Annual Report 2017

Profile of the DZ BANK Group

Partners in the Volksbanken Raiffeisenbanken cooperative financial network

The DZ BANK Group forms part of the German cooperative financial network, which includes around 900 Volksbanken Raiffeisenbanken and is one of Germany’s largest private-sector financial services organizations measured in terms of total assets. Within the cooperative financial network, DZ BANK AG functions as the central institution and is responsible for supporting the business of the cooperative banks in their regions and strengthening their competitiveness. It also operates as a corporate bank and acts as the holding company for the DZ BANK Group.

The Group Coordination Committee is the highest-level management and coordination committee in the DZ BANK Group. The objectives of this committee are to strengthen the competitiveness of the DZ BANK Group and to manage the coordination of fundamental product and sales issues. The committee ensures coordination between the key entities within the DZ BANK Group in order to achieve consistent management of opportunities and risks, to allocate capital, to deal with strategic issues and to leverage synergies. The members of this committee comprise the Board of Managing Directors of DZ BANK, the General Executive Manager of DZ BANK, and the chief executive officers of Bausparkasse Schwäbisch Hall, DG HYP, DZ PRIVATBANK, R+V Versicherung, TeamBank, Union Investment, VR LEASING, and WL BANK.

Services offered by the DZ BANK Group for the cooperative banks and their customers

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Network focus and principle of subsidiarity

Strengthening the market position of the cooperative banks is a key factor for the success of the cooperative financial network. The DZ BANK Group supports the pursuit of this objective within the framework of its network-focused corporate strategy based on the principles of subsidiarity, decentralization, and regional market responsibility. It is guided by its overarching mission as a network-oriented central institution and financial services group and organizes its activities in line with a three-pronged strategy: growth in accordance with the needs of the cooperative financial network, continuation of the focus on business activities, and integration within the group and with the cooperative banks.

Strong brands – strong partners

Selected brands of the DZ BANK Group

DG HYP

DG HYP is the commercial real estate bank of the Volksbanken Raiffeisenbanken cooperative financial network and a leading provider of finance in this sector in Germany. Business activities are focused on financing properties in the German market, specifically in the core segments of office, residential, and retail properties. Target clients are private and institutional investors, housing companies, as well as commercial and residential real estate developers. DG HYP has a nationwide presence throughout Germany with six Real Estate Centres in Hamburg, Berlin, Dusseldorf, Frankfurt, Stuttgart, and Munich, and regional offices in Hanover, Kassel, Leipzig, Mannheim, Münster and Nuremberg. DG HYP focuses on a clear business model with a robust funding structure. In doing so, it has developed an enviable reputation as a reliable finance partner, building and retaining long-term client relationships based upon consistency and continuity. These are all key factors that have helped the bank successfully position itself in the market. The central business policy role of DG HYP – as a specialist, center of competence, and first point of contact for nearly 1,000 local cooperative banks – is to anchor the importance of commercial real estate finance, and the opportunities it presents, in the cooperative financial network and to realise financing solutions together. with the cooperative banks. To this end, DG HYP offers the local cooperative banks a highly efficient range of products and services tailored to their specific needs. Both sides of this partnership benefit from the joint marketing – DG HYP from the local customer contacts enjoyed by the primary banks in their respective regions, and the local cooperative banks from the business relationships arising from developing the market throughout Germany.


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DZ BANK AG

DZ BANK is the second-largest commercial bank in Germany and the central institution in the Volksbanken Raiffeisenbanken cooperative financial network. It is the central institution for all cooperative banks in Germany, which number almost 1,000 and between them hold the majority of its shares. Under the tagline ‘DZ BANK. Die Initiativbank’, it supports the business of the independent cooperative banks in their regions with the aim of strengthening their competitiveness. The combination of local customer knowledge and central product expertise has proved to be highly effective.

DZ BANK’s range of products and services extends from classic and innovative products, structuring, and issues, to trading and sales in the equity and bond markets. DZ BANK also acts as a corporate bank for businesses and institutions. It maintains branches and representative offices in key economic regions around the globe, helping businesses to further their international activities.

DZ BANK also acts as a holding company for the entities in the DZ BANK Group, each of which has its own strong brand and constitutes a key pillar in the range of financial products and services offered by the cooperative financial network.

DZ BANK aims to offer high quality not only for its customers, but also for its employees. With this in mind, it regularly arranges for its services as an employer to be reviewed by third parties. For example, for ten years in succession, the bank has been singled out as one of Germany’s top 100 employers by the Top Employers Institute. Since 2007, it has also regularly received the auditberufundfamilie® certificate for its life-stage-oriented HR policies. The certificate has to be renewed every three years. Likewise, DZ BANK’s appeal as an employer of choice for university graduates has been confirmed for a number of years by its ranking in the Universum Top 100 Employers and in the trendence Absolventenbarometer graduates survey.


