Frankfurt am Main, 9th of May 2007

Dresdner Bank reports record result from operating activities

• Operating result up 44 percent
• Return before taxes rises to just under 32 percent
• Operating income increases by more than 11 percent

Dresdner Bank generated a record result of €712 million from its operating activities in the first quarter of 2007. This represents an increase of 44.1 percent as against the comparable figure for the previous year. The strong rise is due to a clear improvement in income, lower costs and a continuing low level of loan loss provisions. Like the prior-year period, the first quarter of 2007 was influenced by special factors. After adjustment for these one-time factors, the operating result rose by more than 13 percent. "This means that Dresdner Bank has beaten its prior-period results for seven quarters in a row", said Herbert Walter, Chairman of the Board of Managing Directors of Dresdner Bank.

Net income for the period increased slightly year on year to €644 million. Income before taxes amounted to €829 million. The decline of €58 million is due to the disposal gains from the sale of the Bank's shares in Munich Re and Eurohypo contained in the figure for the prior-year period.

The return on equity before taxes in the first quarter amounted to 31.7 percent. After adjustment for the one-time income from the sale of subsidiaries by KGAL, the figure was 24.7 percent. The cost-income ratio improved by a substantial 9.3 percentage points, to 65.8 percent. The adjusted figure was 72.3 percent, after 75.1 percent in the prior-year period.

Dresdner Bank continues growth course

Operating income in the first quarter rose by 11.2 percent year on year to €2,061 million (previous year: €1,853 million). Even after adjustment for the one-time income from KGAL, the Bank was able to slightly exceed its strong showing in the first quarter of 2006, with a figure of €1,875 million.

In the Bank's business with private and middle-market clients the rise in income was driven in particular by a positive trend in the investment business. Competitive deposit products, certificates and closed-end funds were in particularly strong demand. All in all, assets under management rose by more than €20 billion as against the first quarter of 2006, to approximately €285 billion. In the financing area, the Bank increased the volume of new loans to middle-market clients. The consumer loans business and the brokerage of Riester pension products also continued their positive performance. In Investment Banking, structured credit products were among the income drivers. In addition, trading income from credit and equities products – and in particular from derivatives – increased encouragingly.

Dresdner Bank's net interest and current income increased after adjustment for the one-time income by 29 percent in the first three months, for a total of €743 million (unadjusted: €929 million). At €789 million, net fee and commission income was almost on the same level as last year's record figure. Net trading income in Investment Banking amounted to €396 million, down 4 percent on the high figure for the previous year. Net trading income for Dresdner Bank as a whole declined to €343 million, largely as a result of the application of hedge accounting provisions.

Strict operational discipline

Operating expenses were reduced by a further 2.6 percent in the first quarter. Total staff costs declined from €894 million to €888 million, while non-staff operating expenses decreased from €495 million to €470 million. With respect to loan loss provisions, the Bank recorded a net release of €7 million, while gross additions of €101 million were made. This reflects the ongoing high quality of the loan portfolio.

Strong contributions to operating results by both divisions

Both divisions recorded satisfactory developments in their results in the first three months.

Private & Corporate Clients (PCC) reported an operating result of €317 million for the first three months of 2007, up 2 percent year on year. Operating income in the same period amounted to €984 million. Income before taxes rose by approximately €4 million to €316 million. At 67.7 percent, the cost-income ratio was on a par with the good figure recorded in the previous year.

Investment Banking (DKIB) increased its operating income by 3 percent to €891 million. At €213 million, the strong result reported in the prior-year quarter was largely sustained in the first quarter of 2007 (€-8 million). The cost-income ratio improved by 1.4 percentage points to 77.1 percent.

(in € million)		1 Jan.–31 Mar.			1 Jan.–31 Mar.			Change
		2007			2006			€ million			Percent
Net interest and current income		929			577			352			61.0
Net fee and commission income		789			793			–4			–0.5
Net trading income		343			452			–109			–24.1
Other operating income		0			31			–31			–100,0
Operating income		2,061			1,853			208			11.2
Administrative expenses		1,358			1,389			–31			–2,2
Other operating expenses		–2			3			–5
Operating expenses		1,356			1,392			–36			–2.5
Loan loss provisions		–7			–33			26			78.8
Operating result		712			494			218			44.1
Result from investment securities		126			395			–269			–68.1
Restructuring charges		9			2			7			>+100.0
Income before taxes		829			887			–58			–6.5
Tax expense		168			225			–57			25.3
Income after taxes		661			662			–1			–0.2
Income attributable to minority interests		17			21			–4			–19.0
Net income for the period		644			641			3			0.5
		Ratios
Cost-Income-Ratio		65.8%			75.1%
Return-on-risk-adjusted capital		33.9%			24.2%
Core capital ratio		10.7%			10.4%*)
Total capital ratio		15.7%			15.6%*)
Risk-weighted assets		117,998			119,980*)			–1,982			–1.7
Employees		27,169			27,625*)			–456			–1.7

*) As at 31 December. 2006

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