Frankfurt am Main, 9th of May 2008

Dresdner Bank: Financial market crisis impacts Q1 results

• Value adjustments of €845 million in the trading book
• Costs reduced significantly by 14.1 per cent
• Core capital ratio stable at 9.2 per cent

The financial market crisis impacted Dresdner Bank’s results in the first quarter of 2008. Value adjustments amounting to €845 million in the ABS trading book at the investment bank Dresdner Kleinwort reduced the operating profit of €712 million in the prior-year period to an operating loss of €397 million in Q1 2008. The negative effect on the Bank’s net trading income was particularly pronounced; this item amounted to €-509 million in the first quarter, after €343 million in the previous year. Excluding the value adjustments, Dresdner Bank’s operating profit in the first three months was €448 million.

Performance of net interest and current income and net fee and commission income

Net interest and current income fell by 27 per cent in the first quarter to €683 million, primarily due to special factors. After adjustment for special factors, this item was at the prior-year level. Net interest and current income in the Private & Corporate Clients (PCC) division rose by 6 per cent year-on-year as a result of the strong deposits business. Investment Banking increased its net interest and current income by 7 per cent due to a positive performance in its structured finance business, among other things.

The decline in net fee and commission income reflects the cautious attitude currently adopted by clients with regard to securities investments: this item amounted to €604 million in the first quarter, after €789 million in the prior-year period. Net fee and commission income in the PCC division was slightly below the average for the prior-year quarters (-6 per cent).

Dresdner Bank’s total operating income amounted to €778 million in the first three months of the year, 62 per cent down on Q1 2007. Excluding value adjustments on the Bank’s ABS trading book exposure totalling €845 million, total operating income was €1,623 million.

Performance of the divisions

The Private & Corporate Clients division generated an operating profit of €217 million in the first quarter of 2008. This is on a par with the average for the prior-year quarters. Total operating income fell by 12 per cent to €875 million. The cost-income ratio was 75 per cent.

Dresdner Kleinwort recorded an operating loss of €575 million, after an operating profit of €219 million in the previous year. Total operating income declined by €921 million to €-31 million, mainly due to the above-mentioned value adjustments.

Costs reduced, stable capital base

Dresdner Bank’s total operating expenses fell by 14 per cent as against the first quarter of 2007 to €1,165 million. Total staff costs decreased from €888 million to €722 million, in particular due to lower performance-related remuneration, while non-staff operating costs fell from €470 million to €437 million.

Loan impairment losses recorded a moderate net addition of €10 million in the first quarter, after releases of €7 million in the previous year. This reflects the continuing high quality of the Bank’s loan portfolio.

The return on risk-adjusted capital (RoRAC) was also impacted by the value adjustments and amounted to -25.8 per cent. At 9.2 per cent, the core capital ratio according to Basel II shows that the Bank continues to have a strong capital base.

¹⁾ 2008 according to Basel II, 2007 according to Basel I.
²⁾ As at 31 December 2007.

Note:
The figures given in this press release relate to the Dresdner Bank subgroup and have been prepared in accordance with the IFRSs. The classification of the figures is comparable with those for other major German banks that apply IFRSs. The figures for the Dresdner Bank subgroup prepared in accordance with the IFRSs are not identical to those published by Allianz for its Banking Segment, which includes all of Allianz’s banking activities.

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