The results of the FINANCIAL SERVICES Corporate Division and of Postbank for 2004 have been adjusted for the effects of a change in accounting policy adopted in 2005.

The corporate division generated income of €7,272 million in 2005 (previous year: €7,349 million). Income from banking transactions comprises income from interest, fees and commissions, and trading transactions; it is equivalent to an industrial company’s revenue.

The corporate division increased its earnings again: thanks to Postbank’s continued healthy operating performance, the profit from operating activities (EBIT) in the corporate division rose by 10.6% from €714 million to €790 million.

In the period under review, Postbank was able to increase its total income – balance sheet-related revenues and net fee and commission income – by a substantial 5.9% to €2,831 million (previous year: €2,674 million). Balance sheet-related revenues – net interest income, net trading income and net income from investment securities – increased by 3.4% in the year under review to €2,132 million (previous year: €2,062 million). Despite the historically low level of interest rates during the course of the year, net interest income improved by 6.9% year-on-year to €1,675 million. At €252 million, net income from investment securities was 15.2% below the prior year. Net trading income increased by 3.5% to €205 million.

Net fee and commission income developed particularly well, rising by 14.2% year-on-year to €699 million. This was partly due to the fact that the new Transaction Banking Business Division was included for only part of the previous year. However, increased sales of products with a high advisory and consulting content and the new charging structure for checking accounts also made a positive contribution to this performance. The proportion of total income accounted for by net fee and commission income rose from 22.9% to 24.7%.

The allowance for losses on loans and advances for the credit business rose by 10.8%, and thus by less than the rate of growth in customer credits. Encouragingly, administrative expenses remained virtually unchanged at €1,886 million, despite the takeover of the payment transaction divisions of Dresdner Bank and Deutsche Bank, during the course of 2004 – these were included for only part of that year – and despite our acquisition of the London branch of BHF on January 1, 2005.

Net other operating income and expenses in the year under review amounted to €–21 million (previous year: €28 million). This item included the reversal of provisions for the Postal Civil Service Health Insurance Fund and the recognition of provisions for forthcoming integration measures.

Postbank’s return on equity (RoE) before taxes rose year-on-year from 14.0% to 14.6%. The cost/income ratio also developed favorably, falling from 67.7% to 63.7% in the traditional banking business, and amounted to 66.6% including Transaction Banking. The tier 1 ratio, calculated in accordance with the BIS standards, amounted to 8.3% at December 31, 2005 compared with 8.5% at the end of the previous year.

Deutsche Postbank AG publishes its own annual report on March 13, 2006.