Euro 4,000,000,000 Debt Issuance Programme (the Programme)

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1 This document compiles two base prospectuses with different categories of securities pursuant to Article 22(6) of the Commission Regulation (EC) No. 809/2004 of 29 April 2004 (the Prospectus Regulation): (i) the base prospectus containing non-equity securities within the meaning of No. 4 of Article 22(6) of the Prospectus Regulation (EC) (Non-Equity Securities), and (ii) the base prospectus containing Pfandbriefe except for Registered Pfandbriefe as non-equity securities within the meaning of No. 3 of Article 22 (6) of the Prospectus Regulation (together, the Base Prospectus). Base Prospectus 15 December 2010 Wüstenrot Bank Aktiengesellschaft Pfandbriefbank Ludwigsburg, Federal Republic of Germany as Issuer Euro 4,000,000,000 Debt Issuance Programme (the Programme) Under this Programme, Wüstenrot Bank Aktiengesellschaft Pfandbriefbank (the Issuer) may from time to time issue notes (including Pfandbriefe as defined below) (the Notes) denominated in any currency (subject always to compliance with all legal and/or regulatory requirements). Application has been made (i) to the Bundesanstalt für Finanzdienstleistungsaufsicht of the Federal Republic of Germany in its capacity as competent authority (the Competent Authority) to provide a certificate of approval attesting that the Base Prospectus (as defined herein) has been drawn up in accordance with the German Securities Prospectus Act (Wertpapierprospektgesetz) which implements the Directive 2003/71/EC (the Prospectus Directive) and (ii) to the Stuttgart Stock Exchange for such Notes to be listed on the regulated market (as defined by the Directive 2004/39/EC) of the Stuttgart Stock Exchange. Please note that the approval of the Base Prospectus by the Competent Authority is based on the scrutiny of the completeness of the Base Prospectus including the consistency and the comprehensibility only and is restricted to securities within the scope of the Prospectus Directive. Registered Pfandbriefe under German Law, as they do not qualify as securities under Article 2 no. 1 of the German Securities Prospectus Act, have been included as additional information only and for the purpose of describing the Programme. Therefore, this document cannot be construed as a prospectus for Registered Pfandbriefe. Pursuant to Article 8f para. 2 no. 7d) of the German Sales Prospectus Act, registered bonds issued by credit institutions and thus Registered Pfandbriefe are exempted from the prospectus requirements under the German Sales Prospectus Act. Notes issued under the Programme may be admitted to trading on an alternative stock exchange or may not be admitted to trading at all. This Base Prospectus replaces and supersedes any previous base prospectuses, information memoranda or supplements thereto relating to the Programme. Arranger Wüstenrot Bank Aktiengesellschaft Pfandbriefbank The Base Prospectus has been filed with the Competent Authority and has been published on the website of the Issuer ( This Base Prospectus is valid for a period of 12 months from the date of its publication.

2 TABLE OF CONTENTS Page 1 SUMMARY SUMMARY OF RISK FACTORS SUMMARY OF THE DESCRIPTION OF THE ISSUER SUMMARY OF THE DESCRIPTION OF THE NOTES SUMMARY OF THE DESCRIPTION OF THE PROGRAMME DEUTSCHE ÜBERSETZUNG DER ZUSAMMENFASSUNG ZUSAMMENFASSUNG DER RISIKOFAKTOREN ZUSAMMENFASSUNG DER BESCHREIBUNG DER EMITTENTIN ZUSAMMENFASSUNG DER BESCHREIBUNG DER SCHULDVERSCHREIBUNGEN ZUSAMMENFASSUNG DER BESCHREIBUNG DES PROGRAMMS RISK FACTORS RISKS RELATING TO THE ISSUER RISKS RELATING TO THE NOTES WÜSTENROT BANK AKTIENGESELLSCHAFT PFANDBRIEFBANK STATUTORY AUDITORS INFORMATION ABOUT THE ISSUER BUSINESS OVERVIEW ORGANISATIONAL STRUCTURE TREND INFORMATION ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES MAJOR SHAREHOLDERS HISTORICAL FINANCIAL INFORMATION MATERIAL CONTRACTS TERMS AND CONDITIONS OF THE NOTES (ENGLISH LANGUAGE VERSION) PART I BASIC TERMS A. TERMS AND CONDITIONS OF NOTES IN BEARER FORM (OTHER THAN PFANDBRIEFE) B. TERMS AND CONDITIONS OF PFANDBRIEFE IN BEARER FORM C. TERMS AND CONDITIONS OF JUMBO-PFANDBRIEFE PART II SUPPLEMENTS TO THE BASIC TERMS A. PFANDBRIEFE IN REGISTERED FORM B. DEFINITIVE NOTES IN BEARER FORM DEUTSCHE FASSUNG DER EMISSIONSBEDINGUNGEN TEIL I GRUNDBEDINGUNGEN A. EMISSIONSBEDINGUNGEN FÜR INHABERSCHULDVERSCHREIBUNGEN (AUSGENOMMEN PFANDBRIEFE) B. EMISSIONSBEDINGUNGEN FÜR AUF DEN INHABER LAUTENDE PFANDBRIEFE C. EMISSIONSBEDINGUNGEN FÜR JUMBO-PFANDBRIEFE TEIL II ZUSÄTZE ZU DEN GRUNDBEDINGUNGEN A. NAMENSPFANDBRIEFE B. AUF DEN INHABER LAUTENDE EINZELURKUNDEN FORM OF FINAL TERMS (MUSTER ENDGÜLTIGE BEDINGUNGEN) PART I GENERAL INFORMATION TEIL I ALLGEMEINE INFORMATIONEN

