsustainabilityandenvironmentalprotectionareofcentralimportancetoaprivatebankthatthinksandactsforthelongterm.Aspartofitsenvironmentalmissionstatement,theBankdevelopedcorrespondingbindingguidelinesforallemployees.ThekeyobjectiveofBankhausLampeGroupistopreservenaturalresources,toprotecttheenvironmentandtosaveenergy.Forexample,nearlyalllocationsaresuppliedwithelectricityfromrenewablesources.Inaddition,energy-savingmeasuresareimplementedalongwithplannedrenovations.
Business Review 2016 and Outlook
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
3.1
3.1
1.5
1.4
1.4
1.4
Global European German
GDP in %2016
2017 forecast
Outlook // Economy
GlobalAfter3.1%in2016,growthofglobalGDPin2017isprojectedtoremainmerelystableat3.1%.Intheemergingcountries,growthislikelytostabilisetoo,andintheindustrialisednations,economicmomentumisunlikelytoimproveascurrentgrowthdriversaretailingoff.
EurozoneTherobusteconomicrecoveryintheeurozoneissettocontinuein2017andeconomicactivityisforecasttoincreaseby1.4%.Theexpansionarymonetarypolicywillnolongerprovideadditionalimpetus.Anexpectedfirmereuroandthehighercrudeoilpricewillhaveaslightlynegativeeffect.Thesituationinthelabourmarketmaywellimprovefurtherslightlyandthus,privateconsumptionshouldremainthemostimportanteconomicdriver.
GermanyGrowthmomentumisunlikelytobeconsiderablystrongerin2017intheabsenceofadditionalimpetusforprivateconsumptionandinvestment,andinthefaceofsubduedglobaleconomicgrowth.Asaresult,GDPisforecasttogrowby1.4%in2017.
ConsumerpricesByendof2017,theinflationrateshouldslowlymovetowards1.5%.However,itissettoremainwellbelowtheECB’stargetrate.
GovernmentbondsInthecurrentenvironment,governmentbondyieldsarelikelytoremainlowin2017.Theslightlyhigheryieldscomparedwith2016resultfromtheinflationtrend,thereducedECBassetpurchasingandhigherbaseratesalongwiththeprobablymoreexpansionarycourseofthefiscalpolicyintheUnitedStates.
CurrenciesTheEUR/USDexchangeratein2017isexpectedtomoveinarangeof1.0to1.15.ThehighexpectationsofastrongeconomicrecoveryandacceleratedratehikesintheUSareunlikelytomaterialise.TheECBwillprobablyannounceafurtherreductionofitsassetpurchasingandthus,exchangeratesataround1.10aremoreprobablethanratesatorbelowparity.
EquitymarketsTheyear2017islikelytobedominatedbytheexpectedUSstimuluspackage.Fiscalpolicydecisionscouldprolongthecurrentequitycycle.However,investorshaveanticipatedsomethisduringtheDecemberrallyandamoreaggressivetradepolicyfromthenewUSadministrationcouldleadtonewrisksfortheexport-dependentDAX.Germancorporateearningswillprobablyincreasesomewhat,however,theoptimisticestimatesoftheanalystsconsensusexpectingdouble-digitgrowthratesmaywellbedisappointed.TheDAXisforecasttofluctuateduring2017andreach11,400pointsbytheendoftheyear.Inthecourseoftheyear,theindexmaywelldropmarkedlybelow10,000points(misgivingsaboutChina,disappointmentabouttheUSstimulusand/ortemporaryuncertaintyintheeurozone).Italsomaywellovershootthetargetto12,200andhigher(duetoexcessiveUSfiscalhopes).
41Business Review 2016 and Outlook
Annual Report 201642
Outlook // Market and Competition
Thebankingsectorisstillfacingasimilarlydifficultenvironmentin2017asinthepastfewyears.Theongoinglow-interestphaseischallengingforbothforthedepositbusinessandthelendingbusiness.Asaresult,thenetinterestincomeofbanksremainsconsiderablyunderpressure.Alooseningoftheregulatoryrequirementsinthebankingsectorisstillnotonthecards.Externalfactors–includingthemegatrendsofdigitalisation,demographicchange,globalisationandsustainability–willcontinuetohaveadetermininginfluencethebankingsectorenvironment.InparticularthebreakingupofthevaluechainandthepartialreplacementofbankingbusinessmodelsbyFinTechsareshapingthesectorintheareaofdigitalisation.Inaddition,therearethechallengesoftheskillsshortageandthechangingdemandsofanageingclientele.Merelyinstitutionsthatarehighlyflexibleandwillingtochange,willremainsuccessfulinthecomingyear.
Outlook // Bankhaus Lampe
Toofferallclientsahigh-qualityandindependentrangeofserviceswillremainBankhausLampe’smainobjective.Thechallengesofcorecapitalratio,refinancingandcompanysizehavebeenaddressed.
// Theequitybaseandthedistributioncapabilityshallbestrengthenedbyanadequategroupnetprofitin2017.
// Awell-differentiatedclientdepositmixwillensureasolidrefinancingbaseforBankhausLampe.Asinthepast,growthintotalassetsisnotoneoftheBank’sobjectives.Refinancingoptionshavetobecontinuouslyreviewedinthecontextofthegeneralinterestrateenvironmenttobeabletoadaptflexiblytolegalandregulatoryrequirements.
// BankhausLampewillcontinuetopursueitsorganicgrowthstrategyacrossalldivisionsin2017.
WealthyprivateclientsAgainstthebackdropofthepersistingnegativeinterestrateenvironmentandthevolatilestockmarkets,thebusinesswithwealthyprivateclientsrequiresintensivemarketanalysis,asuccessfulportfoliomanagementandacustomisedproductrange.OneoftheeffectstheBankhasbeenanticipating,istheincreasingdemandforalternativeinvestments,whichitisrespondingtowithanexpandedserviceoffering.
CorporateclientsWithacomprehensiveadvisoryapproach,BankhausLampeaddressesandhelpstoco-ordinatetheneedsofcompanies,entrepreneursandfamilywealth.Forexample,theBankisofferingcapital-marketrelatedadvisoryservicestoservetheneedforindependentfinancing.Inaddition,therequirementsofdefinedclientgroupsaremetbytheBank’sexistingserviceoffering,supplementedbyspecialservicesprovidedthroughsubsidiariesandselectedco-operations.
43
Thecorporateclientbusinesshasgeneratedstablecontributionstoearningsinrecentyearsandhasbeenlargelycharacterisedbyhighcreditqualitycombinedwithlowdefaultrates.BankhausLampecontinuestopursueacautiouslendingpolicyin2017.Asinthepreviousyear,itsobjectiveistonotrequirealloftheplannedriskbudget.
InstitutionalclientsThankstoitsstrongtrackrecordinplacements,BankhausLampewillcontinuetoexpanditsissuingbusinesswithinstitutionalclients.Thespotlightisonaholisticandstrategicdialoguewithinstitutionalinvestors.Inthisway,BankhausLampeisabletodelivergenuineaddedvaluethankstoitsextensiveexpertise.Moreover,theBankhasbeencontinuouslyexpandingitsalternativeinvestmentoffering.
Outlook // Income Components
NetinterestincomeOverall,BankhausLampeexpectsnetinterestincometoweakenagainastheprevailinglowinterestratelevelwillcontinueandtherewillbenosignificantexpansionofthecapital-intensivebusiness.Owingtoitslargelymaturity-matchedbalancesheetstructure,however,interest-relatedoperationsatBankhausLampewillbarelybeaffectedcomparedwithothercompetitorsbythedeclineinmaturitytransformation.
NetcommissionincomeBankhausLampeisconfidentregardingitsnetcommissionincome.Theextensionofserviceofferingtoallthreeclientgroupsisexpectedtohaveapositiveimpactprovidedthefinancialmarketswillremainstable.
NetprofitfromproprietarytradingItisdifficulttoestimatenetincomefromproprietarytradinggiventheuncertaintiesinthefinancialmarkets.However,theBankanticipatesthatitstradingactivitieswillcontinuetocontributepositivelytoearningsin2017.
AdministrativeexpensesTheexpectedincreaseinadministrativeexpenseswillbemoderate,however,itwillincludeinvestmentandup-frontcostsfortheimplementationofstrategicprojects.
GroupnetincomefortheyearOnbalance,theBankexpectsnetincomein2017tobesignificantlybelowlastyear’slevel,whichwasnoticeablyinfluencedbythesaleofthestakeinUniversal.Moreover,theBankonlymakescautiousassumptionsabouttheincreaseofindividualincomecomponentsastheeffectsofthestrategicadjustmentmeasuresaresubjecttoconsiderableuncertainty.
Outlook // Strategy
TheBankhausLampeiscontinuouslyworkingonimprovingitsbusinessmodel.Itiswellequippedtooperateinthecurrentmarketenvironmentthankstoitssolidcorecapitalbase,acomfortabledepositsituationandstablebackgroundprovidedbyitsowners.Meetingupcomingregulatoryrequirementswillremainakeychallenge.TheimportanceofprudentmanagementattheBankincreasesinperiodsofsignificantmarketturmoil.Nonetheless,theBankisinasolidpositionthankstoitsbusinessmodelandissettobenefitfromtheproblemsinthefinancialservicesindustry.
Business Review 2016 and Outlook
Breakdown of conservatively calculated aggregate risk contribution
34.5 % credit risks
26.3 % shareholding risks
18.0 % market risks proprietary trading/liquidity reserve
16.0 % operational risks/reputation risks
2.7 % interest rate risks in the banking book
2.5 % market liquidity risks proprietary trading/
liquidity reserve
47
ThekeyobjectiveofBankhausLampeKG’sriskmanagementistoappropriatelylimitthemajorrisksfrombusinessoperationsaccordingtoitsrisk-bearingcapacitytoenableittogenerateareturnoncapitalemployedcommensuratewithrisk.
Tosupportefficientriskmanagement,theBank’smanagementattachesparticularimportancetopromotingandmaintaininganadequateriskcultureintheBankasawhole.Basedontherisk-orientedapproachinitsguidingprinciples,theBankdemandsitsmanagersandemployeestoactrisk-consciously.Opencommunicationandcriticaldialogueaswellasadequateincentivestructuresareamatterofcourse.
TheBankthereforeidentifies,assesses,controls,monitorsandcommunicatesthemainriskspromptlyatGrouplevelandbacksthemwithcapital.Particularfocusisplacedonriskconcentrations.Anannualriskreviewensuresthatallrisksaretakenintoaccountintheirentirety.
Forthepurposeofaquarterlyrisk-bearingcapacitycalculationinaccordancewiththeliquidationapproach,alltypesofriskareevaluatedataconfidencelevelof99.9%usingariskhorizonofoneyear.Allindividualrisksarecalculatedusingaconservativeapproach,i.e.risk-loweringcorrelationsaredisregarded,andthenaggregatedtoanoverallbankrisklevel.TheresultingfiguremustalwaysbelessthanthesumoftheBank’sequityandallowablereserves.Positivebudgetresultsaredisregardedundertheconservativeapproach.Autilisationofriskcoverfundsof80%ormoretriggersinternalsanctionmeasures.
InFY2016,basedontheliquidationapproachtheoverallbankriskscalculatedaccordingtothesemethodswerealwayswellbelowtheBank’sdefinedrisk-bearingcapacity.Utilisationatallreportingdateswasbetween46%and59%.
Asat31December2016,theconservativelycalculatedtotalriskcontributionof€187.2millionwasbrokendownbytypeofriskasfollows:
// 34.5% creditrisks// 26.3% shareholdingrisks// 18.0% marketrisksproprietarytrading/
liquidityreserve// 16.0% operationalrisks/reputationrisks// 2.7% interestraterisksinthebankingbook// 2.5% marketliquidityrisksproprietarytrading/
liquidityreserve
Afeasibilitytestoftheresultsisalsoperformedeveryquarterinaccordancewiththegoingconcernapproach.CorecapitalandtotalcapitalinvestedinaccordancewiththeCapitalRequirementsRegulation(CRR)issubtractedfromtheregulatoryriskcoverfunds.Thetotalbankrisks(calculatedataconfidencelevelof95%)arethencomparedtotheremaininglevelofriskcover.Accordingtothismethod,utilisationofcorecapitalwasbetween55%and72%,andutilisationoftotalcapitalwasbetween59%and81%asofallreportingdates.
