ALLIANZ GROUP 78 Segment reporting after the transfer of business acti- vities of Dresdner Bank to the IRU (reporting structure 2004) At the beginning of 2003, the Institutional Restructuring Unit (IRU) commenced its activities. To this segment were trans- ferred the non-strategic domestic and foreign loan portfolios, the private equity business as well as selected restructuring ac- tivities of Dresdner Bank. This way, we eased the pressure on the company’s operating segments Private & Business Clients (PBC), Corporate Banking and Dresdner Kleinwort Wasserstein (DrKW). Looking ahead to the 2004 reporting, we provide a commentary here according to the new structure. PBC Corporate DrKW IRU Other 1) Total 2) Banking Operating income ¤  mn 3,019 1,065 2,185 578 – 553 6,293 Administrative expenses ¤  mn – 2,524 – 499 – 1,875 – 422 – 418 – 5,738 Loan loss provisions  ¤  mn –247 –118 45 –884 188 – 1,015 Operating result ¤  mn 248 447 354 – 728 – 782 – 460 Other income/expenses ¤  mn –175 –102 7 –527 –848 –1,645 Earnings after taxes ¤  mn 53 208 238 – 933 – 597 – 1,030 Operating cost-income ratio % 83.6 46.9 85.8 73.1 n.m. 91.2 1) Other = Corporate items and corporate investments of Dresdner Bank as well as consolidations 2) Total = Dresdner Bank contribution to banking business of Allianz Group Private & Business Clients (reporting structure 2004) In a fiercely contested market, the Private & Business Clients di- vision of Dresdner Bank recorded  operating income of some 3 billion euros. This amount divides up almost equally between net interest income and net fee and commission income. How- ever, developments differed:  net fee and commission income im- proved due to a successful brokerage business and the success- ful cooperation between Allianz and Dresdner Bank. Both rev- enues and profit improved. In contrast,  net interest income con- tracted because the market allowed only lower margins in the deposit business.  Administrative expenses were significantly re- duced thanks to rigorous cost management and further staff re- ductions, especially in the back office area. By continuously cleaning-up the loan portfolio, we lowered the  loan loss provi- sions strongly to 247 million euros. Overall, the Private & Busi- ness Clients segment recorded an  operating result of 248 mil- lion euros. After taking other income and expenses into account (essentially restructuring expenses of 174 million euros),  earn- ings after taxes were 53 million euros. Corporate Banking (reporting structure 2004) In persistently difficult economic conditions, the Corporate Banking division of Dresdner Bank recorded  operating income of 1.1 billion euros, with all earnings components – in spite of declining risk weighted assets – showing a stable trend. The projects to streamline the support and service functions that were almost entirely implemented in the year under review, led to a significant decline in  administrative expenses to 0.5 billion euros. In response to a new record in company insolvencies, loan loss provisions were raised to 118 million euros. Overall, the  operating result climbed to 447 million euros. After other income/expenses, especially restructuring expenses of 90 mil- lion euros,  earnings after taxes were 208 million euros. Segment reporting after the transfer of business activities of Dresdner Bank to the IRU as of December 31, 2003