3 PART II INFORMATION RELATED TO SPECIFIC ARTICLES OF TERMS AND CONDITIONS TEIL II INFORMATIONEN IN BEZUG AUF EINZELNE ARTIKEL DER EMISSIONSBEDINGUNGEN PART III OTHER INFORMATION TEIL III WEITERE INFORMATIONEN PART IV - TERMS AND CONDITIONS OF THE OFFER TEIL IV - BEDINGUNGEN UND VORAUSSETZUNGEN FÜR DAS ANGEBOT PART V - ADMISSION TO TRADING AND DEALING AGREEMENTS TEIL V - ZULASSUNG ZUM HANDEL UND HANDELSREGELN GERMAN PFANDBRIEFE AND THE GERMAN MORTGAGE BANKING SECTOR SUBSCRIPTION AND SALE TAXATION GENERAL DESCRIPTION OF THE PROGRAMME ANNEX I... F-1 ANNUAL FINANCIAL STATEMENTS OF WÜSTENROT BANK AG PFANDBRIEFBANK FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-2 AUDITOR'S REPORT ON THE ANNUAL FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-32 CASH-FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-34 AUDITOR'S REPORT ON THE CASH-FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-36 ANNEX II... F-37 ANNUAL FINANCIAL STATEMENTS OF WÜSTENROT BANK AG PFANDBRIEFBANK FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-38 AUDITOR'S REPORT ON THE ANNUAL FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-71 CASH-FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-73 AUDITOR'S REPORT ON THE CASH-FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER F-75 ANNEX III... F-76 CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE FIRST HALF OF THE FINANCIAL YEAR 2010 ENDED 30 JUNE F-77 REVIEW REPORT ON THE CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE FIRST HALF OF THE FINANCIAL YEAR ENDED 30 JUNE F-91 ANNEX IV... F-92 JAHRESABSCHLUSS DER WÜSTENROT BANK AG PFANDBRIEFBANK FÜR DAS GESCHÄFTSJAHR F-93 BESTÄTIGUNGSVERMERK ZUM JAHRESABSCHLUSS DER WÜSTENROT BANK AG PFANDBRIEFBANK FÜR DAS GESCHÄFTSJAHR F-124 BESTÄTIGUNGSVERMERK ZUR CASH-FLOW BERECHNUNG FÜR DAS GESCHÄFTSJAHR F-126 ANNEX V... F-127 JAHRESABSCHLUSS DER WÜSTENROT BANK AG PFANDBRIEFBANK FÜR DAS GESCHÄFTSJAHR F-128 BESTÄTIGUNGSVERMERK ZUM JAHRESABSCHLUSS DER WÜSTENROT BANK AG PFANDBRIEFBANK FÜR DAS GESCHÄFTSJAHR F-161 BESTÄTIGUNGSVERMERK ZUR CASH-FLOW BERECHNUNG FÜR DAS GESCHÄFTSJAHR F-163 3

4 ANNEX VI... F-164 HALBJAHRESBERICHT DER WÜSTENROT BANK AG PFANDBRIEFBANK ZUM 30. JUNI F-165 SIGNATURE PAGE...U-1 4

5 1 SUMMARY The following constitutes a summary (the Summary) of the essential characteristics and risks associated with the Issuer and the Notes (including Pfandbriefe) to be issued under the Programme. This Summary should be read as an introduction to this Base Prospectus. Any decision by an investor to invest in the Notes (including Pfandbriefe) should be based on consideration of this Base Prospectus as a whole, including the supplements thereto and the relevant Final Terms. Where a claim relating to the information contained in this Base Prospectus, any supplement thereto and the relevant Final Terms is brought before a court, the plaintiff investor might, under the national legislation of the Contracting States of the European Economic Area, have to bear the costs of translating the Base Prospectus, any supplement thereto and the relevant Final Terms before the legal proceedings are initiated. The Issuer, who has assumed responsibility for this Summary including any translation thereof, can be held liable, but only if the Summary is misleading, inaccurate or inconsistent when read together with the other parts of this Base Prospectus. The following Summary is taken from and qualified in its entirety by the remainder of this Base Prospectus and, in relation to a particular Series of Notes, the relevant Final Terms. 1.1 SUMMARY OF RISK FACTORS SUMMARY OF RISKS RELATING TO THE ISSUER Like other market participants, the Issuer is exposed to risks in connection with its business activities, the realisation of which might, in a worst case scenario, lead to the Issuer s inability to fulfil its obligations under the Notes (including Pfandbriefe) issued under the Programme at all or in due time and cause the investor to lose its investment in whole or in part. The following is a disclosure of the material risk factors relating to the Issuer which are associated with an investment in Notes (including Pfandbriefe) issued under the Programme. Credit Risk Investment Risks Market Price Risk Credit risks are risks from bad debts or from the deterioration of customers credit rating. Credit risks can be subdivided further into counterparty default risks, including the counterparty risks and the country risks, and credit rating risks. To achieve their corporate goals, the Issuer and its subsidiaries make investments in other enterprises. This involves the entering into investment risks, i. e. the risk of potential (value) losses from (i) the provision of equity or equity-type funding (e. g. silent partnerships) or payment of a purchase price, such as non-payment of dividends, partial write-downs, losses realised on sales or a reduction in hidden reserves, (ii) liability obligations (e. g. from letters of comfort or loss transfers resulting from profit and loss transfer agreements), or (iii) from capital contribution commitments. Any realisation of investment risks would negatively affect the assets, earnings and financial position of the Issuer. The term market price risk describes potential losses due to adverse changes in market prices or pricerelated parameters with respect to securities, loans, derivative instruments or foreign currencies, differentiating between interest and currency risks. Interest risks arise from timing differences in the refinancing of assets or any other mismatched terms. Currency risks are created when payment obligations 5

