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REPORT OF THE SUPERVISORY BOARD

In 2020, the Supervisory Board, and Executive Committee appointed by it, advised and supervised the members of the Board of Management in accordance with legal requirements and the provisions of the Articles of Association. Decisions on the transactions presented for their approval were also made.

COOPERATION WITH BOARD OF MANAGEMENT

The Board of Management reported regularly, promptly and extensively in verbal and written form to the Supervisory Board regarding the performance of the Company and the
DZ PRIVATBANK Group regarding day-to-day business. Furthermore, the Board of Management informed the Supervisory Board on a regular basis concerning the business policy including the strategic and organisational direction of DZ PRIVATBANK S.A. The commercial position of the Company, the corporate planning and strategy, as well as key financial data and risk management, were highlighted in the statements.

Four meetings of the Supervisory Board were held in the 2020 financial year. A major focus of the work of the Supervisory Board was to help the Bank to implement its growth strategy as a centre of expertise and provider of solutions to the cooperative banking group in private banking, fund services and lending. In its December meeting, the Supervisory Board defined the risk, capital and liquidity strategy for 2021 and updated the business strategy, in particular adding the topic of sustainability.
The Supervisory Board acknowledged the measures implemented by the Board of Management in close cooperation with the Bank's emergency organisation at an early stage and with high implementation speed in the context of the SARS-CoV-2 pandemic to ensure the Bank's operations and the protection of its employees. This included the distribution of the workforce across different workplaces, increased mobile working and the use of digital communication formats for personal exchanges with customers and business partners.

The smooth business operations along the entire value chain, even under huge stress, and the very pleasing sales successes in the business segments demonstrate the effectiveness of the measures as well as the Bank's performance, reliability and customer focus, even in times of crisis.

Following the successful realignment of the Private Banking business segment, the attractive growth opportunities in the German market for serving high net-worth private clients, entrepreneurs, foundations and semi-institutional clients were exploited very successfully in cooperation with the cooperative banks. Compared to the previous year (EUR 0.4 billion), the net sales volume increased to a new record of EUR 1.1 billion.

Assets under management reached the EUR 20 billion mark for the first time. Substantial customer demand was evident in professional asset management (financial portfolio management). Swissness solutions and investment solutions, in particular, managed according to strict sustainability criteria recorded high growth rates. They enable clients to invest part of their assets in Europe, but outside the eurozone, or to take on social and environmental responsibility with their investment.

In the Fund Services business segment, the total volume of funds under management reached a new high of EUR 139 billion as a result of a significant number of new issues and record net inflows in the Luxembourg, Zurich and Frankfurt depositaries. The pleasing growth confirms the professional support of fund initiators as a cross-border full-service provider in the third-party fund business with fully comprehensive value chains for investment funds in liquid and alternative (illiquid) asset classes in the DACH region.

Treasury/Brokerage, in cooperation with the Private Banking, Fund Services and Credit business units, made a very important contribution to the Bank's overall result in a challenging market environment by exploiting market opportunities in liquidity management as well as a record result in brokerage due to high market volatility and a significant increase in transaction numbers.

In line with the strategic target and dynamic trend of previous years, the share of variable euro financing in the total lending volume of EUR 5 billion continued to increase significantly in the Lending business segment. The positive development is based on intensive cooperation with the cooperative banks and high demand from private and SME borrowers for flexible credit products, particularly in real estate and project financing. In addition to the highly standardised LuxCredit brokerage business, the focus is on expanding the individual lending business with private banking and wealth management clients, for which DZ PRIVATBANK has specialist expertise.

DZ PRIVATBANK's complementary, high-quality national and international investment, fund and financing expertise as well as its regional presence in Germany will continue to form the basis for the Bank's successful development in the future and for closer cooperation with its cooperative partner banks. The Supervisory Board participated in internal qualification measures on the topics of “international financial markets” and “fund services” along the current regulatory requirements and their implementation at DZ PRIVATBANK.

The Supervisory Board conducted the annual evaluation of the Board of Management and the Supervisory Board in the first half of 2020. In doing so, it came to the conclusion that the structure, size, composition and performance of the Board of Management and the Supervisory Board as well as the knowledge, skills and experience of the individual members of the Board of Management and the Supervisory Board and of the Board of Management and the Supervisory Board as a whole meet the requirements. The Supervisory Board has determined both the suitability of the individual members of the Board of Management and Supervisory Board and the collective suitability of the Board of Management and Supervisory Board as a whole.

DRAWING UP OF THE ANNUAL FINANCIAL STATEMENTS

The Executive Committee and the Supervisory Board had detailed discussions on the annual financial statements and the operations report for the 2020 financial year. The audit report of Ernst & Young S.A. was also available. The auditor representative reported in detail to the Executive Committee on the results of the audit and were available to give additional explanations and opinions. The auditor issued an unqualified audit opinion.

 

The Supervisory Board has confirmed the annual financial statements for the 2020 financial year prepared by the Board of Management.

It is proposed to distribute a dividend to shareholders at the previous year’s level of EUR 0.5 per share.

 

CHANGE IN THE SUPERVISORY BOARD AND THE BOARD OF MANAGEMENT

Mr Stefan Bielmeier joined the Board of Management of DZ PRIVATBANK S.A. as a new member with effect from 1 January 2021. There were no personnel changes on the Supervisory Board in the 2020 financial year.

The Supervisory Board expresses its thanks to the Board of Management and all the employees of DZ PRIVATBANK S.A. for their successful work in 2020.

 

Luxembourg, 12 March 2021


DZ PRIVATBANK S.A.

Uwe Fröhlich
Chairman of the Supervisory Board