Risk Report
Risk Report
Annual Report 201648
Moreover,aspartofaquarterlystresstestthatincludesallriskclasses,wesimulateaseriouseconomicdownturnandanextremelossofconfidenceinthemarketsoramongclientsfollowinganexternalevent.Utilisationofriskcoverageincludingsubordinatefundswasbetween46%and67%.Throughqualitativeinversestresstestsweanalysevariousscenarios,whichcouldbecriticaltothesurvivaloftheBank.ThesescenariosarebasedonthebusinessmodelofaprivatebankandonthemainsourcesofincomeandriskfortheBank.
InaccordancewiththerequirementsoftheCRR,theconsolidatedtotalratiointhereportsubmittedtothesupervisoryauthoritiesstoodat18.6%asper31December2016.Themandatoryminimumrequirementsforcorecapitalandtotalcapitalwereclearlyexceededduringtheentirefinancialyear.
TheBankusesderivativefinancialinstrumentsprimarilyashedginginstruments.InterestrateswapsintheOTCmarketandfuturesandoptionsonEurexarethepreferredproducts.Suchitemsarecloselyintegratedintotheriskmanagementsystem.
ThereportontheuseofderivativefinancialinstrumentsisincludedintheConsolidatedFinancialStatementsAnnex.
Asinthepreviousyear,norisksthatendangeredthecontinuedexistenceofBankhausLampeoritsperformancewereidentifiedneitheratthebalancesheetdatenorinthecourseofthereportingyear.Riskswerecoveredbasedonallmethodsofanalysisandatalltimesduringtheperiodunderreview.Allexecutedstresstestsconfirmedtheadequateriskcoverage.Allexecutedvaluationmeasuresconfirmedtheadequacyoftheriskcontrollingmeasures.
Inthefollowing,thematerialrisksasdefinedbytheBankareexplainedinmoredetail.
49
Credit Risks
Creditrisksincludepotentiallossesduetodefaultorachangeinthecreditratingofbusinesspartners.Theyaresubdividedintogeneralcreditrisks,counterpartyrisks,issuerrisksandcountryrisks.
TheBank’screditriskstrategyfollowsallqualitativeandquantitativerequirementsforriskcontrol,andformsthebasisofthecreditbusiness.Thefocusisonshort-termfinancinginGermany.Inordertoavoidinappropriateconcentrationsofrisk,thecreditriskstrategyspecifieslimitsforthetotalcreditrisk,grossandnetvolumesofcommitments,andotheraspects.
TheBank’screditcommitteeisresponsibleforthemanagementofcreditrisksinbothindividualcasesandthetotalportfolio.Supportedbyanearly-warningsystem,risksaremanagedbytheprofitcentresandindividualkeypersonnelincludingthebackoffice.Closeco-operationbetweentheriskcontrollingdepartmentandback-officefunctions,togetherwiththeprofessionalhandlingofproblematicloans,ensuresthepromptidentificationofpotentialrisks.Theclientcreditportfolioischaracterisedbyabove-averagecreditratings.
TheBankappliesawidelyusedandrecognisedcreditportfoliomodeltoquantifyportfoliorisk.Thekeyperformanceindicatoristhecreditvalue-at-riskintheclientcreditportfolioincludingbanksandissuersataconfidencelevelof99.9%foraone-yearperiod.Asat31December2016,thecreditvalue-at-riskcameto€55.3million.
Inaddition,migrationrisksfortheclientcreditportfolioincludingbanksarecalculatedatthesameconfidencelevel.Atyear-end,theriskcontributionstoodat€2.7million.Furthermore,thedefaultriskofcommitmentsasper31December2016wasdeterminedtobe€6.7million.
Theanalysesarecomplementedbyregularmodel-based,historicalandhypotheticalstresstestsandongoingmonitoringofrelevantearly-warningindicators.TheseprovidednoevidenceofdevelopmentsthreateningtheBank’scontinuedexistenceasagoingconcern.Theprocedureisbasedonspecificratingsystemsfortargetcustomergroups(retailclients,corporateclients,banksandrealestate)andtakesintoaccountbothquantitativeandqualitativecriteria.
Significantparameterandmethodspecificationsareregularlyreviewedand,ifappropriate,adjustedtotakeaccountofalteredconditions.Themethodsandmodelsusedforriskcontrolundergoanextensivevalidationprocessatleastonceeveryyear.
Boththeriskcontrollingdepartmentandthecreditbackofficesubmitcomprehensivequarterlyreportsonriskswithinthecreditportfolioandsignificantindividualcommitments,togetherwithinformationontheutilisationofthevariouslimitstothegeneralpartnersandtheadvisoryboard.Efficientad-hocreportingcompletesthereporting.Nounacceptablerisksweredetectedatanytimeinthereportingyear.
TheBankdoesnotusesecuritisationorloanderivativestohedgerisks.Itmitigatesrisksonanindividualbasisthroughvolumereductions,sub-participationsorbyobtainingadditionalcollateralorappropriatecovenants.Inaddition,portfolioeffectsareusedtominimisetotalrisk.
Intheyearunderreview,theBankreportedapositivevaluationresultinthecreditbusiness.Additionstoriskprovisioningwerebelowtheplannedstandardriskexpenses.
Risk Report
Annual Report 201650
Market Risks
Marketrisksarepotentiallossesduetodetrimentalchangesinmarketpricesorotherprice-influencingmarketparameters.Dependingontherelevantfactors,theycanbesubdividedintointerestratechangerisks,currencyrisksandotherpricerisks,aswellasspotrate,forwardandoptionrisks.Dependingontherelevantfactors,theycanbesubdividedintointerestratechangerisks,currencyrisksandpricerisks,aswellasspotrate,forwardandoptionrisks.Moreover,marketrisksalsoincludespreadrisksfrombondsandpromissorynoteloans.
Adetailedtradingstrategyisappliedtomanagemarketrisks.Itdefinesproprietarytradingasasupplementarysourceofrevenuethatcontributescorrespondinglytobasicprofitability.ProprietarytradingoccursmainlyineurosonEuropeanmarketsandstockexchangesandthuscurrencyrisksplayasubordinaterole.Thebankhasnoexposuretocommodityrisks.
Thelimitsystemislaiddowninthetradingstrategy.Itdefinesupperlosslimits,losslimits,risklimitsandvolumelimitsifapplicable,andincludesreportingregulationsaswellassanctionmechanismsforcasesofcriticallimitutilisations.Atyear-end,thelosslimitsforproprietarytrading,includingtheliquidityreserveof€21.6million,werebrokendownbytypeofriskasfollows:
// 42.7% spreadrisks// 23.2% pricerisks// 22.0% interestraterisks// 12.1% currencyrisks
Inaddition,alosslimitwassetupforcapitalmarkettransactionsmostlyasareservelimitof€10.0million.Alltheaforementionedlosslimitscountasriskcontributionsinthecalculationoftherisk-bearingcapacityinsteadofactualvalue-at-risks.Inthecaseofmostlylowlimitutilisations,thisrepresentsaconservativeapproach.Marketrisksaremanagedbyaninternalriskmanagementcommittee,whichmeetsatleastonceamonth.Theriskcontroldepartmentmonitorsriskscontrolledbytrading.
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TheBankusesthevariance-covarianceapproachasitsmaininstrumentforriskmeasurement.Usingthisapproach,itcalculatesrisksfrommarketpricechangesintheformofpotentiallossesbasedonhistoricaldatafromthelast250tradingdays.BankhausLampequantifiestherisksfrompotentialchangesinthemarketpriceaspartofthedailycontrolprocessataconfidencelevelof97.7%assumingaholdingperiodofonetradingday.Inaddition,risksarecalculatedonthebasisof99.0%andaten-dayholdingperiod.Asat31December2016,theseregulatoryparametersresultedinavalue-at-riskof€5.8millionforallproprietarytradingincludingtheliquidityreserveportfolioandthecapitalmarketbusiness.Limitallocation,specificationofriskparametersandriskevaluationmethodsareregularlycheckedandadjustedasnecessaryifconditionschange.
Tradingresults,riskestimatesandlimitutilisationsarecompiledeveryworkingdaydividedbyriskareaandbrokendowntothesub-portfoliolevel.Thisreportissubmittedtothegeneralpartners.Additionalspecialanalysesaswellashistoricalandhypotheticalstresstestscomplementthereporting.Thequalityoftheriskassessmentisensuredbyback-testinganalyses,inwhichthestatisticalassumptionsarecomparedwithactualempiricaltrends,andawiderangeofothervalidationmeasures.
Inthecaseofcriticalutilisations,theBankimplementsimmediatereductionsinitsriskpositionstoprotecttheupperlosslimitandlosslimitsataconfidencelevelof99.9%.Intheyearunderreview,therewerenocasesthatnecessitatedaction.
Risk Report
Interest Rate Risks in the Banking Book
Inaccordancewiththetradingstrategy,interestraterisksinthebankingbookarekepttoaminimumbasedonarefinancingpolicyandmanagedbythetreasurydepartmentseparatelyfromothermarketrisks.Additionalmonitoringisperformedbytheinternalriskmanagementcommittee.
Inordertoquantifyavalue-at-risk,amonthlyhistoricalsimulationiscarriedoutusingthenetpresentvaluemethodataconfidencelevelof99.9%withariskhorizonofoneyear.Forfixedinterestratepositions,agreedinteresttermsaretakenintoaccountthroughout.Forvariableandopen-endedinterestratepositions,appropriatemixingratiosofslidingaveragesareassumedbasedonexpertassessments.Implicitoptionsandpotentialspecialrepaymentsplayasubordinateroleduetoshort-termfixedinterestrates.
Amonthlyreporttothegeneralpartnersdetailsthecashvalues,cashflowstructuresandkeyriskfiguresfortheinterestratepositionsinthebankingbook,brokendownbysub-portfolio.Thereportalsocontainslimitutilisations,theresultsofstresstestsandback-testingandonaquarterlybasistheeffectsofinterestrateshockspursuanttoGermanregulations.Assignificantfixedinterestpositionsinthebankingbookareusuallyrefinancedorinterest-ratehedgedthroughsimultaneousback-to-backtransactionswithmatchingmaturitiesandtypicallyveryshortperiodsoffixedinterestrates,thistypeofriskisofminorimportancefortheBank.Asat31December2016,thevalue-at-riskcameto€1.5millionwithalosslimitof€5.0million.
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Annual Report 201654
Risks from Shareholdings
RisksfromshareholdingsaredefinedaspotentiallossesthatcouldarisefromtheprovisionofequityandmezzaninecapitalbytheBanktoothercompaniesincludingsupplementalloansandcapitalcommitments.
BankhausLampe’sstrategicobjectivesforshareholdingsaresetoutinaseparateshareholdingstrategy.AlloftheBank’sshareholdingsareclassifiedasstrategicholdings(includingprivateequity),otherfinancialholdings,andotherenterprises.TheyareallocatedtotheappropriateBankdivisionaccordingtotheoperationalmanagementandresponsibility.
ShareholdingriskiscontrolledbytheBankriskcontrollingdepartment.Inaddition,foreachofitsassociatedcompaniestheBankhasappointedariskcontrollereitheratthecompanyorattheBank.Majordecisionsonshareholdingsaremadeafteravotebythecreditdepartmentonacase-by-casebasisbytheBank’sgeneralpartnersand,tosomeextent,withinvolvementofthelimitedpartners.Moreover,aseparatelimitforthetotalvolumeofprivateequitydealsisalsoinplace.Thebusinessperformanceoftheshareholdingsisconstantlymonitoredandanalysed.