6 in one or several foreign currencies are not matched by corresponding claims. Liquidity Risk Operational Risks The liquidity risk comprises the short-term liquidity risk which is the risk of insufficient liquidity for the performance of day-to-day payment obligations, the structural liquidity risk which arises from an imbalance in the medium and long-term liquidity structure and the market liquidity risk which is the risk of insufficient liquidity of pertinent financial instruments, with the consequence that positions can be closed out only, if at all, at disproportionately high cost. Operational risks mainly result from inadequate or failed internal processes and systems, human failure or from external events. Legal risks are also part of the operational risk. Wüstenrot Bank Aktiengesellschaft Pfandbriefbank employs uniform procedures to control and monitor its risks across its business areas. The objective is to optimise the Bank s risk/return profile for all of the various types of risk. All risks are identified, measured, aggregated and controlled in the process based on a framework of risk principles, as well as corresponding organisational structures and processes. However, there can be no assurance that Wüstenrot Bank Aktiengesellschaft Pfandbriefbank procedures for identifying, analyzing, assessing, controlling and monitoring the risks will prove sufficient and adequate in the future. Capital Adequacy (Solvability and Risk Bearing Capacity) In line with regulatory requirements and under rating aspects, the Issuer is required to maintain sufficient own funds at any time in order to cover potential losses resulting from the realisation of risks. Pursuant to regulatory definition currently in force, own funds are composed of liable capital being the sum of core capital and supplementary capital plus regulatory Tier III capital. Core capital consists essentially of subscribed capital plus reserves and capital contributions from silent partners. Supplementary capital includes participation rights capital (Genussrechtskapital) and long-term subordinated liabilities. Regulatory Tier III capital includes short-term subordinated liabilities. There is a risk that the regulatory requirements concerning own funds, in particular in relation to the required amount of own funds and the definition of the instruments qualifying as components of own funds, may be narrowed in the course of political and legislative initiatives on international, European and national level. This could entail that existing components of the Issuer s own funds may no longer be recognised as own funds and would have to be replaced. Generally, the risk exists that the Issuer may not be in a position to obtain such own funds as might become required or to obtain such funds only at higher cost. This could negatively affect the Issuer s business prospects as well as its 6

7 earnings, financial and liquidity position. Financial and Economic Crisis, Extending National Deficits Other Risks The global financial market crisis initially triggered by an increase of defaults in U.S. subprime mortgages in 2007 and the subsequent global economic slowdown have led to a number of bank bankruptcies and substantial losses suffered by the financial industry. The general financial market recovery is not yet sustainable. The centre of the crisis has shifted to real economy, from where it has effects back on the financial industry predominantly in the form of increased credit risks. Moreover, an extensive range of measures adopted by governments and central banks worldwide in order to prop up demand and stabilise financial markets have lead to a considerable extension of national deficits. A crisis of confidence on the financial markets, combined with sluggish economic recovery in the industrial nations, and an insolvency of individual states would have material adverse effects on the earnings, asset, liquidity and financial position of the Issuer. Other risks comprise business and strategic risk together with reputational, tax and real estate risk. Furthermore, it should be taken into account that the Issuer might stop its lending activities if a particular market becomes too risky due to overall market developments. As a bank offering capital markets products and active in public finance, Wüstenrot Bank Aktiengesellschaft Pfandbriefbank activities involve credit spread risks. The risk profile of Wüstenrot Bank Aktiengesellschaft Pfandbriefbank includes also liquidity risk, market risk and business risk. SUMMARY OF RISKS RELATING TO THE NOTES Independent Review and Advice Liquidity Risk Market Price Risk A potential investor should not invest in Notes which are complex financial instruments unless it has the expertise (either alone or with a financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value of the Notes and the impact this investment will have on the potential investor s overall investment portfolio. There can be no assurance that a liquid secondary market for the Notes will develop or, if it does develop, that it will continue. In an illiquid market, an investor might not be able to sell his Notes at any time at fair market prices. The possibility to sell the Notes might additionally be restricted by country specific reasons. The holder of Notes is exposed to the risk of an unfavourable development of market prices of its Notes which materialises if the holder sells the Notes prior to the final maturity of such Notes. 7

8 Currency Risk Risk of Early Redemption Subordinated Notes of the Issuer Taxation Legality of Purchase Change of Law Fixed Rate Notes Floating Rate Notes Zero Coupon Notes A holder of a Note denominated in a foreign currency is exposed to the risk of changes in currency exchange rates which may affect the yield and/or the redemption amount of such Notes. If the Issuer has the right to redeem the Notes prior to maturity, a holder of such Notes is exposed to the risk that due to early redemption his investment will have a lower than expected yield. The obligations of the Issuer in case of Subordinated Notes constitute unsecured and subordinated obligations. In the event of the liquidation, insolvency, composition or other proceedings for the avoidance of insolvency of, or against, the Issuer, such obligations will be subordinated to the claims of all unsubordinated creditors of the Issuer so that in any such event no amounts will be payable under such obligations until the claims of all unsubordinated creditors of the relevant Issuer will have been satisfied in full. Potential purchasers and sellers of the Notes should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or other jurisdictions. Potential purchasers of the Notes should be aware that the acquisition of the Notes might be subject to legal restrictions potentially affecting the validity of the purchase. Neither the Issuer, institutions for the purpose of underwriting Notes as dealers under the Programme (Dealers), if any, nor any of their respective affiliates has or assumes responsibility for the lawfulness of the acquisition of the Notes by a prospective purchaser of the Notes, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different). The Terms and Conditions of the Notes are based on German law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to German law or administrative practice after the date of this Base Prospectus. A holder of a Fixed Rate Note is exposed to the risk that the price of such Note falls as a result of changes in the market interest rate. A holder of a Floating Rate Note is exposed to the risk of fluctuating interest rate levels and uncertain interest income. Fluctuating interest rate levels make it impossible to determine the yield of Floating Rate Notes in advance. A holder of a Zero Coupon Note is exposed to the risk that the price of such Note falls as a result of changes in the market interest rate. Prices of Zero Coupon 8

