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DG HYP and WL BANK to enter into merger negotiations

At DZ BANK's press conference today to present the financial statements and business performance of DZ BANK Group in 2016, Mr Wolfgang Kirsch, Chief Executive Officer of DZ BANK, reported that DG HYP and WL BANK will commence merger negotiations, within the framework of reorganising the real estate finance business within DZ BANK Group. Specifically, he commented as follows:

"DZ BANK Group has four companies with a strong position in the real estate business – DG HYP, WL BANK, Bausparkasse Schwäbisch Hall, and DZ BANK AG – all of which have developed successfully in their own right. Following the merger [of DZ BANK and WGZ BANK], we are faced with overlaps which we need to address through a realignment of our real estate [finance] business.

This will adhere to the following guiding principles:
• to serve clients from a single source, to the greatest extent possible;
• to bundle skills and expertise, avoiding duplication as well as any gaps in our range of products and services; and
• to boost economic benefits for cooperative banks.

Against this background, DZ BANK will contribute the commercial real estate [finance] activities of the former WGZ BANK – which DZ BANK has been conducting since the merger – into DG HYP. Moreover, following thorough analysis, the Group's two real estate finance houses, DG HYP and WL BANK, have been asked to enter into merger negotiations. The plan is for the combined real estate bank to continue servicing all four client segments – commercial real estate investors, the housing industry, local authorities, as well as retail customer. The current Chairmen of the Management Boards of the two institutions are set to manage the combined entity as Co-CEOs. We expect the realignment to yield income and cost synergies in a low to mid-double-digit million euro amount."

More information is available at www.dzbank.de.