Following the consent given by the City, the State and the savings banks, the conversion of the silent partners' contributions up to a total of about EUR 3.2 billion can now be implemented. On 1 January 2013 EUR 2.2 billion will be converted as planned. The background to the conversion plans relates to the higher future capital requirements arising from the introduction of Basel III and the requirements which are expected to be imposed by European banking supervisory authorities. Among other things, silent partners' contributions will no longer count as Tier 1 capital in the future.
LBBW has been systematically running off its risk weighted assets, particularly in its credit investment business, for years. In this way, it has already managed to strengthen its capital ratios substantially. As of 30 September 2012, its Tier 1 capital ratio stood at 14.9 percent. "We are systematically disposing of all non-core activities and turning LBBW into an exclusively customer-oriented bank. We have already made substantial progress in achieving this goal. With our owners' consent we will be able to continue on this path on a solid basis," explained Hans-Jörg Vetter.