9 Notes are more volatile than prices of Fixed Rate Notes and are likely to respond to a greater degree to market interest rate changes than interest bearing notes with a similar maturity. Index Linked Notes An investment in Index Linked Notes entails significant risks that are not associated with similar investments in a conventional fixed-rate debt security. If the interest rate of such an Index Linked Note is so indexed, it may result in an interest rate that is less than that payable on a conventional fixed-rate debt security issued at the same time, including the possibility that no interest will be paid, and if the principal amount of such an Index Linked Note is so indexed, the principal amount payable at maturity may be less than the original purchase price of such Index Linked Note if allowed pursuant to the terms of such Index Linked Note, including the possibility that no redemption amount will be paid (risk of total loss). Investors should be aware that the market price of Index Linked Notes may be very volatile (depending on the volatility of the relevant index, other factor or formula). Neither the current nor the historical value of the relevant index, other factor and/or formula should be taken as an indication of future performance of such index, other factor and/or formula. 1.2 SUMMARY OF THE DESCRIPTION OF THE ISSUER Statutory Auditors Information about the Issuer For the financial years ended 31 December 2008 and 31 December 2009, the independent auditor of the Issuer was PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Friedrichstrasse 14, Stuttgart, Federal Republic of Germany. The Issuer acts under its legal name Wüstenrot Bank Aktiengesellschaft Pfandbriefbank and under its commercial name wüstenrot partner der württembergischen. The Issuer was incorporated under the laws of the Federal Republic of Germany under its legal name Wüstenrot Hypothekenbank AG on 12 October 1994 and registered in the commercial register (Handelsregister) of Ludwigsburg on 14 April 1995 under No. HRB In 2005 Wüstenrot Bank AG was merged with Wüstenrot Hypothekenbank Aktiengesellschaft, whereby Wüstenrot Hypothekenbank AG was the receiving company. The extraordinary shareholders meeting of the Issuer resolved on 5 July 2005 to merge and to change the legal name of the Issuer into Wüstenrot Bank Aktiengesellschaft Pfandbriefbank. The change became effective with the registration in the commercial register (Handelsregister) on 6 September Due to the restructuring of the commercial register the Issuer is now registered with the commercial register of the Local Court of Stuttgart 9

10 under No. HRB There is a dependency and profit and loss pooling agreement in place between the Issuer and its only shareholder Wüstenrot & Württembergische AG in accordance with sec. 291 German Stock Companies Act (Aktiengesetz - AktG). Furthermore, the Issuer is a unit entity of the tax group of Wüstenrot & Württembergische AG. The head office of the Issuer is located at Hohenzollernstraße 46, Ludwigsburg, Federal Republic of Germany. Its telephone number is Business Overview The principal activities of the Issuer are carrying out banking business as defined in sec. 1 German Banking Act (Kreditwesengesetz - KWG), with exception of Investment Business and the e-money Business (sec. 1 subsection 1 sentence 2 Nr. 11 KWG). The Issuer s business relating to Pfandbriefe is limited to Mortgage Pfandbriefe (Hypothekenpfandbriefe) and Public Sector Pfandbriefe (öffentliche Pfandbriefe). The Issuer does business in the German market with a near-exclusive focus on Retail Business. Wüstenrot Bank Aktiengesellschaft Pfandbriefbank offers products to private customers regarding residential property financing, current accounts and services relating to securities. The majority of the Issuer s customers are resident in Germany. The Issuer also provides services relating to securities to affiliated companies. All transactions with affiliated companies are subject to common market conditions. The Issuer s Retail Business is marketed by 6,000 sales representatives working for W&W Group (as defined below). Furthermore, customers are acquired on behalf of the Issuer by 1,000 Service Centres of Wüstenrot Bausparkasse AG and 2,000 branches of Württembergische Versicherung AG. Therefore, Wüstenrot Bank Aktiengesellschaft Pfandbriefbank does not have its own network of branches. The Issuer refinances itself by means of Mortgage Pfandbriefe (Hypothekenpfandbriefe), deposit business and loans from other financial institutions or institutional investors. Organisational Structure Wüstenrot Bank Aktiengesellschaft Pfandbriefbank is 100% owned by Wüstenrot & Württembergische AG, which is the parent company of W&W Group (W&W Group), a financial conglomerate (Finanzkonglomerat) as in sec. 104 k German Insurance Regulatory Act (Versicherungsaufsichtsgesetz - VAG). Wüstenrot & Württembergische AG is the superior company in the financial conglomerate. The product range of W&W 10

