Our activities in 2006 were dominated by the integration of BHW and the acquired branches. The central integration project was completed by September 30, 2006, one quarter ahead of schedule. A major reason for early completion was that Postbank, BHW and the acquired retail outlets had very similar corporate cultures, which significantly facilitated the design of the new structures and the implementation of the measures. The most important milestones to integration were as follows:

• First quarter: Definition of the new organizational structure, including appointment of all future managers and definition of their areas of responsibility. This gave managers and employees a clear idea of the future structure of the new Postbank Group.
  
  
• May 24: Reconcilement of interests
  A reconcilement of interests was finalized with the employee representatives at a very early stage during the integration process. The agreement provided for socially responsible workforce adjustments affecting around 1,200 employees in the Postbank Group. The size of the workforce is being reduced through early retirement and termination agreements, without redundancies. The high degree of workforce acceptance facilitated the contractual agreement of 80% of the job-reduction-related termination agreements by mutual consent to have already taken place by 2006.
  
  
• End of second quarter: Standardization of the regional structure of mobile and over-the-counter sales for senior management levels.
  
  
• July 17: Formation of Postbank Finanzberatung AG
  Following extensive technical and legal preparations, we merged BHW and Postbank’s mobile sales organizations into a single entity, Postbank Finanzberatung AG, again ahead of schedule. The 4,350 mobile advisers, brought together under the umbrella of Postbank Finanzberatung, sell customers products of BHW, Postbank and selected third-party providers on behalf of the Postbank Group. This serves to realize the requirement of leveraging the enormous sales potential present in Postbank’s customer base.
  
  
• July 20/21: BHW Holding AG resolves squeeze-out
  The ordinary Annual General Meeting of BHW Holding held on July 20 and 21, 2006 resolved to squeeze out the remaining minority shareholders. On completion of the procedure, Postbank will be the sole shareholder of BHW Holding AG.
  
  
• November 1: Merger of Postbank’s and BHW’s IT units
  The corporate IT department at BHW Bausparkasse AG was transferred to Postbank Systems AG, thus creating the conditions for greater synergies, especially with regard to the joint procurement of hardware and software.

Following a strategic analysis of its investment portfolio, BHW Holding AG sold its subsidiaries Modrá Pyramida in the Czech Republic and BHW Rückversicherung.