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27management report The items “Write-downs on and adjustments to claims and certain securities and additions to provisions for possible loan losses”, to- talled minus € 2.3 million. The lending risk situation remained very satisfactory and allowed us to make just a moderate addition to provisions for risk in the lending business. This amounted to (in- cluding direct write-downs) minus € 7.8 million (previous year mi- nus € 11.7 million). Net earnings derived from the redemption and the sale of securities held as current assets, as well as promissory note loans, amounted to € 13.5 million. Expenses of € 6.6 million were incurred for the conversion of silent participations into paid- up capital as part of our efforts to increase equity capital. The item “Income from reversals of write-downs on participating interests, shares in affiliated companies and securities treated as fixed assets” amounted to plus € 2.0 million. This figure is pri- marily the result of proceeds from the sale of securities held as fixed assets. We took write-downs on certain securities held as fixed assets that we anticipated would incur a permanent impair- ment in value. These write-downs are accounted for in this item. Prior to the transfer of funds to the Fund for General Banking Risks pursuant to Art. 340g of the German Commercial Code, re- sults from operations after deducting provisions for risk amounted to € 26.8 million. After transferring € 5.4 million to the Fund for General Banking Risks, and a tax expense item of € 5.2 million, annual net income amounted to about € 16.1 million. These results show that we were able to increase our net income for the year as forecast. We are generally satisfied with the de- velopment of our business. Proposed allocation of distributable income Net income for the year amounted to € 16,140,177.21. A dividend distribution of 3.25 percent will be proposed at the Delegates’ Meeting. Unappropriated profit for the year – includ- ing profit brought forward from the previous year (€ 206,771.02) – amounting to € 16,346,948.23 should therefore be allocated as follows: 3.25 percent dividend € 16,144,150.00 Carried forward to new year € 202,798.23 Rating At the end of February 2014 Moody’s raised its outlook for the ratings of MünchenerHyp’s senior unsecured liabilities and fun- damental financial strength from negative to stable. The rating agency explained this step by noting that the Bank had strength- ened its level of equity capital in 2013. Furthermore, Moody’s also commented that the risk content of MünchenerHyp’s loan portfolio had improved as the Bank continued to reduce its port- folio of loans originated in countries within the eurozone that had been harder hit by debt crisis, as well as the portfolio of loans to banks domiciled in these countries. In addition, the Bank had also further reduced its portfolio of loans originated within the USA. Moody’s additionally pointed out that MünchenerHyp had earned a solid reputation in the capital market as an issuer of Pfandbriefe and thus had a correspondingly high level of refinancing strength. The Bank’s firm ties and support within the Cooperative Financial Network were also favourably acknowledged by the agency. “Moody’s acknowledged our high reputation in the capital market, as well as our refinancing strength and firm ties with the Cooperative Financial Network.” In a July 2014 Issuer Comment, Moody’s commented favoura- bly on the substantial increase in equity capital carried out by MünchenerHyp ahead of the ECB assuming direct supervision of the Bank. Moody’s announced in the fall that it would revise its rating methodology and would apply the new standards as of the spring of 2015. Based on currently available information, we do not anticipate that Moody’s will alter its opinion of the Bank. Rating, sustainability and regulatory conditions