11 Group comprises Banking and Building and Loan Association (Bausparkasse) Business, Asset Management and Insurance Business. Trend Information There has been no material adverse change in the prospects of the Issuer since the date of its last published audited financial statements for the year ended 31 December The wordwide financial crisis and the turbulences within the European Union are still a difficult environment. The weakness among the European countries effected by the changes in the international capital markets is also still a challenge for the issuer. The Mortgage Pfandbrief (Hypothekenpfandbrief), however, has proven to be crisis-proof and secured a continued access to the capital markets. The Issuer has not invested in Asset Backed Securities. Wüstenrot Bank Aktiengesellschaft Pfandbriefbank assumes that the inclusion of residential property into the private retirement provisions ( Wohnriester ) will have a positive effect on the residential property financing market. The Issuer further expects a higher demand for modernization and development of buildings in order to decrease energy use. Management and Supervisory bodies Board of Managing Directors Supervisory Board Chairman of the supervisory board Address of the Board of Managing Directors Wüstenrot Bank Aktiengesellschaft Pfandbriefbank s governing bodies are the board of managing directors, the supervisory board and the shareholders meeting (Hauptversammlung). The board of managing directors currently consists of two members. Pursuant to the articles of association, the supervisory board consists of nine members, elected by the shareholders meeting. Dr. Alexander Erdland. Hohenzollernstraße 46, Ludwigsburg, Federal Republic of Germany. Address of the Supervisory Board Gutenbergstraße 30, Stuttgart, Federal Republic of Germany. Shareholder s Meeting Conflict of Interests The ordinary Shareholder s Meeting is convened by the board of managing directors or by the supervisory board. No potential conflicts of interests exist between any duties to Wüstenrot Bank Aktiengesellschaft Pfandbriefbank of the members of the board of managing directors and the supervisory board and their private interests and/or their other duties. Major Shareholders The Issuer is wholly owned by Wüstenrot & Württembergische AG. 11

12 Historical Financial Information The following table sets out in summary form the balance sheet of Wüstenrot Bank Aktiengesellschaft Pfandbriefbank pursuant to the German Commercial Code (Handelsgesetzbuch - HGB), which has been extracted from the audited individual annual financial statements of Wüstenrot Bank Aktiengesellschaft Pfandbriefbank for the financial years ended 31 December 2008 and 2009 and from the reviewed condensed interim financial statements for the first half year 2010 as of 30 June 2010 respectively. 12

13 Assets in Mio June 2010 Liabilities in Mio June 2010 Claims on banks Liabilities to banks 4,860 2,931 4,932 Claims on customers 9,555 10,076 9,442 Liabilities to customers 8,450 7,556 8,479 Bonds and other fixed income securities 5,113 2,138 4,784 Certified Liabilities 1,343 2,127 1,503 All other assets Subordinate Liabilities Profit Participation certificates All other Liabilities Capital and reserves Balance-sheet total 15,302 13,289 15,526 Balance-sheet total 15,302 13,289 15,526 The following table sets out in summary form the income statement of Wüstenrot Bank Aktiengesellschaft Pfandbriefbank pursuant to the German Commercial Code, which has been extracted from the audited individual annual financial statements of Wüstenrot Bank Aktiengesellschaft Pfandbriefbank for the financial years ended 31 December 2008 and 2009 and from the reviewed condensed interim financial statements for the first half year 2010 as of 30 June In Mio June June 2009 Interest Income Interest Expense Net Interest Income Net Commission income 3 Net Interest and Commission Income General administrative expenses a.) Personnel expenses b.) Other administrative expenses c.) Amortisation of intangible and tangible assets Administrative Expenses Risk Provisioning Balance of other operating revenue/expenses Consisting of cash reserve, equities and other non-fixed-income securities, equity investments, investments in affiliated companies, trust assets, intangible fixed assets, tangible fixed assets, other assets, and prepaid expenses. 2 Consisting of trust liabilities, other liabilities, deferred income, provisions, and fund for general banking risks. 3 Fee and commission income less fee and commission expenses. 4 Other operating income less other operating expenses. 13

14 Auditing of Historical Financial Information Interim and other Financial Information Legal and Arbitration Proceedings Significant Change in the Issuer s Financial Position Material Contracts The auditors of the Issuer have issued unqualified auditor's reports in respect of each annual financial statement for the two financial years ended 31 December 2008 and 31 December The Issuer has published condensed interim financial statements for the first half year 2010 as of 30 June 2010 which are part of the half yearly financial report as stipulated in sec. 37w German Securities Trading Act (Wertpapierhandelsgesetz - WpHG). The auditor has reviewed the condensed interim financial statements and has issued a review report. The Issuer is not involved in any legal proceedings or arbitration proceedings that could significantly effect its economic situation. There has been no significant change in the financial position of the group which has occurred since the end of the last financial period for which interim financial information has been published. There is a dependency and profit and loss pooling agreement in place between the Wüstenrot Bank Aktiengesellschaft Pfandbriefbank and its sole shareholder, the Wüstenrot & Württembergische Aktiengesellschaft, since SUMMARY OF THE DESCRIPTION OF THE NOTES Currencies Subject to any applicable legal or regulatory restrictions and requirements of relevant central banks, Notes may be issued in Euro or any other currency as indicated in the relevant Final Terms. Denominations of Notes Pfandbriefe Notes will be issued in such denominations as indicated in the relevant Final Terms save that the minimum denomination of the Notes will be such as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant specified currency. The Issuer may issue Pfandbriefe as Mortgage Pfandbriefe (Hypothekenpfandbriefe) or Public Sector Pfandbriefe (Öffentliche Pfandbriefe). Mortgage and Public Sector Pfandbriefe constitute recourse obligations of the Issuer. They are secured or covered by separate pools of mortgage loans (in the case of Mortgage Pfandbriefe (Hypothekenpfandbriefe)) or public sector loans (in the case of Public Sector Pfandbriefe (Öffentliche Pfandbriefe)). Pfandbriefe can be issued under this Programme in the form of Jumbo-Pfandbriefe. Jumbo-Pfandbriefe are fixed-rate Pfandbriefe with a minimum principal 14

