Compliance declaration by the Management Board and Supervisory Board pursuant to Section 161 of the Stock Corporation Act (Aktiengesetz) in the version of the DCGK dated 2 June 2005

The Berlin-Hannoversche Hypothekenbank AG complied/complies with all recommendations of the Government Commission German Corporate Governance Code announced by the Federal Ministry of Justice in the official section of the electronic Federal Gazette, with the following exceptions:

a) In divergence from the conduct recommendation, the group annual accounts for 2004 and the interim reports of the business year 2004 were not produced in compliance with international accounting standards but in accordance with the provisions of the German Commercial Code (Handelsgesetzbuch). From the business year 2005 onwards, Berlin Hyp no longer produces group annual accounts, because it now only still holds shares in subsidiaries whose involvement – from the point of view of significance – has no influence on the reflection of the assets, financial and earnings situation. (7.1.1 German Corporate Governance Code)

b) Berlin Hyp was unable to satisfy the requirement of making the group accounts available to the public within 90 days after the end of the business year in the past due to the phase of radical change. (7.1.2 German Corporate Governance Code)

c) The system of Management Board remuneration was not published. (4.2.3 German Corporate Governance Code)

d) The remuneration of the Management Board members was disclosed as a lump-sum in the Annex up to and including the annual accounts for 2005. There was no individualisation and statement of the apportionment. (4.2.4 German Corporate Governance Code)

e) The remuneration of the Supervisory Board members was not individualised and disclosed in an apportioned way up to and including the annual accounts for 2005. However, the Annex contained a lump-sum figure. (5.4.7 German Corporate Governance Code)

Management Board and Supervisory Board of the Berlin-Hannoversche Hypothekenbank AG

Berlin, 29 March 2006

Translation of the delaration issued in German language. The German text is authoritative.