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• Substantial burdens from financial market crisis absorbed
• Full allowance made for exposure to Icelandic banks
• Costs reduced considerably

WestLB AG´s Managing Board has decided to publish key information today about its results for the first nine months of the current year. The decision is prompted by the need to build confidence by providing transparency in the current uncertainty on the capital markets. The full interim report will be published as planned on November 27, 2008.

WestLB Group generated a profit before taxes of € 604 million in the first nine months of 2008 (previous year: € -113 million). Profit after taxes amounted to € 532 million (previous year: € -145 million). Restructuring expenses, higher risk provisions, valuation losses on securities caused by acute market distortions and the effects from the risk shield at the end of the first quarter have all been included in the result.

In the first nine months WestLB made further progress with its comprehensive restructuring programme and further strengthened its position in the area of project finance, improving its global ranking from 18th to 7th (source: Thomson Reuters). Whilst net interest income rose by 6% to € 897 million, net fee and commission income fell from € 322 million in the previous year to € 289 million as a result of customer reticence in securities and custodial business. The net trading result of € 631 million was largely accounted for by the ring-fence gain at the end of the first quarter of 2008. Offsetting items included valuation losses from state-guaranteed securitisations, government bonds and trading positions with Icelandic credit institutions. The application of the amended IAS 39 meant that valuation losses of € 150 million could be avoided as a result of reassigning financial instruments in the held-for-trading category to the loans and receivables category.

The impairment charge for credit losses was increased further to a total of € 345 million in the third quarter on account of the deteriorating economic outlook. The Bank made full allowance in the third quarter for its exposure to Icelandic banks amounting to € 196 million. The charges were attributed to the impairment charge for credit losses, the net trading result and the result from financial investments in accordance with the categorisation of the positions.

WestLB has made considerable progress with its measures aimed at reducing costs. In the first nine months of the year administrative expenses amounted to € 1,040 million, down 11% from the year-earlier figure of € 1,167 million. The cost cuts on the personnel side were largely achieved through headcount reductions and cuts in performance-related remuneration. In the area of operating costs, the reduction in the current cost base was partly offset by one-off restructuring and project expenses.

The restructuring measures are designed, amongst other things, to reduce non-strategic assets and to strengthen the customer business. At September 30, 2008, total assets amounted to € 273 billion, down 5% from the figure of € 287 billion at the end of 2007. The reduction was curbed, amongst other things, by the appreciation of the U.S. Dollar.

The refinancing of the special purpose company set up within the framework of the risk shield is currently being restructured by an external credit rating of the notes. This will help to reduce the risk-weighted assets significantly. Taking this effect into account, the core capital ratio stood at 6.8% at the end of the third quarter.

Heinz Hilgert, Chairman of the Managing Board of WestLB AG, said: “Despite the substantial burdens resulting from the financial crisis and the market distortions, which deteriorated again in September, WestLB remains on course operationally. The ring-fencing measures implemented by the owners in the spring are beginning to bite. As a result we are well equipped for future challenges in these troubled times – also with respect to the required consolidation in the Landesbank sector.”