15 amount of Euro 1 billion (or the equivalent thereof in another currency), supported by a commitment of at least five market-makers to quote continuous two-way prices during normal trading hours as long as there is sufficient liquidity in the particular Jumbo-Pfandbrief. Maturities Such maturities as may be indicated in the relevant Final Terms, subject to such minimum or maximum maturities as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the Issuer or the relevant specified currency. Distribution Subject to certain restrictions, Notes may be distributed by way of public or private placements and, in each case, on a syndicated or non-syndicated basis. The method of distribution of each Tranche will be stated in the relevant Final Terms. Issue Price Form of Notes Notes may be issued at an issue price which is at par or at a discount to, or premium over, par. Notes other than Pfandbriefe may be issued in bearer form only. Pfandbriefe may be issued in bearer or registered form. Notes to which U.S. Treasury Regulation (c) (2) (i) (C) (the TEFRA C Rules) applies (TEFRA C Notes) will be represented either initially by a temporary global Note in bearer form, without interest coupons, in an initial principal amount equal to the aggregate principal amount of such Notes (Temporary Global Note) or permanently by a permanent global Note in bearer form, without interest coupons, in a principal amount equal to the aggregate principal amount of such Notes (Permanent Global Note). Any Temporary Global Note will be exchanged for either definitive Notes in bearer form (Definitive Notes) or in part for Definitive Notes and in the other part for one or more collective global Notes in bearer form (Collective Global Notes). Notes to which U.S. Treasury Regulation (c) (2) (i) (D) (the TEFRA D Rules) applies (TEFRA D Notes) will always be represented initially by a Temporary Global Note which will be exchanged for either Notes represented by one or more Permanent Global Note(s) or Definitive Notes or in part for Definitive Notes and in the other part for one or more Collective Global Notes, in each case not earlier than 40 days and not later than 180 days after the completion of distribution of the Notes comprising the relevant Tranche upon certification of non U.S.- beneficial ownership in the form available from time to time at the specified office of the Fiscal Agent. Notes in bearer form to which neither the TEFRA C Rules nor the TEFRA D Rules apply will be represented either initially by a Temporary Global Note or permanently by a Permanent Global Note. 15

16 Any Temporary Global Note will be exchanged for either Definitive Notes or in part for Definitive Notes and in the other part for one or more Collective Global Notes. Permanent Global Notes will not be exchanged for Definitive Notes or Collective Global Notes. Notes in definitive form and interest coupons will not be issued. Fixed Rate Notes Floating Rate Notes Fixed Rate Notes bear a fixed income throughout the entire term of the Notes. Fixed interest will be payable on such basis as specified in the relevant Final Terms. Floating Rate Notes will bear interest on the same basis as the floating rate under a notional interest rate swap-transaction in the relevant specified currency governed by an agreement incorporating either the 2000 ISDA Definitions or the 2006 ISDA Definitions (each as published by the International Swaps and Derivatives Association, Inc., and each as amended and updated as at the date on which the first tranche of the Notes of the relevant Series is issued), on the basis of a reference rate appearing on the agreed screen page of a commercial quotation service, or as indicated in the relevant Final Terms. The margin relating to such floating rate will be set out in the relevant Final Terms for each Series of Floating Rate Notes. Interest periods for Floating Rate Notes will be one, two, three, six or twelve months or such other period(s) as may be indicated in the relevant Final Terms. Index Linked Notes Payments of principal in respect of Index Linked Redemption Amount Notes or of interest in respect of Index Linked Interest Notes (together Index Linked Notes) will be calculated by reference to such index, other factor and/or formula as indicated in the relevant Final Terms. Each issue of Index Linked Notes will be made in compliance with all applicable legal and/or regulatory requirements. Other Provisions in Relation to Floating Rate Notes and Index Linked Interest Notes Zero Coupon Notes Floating Rate Notes and Index Linked Interest Notes may also have a maximum interest rate, a minimum interest rate or both. Interest on Index Floating Rate Notes and Index Linked Interest Notes in respect of each Interest period, as selected prior to issue by the Issuer, will be payable on such Interest Payment Dates specified in, or determined pursuant to, the relevant Final Terms and will be calculated as indicated in the relevant Final Terms. Zero Coupon Notes will be offered and sold at a discount to their principal amount and will not bear interest other than in the case of late payment. 16

17 Redemption The relevant Final Terms will indicate either that the Notes cannot be redeemed prior to their stated maturity (except for taxation reasons, or, in the case of Senior Notes (as defined herein) only, upon the occurrence of an event of default) or that the Notes will be redeemable at the option of the Issuer and/or the Holders upon giving notice within the notice period (if any) indicated in the relevant Final Terms to the Holders or the Issuer, as the case may be, on a date or dates specified prior to such stated maturity and at a price or prices and on such terms as indicated in the relevant Final Terms. Any Notes, the proceeds of which are to be accepted by the Issuer in the United Kingdom, which must be redeemed before the first anniversary of the date of their issue, shall (a) have a redemption value of not less than GBP 100,000 (or an amount of equivalent value denominated wholly or partly in a currency other than Sterling), and (b) provide that no part of any such Note may be transferred unless the redemption value of that part is not less than GBP 100,000 (or such an equivalent amount). Pfandbriefe and Notes, for which the Issuer is not obliged to compensate any withholding tax will not in any event be capable of being redeemed prior to their stated maturity for taxation reasons or at the option of their Holders. Early Redemption for Taxation Reasons Status of the Notes Early redemption for taxation reasons will be permitted as provided in 5 of the Terms and Conditions of the Notes. The Senior Notes (the Senior Notes) will constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the Issuer. The Pfandbriefe will constitute unsubordinated obligations ranking pari passu among themselves and (i) in the case of Public Sector Pfandbriefe (Öffentliche Pfandbriefe) at least pari passu with all other obligations of the Issuer under Public Sector Pfandbriefe (Öffentliche Pfandbriefe) and (ii) in the case of Mortgage Pfandbriefe (Hypothekenpfandbriefe) at least pari passu with all other obligations of the Issuer under Mortgage Pfandbriefe (Hypothekenpfandbriefe). Pfandbriefe are covered, however, by separate pools of public sector loans (in the case of Public Sector Pfandbriefe (Öffentliche Pfandbriefe)) or mortgage loans (in the case of Mortgage Pfandbriefe (Hypothekenpfandbriefe)). The Subordinated Notes (the Subordinated Notes) will constitute unsecured and subordinated obligations of the Issuer ranking pari passu among themselves and at least pari passu with all other subordinated 17

