03.07.2009

Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG (Xetra: 549416 - Nachrichten) . The issuer / publisher is solely responsible for the content of this announcement.
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Correction of the corporate news from 20:23.

* Preliminary consolidated loss (IFRS) EUR 580 million * Results still impaired by heavy extraordinary effects * Core business (London: CORE.L - Nachrichten) not profitable due to economic circumstances * Restructuring progress ongoing

The Board of Managing Directors of IKB (Xetra: 806330 - Nachrichten) has prepared the preliminary figures for the financial year 2008/09 (1 April 2008 to 31 March 2009) for the IKB Group. All the figures stated below have not yet been formally stated by the Board of Managing Directors or audited and remain preliminary until approved by the Supervisory Board of IKB.

The preliminary annual loss (after taxes) in the 2008/09 IFRS consolidated financial statements amounts to EUR 580 million (2007/08 financial year: EUR 11 million). Following the dissolution of retained earnings of EUR 502 million, there will be a preliminary consolidated balance sheet loss of EUR 78 million (2007/08 financial year: EUR 11 million). The losses in the 2008/09 financial year are due to further losses on portfolio investments, heavy fair values losses on securities and derivatives due to the severe interest rate volatility and a sharp rise in risk premiums, including for first class securities, the continuing high costs of managing the crisis and ongoing restructuring expenses incurred due to EU requirements. In addition there is the deep recession, requiring a significantly higher allowance for provisions for possible loan losses. In particular, the loss in the previous year was lower because IKB reported income from risk assumption of EUR 2.4 billion by third parties.

The preliminary income statement for the financial year 2008/09 is as follows.

EUR million FY 2008/09 / FY 2007/08 / Difference Net interest income 303 / 452 / -149 Provision for possible loan losses 590 / 255 / 334 Net interest income (after provision for possible loan losses) -287 / 196 / -483 Net fee and commission income 33 / 55 / -22 Net income from financial instruments at fair value -162 / -1,830 / 1,668 Income from investment securities -282 / -980 / 698 Net income from investment accounted for using the equity method -8 / 2 / -10 Administrative expenses 375 / 386 / -11 Other operating income 131 / 666 / -535 Result from risk transfer 2,401 / -2,401 Restructuring expenses 52 / 0 / 52 Operating result -1,002 / 124 / -1,126 Taxes 422 / -135 / 557 Consolidated loss -580 / -11 / -569

Net interest income declined by EUR 149 million to EUR 303 million. Net interest income in the Portfolio Investments segment declined by EUR 106 million as a result of the deconsolidation of the Rhineland Funding Capital Corporation conduit and the reduction in holdings. The reduction is also due to the lower credit volume and higher refinancing costs in sales areas. The new business volume in the three segments of Corporate Clients, Real Estate Clients and Structured Finance was reduced to EUR 5.9 billion in financial year 2008/09 (previous year: EUR 9.8 billion). For the first time, the compounding of liabilities carried at present value in accordance with IAS 39.AG8 resulted in an interest expense of EUR 61 million. Positive factors included the EUR 45 million lower interest expense from the write-down of compensating positions for hedging positions in line with IG 60 A & (Paris: FR0000075160 - Nachrichten) amp; B (EUR 49 million) and the inflow of liquidity from the equity increase.

The allowance for losses on loans and advances more than doubled from EUR 255 million in the previous year to EUR 590 million as a result of the massive economic slump. The rise in the allowance for losses on loans and advances focused on the Structured Finance segment (EUR 324 million after EUR 63 million in the previous year); an increase in the allowance for losses on loans and advances of EUR 60 million was needed for Corporate Clients business in Germany (EUR 126 million after EUR 66 million in the previous year).

Against the same period of the previous year, net fee and commission income was down EUR 22 million to EUR 33 million (previous year: EUR 55 million). This was largely due to lower commission income on account of the smaller new business volume and fee and commission expenses, which rose by EUR 8 million, driven mainly by transactions to procure liquidity.

The fair value loss amounted to EUR 162 million after EUR 1,830 million in the previous year. Good quality securities used in long-term investments - for which the measurement through profit and loss option was exercised in previous years - and derivatives incurred fair value losses recognised in the income statement of EUR 779 million. This was offset by gains of EUR 617 million, particularly on liabilities measured through profit and loss.

The net loss on investment securities of EUR 234 million was essentially due to measurement losses on IKB's portfolio investments (previous year: EUR 980 million).

Administrative expenses declined by EUR 11 million to EUR 375 million. Personnel expenses contracted by EUR 12 million to EUR 179 million, due largely to the reduced headcount. As of the of the financial year, IKB had 1,718 employees (previous year: 1,839). At EUR 196 million, other administrative expenses were roughly stable year-on-year (EUR 195 million). This includes administrative expenses due to the crisis of EUR 57 million. Restructuring expenses of EUR 52 million were also incurred.