Aspartofinternalriskcontrol,capitalbackingisprovidedforallinvestmentsfollowingthesimpleriskweightingapproachinaccordancewiththeCRR,basedonariskcontributionof47.6%calibratedataconfidencelevelof99.9%.Thebasisforthiscalculationcomprisesthebookvaluesofshareholdings,mezzaninecapital,loansand,ifapplicable,additionalfundingobligationsfromopencapitalcommitments.Asat31December2016,thisresultedinaconservativelycalculatedriskcontributionof€49.2million.Ongoingmonitoringofearly-warningindicatorscompletestheriskmonitoring.
Incomprehensivequarterlyshareholdingsreportsandappropriatead-hocreporting,theriskcontrollingdepartmentinformsthegeneralpartnersandtheadvisoryboardabouttheindividualcapitalcomponentsofshareholdingsaswellasonallimportantdevelopmentsofthevariouscompanieswithrespecttoperformanceandrisk.TherewerenocriticaldevelopmentsfortheBankintheyearunderreview.
Forriskmanagementpurposes,BankhausLampeisgenerallygrantedextensiveinformationandvotingrightsintheindividualcompanies.Inaddition,thegeneralpartnersoremployeesoftheBanknormallysitonsupervisorybodies.
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Liquidity Risks
Liquidityrisksincludecall,maturity,refinancingandmarketliquidityrisks.
Themainobjective,setoutinaseparateliquiditystrategy,istosecuretheBank’ssolvencyatalltimesandatthesametimeoptimiseprofit.Sufficientliquidityfundsaremaintainedpermanentlytoavoidliquiditybottlenecks.Securitiesandderivativefinancialinstrumenttransactionsaregenerallyconcludedwithinthemostliquidmarkets.TheBankalsotakesECBeligibilityintoaccountinthecaseofannuitybondsandpromissorynoteloansforthetradingportfolio.Theliquidityreserveportfolioexclusivelyconsistsofhigh-qualityliquidassets.Forthemostpart,liquiditymaturitytransformationisconductedonaveryshort-termbasis.Thankstoacomfortabledepositsituationinclientbusiness,liquidityremainedverysoundthroughoutthepastyear.
TheBank’streasurydepartmentisresponsibleforcontrollingliquidityrisks.Therefinancingstructureisconstantlyoptimisedbytakingcostsintoaccount.Theinternalriskmanagementcommitteeisresponsibleformanagementoftherisks,whiletheriskcontrollingdepartmentisinchargeofmonitoringthem.
Amodel-basedmethodisnotappliedtoquantifyliquidityrisks.BankhausLampe’sconsistentlyverygoodliquiditysituationisdemonstrated,forexample,bytheliquidityratioaccordingtotheGermanLiquidityRegulation(LiqV),whichwas5.42asper31December2016,andwasconsistentlywellabovetheminimumrequirementof1.0.Theregulatoryliquiditycoverageratiocameto2.12asof31December2016.
TheBankusesdetailedmonthlyliquidityforecasts,earlywarningindicatorsandvariousstressteststomonitorliquidityrisks,whicharereportedtothegeneralpartners.SuchtestssimulateinparticulartheeffectsofsignificantdamagetotheBank’sreputationoranextremeeconomiccrisisontheBank’sliquiditysituation.Theresultsprovethatsufficientrefinancingwouldbeensuredevenifextremescenariosweretooccur.Additionalstatementsfromthetreasurydepartmentcomplementthereportingtothegeneralpartners.
Aconservativeliquiditypolicyandongoingcontrollingreduceliquidityrisksinmoneymarkettrading.Forpotentialemergencysituations,BankhausLampemaintainsasufficientliquidityreserveofdemanddepositsatalltimes.Marketliquidityrisksarerestrictedthroughlimitationofthepermissiblemarketsfortheindividualtradingportfoliosandbymeansofrigorousinternalrequirementsforcounterpartiesandproductselection.Inaddition,anappropriatecapitalchargeissetforthistypeofriskintherisk-bearingcapacitycalculation.Asat31December2016,theriskcontributionforproprietarytrading,includingtheliquidityreserve,was€4.8million.
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Operational Risks / Reputation Risks
Operationalriskscomprisetherisksoflossesincurredasaresultoftheinadequacyorfailureofinternalprocedures,peopleorsystems,orasaresultofexternaleventssuchasnaturaldisasters.Legalrisksarealsodefinedasoperationalrisks.
ReputationrisksareindirectordirectrisksofthelossoftrustofitsstakeholdersorthereputationoftheBankduetonegativeeventsrelatedtoitsbusinessoperations.TherebythelossofstakeholdertrustortheBank’sreputationmusthaveapotentialimpactontheBank’scorebusiness.Stakeholdersincludeclients,competitors,businesspartners,media,thegeneralpublic,supervisoryauthorities,governmentinstitutions,employeesandthegeneralpartnersoftheBank.
AspecialstrategyforoperationalandreputationrisksformsthebasisforhandlingoperationalrisksthroughouttheBank.Thegeneralpartnersareresponsibleformanagingthistypeofrisk.Riskcontroliscarriedoutbyspecificofficersinthespecialistdepartments.Tolimitreputationrisks,theBankhassignificantlyexpandeditsspecificationsandrestrictionsintheyearunderreview.Inparticular,theBankdefinedexplicittransactionsinwhichitsisnotallowedtoparticipateknowinglyneitherdirectlynorindirectly.
LawfirmsretainedbytheBankandthelegaldepartmentofthebankareresponsibleforlegalrisks.Animportanttoolforriskreductionhereistheuseofstandardisedagreementscustomaryintheindustry.Adequateprovisionshavebeenrecognisedforcurrentlitigation.
TheparticularlysensitiveareaofITrisksiscoveredbyextensiveandappropriateprotectivemeasuresoftechnicalandorganisationalcharacter.TheBankalsocontinuallyrefinesitsinformationsecurityandbusinesscontinuitymanagementsystemsinaccordancewithprevailingstandards.Forthispurpose,thecompanyappointedaninformationsecurityofficerwhoisindependentfromitsITdepartment.Thecentraloutsourcingmanagementoftheorganisation/ITdepartmentisinchargeoftheoutsourcingofservices.
TheBankdoesnotusemodel-basedquantificationofoperationalandreputationalrisks.Itsmethodsofanalysisconsistofthemaintenanceofaninternalriskandlossdatabase(forcasesfrom€1,000upward)togetherwitharegularbank-wideself-assessmentprogramme.BankhausLampeusesthebasisindicatorapproachinaccordancewithCRRtomeasuretheregulatorycapitalrequirementforoperationalrisks.
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Fortheinternalriskcalculation,theregulatoryriskcovercalculatedatgrouplevelisadjustedforpotentialnewordiscontinuedbusinessdivisionsorshareholdings.Tocoverreputationrisks,theratioissubsequentlymultipliedbyapre-determinedfactortoraiseittoanappropriatelevel.Asat31December2016,theriskcontributionthusstoodat€30.0million.
ThegeneralpartnersarealwayskeptfullyinformedabouttheBank’soperationalandreputationalrisks.Thisisachievedthroughthequarterlystandardreportstakenfromtheriskandlossdatabase,aregularpresentationonthedevelopmentofselectedoperationalandreputationalrisks,andadhocreportingonspecialcases.
Thereductionofoperationalandreputationalrisksisachievedprimarilythroughclosecommunicationbetweentheriskunitsandthedecision-makersandcase-by-caserisk-mitigatingaction.Raisingriskawarenessamongallemployeescreatestransparencyandreducestheriskofloss.Reputationrisksarealsolimitedthroughspecificbusinessguidelines.
Strategic Risks
Strategicrisksrefertotheuncertaintyrelatingtoearningsperformanceduetobusinesspolicydecisionsorchangedconditionssuchasmarketenvironment,customerbehaviourortechnologicaladvances.
ManagementofstrategicrisksbytheBank’sgeneralpartnersisbasedonanannualforwardprojectionoftheoverallbankstrategyaspartofthestrategyandplanningprocesses.Thedecisionmakersaresupportedintheirstrategicmanagementbythequarterlyshort-termincomestatement,themonthlyprofitandlossaccount,andanalysesoftheearningsstructureinresponsetospecificsituations.Thisprocessensuresclosemonitoringofcompliancewiththestrategicgoalsandguidelines.
Risk Report
Subsidiaries and Holdings
Besidestraditionalassetmanagementservices,LampeAssetManagementGmbHalsooffersindividualspecialtyfundmandatesandmutualfundconceptswithinvestmentsinbonds,equitiesandcommodities.Thus,thecompanyoffersacomprehensiveandprofessionalarrayofassetmanagementservices.
Itstailor-madeinvestmentsolutionsarebasedonanactiveapproachtoassetmanagementthatfocusesontheabsolutereturnachievablefortheclient.LampeAssetManagementco-operatesinsettlementwithmanyrenownedcustodianbanksandcapitalinvestmentcompanies.Thecompanyisasought-afterpartnerforsegmentfundsintheMasterKVGenvironment.Riskmanagementisofparticularimportance,beingafundamentalelementofportfoliomanagement–especiallyinthecaseofguaranteedvaluemandates.
Inadditiontotraditionalinvestments,LampeAssetManagementGmbHisalsoincreasinglyofferinginvestmentsolutionsthataregearedtowardssustainabilitycriteria.Inthisarea,LampeAssetManagementGmbHco-operateswithoekomresearchAG.
Theassetmanagementbusinesswithinstitutionalclientsputinaverygoodperformancein2016.Specialtyandmutualfundsregisteredaslightlynegativeperformance.Whilethemanagedvolumesintheinsuranceandcorporateclientsegmentdeclined,assetsundermanagementforassociations,familyofficesandchurch-relatedinvestorsincreasedsignificantly.Thefocusofthenewbusinesswasonequityfundsandabsolute-returnstrategies.Traditionalfixed-incomeproductsdeclinedduetothelow-interestrateenvironment.
Thecompany’sresponsetoachangedcapitalmarketenvironmentisamoreglobalapproachtoinvestmentsolutionsaswellasinnovativemulti-assetconceptsandrisk-basedinvestmentstrategies.
Inachallengingcapitalmarketenvironment,assetsundermanagementwereslightlydownonayearagoat€6.36billion(previousyear:€6.45bn).
Onceagain,theeditorialteamofRenditeWerkhashonouredthebestendowmentfundsoftheyear.TheendowmentfundLAM-Stifterfonds-Universalwonthesecondplaceinthecompetition.ThenewestLAMmutualfund,LAM-Euro-CorporateHybride,wasratedforthesecondtimebyTelosGmbH.ThefundwasawardedanAA+ratingasitmeetstheveryhighstandardsofquality.
Subsidiaries and Holdings
59Subsidiaries and Holdings
TheBankhausLampeGroupcomprisesseveralsubsidiariesandvariousshareholdingsinadditiontoBankhausLampeKG.Withacomprehensiverangeofbankingandadvisoryservices,thegrouptherebymeetsitsclients’manyandvariedrequirements.
Annual Report 201660
LampeBeteiligungsgesellschaftmbHoffersBankhausLampeKG’smedium-sizedcorporateclientsarangeofcomplementaryservicesforallaspectsofacquisitionandmanagementofcorporateinvestmentsofanytypeorlegalform.Inaddition,itsservicesalsoincludethestructuringandexecutionofcustomisedfiduciaryoperations.
LampeCreditAdvisorsGmbHoffersadvisoryservicesforcomplexissuesrelatingtoEuropeanfinancialinstitutions,insurancecompaniesandpublic-sectorinstitutions.Theseservicesincluderegulatoryadvice,thestructuringandarrangementofinvestmentandrefinancingsolutions,portfolioandriskmanagementservicesandcomprehensiveadvisoryandotherservicesrelatingtostrategicpartnershipsandequityholdings.
