Helaba reports best-ever Group Earnings Before Tax under IFRS in an amount of EUR 492 million

Frankfurt/Main (ots) -

- Owners will receive a dividend of 8 per cent
- Requirements of EBA and Basel III are satisfied
- Regulatory environment requires portfolio adaptations and cost
optimisation

With Group earnings before tax in an amount of EUR 492 million,
Helaba Landesbank Hessen-Thüringen exceeded both its targets and the
previous year's result (EUR 398 million) and confirmed its earnings
forecast. CEO Hans-Dieter Brenner is satisfied: "This is our best
performance not only since the introduction of IFRS accounting in
2007, but also the highest Group earnings before tax ever generated
by Helaba. Consolidated net income rose by EUR 99 million to EUR 397
million. This performance is indeed impressive and we are highly
satisfied with this result."

The development of the trading result was extremely volatile.
After an excellent first half of the year (EUR 173 million), there
was a change for the worse in the fourth quarter in particular, due
to the aggravation of the debt crisis and the associated spread
increases, which in the end led to a negative trading result of EUR
44 million. This trading result was more than offset by positive
valuation effects from banking book derivatives. The result of
hedges/derivatives rose by EUR 287 million to EUR 292 million.
Brenner: "Quite clearly the rollercoaster ride the financial markets
experienced in 2011 posed extreme challenges to bank management and
control."

Reliability, competence and competitiveness in Brenner's opinion
form the basis for this good performance. For him, this is
demonstrated by five factors in particular.

1. Thanks to its sustainable, customer-oriented business model,
the Bank is in a position to stay on a stable, ascendant earnings
path, even during periods of market turbulence. Despite a lower
balance sheet total, net interest income and net commission income
have increased.

2. In the financial year 2011, Helaba again generated a result
which enables all subordinated capital to be serviced, allocations to
revenue reserves to strengthen Tier-1 capital and the reporting of a
net income for the year. The owners will receive an unchanged
dividend of 8 per cent. 3. The management and control of the Bank in
the year 2011 again remained geared to the further strengthening of
the capital base, in addition to generating significantly higher
income. The Tier-1 Capital Ratio reached 10.3 per cent ? after the
establishment of the annual accounts ? and the bank achieved a Total
Capital Ratio of 15.3 per cent. Since the conversion of the silent
participations in the amount of EUR 1.9 billion into capital
contributions of the State of Hesse at the end of 2011, Helaba has
complied with the requirements of both Basel III and the criteria
defined by the EBA for CET-1 capital.

4. Pre-tax ROE improved from 7.9 per cent to 9.2 per cent. The
Cost-Income-Ratio declined from 61.0 to 56.6 per cent. Prudential
risk assets remained constant at EUR 57.3 billion ? despite stricter
capital-backing requirements for trading operations and securitized
positions, which were tightened at the end of the year.

5. Thanks to its robust condition, Helaba is one of the credit
institutions with the highest creditworthiness ratings. The
downgrades in the past year have not had an influence on either the
Bank's access to funding in the capital markets or on funding costs.
Brenner: "In my opinion, the positive Group net profit before taxes
that has been generated again should be a factor which ensures that
our rating position will at least not deteriorate compared to our
main competitors."

Key Elements of the Consolidated Accounts

Balance Sheet

The consolidated balance sheet total of Helaba declined by 1.4 per
cent in the financial year 2011 to EUR 164.0 billion. The decline of
the balance sheet total is due to unscheduled redemptions of loans
and advances to customers and the focused reduction in the trading
assets. The business volume was down by 3.4 per cent to EUR
186.6 billion.

Despite an increase in new business, loans and advances to
customers declined to EUR 84.0 billion. Extraordinary redemptions by
customers and the replacement of bank loans by bond issues as a
result of the favourable capital market environment had an impact
here. The share of loans and advances to customers in the balance
sheet total amounts to 51.2 per cent.

In the lending business with customers, an above-target volume was
generated in Helaba?s medium and long-term new business - including
loan renewals - in an amount of EUR 14.4 billion. Of this total, Real
Estate Finance accounted for EUR 6.7 billion, Corporate Finance for
EUR 4.1 billion, business with the savings banks and with municipal
authorities for EUR 1 billion each and Frankfurter Sparkasse for EUR
0.9 billion. Brenner: "Helaba was thus once again one of the banks
which provided comprehensive services to their customers even during
difficult market phases."

Thanks to the confidence of investors, the sound business
development and good ratings, Helaba obtained the funds required for
funding this new business at competitive terms and with a well
diversified structure in the capital markets. Medium to long-term
borrowings amounted to EUR 12 billion. Of this total, unsecured
issues accounted for EUR 9 billion and Pfandbrief (covered bond)
issues for EUR 3 billion, among them for the first time
USD-denominated public Pfandbriefe. The sale of retail issues,
amounting to EUR 2.3 billion, also significantly exceeded the
previous year's level.

Income Statement

CFO Dr. Detlef Hosemann states three reasons for the renewed
improvement in performance on the year before. First, net interest
income and net commission income increased, even though the balance
sheet total and the business volume declined. Second, risk
provisioning was below the previous year's level. Third, the trading
result was more than offset by positive effects from the result of
hedges/derivatives due to the use of the fair value method.