18 obligations of the Issuer. In the event of the liquidation or bankruptcy of the Issuer, such obligations will be subordinated to the claims of all unsubordinated creditors of the Issuer No Negative Pledge Events of Default The Terms and Conditions of the Notes will not provide for a negative pledge. The Senior Notes will provide for events of default entitling Holders to demand immediate redemption of the Notes as set out in 9 of the Terms and Conditions of the Notes. The Subordinated Notes will not provide for any event of default entitling Holders to demand immediate redemption of the Notes. Pfandbriefe will not provide for any event of default entitling Holders to demand immediate redemption of the Notes. No Cross Default Governing Law Jurisdiction The Terms and Conditions of the Notes will not provide for a cross-default. German law Non-exclusive place of jurisdiction for any legal proceedings arising under the Notes is Stuttgart. This place of jurisdiction is exclusive if the proceedings are brought by merchants (Kaufleute), legal persons under public law (juristische Personen des öffentlichen Rechts), special funds under public law (öffentlich-rechtliche Sondervermögen) and persons not subject to the general jurisdiction of the courts of the Federal Republic of Germany (Personen ohne allgemeinen Gerichtsstand in der Bundesrepublik Deutschland). 1.4 SUMMARY OF THE DESCRIPTION OF THE PROGRAMME Arranger and Dealer Fiscal and Paying Agent Initial Programme Amount Wüstenrot Bank Aktiengesellschaft Pfandbriefbank, unless otherwise specified in the Final Terms Wüstenrot Bank Aktiengesellschaft Pfandbriefbank, unless otherwise specified in the Final Terms The maximum aggregate principal amount of Notes outstanding at any one time under the Programme will not exceed Euro 4,000,000,000 (and for this purpose, any Notes denominated in another currency shall be translated into Euros at the date of the agreement in accordance with the Dealer Agreement). The Issuer may increase the amount of the Programme from time to time by way of supplement to this Base Prospectus which is subject to approval of the Bundesanstalt für Finanzdienstleistungsaufsicht as the Competent 18

19 Authority. Issuance in Series Taxation Notes in bearer form (including Pfandbriefe) will be issued on a continuing basis in Tranches (each a Tranche), each Tranche consisting of Notes which are identical in all respects. One or more Tranches, which are expressed to be consolidated and forming a single series and identical in all respects, but having different issue dates, interest commencement dates, issue prices and dates for first interest payments may form a Series (Series) of Notes. Further Notes may be issued as part of an existing Series. The specific terms of each Tranche (which will be supplemented, where necessary, with supplemental terms and conditions) will be set forth in the applicable Final Terms. The relevant Final Terms will indicate either that payments of principal and interest in respect of the Notes will be made without withholding for any present or future taxes or duties of whatever nature imposed or levied by the Federal Republic of Germany unless such withholding is required by law, or that in such event, the Issuer will pay such additional amounts as shall be necessary in order that the net amounts received by the Holders of the Notes after such withholding shall equal the respective amounts of principal and interest which would otherwise have been receivable in respect of the Notes in the absence of such withholding, subject to certain exceptions as set out in 7 of the Terms and Conditions of the Notes. Pfandbriefe will not provide for the obligation of the Issuer to pay such additional amounts in the event of taxes or duties being withheld from payments of principal or interest as aforesaid. Selling Restrictions Approval and Notification There will be specific restrictions on the offer and sale of Notes and the distribution of offering material in the United States of America and the European Economic Area and such other restrictions as may be required under applicable law in connection with the offering and sale of a particular Tranche of Notes. Approval for this Base Prospectus pursuant to Article 13 of the Prospectus Directive and the German Securities Prospectus Act (Wertpapierprospektgesetz) has exclusively been sought from the Bundesanstalt für Finanzdienstleistungsaufsicht as the Competent Authority. As at the date of this Base Prospectus, a notification of the Base Prospectus pursuant to Articles 17 and 18 of the Prospectus Directive to Luxemburg and the United Kingdom has been applied for. In addition, the Issuer may request BaFin to provide competent authorities in additional host Member States within the European Union with a notification pursuant to Articles 17 and 18 of the Prospectus Directive. 19