LampeCreditAdvisorsGmbHisapartnerinCaplanticGmbH,ajointventureestablishedbetweenBankhausLampe,Nord/LBandTalanxGroup.Caplanticprovidesbanks,insurancecompaniesandinstitutionalinvestorswithadministrativesupport,riskmodellingandreportingonvariousinvestmentproducts,especiallyalternativeassetclasses.Caplanticalsostructuresinnovativeinvestmentproducts,suchasalternative(credit)fundsormanageddebtaccountsthatinvestinloansandcomparablefinancialinstruments.
LampeEquityManagementGmbHoffersinstitutionalinvestorsexclusiveinvestmentopportunitiesinthefieldofrealassets.
InvestmentsintheenergyinfrastructuresectoraremadeviatheholdingcompanyCEEHoldingGmbH&Co.KGaA.InconjunctionwithaLuxembourg-basedspecialistfund,LampeAlternativeInvestmentsS.A,SICAV-FIS(withthethreesub-fundsLAI-CEESidefundI,IIandIII),institutionalinvestorshavepooledroughly€460millioninequityandthusachievedatotalinvestmentvolumeofsome€1.2billion.
TheCEEinvestmentscurrentlyinclude28photovoltaicparkswithatotaloutputof300megawatts,ofwhich22inGermany,threeinFranceandthreeinEngland.Inaddition,thecompanyhasinvestedin14GermanandfourFrenchwindparkswithatotaloutputof256megawatts.TheCEEgrouptherebyexpandeditsportfolioofrenewableenergiesplantstoanoutputofmorethan550megawatts.
Inadditiontotheseactivities,CEEHoldinghasworkedwithRWEInnogysince2011toinvestintechnologycompaniesinthefieldofcleantech,thusbenefitingfromtheindustrialexpertiseoftheRWEGroup.
Foundedin2014,CEEFundAdvisoryGmbH(CEEFA)isaninvestmentadvisoryfirmthatspecialisesininfrastructureinvestments.CEEFAprovidesadvisoryservicestotheinvestmentmanagerofaninfrastructuredebtfundwithatargetvolumeof€1billion.Thefundoffersinstitutionalinvestorstheoptiontoparticipateinprofitableinfrastructureprojects.DeutscheBankactsasdistributionpartnerforthisinfrastructuredebtfund.
61Subsidiaries and Holdings
Annual Report 201662
ThesubsidiaryLampePrivatinvestManagementGmbHpermitsaselectgroupofentrepreneuriallymindedprivateinvestorstobuyupmajorityandminorityshareholdingsinallsectorsofGermany’sMittelstand.Aconsciousdecisionhasbeentakennottousefundstructuressothateveryinvestmentisflexibleandgearedtotherelevantinvestor’sneeds,aswellastoensurelong-termsupportfortherespectivecompanies.
TheinvestmentfundLampeMezzanineFondsIGIKGGmbH&Co.KG,establishedbythesubsidiaryLampeCapitalFinanceGmbHin2014,representsaninterestinginvestmentalternativeforinstitutionalinvestorsespeciallyinthecurrentlow-interestenvironment,whileprovidingcompanieswithanadditionalsourceoffinancingintheformofmezzaninecapital.ThefundsraisedareexclusivelyinvestedinGermanMittelstandcompanies,wheretheyareusedtofinancegrowthsituationsorcorporatetransactions.Withtheinvestmentsmadebytheendof2016,aboutonethirdofthefundshavebeenallocatedthusfar.
Foundedin2015,LampeInvestmentManagementGmbH(LIM)istheinvestmentmanagementcompanyofBankhausLampeGroup.Thefirmmanagesalternativeinvestmentfunds(abbreviated“AIF”)forsemi-professionalandprofessionalinvestors,inparticularinareasofenergy&infrastructure,privateequity,venturecapital&mezzanineaswellasrealestate.Besidestherelatedcoreservicessuchasadministration,portfolioandriskmanagement,thecompanyalsooffersplanningandstructuringservicesforsettingupnewAIF.Thecompany’smanagedfundvolumestandsataround€215million.
VilmarisManagementGmbHprovidesfurtherinvestmentopportunitiesintheshippingsector.ThisisthemanagementcompanyofVilmarisGmbH&Co.KGaA,ashippinginvestmentcompanythatpurchases,sellsandcharterssea-goingvessels.Itsportfoliocurrentlyconsistsofonebulkcarriersandanewlybuiltcontainershipthatwasaddedin2013.
BankhausLampehasaccesstotheAustrianmarketthroughitsmajorityholdinginVienna-basedDALEInvestmentAdvisorsGmbH.DALEhaslongstandingexperienceinthemanagementofsignificantfamilywealthandprivatefoundations.DALEalsoincreasinglymanagespensionplansofprofessionalassociationsandotherpubliccorporations.Moreover,DALEhasestablisheditselfinthefieldofethicalandsustainableinvestmentsandisspecialisedinanabsolute-returnbased,systematicapproachtoassetmanagement.BankhausLampe’sGermanclientsalsobenefitfromthisexpertiseasDALEactsasanadvisortotheLampeUniversalSolidFonds.DALEmanagedatotalof€1.8billionininstitutionalandprivateassetsasper31December2016.ThismakesDALEoneofthelargestmulti-familyofficesintheGerman-speakingcountries.
Inthesecondhalfof2016,BankhausLampesoldthemajorityofits50%stakeinUniversal-Investment-GesellschaftmbH,Frankfurt/Main,toMontaguPrivateEquity,aUK-basedfirm.Withfundsundermanagementofsome€290billion(asper31December2016),morethan1,000specialtyandmutualfundmandatesandapproximately650staff,Universal-InvestmentisoneofGermany’smostsuccessfulinvestmentcompanies.ItremainsanimportantpartnerforBankhausLampeGroupinthespecialtyfundarea.
63Subsidiaries and Holdings
Consolidated Financial Statements for 2016
Consolidated Balance Sheet for Bankhaus Lampe KGasat31December2016
Assets
in euros 2016 2015inTeuros
Cash Reserves
a)Cashonhand 708,279.55 635
b)Balanceswithcentralbanks 548,921,848.20 455,058
thereof:atDeutscheBundesbank 548,921,848.20 549,630,127.75 (455,693)
Loans and advances to banks
a)Dueondemand 125,236,656.83 174,910
b)Otherclaims 70,276,138.06 195,512,794.89 72,331
Loans and advances to clients 1,392,572,453.59 1,236,448
thereof:securedbyliensonproperty 42,628,439.77 (63,583)
thereof:loanstomunicipalities 45,268,000.00 (55,400)
Debt securities and other fixed income securities
Bondsanddebtsecurities
a)Frompublicissuers 50,655,477.08 15,043
thereof:eligibleascollateralforadvancesfromDeutscheBundesbank 50,655,477.08 (15,043)
b)Fromotherissuers 110,039,584.59 160,695,061.67 133,313
thereof:eligibleascollateralforadvancesfromtheDeutscheBundesbank 110,039,584.59 160,695,061.67 (133,313)
Equity and other variable-yield securities 400.00 0
Trading portfolio 452,684,001.06 440,633
Shareholdings 42,346,089.42 30,657
thereof:banks 8,147,193.04 (7,453)
thereof:financialservicesinstitutions 8,605,068.01 (5,923)
Shareholdings in affiliated companies 352,000.00 276
thereof:banks 0.00 (0)
thereof:financialservicesinstitutions 0.00 (0)
Shareholdings in associated companies 0.00 28,706
Fiduciary assets 11,855,266.91 11,889
thereof:fiduciaryloans 11,855,266.91 (11,889)
Intangible assets 4,290,472.19 5,224
Property, plant and equipment 28,243,885.24 28,949
Other current assets 30,621,889.26 22,348
Accruals and deferred items 16,403,777.10 1,784
Total assets 2,885,208,219.05 2,658,206
Annual Report 201666
Liabilities
in euros 2016 2015inTeuros
Liabilities to banks
a)Dueondemand 71,957,522.07 49,368
b)Subjecttoanagreedtermorperiodofnotice 65,480,816.22 137,438,338.29 49,333
Liabilities to clients
Otherliabilities
a)Dueondemand 1,694,393,633.90 1,850,335
b)Subjecttoanagreedtermorperiodofnotice 426,166,168.25 2,120,559,802.15 2,120,559,802.15 225,399
Trading portfolio 32,844,154.61 23,860
Fiduciary liabilities 11,855,266.91 11,889
thereof:fiduciaryloans 11,855,266.91 (11,889)
Other liabilities 31,578,247.20 14,943
Accruals and deferred items 17,855,139.45 1,586
Provisions
a)Provisionsforpensionsandsimilarobligations 10,866,608.84 11,308
b)Taxprovisions 2,882,104.47 4,862
c)Otherprovisions 66,926,785.82 80,675,499.13 26,436
Subordinated liabilities 27,723,640.28 27,724
thereof:duewithintwoyears 723,640.28 (724)
Profit participation capital 20,000,000.00 20,000
thereof:duewithintwoyears 10,000,000.00 (0)
Funds for general banking risks 56,950,000.00 36,900
thereofspecialitemsaccordingtoSection340eParagraph4GermanCommercialCode(HGB) 4,250,000.00 (4,200)
Equity
a)Subscribedcapital 70,000,000.00 70,000
b)Capitalreserve 205,500,000.00 194,000
c)Othersurplusreserves 16,749,861.39 16,748
d)Adjustmentsforminorityinterests 478,269.64 517
e)Consolidatedprofit 55,000,000.00 347,728,131.03 23.000
Total liabilities 2,885,208,219.05 2,658,206
Contingent liabilities
Liabilitiesarisingfromguaranteesandwarrantyagreements 74,965,931.22 80,466
Other liabilities
Irrevocablelendingcommitments 98,298,310.07 57,397
67Consolidated Balance Sheet for Bankhaus Lampe KG
Consolidated Profit and Loss Accountof Bankhaus Lampe KG fortheperiodfrom1Januaryto31December2016
Expenses
in euros 2016 2015inTeuros
Interest payable 24,459,789.43 29,375
Commission payable 10,190,948.43 22,147
General administrative expenses
a)Personnelexpenses
aa)Wagesandsalaries 82,876,505.89 76,215
ab)Socialsecuritycontributionsandexpendituresforpensionsandrelatedbenefits 10,413,644.63 93,290,150.52 8,403
includingpensions:2,517,879.83EUR (2,270)
b)Otheradministrativeexpenses 62,481,926.40 155,772,076.92 54,694
Depreciation and valuation allowances on intangible assets and property, plant and equipment 5,845,125.10 3,876
Other operating expenses 5,529,693.61 2,426
Depreciation and valuation allowances to accounts receivable and certain securities and allocation of provisions in the credit business 12,244,523.77 0
Allocation to fund for general banking risks 20,000,000.00 0
Depreciation and valuation allowances to shareholdings, shareholdings in affiliated companies and securities treated as fixed assets 0.00 5
Taxes on income and profit 10,828,833.76 4,582
Other taxes not shown under “other operating expenses” 62,023.30 96
Consolidated net income for the year 55,341,475.08 23,377
Total expenses 300,274,489.40 225,195
Annual Report 201668
Income
in euros 2016 2015inTeuros
Interest earned on
a)Creditandmoneymarkettransactions 30,316,160.77 35,040
b)Fixed-incomesecuritiesanddebtregisterclaims 22,439,752.67 52,755,913.44 26,504
Current income from
a)Equityandothervariable-yieldsecurities 9,135,073.96 981
b)Shareholdings 11,088,977.37 20,224,051.33 3,205
Earnings from associated companies 0.00 6,789
Commission earnings 110,212,159.42 132,488
Net earnings from financial transactions 276,723.62 4,323
thereof:allocationaccordingtoSection340eParagraph4GermanCommercialCode(HGB) 50,000.00 (500)
Earnings from write-ups to accounts receivable, certain securities and from reversal of provisions in the credit business 0.00 9,198
Earnings from write-ups to to shareholdings, shareholdings in affiliated companies and securities treated as fixed assets 108,431,584.54 0
Other operating earnings 8,374,057.05 6,666
Total income 300,274,489.40 225,195
Net income for the year 55,341,475.08 23,377
thereof:profitduetootherpartners -341,475.08 -377
Profit carryforward from previous year 0.00 0
Withdrawal from capital reserves 0.00 0
Withdrawals from retained earnings 0.00 0
Advance distribution 0.00 0
Allocations to retained earnings 0.00 0
Advance withdrawals from partners 0.00 0
Group profit 55,000,000.00 23,000
69Consolidated Profit and Loss Account
71Auditors’ Certificate
WehaveauditedtheconsolidatedfinancialstatementspreparedbyBankhausLampeKGcomprisingthebalancesheet,theprofitandlossaccount,theannexaswellasthecashflowstatementandconsolidatedstatementofchangeinshareholders‘equity,andthegroupmanagementreportforthebusinessyearfrom1Januaryto31December2016.InaccordancewiththerequirementsofGermancommerciallaw,thepreparationoftheconsolidatedfinancialstatementsandthegroupmanagementreportistheresponsibilityofthegeneralpartnersoftheCompany.Ourresponsibilityistoexpressanopinionontheannualconsolidatedfinancialstatementsandtheconsolidatedannualreportbaseduponouraudit.