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TeamBank AG

TeamBank AG with its easyCredit product family is the liquidity management specialist in the Volksbanken Raiffeisenbanken cooperative financial network. It provides integrated, innovative products and services that give customers easy access to liquidity wherever they are and whenever they want. The key elements of the ecosystem are the customer-friendly finance service ‘easyCredit-Finanzreserve’, the seamless cross-media payment process ‘ratenkauf by easyCredit’, and an online credit agreement service.

In 2017, the number of customers increased by 6.3 percent to 833,000*. Last year, TeamBank again stepped up its collaboration with the cooperative banks – including 50 new partner banks in Germany and 18 in Austria. The core easyCredit product is now available in 88 percent of all cooperative banks in Germany.

Numerous awards and certificates provide external recognition of the excellence of TeamBank’s product range. The easyCredit product brand, for example, was again certified on the basis of the fairness criteria of institut für finanzdienstleistungen e.V. (iff) [institute for financial services]. TeamBank once more achieved platinum status for service excellence and had its quality confirmed in accordance with the DIN ISO 9001:2008 standard.

In 2017, TeamBank was again a winner in the illustrious TOP JOB competition, underlining its continuing appeal as an employer.

*The second borrower has also been included in the customer count since January 1, 2017.


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DZ PRIVATBANK

DZ PRIVATBANK is a cooperative private bank, specializing in customized solutions for high-net-worth individuals. As center of competence for private banking, fund services, and lending in all currencies it is focused on the German-speaking market and the close cooperation with the cooperative financial network. DZ PRIVATBANK operates from ten locations in Germany – Hamburg, Hanover, Oldenburg, Berlin, Leipzig, Düsseldorf, Frankfurt, Stuttgart, Nuremberg, Munich – and has offices at the international financial centres of Luxembourg (headquarter) and Zurich. Based on assets under management of more than €17 billion it belongs to the largest private banking providers in Germany. The range of services extends from structuring and managing of assets, pension planning and advice on charitable foundations to the issuing of funds and financing.

The option of diversify assets across accounts in Germany, Luxembourg, and Switzerland as well as the provision of specialized products in each country are further pillars in a comprehensive portfolio of services for wealthy private customers, business and institutional clients. The combination of local, national and international wealth management expertise with cooperative values such as partnership, stability and security makes its business model unique. As they say at DZ PRIVATBANK: "Weil nicht nur zählt, was zählbar ist" – "Things you can count are not the only things that count".


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R+V Versicherung

R+V Versicherung is one of the leading insurance companies in Germany and has been on a growth trajectory for many years now. It is the second-largest insurer in both the life and non-life sectors. Based in Wiesbaden, R+V enjoys the trust of more than eight million customers, who have insured over 24 million risks.

It forms part of the Volksbanken Raiffeisenbanken cooperative financial network and offers innovative, tailored insurance solutions. The product range encompasses all established types of insurance. For retail customers, R+V offers bespoke insurance and pension solutions. In its corporate business, R+V is traditionally closely associated with SMEs operating in industry, commerce, skilled trades, agriculture, and other areas of small and medium-sized business activity, and develops specific risk mitigation strategies for these businesses. R+V also takes on inward reinsurance business around the globe.

R+V’s significant financial strength has been constantly reaffirmed by leading rating agencies. For instance, S&P Global Ratings (formerly Standard & Poor’s) has repeatedly issued R+V Versicherung AG with a rating of AA– with a stable outlook, while Fitch Ratings has given R+V Lebensversicherung AG an AA rating. R+V has received a Top German Employer award and holds the Fair Company seal of approval. It also regularly occupies some of the top spots in numerous product ratings. For example, R+V Lebensversicherung AG was awarded five stars in the Finsinger ratings published by Wirtschaftswoche magazine, while the R+V-KfzPolice-Plus motor vehicle policy was rated ‘outstanding’ by Franke and Bornberg. In the agricultural insurance business, R+V has been ranked number one for many years in the image barometer of the Deutsche Landwirtschaftsgesellschaft (DLG) [German Agricultural Society].

R+V is also committed to sustainability and has an environmental management system certified by TÜV Rheinland.


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Schwäbisch Hall

Schwäbisch Hall is Germany's largest institution to offer contractual savings for housing plans, with around 7.3 million customers. It is also one of the leading home finance providers. Since its establishment in 1931, Schwäbisch Hall has been firmly anchored in the cooperative financial network. The shared cooperative values – respect, solidarity, responsibility, and partnership – are expressed in Schwäbisch Hall's mission statement 'Creating and maintaining a home together'. The institution’s almost 3,300 field staff and around 3,000 inhouse employees provide customers with expert advice and support. Schwäbisch Hall also operates outside Germany. Its investee companies in eastern Europe and China have around three million customers between them.

A commitment to employees and society is part of Schwäbisch Hall's corporate identity. The institution regularly wins awards for its systematic professional development of trainees, specialists, and managers, for its family-friendly corporate culture, and for its health management activities. Since 2013, Schwäbisch Hall has held 'audit berufundfamilie' certification, an initiative of the non-profit-making Hertie Foundation that recognizes companies with family-friendly HR policies. The company has been highly placed in the Top German Employer competition for many years. In 2017, Schwäbisch Hall was again ranked one of the top 5 employers among all financial institutions in Germany.