Net interest income, amounting to more than EUR 1 billion,
increased by 5 per cent on the previous year's level. The retail
business of Frankfurter Sparkasse accounts for one quarter of net
interest income.

Provisions for losses on loans and advances, amounting to EUR 273
million, were slightly below the previous year's figure. Of this
total, an amount of EUR 180 million is attributable to itemized
valuation allowances for bad debts where there was a concrete risk of
default. For exposures to which no default criteria apply, we
increased the portfolio allowance by about EUR 80 million. In this
context, an adequate buffer for unexpected defaults has also been
established.

Net commission income rose from EUR 249 million to EUR 254 million
in 2011. As in the year before, net commission income remained a very
stable element of operating earnings.

Helaba?s net trading loss for the year amounted to EUR 44 million,
after reporting a semi-annual profit of 173 million. The overall
trading result for 2012 is expected to be positive should the markets
stabilise, thanks to a reversal in impairments.

The result of hedges/derivatives rose by EUR 287 million to EUR
292 million. This strong increase is mainly due to taking the
liquidity component of foreign currency in connection with the
valuation of derivatives into account, which is required under IFRS.

Income from non-current financial assets, including companies
valued at equity, which is negative at EUR 16 million, improved
slightly. The write-downs concern Greek government bonds in an amount
of EUR 58 million in particular as well as the shareholding in
Landesbank Berlin which is held indirectly via Frankfurter Sparkasse.

The Other operating result declined significantly, from EUR 357
million to EUR 209 million. This is solely due to the deconsolidation
of HANNOVER LEASING, which was still fully consolidated in the year
before.

The decline of general administrative expenses, from EUR 1.1
billion to just under EUR 1 billion is also due to the
deconsolidation of HANNOVER LEASING at the end of 2011. On the basis
of adjusted figures, personnel expenses remained practically
unchanged at EUR 513 million. Non-personnel expense increased
markedly on an adjusted basis, from EUR 428 million to EUR
484 million. This increase was essentially due to the bank levy of
about EUR 30 million. Earnings before tax amounted to EUR 492
million, after EUR 398 in the year before. After taking taxes on
income in the amount of EUR 95 million into consideration, Helaba
generated a consolidated net income of EUR 397 million.

Hosemann arrives at a positive assessment of Helaba's performance:
"In 2011 Helaba again demonstrated that it can generate consistently
good earnings in a difficult and volatile market environment. It is
not always possible to compensate for the fair value effects of IFRS
accounting. What is much more important however is the consistency of
results from operating activities in our customer business which have
been on a sustainably positive trajectory for years. "

Changes in the regulatory Environment require Adaptation Measures

The new fundamental prudential and regulatory requirements that
apply on an international level, as well as the hardening of the
silent participations of the State of Hesse and their conversion into
equity eligible under Basel III (capital contribution by the State of
Hesse), will lead to significantly higher capital and liquidity costs
for Helaba in future. At the same time, the risk/reward profiles of
individual transactions and entire business fields will change.
Brenner: "The consequences for competition and profitability in the
banking sector are significant and will force us to take corrective
action." The Bank intends to respond to these challenges by adapting
the business portfolio and optimising costs further. The necessary
optimisation of the business processes will require personnel
cutbacks over the next four years. Brenner: "These measures, which
have been forced upon us by changes in the fundamental regulatory
requirements and for which there is therefore no alternative, will
enable us to strengthen the sustainability and long-term viability of
Helaba. I cannot deny, however, that this will also call for
considerable sacrifice."

S-Group Bank North Rhine-Westphalia - An opportunity for strategic
further Development

After successfully completing the current negotiations, Helaba
intends to integrate the former S-Group Bank business of WestLB with
the savings banks in North Rhine-Westphalia into Helaba, effective 1
July 2012. The S-Group Bank will have total assets of about EUR 40
billion, about EUR 8 billion of risk-weighted assets, EUR 1 billion
of equity and about 400 employees. It has been agreed that the
S-Group Bank will be transferred to Helaba with a goodwill of zero
and that the savings banks in North Rhine-Westphalia, represented by
their two savings banks associations, will join the group of owners
of Helaba. Brenner: "This strategic alignment will pave the way for
us to continue the development in our strategic business model. We
will do whatever is needed to make this transaction a success.
However, I am not going to play down the fact that there are still
obstacles that need to be overcome."

Outlook

The German economy is expected to end its current sideways
movement and return to a moderate growth path in the spring. Interest
rates are likely to remain at a low level. Brenner: "For me, the
development of earnings seen in the first three months of the 2012
business year is cause for optimism that we are on track to achieve
our ambitious earnings targets and that, for 2012, we will see a
similarly good performance to the year under review."

Presse und Kommunikation:
MAIN TOWER · Neue Mainzer Straße 52-58
60311 Frankfurt am Main · www.helaba.de
Tel.: +49 (0) 69 / 9132 - 2192

Wolfgang Kuß
E-Mail: wolfgang.kuss@helaba.de

Ursula-Brita Krück
E-Mail: ursula-brita.krueck@helaba.de