With strong growth in new business in the first five months of this year, the BHW Group has once again been able to buck the generally negative market trend. At the Annual General Meeting of BHW Holding AG in Berlin, Management Board Chairman Reinhard Wagner reported double-digit growth, especially in the core segments of Private Home Finance and Private Asset Accumulation. New Bauspar business and the demand for home finance proved to be particularly positive.

Wagner also pointed out that given the difficult economic situation, the Group could look back on a generally satisfactory financial year 2002. While new business last year was characterised by winning additional market share, significant special factors had impacted on results. By contrast, Group results in the first quarter of this year are in line with forecasts, with post-tax profit of € 26.6 million being reported.

Annual General Meeting resolves dividend of € 0.22 per share

Despite the special factors, which are largely attributable to the consolidation measures necessary at our subsidiary AHBR, BHW is sticking to its policy of dividend stability and strength. The impact of these factors on earnings may well be reflected in the dividend payment for 2002 - the Annual General Meeting resolved a dividend of € 0.22, compared with € 0.60 in the previous year - but this corresponds to dividend expectations in difficult economic times. Reinhard Wagner also announced BHW's intention to increase the dividend for 2003 considerably, provided that the anticipated annual post-tax result of at least € 100 million is achieved.

Strong growth in the core segments in the first five months of 2003

BHW was able to increase its sales in both core segments, Private Home Finance and Private Asset Accumulation, by around 18.7 per cent to € 10.4 billion in the first five months of 2003. Despite the recession in the construction industry, BHW reported positive demand for home finance overall, with the volume of contracts taken up rising by 21.8 per cent to around € 2.5 billion. The company awarded more mortgage loans and instant Bauspar loans in April, for example, than in any other month in BHW's 75-year history. This enabled the company to win additional market share compared to its competitors.

There was a great deal of interest in and demand for BHW's range of Bauspar products and services in 2002. The total Bauspar contract amount with fully paid-up contract fees increased by 21.8 per cent to approx. € 4.5 billion.

In the Private Asset Accumulation segment, which concentrates mainly on life insurance and pension plans as well as fund business, BHW achieved growth of 17 per cent in sales to € 1.3 billion. Traditional life insurance and pension plans proved to be particularly popular, with the insured amount in this area rising by a good 38 per cent to € 322 million. Fund business was marked by a change in trend and a clear rise in confidence on the part of investors. The investment volume increased by more than 66 per cent compared with the same period in the previous year.

Satisfactory results for the first quarter of 2003

With operating profit of € 39.2 million and a quarterly post-tax profit of € 26.6 million, the BHW Group has closed the first quarter of 2003 satisfactorily and on target. This is despite adverse market and interest rate conditions. The Group is predicting a post-tax result of at least € 100 million for financial year 2003.

Outlook

Wagner believes that the BHW Group is well on the way to achieving its aim of being one of the top 3 provisioning providers in Germany by 2005. The sales successes of the first five months of this year confirm the Group's excellent strategic positioning in private home finance and in the growth market of private asset accumulation. BHW is set to achieve further organic growth in 2003, with the Group's own sales force being consistently expanded. The Group result will be lower than in previous years as a result of the restructuring measures at AHBR, but the anticipated result of at least € 100 million after tax nonetheless signals a return to normality - a satisfactory result. Management Board Chairman Reinhard Wagner is confident that the inherent strengths of the Group will once again be reflected in the BHW share price in the medium term.