WeconductedourauditoftheconsolidatedfinancialstatementsinaccordancewithSection317oftheGermanCommercialCode(HGB)andgenerallyacceptedGermanstandardsfortheauditoffinancialstatementspromulgatedbytheInstitutderWirtschaftsprüfer(InstituteofPublicAuditorsinGermany)(IDW).Thesestandardsrequirethatweplanandperformanauditsuchthatanymisstatementsandinfringementsthatwouldmateriallyaffectthepresentationofnetassets,financialpositionandresultsofoperationsintheconsolidatedfinancialreportinaccordancewithprinciplesofproperaccountingandinthegroupmanagementreportaredetectedwithreasonableassurance.KnowledgeofthebusinessactivitiesandtheeconomicandlegalenvironmentoftheGroupandexpectationsregardingpotentialmisstatementsaretakenintoaccountinthedeterminationofauditprocedures.Theeffectivenessoftheaccounting-relatedinternalcontrolsystemandtheevidencesupportingthedisclosuresintheconsolidatedfinancialstatements
andthegroupmanagementreporthaveprimarilybeenexaminedonarandomsamplebasiswithintheframeworkoftheaudit.Theauditincludesassessingtheannualfinancialstatementsofthecompaniesincludedintheconsolidation,thedeterminationofthecompaniestobeincludedintheconsolidation,theaccountingandconsolidationprinciplesusedandsignificantestimatesmadebytheCompany‘sgeneralpartners,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatementsandthegroupmanagementreport.Webelievethatourauditprovidesareasonablebasisforouropinion.
Ouraudithasnotledtoanyreservations.
Inouropinion,basedonthefindingsofouraudit,theconsolidatedfinancialstatementscomplywiththelegalrequirementsandgiveatrueandfairviewofthenetassets,financialpositionandresultsofoperationsoftheGroupinaccordancewiththeprinciplesofproperaccounting.ThegroupmanagementreportisconsistentwiththeconsolidatedfinancialstatementsandasawholeprovidesasuitableviewoftheGroup‘spositionandsuitablypresentstheopportunitiesandrisksoffuturedevelopment.
Dusseldorf,13March2017
PricewaterhouseCoopersGmbHWirtschaftsprüfungsgesellschaft
PeterKleinschmidt ppa.RalfScherelloWirtschaftsprüfer Wirtschaftsprüfer(GermanPublicAuditor) (GermanPublicAuditor)
Auditors’ Certificate
Scope of Consolidation
InadditiontoBankhausLampeKG,thescopeofconsolidationncludesthefollowingcompanies:
Basic Accounting Principles
BankhausLampeKGisheadquarteredinBielefeldandregisteredunderthecommercialregisternumber12924atthedistrictcourtofBielefeld.
TheconsolidatedfinancialstatementsofBankhausLampeKGasat31December2016werepreparedinaccordancewiththeprovisionslaiddownintheGermanCommercialCode(HGB)inconjunctionwiththeRegulationonAccountingforCreditandFinancialServiceInstitutions(RechKredV).
PursuanttoSection313HGB,theseconsolidatedfinancialstatementshaveanexemptingeffectonthecompaniesincludedintheListofShareholdings,publishedintheelectronicBundesanzeiger(GermanFederalGazette),withinthemeaningofSection264Paragraph4HGB.
Theconsolidatedfinancialstatementscomprisethebalancesheet,theprofitandlossstatement,thenotes,thecashflowstatementandthestatementofchangesinequitycapital.Furthermore,agroupmanagementreportpursuanttoSection315HGBhasbeenprepared.
100 %
25
Lampe Immobilien Verwaltungs GmbH, Dusseldorf
100 %
Lampe UI Holding GmH & Co. KG, Dusseldorf
5,917
100 %
Lampe Equity Management GmbH (subgroup), Hamburg1)
-686
100 %
Lampe Beteiligungsgesell-schaft mbH, Dusseldorf 1)
1,100
100 %
Lampe Immobilien GmbH & Co. KG, Dusseldorf
51
100 %
TETRARCH Aktiengesell-schaft, Dusseldorf 1)
50
Share in company
Equity in thousand
euros
61 %
DALE Investment Advisors GmbH, Vienna
1,269
100 %
Lampe UI Beteiligungs GmbH, Dusseldorf
24,631
100 %
Lampe Verwaltungs- GmbH, Dusseldorf
6,084
100 %
Lampe Private Advisory GmbH (previously Poseidon Beteiligungs- GmbH), Bielefeld1)
52
100 %
Lampe Asset Management GmbH, Dusseldorf 1)
3,000
100 %
Lampe Credit Advisors GmbH, Dusseldorf
1,021
100 %
BTF Beteiligungs- und Treuhandgesellschaft mbH, Frankfurt/Main1)
52
Consolidated Financial Statements AnnexGeneral Disclosures
1) A profit-and-loss transfer agreement exists with Bankhaus Lampe KG
Annual Report 201672
Duetothesaletoathirdparty,Universal-Investment-GesellschaftmbHisnolongerregardedasanassociatedcompanyandthusnotconsolidated.Thesaleledtoanearningseffectof€137.4million.
Othergroupcompanieswerenotincludedasthecompaniesareofsecondaryimportanceforthenetassets,financialpositionandresultsofoperationpursuanttoSection296Paragraph2HGB.
Shareholdingsinsubsidiarycompaniesthatdidnothavetobeincludedarestatedathistoricalcostunderfinancialassets.
Consolidation principles
Thecapitalconsolidationofthesubsidiariesacquiredbefore31December2009wasdoneaccordingtothebookvaluemethod.Theacquisitioncostsofanaffiliatedcompanywereoffsetagainsttheparentcompanyshareinitsequitycapitalatthetimeoftheaffiliatedcompany’sacquisitionorinitialconsolidation.Since1January2010,capitalconsolidationhasbeendoneaccordingtotherevaluationmethod.AcquisitioncostsofanaffiliatedcompanyareoffsetagainsttheGroup‘sshareinequityatthatdateatwhichthecompanybecameasubsidiary.Equityofthesubsidiaryissetattheamountcorrespondingtothepresentvalueofassets,liabilities,prepaidanddeferreditemsandspecialitemstobeincludedintheconsolidatedfinancialstatements(ifapplicable,afteradjustmentofthevaluationratespursuanttoSection308Paragraph2HGB).Ifadifferenceremainsontheassetsideafteroffsetting,itisshownintheGroupbalancesheetasgoodwillundertheposition“intangibleassets“andisdepreciatedaccordingtoscheduleovertheexpectedusefullife.Adifferenceaccruingontheliabilitiessideisshownundertheitem“Differencefromcapitalconsolidation“afterequity.
Intra-Groupreceivablesandliabilities,provisions,contingentliabilitiesandotherliabilities,aswellasexpensesandincome,areoffsetagainsteachother.InterimresultsthatareofsecondaryimportancetoprovidinganaccurateviewoftheGroup‘snetassets,financialpositionandresultsofoperationsarenoteliminated.
73Consolidated Financial Statements Annex
Group Accounting Principles and Valuation Methods
TheannualfinancialstatementsofBankhausLampeKGandthedomesticandforeignsubsidiarycompaniesincludedintheconsolidatedfinancialstatementsarepreparedinaccordancewithstandardaccountingprinciplesandvaluationmethods.
Theaccountingprinciplesandvaluationmethodshaveessentiallyremainedunchangedfromthepreviousyear.
Therehasbeenanamendmenttotheaccountingprinciplesandvaluationmethodsinconnectionwiththeintroductionofthetradingsystemforforeigncurrencytransactions.Intheprofit-and-lossaccount,incomeandexpensesfromcurrencyconversionarenotbalancedinthetradingportfoliobutreportedunder“otheroperatingearnings”and“otheroperatingexpenses”,respectively.Incomeandexpensesfromforeigncurrencytransactionsinthetradingportfolioarereportedasnetincomeorthenetexpensesinthetradingportfolio.
Inaddition,accrualsforsecuritiescommissionsfromvolume-basedfeemodelshavebeenallocatedtotheaccountingperiodduetofurtherdevelopmentoftherespectivesystems.
Loansandadvancestobanksandclientsarealwaysreportedattheirnominalamountorattheiracquisitioncosts.Allforeseeablecreditandcountryriskshavebeentakenintoaccountbysettingupspecificvaluationallowancesandprovisions.
Latentcreditriskisaccountedforbygeneralvaluationallowancesaccordingtocommerciallawprinciples.Furthermore,thereisaprovisionforgeneralbankingriskspursuanttoSection340fHGB.Forthepurposeofshowingriskprovisioningintheprofitandlossstatement,theoptionofcompensationofexpensesandrevenuewasapplied.
Separatevaluationunits(micro-hedges)areformedforthevaluationofownissues,selectedclienttransactionsandsinglecreditsofthenon-tradingportfolio.Theobjectiveofmicro-hedgesistocoverinterestfluctuationsrelatedtoassetsanddebtinstrumentsviaderivativeswithmatchingvalues,currenciesandmaturities.
Thesemicro-hedgesareformedinaccordancewiththeregulationssetoutinSection254HGBandthereportingprinciplesforfinancialderivatives(IDWRSHFA35).Thesehedgingrelationshipsendwhentheunderlyingtransactionorthehedginginstrumentmatures,issoldorexercised,ortherequirementsfortheformationofvaluationunitsarenolongermet.
Thesevaluationunitsareaccountedforunderthenethedgepresentationmethod.Usingthismethod,balancingvaluechangesresultingfromthehedgedrisk(effectivepart)arenotstatedonthebalancesheet.Ifthevaluationunitresultsinanunrealisedgain,itisnottakenaccountof.However,ifthenon-effectivepartofthevaluechangesfromthehedgeditemandhedginginstrumentsresultsinaloss,acorrespondingprovisionismade.
Forecastingandtheretroactivelyassessingthevaluationunit‘seffectivenessisdonebywayofthecriticaltermmatchmethodasthetermsforthehedgeditemandthehedginginstrumentsareworkingintheoppositedirection.
Annual Report 201674
Asofthebalancesheetdate,liabilitieswithabookvalue€60millionandderivativeswithapositivemarketvalueof€51.5millionwerehedgedinvaluationunits.Thederivativesusedashedginginstrumentshaveanegativemarketvalueof€52.1million.
Therearenovaluationunitswithahighprobabilityforexpectedtransactions.
Henceforth,thestrictlower-of-cost-or-marketprincipleisappliedtosecuritiesfromtheliquidityreservepursuanttoSection340eParagraph1Clause2HGBinconjunctionwithSection253Paragraph4HGB.
Financialinstrumentsinthetradingportfolioareassessedatfairvalueminusariskpremium.Fairvalueistheamountatwhichanassetcouldbeswappedbetweencompetentbusinesspartnerswhoarewillingtoenterintoacontractandwhoareindependentofeachotheroratwhichaliabilitycouldbesettled.Therewasanactivemarketforallfinancialinstrumentsshowninthetradingportfoliosothatthefairvaluecorrespondstothemarketprice.