At EUR 131 million, other operating income was down on the previous year by EUR 535 million. This item was essentially dominated by gains on the measurement of liabilities in line with IAS39 AG.8 (EUR 255 million after EUR 649 million in the previous year) on the one hand, and the amortisation of goodwill from the acquisition of IVG Kavernen GmbH on the other. This resulted in goodwill of EUR 186 million to be amortised in full. At the same time, income tax provisions at IVG Kavernen GmbH of EUR 373 million were reversed, resulting in overall income from this transaction of EUR 187 million.

The operating result (before taxes) amounted to EUR 1.002 billion (EUR 124 million). In addition to the non-recurring effects described above, this was also contributed to by the negative results due to economic circumstances of the three segments - Corporate Clients (EUR 106 million after EUR +21 million in the previous year), Structured Finance (EUR 268 million after EUR 3 million in the previous year) and Real Estate Finance (EUR 48 million after EUR +11 million in the previous year).

At EUR 44.8 billion, total assets declined by EUR 5.4 billion between 31 March 2008 and 31 March 2009. This was primarily attributable to the reduction in investment securities (including portfolio investments) and other assets as a result of the early settlement of risk shielding by KfW and, on the equity and liabilities side, the reduction of the portfolio of securitised liabilities due to repayments, early buy-backs and measurement effects. The Tier 1 capital ratio at Group level is 8.1%.

Overall, the Bank's business performance and its position in the 2008/09 financial year were strongly impacted by its own crisis and the general financial market and economic crisis. In the past financial year, IKB succeeded in stabilising its position as a result of the capital increase subscribed by KfW, the extensive reduction of portfolio investments and the guarantees provided by the SoFFin.

Outlook

The Special Fund for the Stabilization of the Financial Market (Sonderfonds Finanzmarktstabilisierung - SoFFin) has resolved in principle to ext the guarantee for new bonds to be issued by IKB in future by EUR 7 billion. Prior to this decision, Lone Star declared the suspensively conditional subordination of a subordinated bond and the conversion of a subscribed convertible bond.

IKB's ability to continue as a going concern deps on compliance with the requirements * of the SoFFin for the provision of guarantees, * of the EU Commission for the approval of state aid and * of the Deposit Protection Fund of private banks and the EU Commission's approval of the exted SoFFin guarantees.

If IKB is unable to maintain a Tier 1 capital ratio of at least 8%, guarantee its risk-bearing capacity and sufficiently reduce risk items in the coming financial years, further additional equity will be required.

The Board of Managing Directors is assuming that the requirements will be implemented on time and that the economic specifications will be complied with at the same time. IKB will therefore continue working intensively to advance its restructuring and to focus more strongly on SMEs. Building on its credit competence, the Bank's offering will be exted to include services such as M&A, restructuring consulting, derivatives and capital market services. This is also expected to generate additional fee and commission income.

Once restructuring is complete, the Bank is expected to have a substantially different earnings structure and a lower overall earnings level than in the financial years prior to 2007/08 as the income from portfolio investments will decline considerably. The financial years 2009/10 and 2010/11 will be significantly impaired by the consequences of the financial market crisis and its spread to the real economy and thereby the corporate sector. The main negative factors will be the restriction of new business, greater allowances for losses on loans and advances and the sharp rise in refinancing costs. Furthermore, IKB will reduce its costs significantly by lowering operating expenses by 30% year-on-year and shedding an anticipated 370 jobs in the Group. In the medium term, the Bank is aiming to achieve a reasonable return on the capital employed in its operating activities.

Düsseldorf, 3 July 2009

Contact: Dr. Jörg Chittka, Tel. +49 (0)211 8221-4349, Volker Rapp Tel. +49 (0)211 8221-3043; Email: investor.relations@ikb.de 03.07.2009 Financial News transmitted by DGAP

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Language: English Issuer: IKB Deutsche Industriebank AG Wilhelm-Bötzkes-Straße 1 40474 Düsseldorf Deutschland Phone: +49 (0)211 8221-4511 Fax: +49 (0)211 8221-2511 E-mail: investor.relations@ikb.de Internet: www.ikb.de ISIN: DE0008063306, DE000A0JQCE3,, DE000A0SMNZ5 WKN: 806330, A0JQCE,, A0SMNZ Listed: Regulierter Markt in Berlin, Frankfurt (General Standard), München, Hamburg, Düsseldorf; Freiverkehr in Hannover, Stuttgart of News DGAP News-Service
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