Postbank with new line-up in insurance business
Future conditions
Expectations of business developments unchanged
Opportunities

Postbank with new line-up in insurance business

Deutsche Postbank AG and Talanx AG signed an agreement on July 18, 2007 for Talanx to purchase BHW Lebensversicherungs AG, BHW Pensionkasse AG and other Postbank insurance investments. The purchase price for the companies comes to €550 million. Subject to regulatory approval, Postbank and Talanx expect to close the transaction this autumn. At the same time, Postbank and Talanx entered into long-term distribution agreements in life and accident insurance. Postbank can now focus on segments promising economies of scale.

Future conditions

The world economy is still on a marked upturn. Adverse factors such as the recent weakness in the US economy and high oil prices have not yet had any lasting negative impact on global economic activity. The International Monetary Fund has announced that it will be raising its growth forecast for 2007 even beyond the approximate 5% currently projected.

At 2.2%, American GDP growth is likely to be moderate for US standards, although the economy is showing signs of picking up for the second half year. Business investment and private consumption are rising. The labour market likewise looks healthy.

At 2.5%, Japan’s GDP growth is likely to be slightly up on the prior year. Foreign trade continues to grow. Business investment and private consumption are on a solid up-ward trend. There is no change to the positive economic outlook for China. The growth trend there will probably continue at a very high level in the second half of the year.

The euro zone economy may have passed its cyclical peak but growth ought to remain solid through the second half of the year. At 2.7%, GDP growth for the year as a whole is likely to be as strong as in the previous year.

In Germany, business investment will remain a key driver of economic activity. Although the impetus from exports will lessen, private consumption is expected to overcome the weak patch triggered by the VAT increase at the start of the year. GDP growth, at 2.5%, is likely to almost match its previous year’s level.

Expectations of business developments unchanged

In the current year, Deutsche Post World Net is optimistic that business performance will be positive overall. We expect revenue to grow slightly. Profit from operating activities (EBIT) before non-recurring effects is anticipated to amount to at least €3.6 billion. This is an increase of at least 3% over the comparable figure in the pre-vious year, when non-recurring effects including exercise of the exchangeable bond on Postbank stock and the related sale of shares in Deutsche Postbank had a positive effect on profits.

In the MAIL Division, revenue is expected to be stable or to increase slightly. We anticipate being able to more than offset revenue losses in the mail business in Germany with the revenue generated by the other business units. EBIT should remain stable at €2 billion.

In 2007, we expect the EXPRESS Division’s EBIT to amount to at least €400 million. This figure includes expenses for construction of the new air hub at Leipzig/Halle airport.

In the LOGISTICS Division, we anticipate a high single-digit percentage increase in revenue for 2007. EBIT growth should be around 15%, not including the non-recurring income of €59 million from the disposal of Vfw AG.

In the FINANCIAL SERVICES Division, income will rise thanks, among other factors, to the continual growth in contributions by BHW. The Group expects EBIT to in-crease by at least 5%.

Opportunities

For a comprehensive outlook on the Group’s economic opportunities, please consult the 2006 Annual Report. No other significant opportunities were identified in the period under review.