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Union Investment Group

The Union Investment Group is the fund management specialist within the cooperative financial network and has been developing investment solutions for retail and institutional investors for more than 60 years. Over 2,900 employees manage assets amounting to some €323.9 billion. In total, more than 4.3 million customers entrust Union Investment with their money.

Union Investment works closely with its partners in the local cooperative banks to provide retail investors with investment solutions that are tailored to their individual circumstances. Multi-asset solutions, open-ended real estate funds, and fund-based saving in regular installments are especially popular products. In 2017, retail fund holdings rose to a record €136.0 billion.

As an experienced risk manager, Union Investment provides domestic and international institutional investors with asset management concepts and sustainable investment solutions. In Germany, it is the second-largest partner to institutional investors such as corporations, banks, insurers, pension funds, and charitable foundations, for which it manages some €187.9 billion.

Union Investment has won a number of awards that bear testimony to the high quality of its services. It has a particularly strong track record in respect of the Capital Fund Compass: Union Investment is the only fund management company to have received the highest rating 16 times in succession. Furthermore, it again won a Top Employer award.


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VR Leasing Group

The VR Leasing Group is the Volksbanken Raiffeisenbanken cooperative financial network’s specialist in the provision of quick and convenient financing solutions for entrepreneurs and small and medium-sized enterprises. It works in collaboration with the cooperative banks and other strategic partners, offering tailored solutions for leasing, loans, rental, hire purchase, factoring, and centralized settlement. In addition, it provides the cooperative banks’ business customers with digital services for day-to-day finance processes, e.g. SmartBuchhalter, a web application for simple accounting and financial planning. The VR Leasing Group’s strengths lie in reliable, digitally supported financing decisions made within just a few minutes, for example the ‘VR Leasing flexibel’ business lending product and the ‘VR Leasing express’ hire purchase solution, which offer the possibility of instant financing up to €60,000. The limit for ‘VR Leasing express’ is to be raised to €200,000 in 2018. In September 2017, the VR Leasing Group began offering online instant financing through selected Volksbanken Raiffeisenbanken. This was the first entirely digital solution of its kind in Germany.

The VR Leasing Group sees itself as a sustainable and responsible company. At the end of 2017, it was again awarded ECOPROFIT certification from the City of Frankfurt in recognition of its environmental initiatives. The company regularly undergoes the ‘berufundfamilie’ audit in order to promote a good work/life balance.

In addition to VR-LEASING Aktiengesellschaft, the main companies in the VR Leasing Group, whose registered office is situated in Eschborn, are VR DISKONTBANK GmbH, VR FACTOREM GmbH, and BFL Leasing GmbH.


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WL BANK

Established 140 years ago as “Landschaft für die Provinz Westfalen”, WL BANK has a tradition of keeping its youthful energy intact. Around 400 people are employed at the head office in Münster and at the representative and sales offices, committed to serving the bank's customers – the local cooperative banks, businesses in the institutional housing sector, funds, investors, and public-sector customers.

As a mortgage (Pfandbrief) bank, WL BANK's main business involves long-term real estate loans and lending to the public sector. It focuses on financing residential properties and also commercial real estate that can be leased out to third parties. WL BANK is tightly integrated into the Volksbanken Raiffeisenbanken cooperative financial network through the shared core banking system and works in close collaboration with the cooperative banks as a strategic partner. Within the DZ BANK Group, it also acts as a center of competence for public-sector customers.

The attractive, market-oriented terms offered by WL BANK are based on the high quality of its funding, which is derived principally from Pfandbrief issues. Pfandbriefe are issued as small-unit bearer and registered securities (including structured securities) and also in benchmark format. Rating agency S&P has given a top AAA rating to both the mortgage Pfandbriefe and the public-sector Pfandbriefe issued by WL BANK.

WL BANK regularly receives good sustainability ratings from imug and oekom research. As an employer, WL BANK repeatedly received exceptional rankings on the kununu employer evaluation portal and in the Great Place to Work awards.


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The DZ BANK Group includes Bausparkasse Schwäbisch Hall, DG HYP, DZ PRIVATBANK, R+V Versicherung, TeamBank, the Union Investment Group, the VR Leasing Group, WL BANK, and various other specialized institutions. With their strong brands, the entities in the DZ BANK Group constitute key pillars in the range of financial products and services offered by the cooperative financial network. The DZ BANK Group delivers its strategy and range of services for the cooperative banks and their customers through its four business lines – Retail Banking, Corporate Banking, Capital Markets, and Transaction Banking.

This combination of banking, insurance, home savings, and investment products and services has a long and successful tradition in the cooperative financial network. The specialized institutions in the DZ BANK Group provide highly competitive products at reasonable prices within their specific areas of expertise. This ensures that the cooperative banks in Germany are able to offer their clients a comprehensive range of outstanding financial services.