Dresdner Bank: Cost savings take effect, loan loss provisions increased

The results of operations, i. e. aggregate net interest income, net commission income and net trading income, declined by 2 percent year-on-year. This includes extraordinary effects caused by the first-time application of IAS 39.

After adjustment for first-time consolidation and other extra-ordinary factors, administrative expenses increased year-on-year by 5 percent. This compares with an average annual increase in costs of 15 percent in the last five years. It shows that the cost-cutting measures introduced in May 2000 and further intensified in 2001 are starting to take effect. The turnaround has begun. By the end of 2001, roughly 4,000 jobs had been shed as part of the cost-cutting program, which – including the measures announced in May 2000 – will see a total reduction in the workforce of 7,800. 1,700 jobs were cut in the second half of 2001 alone. The number of German branch offices declined by 183 to 803 in 2001.

Loan loss provisions were lifted to total roughly EUR 1.9 billion. Loans to middle-market US companies extended in the mid-nineties play a major role here. Dresdner has been systematically streamlining this portfolio since May 2000, and was able to reduce it by 20 percent in 2001.

The pre-tax profit, including net income from investment securities, amounted to EUR 153 million. This includes integration and restructuring costs of around EUR 620 million.

The preliminary key financial data for fiscal 2001 could be found under the following link.

The Board of Managing Directors of Dresdner Bank is confident that the Dresdner Bank Group’s development program – which was launched in 2001 and focuses on the "Private and Business Clients" and "Corporates & Markets" divisions – as well as ongoing integration with Allianz will lead to a sustained improvement in the Bank’s earnings situation.

The Board of Managing Directors intends to propose a dividend of EUR 0.70 per share to the Supervisory Board. This corresponds to a reduction of around 25 percent as against last year.

The Supervisory Board meeting to approve the annual financial statements will be held on April 9, 2002.

Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's business and markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates including the Euro – U.S. dollar exchange rate, (viii) changing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the European Monetary Union, (x) changes in the policies of central banks and/or foreign governments, (xi) the impact of our acquisition of Dresdner Bank, including related integration issues, and (xii) general competitive factors, in each case on a local, regional, national and / or global basis. The matters discussed in this release may also involve risks and uncertainties described from time to time in Allianz AG’s filings with the U.S. Securities and Exchange Commission. Allianz AG assumes no obligation to update any forward-looking information contained in this release.