20 Listing/Admission to a Regulated Market Application has been made to the Stuttgart Stock Exchange for the listing of Notes (including Pfandbriefe) issued under the Programme. The Final Terms will determine for the specific Tranche whether the Notes will be admitted to trading on an (alternative) regulated market and stock exchange respectively or whether Notes will not be admitted to trading at all. Pfandbriefe in registered form will not be listed or admitted to trading on any stock exchange. 2 DEUTSCHE ÜBERSETZUNG DER ZUSAMMENFASSUNG Der folgende Abschnitt stellt die Zusammenfassung (die Zusammenfassung) der wesentlichen mit der Emittentin und den unter dem Programm zu begebenden Schuldverschreibungen (einschließlich Pfandbriefe) verbundenen Merkmale und Risiken dar. Die Zusammenfassung ist als Einführung zum Basisprospekt zu verstehen. Der Anleger sollte jede Entscheidung zur Anlage in die Schuldverschreibungen (einschließlich der Pfandbriefe) auf die Prüfung des gesamten Basisprospekts einschließlich etwaiger Nachträge hierzu und der maßgeblichen Endgültigen Bedingungen stützen. Wenn vor einem Gericht Ansprüche aufgrund der in diesem Basisprospekt, einem etwaigen Nachtrag oder den Endgültigen Bedingungen enthaltenen Informationen geltend gemacht werden, könnte der als Kläger auftretende Anleger in Anwendung der einzelstaatlichen Rechtsvorschriften der Staaten des Europäischen Wirtschaftsraums die Kosten für die Übersetzung des Basisprospekts, etwaiger Nachträge und der maßgeblichen Endgültigen Bestimmungen vor Prozessbeginn zu tragen haben. Die Emittentin, die für diese Zusammenfassung verantwortlich ist, kann haftbar gemacht werden, jedoch nur für den Fall, dass die Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit anderen Teilen des Prospekts gelesen wird. Die der Zusammenfassung zugrunde liegenden Informationen wurden den übrigen Teilen des Basisprospekts entnommen, welche zusammen mit den in Bezug auf eine Serie von Schuldverschreibungen relevanten Endgültigen Bedingungen den inhaltlichen Rahmen der Zusammenfassung vorgeben. 2.1 ZUSAMMENFASSUNG DER RISIKOFAKTOREN ZUSAMMENFASSUNG DER MIT DER EMITTENTIN VERBUNDENEN RISIKEN Wie auch andere Marktteilnehmer ist die Emittentin bei ihrer Geschäftstätigkeit Risiken ausgesetzt, deren Realisierung im schlimmsten Fall dazu führen könnte, dass die Emittentin ihren Verpflichtungen aus den im Rahmen des Programms begebenen Schuldverschreibungen (einschließlich der Pfandbriefe) nicht oder nicht fristgerecht nachkommen kann und der Investor seine Investition ganz oder teilweise verliert. Im Folgenden werden die wesentlichen mit der Emittentin verbundenen Risikofaktoren offengelegt, die mit einer Investition in im Rahmen des Programms begebene Schuldverschreibungen (einschließlich Pfandbriefe) einhergehen. Kreditrisiko Beteiligungsrisiken Kreditrisiken sind Risiken eines Verlustes aufgrund uneinbringlicher Forderungen oder der Verschlechterung der Bonitätseinstufung eines Kunden. Das Kreditrisiko kann weiter unterteilt werden in Adressenausfallrisiko, einschließlich Kontrahentenrisiko und Länderrisiko, und Bonitätsrisiko. Um ihre Unternehmensziele zu erreichen, beteiligen sich die Emittentin und ihre Tochtergesellschaften an anderen Unternehmen. Damit sind Investitionsrisiken verbunden, u.a. das Risiko möglicher (Wert-)Verluste 20

21 aus (i) der Bereitstellung von Eigenkapital oder eigenkapitalähnlicher Mittel (z.b. stille Beteiligungen) oder der Zahlung eines Kaufpreises, wie Nichtzahlung von Dividenden, teilweise Abschreibungen, Verluste bei Verkäufen oder eine Reduzierung der stillen Reserven, (ii) Haftungsverpflichtungen (z.b. aus Patronatserklärungen oder Verlustübertragungen infolge von Gewinnabführungsverträgen), und (iii) aus Kapitaleinlageverpflichtungen. Jede Realisierung von Beteiligungsrisiken würde sich negativ auf die Vermögens-, Ertrags- und Finanzlage der Emittentin auswirken. Marktpreisänderungsrisiko Der Begriff Marktpreisänderungsrisiko beschreibt potenzielle Verluste aufgrund erheblicher Veränderungen von Marktpreisen oder preisbezogenen Parametern mit Bezug auf Wertpapiere, Kredite, derivative Instrumente oder Fremdwährungen, die zwischen Zins- und Währungsrisiken unterscheiden. Zinsrisiken entstehen aus zeitlichen Unterschieden bei der Refinanzierung der Vermögensanlagen oder sonstiger nicht abgestimmter Bedingungen. Währungsrisiken entstehen, falls Zahlungsverpflichtungen in einer oder mehreren Fremdwährungen nicht mit Gegenansprüchen abgeglichen werden. Liquiditätsrisiko Das Liquiditätsrisiko umfasst das kurzfristige Liquiditätsrisiko, welches das Risiko einer nicht ausreichenden Liquidität für die Erfüllung der laufenden Zahlungsverpflichtungen ist, das strukturelle Liquiditätsrisiko, welches infolge einer unausgewogenen mittel- und langfristigen Liquiditätsstruktur entsteht, und das Marktliquiditätsrisiko, welches das Risiko einer nicht ausreichenden Liquidität der entsprechenden Finanzinstrumente ist, aufgrund derer Positionen nicht oder nur zu unverhältnismäßig hohen Kosten glatt gestellt werden können. Operationelle Risiken Operationelle Risiken entstehen hauptsächlich infolge der Unangemessenheit oder des Versagens von internen Verfahren, Menschen und Systemen oder infolge externer Ereignisse. Ein Teil der operationellen Risiken sind rechtliche Risiken. Die Wüstenrot Bank Aktiengesellschaft Pfandbriefbank überwacht und steuert ihre Risiken geschäftsfeldübergreifend nach einheitlichen Verfahren mit dem Ziel, ihr Risiko- und Ertragsprofil über alle Risikoarten zu optimieren. Identifikation, Messung, Aggregation und Steuerung über alle Risiken basieren dabei auf einem Rahmenwerk von Risikogrundsätzen sowie entsprechenden Organisationsstrukturen und Prozessen. Es besteht jedoch die Möglichkeit, dass die Verfahren zur Identifizierung, Analyse, Bewertung, Steuerung und Überwachung der Risiken sich in der Zukunft als unzureichend und ungeeignet erweisen könnten. 21