Thetradingportfoliocomprisesallfinancialinstrumentsthatarepurchasedorsoldwiththeintentofgainingashort-termproprietary-tradingprofit.Liabilitiesthatareenteredintowiththeintentofrepurchasingthemintheshorttermforthepurposeofgainingatradingprofitareshownastradingliabilities.
Inordertoaccountforpossibleresidualrealisationrisks,theamountresultingfromthemarketvaluationisreducedbyariskpremium,whichisdeductedfromtheassetsidetradingportfolio.Theriskpremiumconstitutesavalueatriskaccordingtothevariance-covariancemethodpursuanttoSection365CRR.Thecalculationisbasedonamonitoringperiodof250days,aholdingperiodoftentradingdaysandaconfidencelevelof99%.Asper31December2016,theriskpremiumcameto€5,267thousand.
Shareholdingsandnon-consolidatedsharesinaffiliatedcompaniesareshowninthebalancesheetatamortisedacquisitioncostsaccordingtotheregulationsapplyingtofixedassets.Incaseofanticipatedpermanentdeclinesinvalue,unscheduleddepreciationsaremade.Ifthereasonsthatledtodepreciationnolongerexist,awrite-upiscarriedoutuptoamaximumoftheacquisitioncosts.Asinpreviousfiscalyears,securitiesmanagedasfixedassetholdingsarenotpartoftheportfolio.Thesettingoffpermissibleaccordingtocommerciallawisapplied.
RepurchaseagreementsarereportedpursuanttotheapplicableprinciplesofSection340bHGB.Securitieslentinsecuritieslendingtransactionsremainpartofthebalancesheetwhereasborrowedsecuritiesarenotstatedonthebalancesheet.
Property,plantandequipment,aswellaspurchasedintangibleassets,arelistedonthebalancesheetattheirrespectiveacquisitionorproductioncosts,reducedbyscheduleddepreciations.Ifpermanentdeclinesinvalueareanticipated,unscheduleddepreciationsaremade.Byanalogywiththeapplicabletaxregulations,certainitemsofthefixedassetsaretreatedaslow-valueassetsforreasonsofsimplicity.
75Consolidated Financial Statements Annex
Deferredtaxesaredeterminedfortimedifferencesbetweenthecommercial-lawandtax-lawvaluationratesofassets,liabilitiesandprepaidanddeferreditems.Inadditiontothebookingdifferencesrelatedtotime,taxlossescarriedforwardareaccountedfor.DuetoBankhausLampeKG’slegalform,deferredtaxesaredeterminedonthebasisofanincometaxrateofcurrently15.8%,whichcomprisesonlytradetax.Anoveralltaxburdenresultingfromthiswouldbeshowninthebalancesheetasdeferredtaxliability.Intheeventoftaxrelief,thecorrespondingoptiontocapitalisewouldnotbeused.Intherelevantfinancialyear,therewasanoveralldeferredtaxassetthatwasnotshowninthebalancesheet.
AccruedanddeferreditemsarecreatedpursuanttotheapplicableprinciplesofSection250HGB.Theseitemsaredeferredcorrespondinglyasincomeorexpensesintheaccountingperiod.
Allotherassetsarestatedonthebalancesheetattheiracquisitioncostortheirfairvalue.
Liabilitiesarestatedonthebalancesheetattheirrespectiveamounttobepaid.
Provisionsforpensionsandsimilarliabilitiesarecalculatedonthebasisofbiometricprobabilities(guidelinetablesHeubeck2005G)accordingtotheentryageactuarialcostmethod.Thereportedpensionprovisionsincludefirmcommitments.Pensionincreasesarecurrentlyaccountedforwithanannualadjustmentrateof1.60%.Thediscountrateappliedtothepensionobligationswas4.01%.Thebankutilisestheoptionofusingtheaveragemarketinterestrateforanassumedmaturityof10years,whichisdeterminedandpublishedbytheBundesbank.ThebalanceasperSection253Paragraph6Clause3HGBcomesto€740thousand.TheinterestrateusedisbasedontheBundesbankprojectionpublishedon31October2016.
Inordertofulfiltheobligationsfromdeferredcompensationpaymentsofemployees,therespectivefinancialresourceshavebeeninvestedininvestmentfundsorqualifyinginsurancepolicies.TheinvestmentfundsareheldintrustforBankhausLampeKG,andothercreditorshavenoaccesstothem.Thequalifyinginsurancepoliciesarepledgedtotherespectiveemployees.Thevaluationiscalculatedbasedonafairvalueof€2,005thousand;thisvalueisbalancedagainsttheindividualunderlyingliabilities,whichcameto€2,378thousand.Theliabilitysurplusof€373thousandisenteredunderprovisions.Acquisitioncostsamountto€546thousand.Thebalancedinterestexpensefromthisliabilityis€27thousand.
Provisionsfortaxesandotherprovisionstakeintoconsiderationallrecognisablerisksanduncertainliabilities.Valuationiscarriedoutintherespectiveamountstobepaid,inaccordancewithapropercommercialassessment,tocoverfuturepaymentobligations.Futurepriceandcostincreasesareaccountedforasfarasthereissufficientobjectiveevidencefortheiroccurrence.
Fornon-bankingitems,theeffectsofinterestaccruedandchangesininterestratesinsubsequentperiodsarereportedunderOtheroperatingexpenses(€345thousand).ThechangesininterestaccruedforprovisionsrelatedtobankingitemsarereportedunderInterestexpenses(€11thousand).
Annual Report 201676
TheitemFundsforgeneralbankingriskswascreatedinaccordancewiththerulesandregulationsofSection340gHGB.Theequityitemsarestatedonthebalancesheetatnominalvalue(Section272Paragraph1HGB).
Undertheloss-freevaluationmethod,provisionsforanticipatedlossesaretobesetasideinthebankingbookforapossibleexcessliabilityarisingfromtransactionswithinterest-basedfinancialinstruments.Allassetandliabilityitemsthatwerenotassignabletothetradingbookorwererecognisedunderequityorequity-likeitemswereincludedinthebankingbook.Indeterminingapossibleexcessliability,bothassetandliabilityamountormaturitycongruencieswereclosedthroughfictitiousforwardtransactions.Thevaluationofthebankingbookwasconductedusingthepresent-valuemethod,wherebythebookvaluesofinterest-bearingtransactionsofthebankingbookarecomparedagainstinterestrate-inducedpresentvalues.Theneedtocoveranyanticipatedriskcostsandadministrativecostsiscarriedoutasadiscountofthegrosscashvalueofthebankingbook.Theauditdidnotascertainanyneedtoaccrueprovisions.
PursuanttoSection256aHGB,receivablesandliabilitiesinforeigncurrencyweretranslatedintoeurosatthemiddlespotexchangerateprevailingonthebalancesheetdate.Forwardtransactionsthathavenotyetbeensettledatbalancesheetdatearetranslatedattheforwardrateprevailingonthebalancesheetdate.
On-balancesheetitemsandopentransactionsdenominatedinforeigncurrenciesoutsideofthetradingportfolioareevaluatedpursuanttotheapplicableprinciplesofSection340hinconjunctionwithSection256aHGBifaspecialcoverageisavailable.Iftherequirementsforspecialcoverarenotfulfilled,thecurrencyconversioniscarriedoutaccordingtotheprincipleslaiddowninSection256aHGB.Iftheresidualtermisoneyearorless,unrealisedprofitsfromcurrencyconversionarerecognisedasincome.Iftheresidualtermismorethanoneyear,thegeneralvaluationprinciplesareapplied.
Theprincipleofspecialcoverage(pursuanttoSection340hHGB)inlinewithIDWRSBFA4canberegardedasfulfilledifthecurrencyriskismanagedthroughaforeigncurrencypositionandtheindividualitemsareincludedinsuchposition.Transactionsoutsideofthetradingportfolioaremanagedasawholeforeachcurrency.
Intheprofit-and-lossaccount,incomeandexpensesfromcurrencyconversionarenotbalancedinthetradingportfolio,butinsteadreportedunder“otheroperatingearnings”and“otheroperatingexpenses”,respectively.
FinancialinstrumentsinthetradingportfolioinforeigncurrencyareassessedatfairvalueandtranslatedatthemeanspotexchangerateonthebalancesheetdatepursuanttoSection340cinconjunctionwithSection340eParagraph3HGB.Accordingly,allexpensesandincomearisingfromcurrencyconversionarerecognisedintheprofit-and-lossaccountasnetincomeornetexpensesfromproprietarytrading.
Expensesfromdepreciationonshareholdings,shareholdingsinaffiliatedcompaniesandsecuritiestreatedasfixedassetsarebalancedwiththeearningsfromwrite-upstosuchitemspursuanttoSection340cParagraph2HGB.
Noeventsofparticularsignificancehaveoccurredsince1January2016thatcouldbeexpectedtohaveamaterialeffectonnetassetsorthefinancialandincomesituation.
77Consolidated Financial Statements Annex
in thousand euros 31/12/2016 31/12/2015
Liabilities to banks with a definite term or notice periodupto3months 22,292 4,187
morethan3monthsandupto1year 40,775 42,900
morethan1yearandupto5years 2,414 2,229
morethan5years 0 17
Liabilities to clients with a definite term or notice periodupto3months 197,625 69,217
morethan3monthsandupto1year 143,486 128,004
morethan1yearandupto5years 50,030 3,178
morethan5years 35,025 25,000
Notes to Consolidated Financial Statements
in thousand euros 31/12/2016 31/12/2015
Loans and advances to banksupto3months 36,282 42,876
morethan3monthsandupto1year 33,994 27,434
morethan1yearandupto5years 0 0morethan5years 0 2,021
Loans and advances to clientsupto3months 637,451 467,661
morethan3monthsandupto1year 93,022 69,801
morethan1yearandupto5years 30,843 124,181
morethan5years 46,098 50,451
indefiniteterm 23,853 70,758
Debt securities and other fixed income securitiesmaturinginthenextyear 50,282 9,458
Breakdown of Liabilities by Residual Terms
Breakdown of Receivables by Residual Terms
Annual Report 201678
Trading portfolio (Assets)in thousand euros 31/12/2016 31/12/2015
Derivativefinancialinstruments 29,350 22,187
Debtsecuritiesandotherfixedincomesecurities 365,915 373,409
Equityandothervariable-yieldsecurities 62,686 50,304
Riskdiscount -5,267 -5,267
Trading portfolio (Liabilities)in thousand euros 31/12/2016 31/12/2015
Derivativefinancialinstruments 32,844 23,859
exchange listed not exchange listedin thousand euros 31/12/2016 31/12/2015 31/12/2016 31/12/2015
Debtsecuritiesandotherfixedincomesecurities 160,695 148,357 0 0
Equityandothervariable-yieldsecurities 0 0 0 0
Relations with Affiliated Companies
Trading Portfolio
Securities Negotiable on the Stock Exchange and Financial Investments
Thefollowingtableitemisesthesecuritiesnegotiableonthestockexchangeincludedinthebalancesheetpositions.
Inprinciple,businesstransactionswithaffiliatedcompaniesandpersonsarecarriedoutatcustomarymarketterms.Majortransactionsatnon-standardmarketterms,whichwouldthushavetobereportedpursuanttoSection314Paragraph1No.13HGB,havenottakenplace.
Affiliated companies Shareholdingsin thousand euros 31/12/2016 31/12/2015 31/12/2016 31/12/2015
Loansandadvancestobanks 0 0 114 100
Loansandadvancestoclients 152 0 3,881 536
Liabilitiestobanks 0 0 0 0
Liabilitiestoclients 1,160 841 3,259 3,694
79Consolidated Financial Statements Annex
Intangibleassetscomprisepaidconcessionsamountingto€3.6million,goodwillof€0.4millionandadvancepaymentsonintangibleassetsof€0.2million.
