Amended: Fitch Affirms DekaBank's Ratings

Business Wire, Oct 13, 2004

LONDON & FRANKFURT, Germany -- (This press release corrects a version issued earlier today.)

Fitch Ratings, the international rating agency, has today affirmed DekaBank Deutsche Girozentrale's ('DekaBank') unguaranteed long-term rating at 'A', Rating Outlook Stable and guaranteed ratings at long-term 'AAA', Rating Outlook Stable and short-term 'F1 '. The Individual and the Support rating are affirmed at 'B/C' and '1', respectively.

The long-term rating for unguaranteed obligations is based on DekaBank's stand alone financial performance. Its Individual rating reflects its strong domestic asset management franchise, relatively low credit risk profile, well diversified revenue structure and good capitalisation.

This rating action follows the approval by DekaBank's Supervisory Board of a plan to stabilise and revitalise its real estate fund Deka-ImmobilienFonds. This fund, which is predominantly invested in Germany, has faced a cash outflow of c.EUR1.7 billion since the beginning of 2004 (total fund value of EUR5.6 billion at end-September 2004), accelerating in the third quarter as DekaBank was hit by internal fraud.

'Following discussions with the bank Fitch believes DekaBank is in a position to provide its fund with the liquidity needed,' said Fitch analyst Britta Graf-Tiedtke. The agency believes the actions approved today should be sufficient to stop additional net cash outflow by bringing about an improvement in the fund's performance. The extra costs arising from these actions should be easily covered by existing revenue and, therefore, should only have a minor impact on profitability. Even in a worst case scenario, DekaBank's reserves should be sufficient to cover the costs.

DekaBank is a central institution of the German public banking sector and its main asset manager (as well as the second largest in Germany). It was formed in 1999 on the merger of Deutsche Girozentrale (DGZ) and DekaBank, combining DGZ's wholesale banking with the fund management activities of DekaBank. At end-June 2004, DekaBank had EUR137 billion assets under management. About two-thirds were retail funds, mainly distributed through the savings banks' branch networks.