The following table sets forth the results of our Global Transaction Banking Corporate Division for the years ended December 31, 2003 and 2002, in accordance with our management reporting systems:
| 2003 increase (decrease) from 2002 | ||||
| in € m. (except where indicated) | 2003 | 2002 | in € | in % |
| Net revenues | 2,469 | 2,612 | (143) | (5) |
| Provision for loan losses | 2 | 6 | (5) | (74) |
| Provision for off-balance sheet positions | (53) | (52) | (1) | (2) |
| Total provision for credit losses | (51) | (46) | (5) | (12) |
| Operating cost base | 1,735 | 2,200 | (465) | (21) |
| Minority interest | – | – | – | – |
| Restructuring activities | (6) | 26 | (32) | (122) |
| Goodwill impairment | – | – | – | – |
| Total noninterest expenses1 | 1,729 | 2,226 | (496) | (22) |
| Therein: Severance payments | 66 | 18 | 48 | 262 |
| Income before income taxes | 791 | 433 | 359 | 83 |
| Add (deduct) | ||||
| Net (gains)/losses from businesses sold/held for sale | (583) | – | (583) | N/M |
| Restructuring activities | (6) | 26 | (32) | (122) |
| Goodwill impairment | – | – | – | – |
| Underlying pre-tax profit | 202 | 458 | (256) | (56) |
| Cost/income ratio in % | 70% | 85% | (15) ppt | (18) |
| Underlying cost/income ratio in % | 92% | 84% | 8 ppt | 9 |
| Assets | 16,709 | 25,098 | (8,389) | (33) |
| Risk-weighted positions (BIS risk positions) | 10,166 | 12,949 | (2,783) | (21) |
| Average active equity2 | 1,409 | 2,073 | (664) | (32) |
| Return on average active equity in % | 56% | 21% | 35 ppt | 169 |
| Underlying return on average active equity in % | 14% | 22% | (8) ppt | (35) |
| N/M – Not meaningful | |
| ppt – percentage points | |
| 1 | Excludes provision for off-balance sheet positions (reclassified to provision for credit losses). |
| 2 | See Note [28] to the consolidated financial statements for a description of how average active equity is allocated to the divisions. |
Income before income taxes increased € 358 million, or 83%, to € 791 million for the year ended December 31, 2003. During 2003, we sold a substantial part of our Global Securities Services (GSS) business to State Street Corporation generating a gain on sale of € 583 million. During 2002, the business sold contributed net revenues of approximately € 700 million with a negligible impact on income before income taxes.
Excluding the aforementioned gain on sale net revenues decreased by € 726 million mainly as a result of the absence of revenues of the disposed business. Reduced interest rate margins in Global Cash Management and lower transaction volumes, mainly in Global Trade Finance , accounted for the rest of the decline.
The provision for credit losses was a net release of € 51 million compared to a net release of € 46 million in 2002.
Noninterest expenses of € 1.7 billion decreased by € 497 million, or 22%, from 2002. Expenses in 2002 included charges for restructuring reserves of € 26 million for restructuring plans initiated in the first and second quarter 2002. In 2003, € 6 million of these reserves were released subsequent to the full implementation of the plans. The decrease in noninterest expenses reflected the lower expense base due partly to the disposal of GSS, somewhat offset by certain expenses related to the sale, and also to the continuing benefits of the cost saving initiatives within the division.
The cost/income ratio of 70% was lower by 15 percentage points than in 2002 mainly due to the effects of the gain on the GSS disposal as noted above. After adjusting for this gain, the underlying cost income ratio, at 92%, was higher by 6 percentage points. The benefits of our cost containment program have been more than offset by the reductions in revenues as noted above and the GSS disposal-related expenses.