Theitemproperty,plantandequipmentincludeslandandbuildingsusedfortheBank’sowncommercialactivitiesof€21.4million,operatingandbusinessequipmentof€3.9million,technicalequipmentandmachineryof€0.3millionandadvancepaymentsforassetsunderconstruction.
Fiduciary Operations
Theassetsandliabilitiesshowninthebalancesheetunder“Fiduciaryassets“and“Fiduciaryliabilities“aredividedasfollows:
Statement of Changes in Fixed Assets
in thousand euros Intangible assets Property, plant and equipment
Financial assets
Historicalcostasper01/01/2016 11,787 42,629 60,495
Additions 2,635 5,359 9,113
Disposals -1,057 -471 -26,055
Historicalcostasper31/12/2016 13,365 47,517 43,552
Accumulateddepreciation 9,074 19,273 855
Bookvalue2016 4,291 28,244 42,698
Bookvalue2015 5,224 28,949 59,640
Depreciationinthefinancialyear 2,501 3,344 0
31/12/2016
Fiduciary liabilities
Fiduciary assets
31/12/2015
Loansandadvances
total11,855
Liabilitiestotal
11,855
Loansandadvances
total11,889
Liabilitiestotal
11,889
Receivablestoclients38
Liabilitiestoclients38
Receivablestoclients37
Liabilitiestoclients37
Loansandadvancestobanks11,817
Liabilitiestobanks11,817
Loansandadvancestobanks11,852
Liabilitiestobanks11,852
Annual Report 201680
Other Assets
Otherassetsamountingto€30,622thousand(previousyear€22,348thousand)essentiallyincludeclaimsfortaxrefundsintheamountof€17,036thousandaswellasclaimsagainstthetaxauthorityof€6,830thousand,reinsurancepoliciesof€5,687thousandandassociatedcompaniesof€2,453thousand.
Foreign Currency
Thetotalassetsinforeigncurrencyonthebalancesheetdatecometo€68,360thousand(previousyear:€71,134thousand).
Liabilitiesinforeigncurrencyonthebalancesheetdatewere€301,493thousand(previousyear:€130,386thousand).
Subordinated Liabilities
Incaseofinsolvencyorliquidation,subordinatedliabilitiesamountingto€27,724thousand(previousyear:€27,724thousand)mayberepaidonlyafterallcreditorsthatarenotsubordinatedhavebeenpaidoff.Uptothatpointthereisnorepaymentobligationoranyclaimtointerestpayments.Interestexpensesforsubordinatedliabilitiesinthefinancialyearremainedunchangedat€1,916thousand.
Subordinated Assets
in thousand euros 31/12/2016 31/12/2015
Loansandadvancestobanks 195,513 247,241
thereof:subordinated 0 0
Loansandadvancestoclients 1,390,181 1,236,301
thereof:subordinated 0 0
Debtsecuritiesandotherfixedincomesecurities 160,215 148,357
thereof:subordinated 0 0
Shareholdings 42,346 30,657
thereof:subordinated 2,002 2,002
Amount in thousand euros (nominal) Interest rate Maturity
12.000 6.90 31/07/2018
5.000 7.10 10/09/2018
5.000 7.21 29/08/2018
5.000 7.45 07/08/2018
81Consolidated Financial Statements Annex
Other Liabilities
Otherliabilitiesamountingto€31,578thousand(previousyear:€14,943thousand)mainlycontainliabilitiesfromvariationmarginsof€12,095thousand,liabilitiestotaxauthoritiesof€9,000thousandandprovisionsforprofitparticipationcapitalof€3,109thousand.
Statement of Changes in Group Equity
in thousand euros
Asper01/01/2015 281,282
Profitdistributionin2015 -22,000
Allocationtocapitalreserve 22,000
Changeinretainedearnings 0
Adjustmentsforminorityinterests -17
Groupprofit 23,000
Asper31/12/2015 304,265
Asper01/01/2016 304,265
Profitdistributionin2016 -23,000
Allocationtocapitalreserve 11,500
Changeinretainedearnings 2
Adjustmentsforminorityinterests -39
Groupprofit 55,000
Asper31/12/2016 347,728
Annual Report 201682
83
Off-Balance Sheet Transactions
Contingent liabilitiesIntheordinarycourseofbusiness,BankhausLampeKGregularlyassumescreditguarantees,otherguaranteesandlettersofcredit.Asaconsequenceoftheseagreements,itisnecessarythatBankhausLampeKGmakespaymentstothebeneficiaryifsomeoneelsedoesnotfulfilhisorherobligationsorpaymentsaccordingtoagreement.Thetablebelowlistsallpotentialpaymentsfromcreditguarantees,otherguaranteesandlettersofcreditaftertakingaccountofanycashcollaterals(€5,310thousand),ifapplicable.
Theamountsstatedabovedonotreflectthecashflowsexpectedfromtheseagreementsinfuturesincemanyofthemexpirewithoutbeingcalledupon.Itispossiblethataprovisionofcollateralisdemandedinordertoreducethecreditriskofthisobligation.Cashdepositsreceivedforcontingentliabilitiesarerecognisedinthebalancesheetasliabilities.Theprobabilityofapossibleclaimontheseliabilitiesisconsideredtobeverylow.Ifafullorpartialclaimisexpectedintheeventofadeteriorationintheborrower‘screditquality,provisionsaresetaside.Provisionsforcontingentliabilitiestotalled€3,083thousandasat31December2016.
Irrevocable lending commitmentsBankhausLampeKGmakesirrevocablelendingcommitmentsinordertomeetitsclients’financingrequirements.TheportionsofgrantedcommitmentswhichwerenotdrawndownareincludedintheirrevocablelendingcommitmentsandcannotberevokedbyBankhausLampeKG.Theselendingcommitmentsaredisclosedattheirnominalvalueaftertakingaccountofcashcollaterals.Theamountslistedbelowthebalancesheetdonotrepresentexpectedfuturecashflowssincemanyoftheseagreementswillexpirewithoutbeingdrawndown.Irrevocablelendingcommitmentsarenotshowninthebalancesheetyetaretakenintoconsiderationinthemonitoringofcreditrisks.Onthebalancesheetdatetheirrevocablelendingcommitmentsamountto€96.3million.
Other financial obligationsAsatthebalancesheetdate,theannualfinancialobligationsresultingfromtenancyagreements,servicecontractsandotherlicenceagreementsamountto€33.8million,withresidualtermsofuptofiveyears.
31/12/2016 31/12/2015
2,882 7,397
38,885 41,536
33,199 31,533
Creditguarantees
Otherguaranteesand
warranties
Lettersofcredit
83Consolidated Financial Statements Annex
84
Resultsontheprofitandlossaccountfrominterestincome,currentincomefromequityandothervariable-yieldsecurities,earningsfromshareholdingsinassociatedcompanies,profittransferagreements,commissionincome,netearningsfromfinancialtransactionsandotheroperatingincomeareessentiallyofdomesticorigin.
Duetothepersistentlow-interestphase,atypicalinterestrates(negativeinterestrates)arepossible.BankhausLampeKGthereforestatesnegativeinterestratesfromreceivablesasinterestincome(€1.295thousand)andnegativeinterestratesfromliabilitiesasinterestexpenses(€1.222thousand).
Other Operating Income
Otheroperatingincomeintheamountof€8,374thousandessentiallyincludestaxrefunds(€2,677thousand),reversalsofprovisions(€1,668thousand)andincomefromrentalandleasecontracts(€839thousand).
Other Operating Expenses
Otheroperatingexpensesintheamountof€5,845thousandessentiallyincludesearningsorexpensesfromcurrencyconversion(€1,782thousand),expensesforreinsurances(€1,332thousand),allocationstoprovisions(€634thousand)andinterest-relatedeffectsonpensionprovisions(€345thousand).
Astheparentcompany,BankhausLampeKGintendstodistributeitsnetprofitof€55.0milliontoitsshareholders.
Notes to the Group Profit and Loss Account
Annual Report 2016
Equity interest in
the company %
Equity of the company as per
31/12/2016 in thousand
euros
Result for the financial
year in thousand
euros
BDHBiodieselHamburgGmbH,Hamburg5) 95.00 887 -200
BTFBeteiligungs-undTreuhandgesellschaftmbH,Frankfurt/Main1)2) 100.00 52 0
CEEFundAdvisoryGmbH,Hamburg5) 100.00 -2,349 -1,062
CEEManagementGmbH,Hamburg5) 99.00 224 198
CEENaturalRessourcesGmbH,Hamburg5) 100.00 -201 -205
CEEOperationsGmbH,Hamburg5) 100.00 45 0
CEETIMBAUSAManagementS.a.r.l.,Munsbach(Luxembourg) 5) 100.00 13 0
CEEProjekteVerwaltungsGmbH,Hamburg 5) 100.00 25 0
DALEInvestmentAdvisorsGmbH,Vienna 61.00 1,269 927
EquityInvestIIGmbH,Dusseldorf 100.00 25 0
EquityInvestmentManagementIIGmbH,Dusseldorf 100.00 25 0
komm.passionGmbH,Dusseldorf4) 25.51 542 83
LampeAssetManagementGmbH,Dusseldorf1)2) 100.00 3,000 0
LampeBeteiligungsgesellschaftmbH,Dusseldorf1)2) 100.00 1,100 0
LampeCapitalNorthAmericaLLC,NewYork7) 100.00 4,1508) 1248)
LampeCapitalUKLimited,London7) 100.00 3533) 533)
LampeCFDevelopmentQuattroGmbH&Co.KG,Hamburg5) 100.00 9,703 2,164
LampeCFDevelopmentQuattroVerwaltungsGmbH,Hamburg5) 100.00 28 0
LampeCreditAdvisorsGmbH,Dusseldorf 100.00 1,021 8
LampeCreditAdvisors(Austria)GmbH,Vienna6) 100.00 61 -9
LampeEquityManagementGmbH,Hamburg1)2) 100.00 1,000 0
LampeImmobilienGmbH&Co.KG,Dusseldorf 100.00 51 0
LampeImmobilienVerwaltungsGmbH,Dusseldorf 100.00 25 -5
LampeInternationalS.A.,Luxembourg 100.00 250 0
LampeInvestmentManagementGmbH,Hamburg5) 94.00 -45 -57
Other Information
List of Equity Interests and Affiliated Companies
BankhausLampeKGholdsadirectorindirectinterestofatleast20%inthefollowingcompaniesorexceeds5%ofvotingrightswithholdingsinlargecorporations.
Annual Report 201686
Equity interest in
the company %
Equity of the company as per
31/12/2016 in thousand
euros
Result for the financial
year in thousand
euros
LampePrivateAdvisoryGmbH(previouslyPoseidonBeteiligungs-GmbH),Bielefeld1)2)
100.00 52 0
LampePrivatinvestManagementGmbH,Hamburg5) 100.00 -443 -493
LampePrivatinvestVerwaltungsGmbH,Hamburg5) 100.00 33 5
LampeUIBeteiligungsGmbH,Dusseldorf 100.00 24,631 66
LampeUIHoldingGmbH&Co.KG,Dusseldorf 100.00 5,917 5,870
LampeVermögenstreuhandGmbHi.L.,Dusseldorf1)2) 100.00 23 -3
LampeVerwaltungs-GmbH,Dusseldorf 100.00 6,084 450
LBVenturesGmbH,Dusseldorf4) 100.00 18 -7
LIImmobilienVerwaltungsGmbH,Dusseldorf4) 100.00 27 2
LPMETWInvestVerwaltungsGmbH,Hamburg5) 20.00 25 0
LPMETWTManagementGmbH,Hamburg5) 100.00 25 0
SEWBeteiligungsVerwaltungsGmbH,Hagen4) 51.00 38 -2
TETRARCHAktiengesellschaft,Dusseldorf1)2) 100.00 50 0
TWGTanklagerWilhelmsburgGmbH,Hamburg 95.00 3,672 0
UnterstützungskasseGmbHderBankhausLampeKG,Bielefeld 100.00 26 0
VilmarisManagementGmbH,Hamburg5) 100.00 84 19
VilmarisPrivateInvestorsVerwaltungsGmbH,Hamburg5) 100.00 45 2
1) A profit-and-loss transfer agreement exists with Bankhaus Lampe KG2) Exemption pursuant to Section 264 Paragraph 4 HGB3) Amount in GBP4) Indirectly via Lampe Beteiligungsgesellschaft mbH
5) Indirectly via Lampe Equity Management GmbH6) Indirectly via Lampe Credit Advisors GmbH7) Indirectly via Lampe Verwaltungs-GmbH8) Amount in USD
87Consolidated Financial Statements Annex
Seats in Statutory Supervisory Bodies
Fees for the Auditor
Thefeesoftheauditorcomprisethefollowingitems(inthousand€):
Forward Transactions
Forwardtransactionsthatwerenotyetcarriedoutonthebalancesheetdatemainlyincludethefollowingtypesoftransactions:
// Interestrate-relatedtransactionsForwardtransactionsoninterestrateinstruments,interest-rateforwardtransactions,interestrateswaps,interest-ratefuturescontracts,optiondealingsandoptioncontractsoninterestratesandinterestrateindices
//� Exchangerate-relatedtransactions Forwardexchangetransactions,currencyswaps,optiondealingsandoptioncontractsonforeign
exchangerates,foreignexchangeandpreciousmetalsfuturescontracts//��� Othertransactions
Equityforwardtransactions,indexforwardcontracts,optiondealingsandoptioncontractsonsharesandshareindices
Theabovetransactionshavebeencarriedoutforthemostparttocoverfluctuationsofinterestandexchangerates,aswellasmarketpricesfortradingtransactions.
