Investment funds with international portal Sachsen LB to expand offering for savings banks Leipzig, 13 December 2006: Sachsen LB aims to further extend its product and services offering for savings banks in the coming year, CEO Herbert Süß has announced. Speaking to journalists in Leipzig, Süß stated that Sachsen LB had already significantly improved the associated ratio in Saxony this year, particularly in capital market business. "In line with our now concluded planning discussions, we expect to achieve an associated ratio of around 70 percent in the coming year. This figure is already well above ninety percent in traditional banking areas such as credit and export financing," remarked Süß. Sachsen LB's strategic realignment as a specialist bank and a partner to the members of the Sachsen Finance Group was therefore progressing well. It was now a question of further intensifying joint market cultivation. Here, the focus would be on extending the product range for the savings banks' corporate and retail customers. Süß cited Sachsen LB's derivatives offerings for small and medium sized companies and the start of investment products for the savings banks' customers as examples of initiatives to be pursued in this area. The Head of Sachsen LB also gave savings banks' proprietary investment offerings as a further focus of product development. Thus an investment fund recently launched by Sachsen LB Europe specifically for savings banks in Saxony had met with great demand. Directly prior to the market launch, Sachsen LB and a number of prestigious international partners had established an investment platform that offered institutional investors "optimal portfolio diversification in terms of risk and taxation from a single source". "Savings banks in Saxony and Eastern Germany also have priority here," emphasised Süß. Süß stated that he was happy with business performance in the ending financial year. Taking into account the figures now available for November, the Bank now forecast an increase in single-entity earnings before taxes to around EUR 50 million (previous year: EUR 20.2 million). According to Süß, the improvement was attributable to the good operating result at the same level as the previous year (EUR 143 million), to which both the credit business and capital market activities had contributed, and the expected reduction in the risk provision in the credit business to around EUR 70 million (previous year: EUR 116 million). Earnings had been depressed by extraordinary expenses relating to the MDL settlement. However, due to the good operating result, these could now be completely absorbed. Thanks to the MDL settlement, claimed Süß, a line had now been drawn under the long-running dispute and all legal proceedings had now been terminated. "We have done the hard work and solved a number of problems that had been proving a major burden for our Bank within the space of just one year," Süß explained. For further information, please contact: Dr. Frank Steinmeyer, Communications/Investor Relations Telephone +49 (0) 341 979-1120, Fax +49 (0) 0341 979-1109, E-mail [email protected] Jeannette Brakemeier, Communications/Investor Relations Telephone +49 (0) 0341 979-1127, Fax +49 (0) 0341 979-1109, E-mail [email protected]