Name Company Function
Prof.Dr.StephanSchüller AarealBankAG,Wiesbaden SupervisoryboardUniversal-Investment-GesellschaftmbH,Frankfurt/Main
Supervisoryboard
1,044.5 849.8
595.2 469.0312.5 158.4
136.8
222.4
31/12/2016 31/12/2015
OtherfeesAuditingfees Otherconsultingfees
Annual Report 201688
Remuneration of Executive Bodies
PursuanttoSection286Paragraph4HGB,wedispensedwithdisclosingtheremunerationofactiveandformergeneralpartners,aswellastheprovisionsmadeforthisgroupofpersons.
Themembersoftheadvisoryboardreceivedloansforatotalamountof€8.3million.Theremunerationforthemembersoftheadvisoryboardcameto€327thousand.
General Partners
Prof.Dr.StephanSchüller,Banker,SpokesmanDr.NicolasBlanchard,BankerWernerSchuster,Banker
31/12/2016
in million €Nominal amount
Positive market values
Negative market values
OTC productsInterestrate-basedtransactions 6,842 173 213
Exchangerate-basedtransactions 2,053 34 37
Othertransactions 185 3 1
Exchange-traded productsInterestrate-basedtransactions 236 0 3
Othertransactions 210 1 5
Total 9,527 211 256
Members of the Management Board and Advisory Board
669Numberofemployees
Number of Employees
Theaveragenumberofemployeesduringtheyearwasasfollows:
117part-timeemployees
Advisory Board of Bankhaus Lampe KG
Dr.ErnstF.Schröder,Businessman,ChairmanDr.AlbertChristmann,Businessman,Vice ChairmanDr.AlfredOetker,BusinessmanDr.HaraldSchaub,BusinessmanDr.ArntVespermann,Businessman
552full-timeemployees
Consolidated Financial Statements Annex 89
Cash Flow Statement
in million € 31/12/2016
Net income 55
Non-cash items in net income and adjustments to reconcile net income
with net cash provided by operating activities
+/-Depreciation,valuationallowances,write-upsofreceivablesandfixedassets 30
+/-Changeinaccruals 26
+/-Changeinothernon-cashincome/expenses 23
+/-Gains/lossesfromthesaleoffixedassets -108
+/-Otheradjustments(onbalance) -23
Subtotal -52
Change in assets and liabilities from operating activities
+/-Changeinloansandadvancestobanks 52
+/-Changeinloansandadvancestoclients -17
+/-Changeinsecurities(insofarasnotfinancialassets) -12
+/-Changeintradingportfolio -2
+/-Changeinotherassetsfromongoingoperatingactivities -23
+/-Changeinliabilitiesowedtobanks 39
+/-Changeinliabilitiesowedtoclients 44
+/-Changeinsecuritisedliabilities 0
+/-Changeinotherliabilitiesfromoperatingactivities 16
+/-Interestexpenses/income -28
+/-Expenses/incomefromextraordinaryitems 0
+/-Incometax 11
+Interestanddividendsreceived 71
-Interestpaid -26
+Extraordinarycashoutflow 0
-Extraordinarycashoutflow 0
+/-Incometaxpayments -9
Cash flow from current business activities 119
+Cashinflowfromthedisposaloffinancialassets -9
-Cashoutflowforinvestmentsinfinancialassets 0
+Cashinflowfromthedisposalofproperty,plantandequipment 0
-Cashoutflowforinvestmentsinproperty,plantandequipment -3
+Cashinflowfromthedisposalofintangibleassets 1
-Cashoutflowforinvestmentsinintangiblefixedassets -3
+Cashinflowfromdisposalsofconsolidatedcompanies 0
-Cashoutflowfromadditionstoconsolidatedcompanies 0
+/-Changeincashflowfromotherinvestmentactivities(balance) 0
+Cashinflowfromextraordinaryitems 0
-Cashoutflowfromextraordinaryitems 0
Cash flow from investment activities -14
Annual Report 201690
Additional disclosures in accordance with Section 26a of the German Banking Act in conjunction with Section 64r of the German Banking Act as per 31 December 2016
Therequirementsforcountry-by-countryreportinglaiddowninArticle89oftheEUDirective2013/36/EU(CapitalRequirementDirective,CRDIV)wasimplementedinGermanlawinSection26aoftheGermanBankingAct(KWG).
Thedisclosurerequirementspertaintoinformationregardingdomicile,salesandwage/salaryrecipientsoftheforeignsubsidiaries,whichaspartofthefullconsolidationareincludedintheconsolidatedfinancialstatements.
Theoperatingresultexcludingvalueimpairmentsandadministrationcosts,includingnetinterestincome,netcommissionincome,tradingresultandotheroperatingincomearedrawnuponasrevenue.
+Receiptsfromadditionsofequityfromshareholdersofparentcompany 12
+Receiptsfromadditionsofequityfromothershareholders 0
-Cashoutflowsfromequityreductionstoshareholdersofparentcompany -23
-Cashoutflowsfromequityreductionstoothershareholders 0
+Cashinflowfromextraordinaryitems 0
-Cashoutflowfromextraordinaryitems 0
-Dividendspaidtoshareholdersofparentcompany 0
-Dividendspaidtoothershareholders 0
+/-Changeincashflowfromothercapital(balance) 0
Cash flow from financing activities -11
Cash and cash equivalents at the end of the previous period 456
Cashflowfromcurrentbusinessactivities 119
Cashflowfrominvestmentactivities -14
Cashflowfromfinancingactivities -11
Changeinthegroupofconsolidatedcompanies
Cash and cash equivalents at the end of period 550
Composition of cash and cash equivalents
Cashbalance 1
Balanceswithcentralbanks 549
Consolidated Financial Statements Annex 91
Company DALEInvestmentAdvisorsGmbH
Typeofbusiness Financialservicescompany
Locationofregisteredoffice Vienna(Austria)
Revenuein€million 2.6
Numberofwage/salaryrecipients 7.0
Profitbeforetaxin€million 1.2
Taxesonprofitin€million 0.3
Publicsubsidiesreceived none
General Partners
Prof.Dr.StephanSchüller,SpokesmanDr.NicolasBlanchardUteGerbauletWernerSchuster
Advisory Board
Dr.ErnstF.Schröder,ChairmanDr.AlbertChristmann GeneralpartnerofDr.AugustOetkerKG,BielefeldDr.AlfredOetker PartnerandDeputyChairmanoftheBoardof Dr.AugustOetkerKG,BielefeldDr.HaraldSchaub MemberoftheManagementBoard ChemischeFabrikBudenheimKG,BudenheimDr.ArntVespermann MemberoftheManagementBoardHamburg
SüdamerikanischeDampfschifffahrts- GesellschaftKG,Hamburg
Limited Partners
Dr.AugustOetkerKGRudolfSchweizerDr.h.c.AugustOetkerLudwigGrafDouglasChristianOetkerRichardOetkerDr.AlfredOetkerFerdinandOetkerJuliaOetker
Members of the Executive Committee
MichaelC.MaletzkyFrank-PeterMartinOliverPlaack
The Boards
AsperApril2017
Annual Report 201692
Addresses
Bankhaus Lampe KG
BerlinCarmerstraße 1310623 BerlinPhone +49 30 319002-0Fax +49 30 319002-324
BielefeldAlter Markt 333602 BielefeldPhone +49 521 582-0Fax +49 521 582-1195
BonnHeinrich-Brüning-Straße 1653113 BonnPhone +49 228 850262-0Fax +49 228 850262-99
BremenAltenwall 2128195 BremenPhone +49 421 985388-0Fax +49 421 985388-99
DresdenKäthe-Kollwitz-Ufer 8201309 DresdenPhone +49 351 207815-0Fax +49 351 207815-29
DusseldorfJägerhofstraße 1040479 DüsseldorfPhone +49 211 4952-0Fax +49 211 4952-111
Frankfurt/MainFreiherr-vom-Stein-Straße 6560323 Frankfurt/MainPhone +49 69 97119-0Fax +49 69 97119-119
HamburgBallindamm 1120095 HamburgPhone +49 40 302904-0Fax +49 40 302904-18
MunichBrienner Straße 2980333 MünchenPhone +49 89 29035-600Fax +49 89 29035-799
MünsterDomplatz 4148143 MünsterPhone +49 251 41833-0Fax +49 251 41833-50
OsnabruckSchloßstraße 28/3049074 OsnabrückPhone +49 541 580537-0Fax +49 541 580537-99
StuttgartBüchsenstraße 2870174 StuttgartPhone +49 711 933008-0Fax +49 711 933008-99
Annual Report 201694
Lampe Asset Management GmbHJägerhofstraße 1040479 DüsseldorfPhone +49 211 95742-500Fax +49 211 95742-570
Bockenheimer Anlage 4460322 Frankfurt/MainPhone +49 69 2444878-0Fax +49 69 2444878-99
Lampe Beteiligungsgesellschaft mbHJägerhofstraße 1040479 DüsseldorfPhone +49 211 4952-197Fax +49 211 4952-188
Lampe Capital Finance GmbHJägerhofstraße 1040479 DüsseldorfPhone +49 211 4952-669Fax +49 211 4952-188
Lampe Credit Advisors GmbHJägerhofstraße 1040479 DüsseldorfPhone +49 211 4952-390Fax +49 211 4952-849
Lampe Equity Management GmbHSpeersort 1020095 HamburgPhone +49 40 688788-0Fax +49 40 688788-70
Lampe Privatinvest Management GmbHSpeersort 1020095 HamburgPhone +49 40 688788-0Fax +49 40 688788-70
Lampe Capital UK Limited2 Savile RowLondon W1S 3PAUnited KingdomPhone +44 203 405-1037
DALE Investment Advisors GmbHWollzeile 16/91010 WienAustriaPhone +43 1 8903507-0Fax +43 1 8903507-50
Lampe Capital North America LLC712 5th Avenue, 28th FloorNew York, NY 10019USAPhone +1 212 218-7410
Addresses 95
Druckstudio GmbH Prof.-Oehler-Straße 10 40589 Düsseldorfwww.druckstudiogruppe.com
Layout and typesetting
HOCH5 GmbH & Co. KGBorriesstraße 1132257 Bündewww.hoch5.com
Photo credits
Bankhaus Lampe KG
Annual Report 201696
Published by
Bankhaus�Lampe�KGCorporate�CommunicationsJägerhofstraße�1040479�DüsseldorfPhone�+49�211�4952-0
www.bankhaus-lampe.de/en
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