FINANCIAL INSTITUTIONS

CREDIT OPINION19 December 2019

Update

RATINGS

Landesbank Berlin AGDomicile Berlin, Germany

Long Term CRR Aa2

Type LT Counterparty RiskRating - Fgn Curr

Outlook Not Assigned

Long Term Debt Withdrawn

Type Senior Unsecured -Dom Curr

Outlook Rating(s) WithDrawn

Long Term Deposit Aa2

Type LT Bank Deposits - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Goetz Thurm, CFA +49.69.70730.773VP-Senior Analystgoetz.thurm@moodys.com

Alexander Hendricks,CFA

+49.69.70730.779

Associate Managing Directoralexander.hendricks@moodys.com

Maryna Harbal +49.69.70730.962Associate Analystmaryna.harbal@moodys.com

Landesbank Berlin AGUpdate to credit analysis

SummaryOn 23 October, we lowered Germany's Macro Profile to Strong+ from Very Strong-. Asa result of Landesbank Berlin AG's (LBB) clear focus on the domestic market, the bank'sWeighted Macro Profile was also lowered to Strong+ from Very Strong-. The bank'sAa2(stable)/P-1 deposit and issuer ratings were unaffected by the change of the MacroProfile. Similarly, its baa2 Baseline Credit Assessment (BCA), a3 Adjusted BCA, and A2 juniorsenior unsecured debt rating, as well as its Aa2/P-1 Counterparty Risk Ratings (CRR) remainedunaffected.

The ratings reflect (1) the bank's baa2 BCA; (2) its a3 Adjusted BCA, based on Very Highaffiliate support from Sparkassen-Finanzgruppe (S-Group, Aa2 negative, a21); (3) the resultsof our Advanced Loss Given Failure (LGF) analysis, which provides three notches of ratinguplift for deposits and issuer ratings; and (4) our assumptions of Moderate support from theGovernment of Germany (Aaa stable2) for deposits and issuer ratings, yielding one notch ofrating uplift.

LBB's baa2 BCA is underpinned by the bank's comfortable funding position and strengthenedcapitalisation, while it is restrained by a comparatively weaker asset profile, as a resultof substantial commercial real estate (CRE) exposures. In addition, LBB's role withinErwerbsgesellschaft der S-Finanzgruppe mbH & Co. KG (SEG) and, in particular, the weakerstandalone credit profile of the bank's sister company Berlin Hyp AG (Berlin Hyp, Aa2/Aa2stable, ba13) constrain LBB's BCA. While direct financial links between LBB and Berlin Hyp arelimited, the close links within the group, via profit and loss transfer agreements (PLTA), resultin meaningful risk correlation between the two key subsidiaries of SEG.

Exhibit 1

Rating Scorecard - Key Financial Ratios

1.9%16.6% 0.2% 15.1% 43.0%

0%

10%

20%

30%

40%

50%

0%2%4%6%8%

10%12%14%16%18%

Asset Risk:Problem Loans/

Gross Loans

Capital:Tangible Common

Equity/Risk-WeightedAssets

Profitability:Net Income/

Tangible Assets

Funding Structure:Market Funds/

Tangible BankingAssets

Liquid Resources:Liquid BankingAssets/TangibleBanking Assets

Solvency Factors (LHS) Liquidity Factors (RHS)

LBB (BCA: baa2) Median baa2-rated banks

So

lve

ncy F

acto

rs

Liq

uid

ity F

acto

rs

Source: Moody's Investors Service

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Credit strengths

» Adequate risk-adjusted capitalisation levels, providing a sufficient buffer to regulatory minimum requirements

» Improved asset quality in the currently benign operating environment

» Solid liquidity profile, supported by strong access to customer deposits and significant liquid resources

Credit challenges

» Substantial CRE exposures, exposing the bank to tail risks from dislocations in CRE markets

» Geographical concentration in the Berlin-Brandenburg region

» Close contractual links within the SEG group, which constrain LBB's credit profile

Outlook

» The outlook on LBB's Aa2 deposit and issuer ratings is stable, reflecting our expectation that (1) the combined credit profile ofLBB and Berlin Hyp, as reflected in the consolidated accounts of both banks' ultimate parent SEG, will stay broadly stable over therating outlook horizon; and (2) the liability structure of SEG will stay stable, which forms the basis for our Advanced LGF analysis,reflecting our assumption of a common resolution perimeter for LBB and Berlin Hyp.

Factors that could lead to an upgrade

» An upgrade of LBB's ratings will be subject to an uplift of its baa2 BCA and a3 Adjusted BCA, in combination with an improvementin the overall creditworthiness of S-Group. In addition, an upgrade of the bank's junior senior unsecured debt rating could be drivenby an improved result from our Advanced LGF analysis, which takes into account the severity of loss faced by the different liabilityclasses in resolution at the level of SEG.

» Upward pressure on LBB's baa2 BCA could develop as a result of an additional strengthening of the combined credit profile of LBBand Berlin Hyp, as reflected in the consolidated SEG accounts. Furthermore, a revision of the currently applicable profit and losstransfer arrangements, as part of a reorganisation of SEG, and the associated reduction in risk correlations between LBB and BerlinHyp, could potentially lead to a reassessment of the currently applicable rating constraint, prompting upward pressure on LBB'sBCA. However, in such a scenario, we would also have to reassess our assumption of a common resolution perimeter for LBB andBerlin Hyp, which could result in a lower LGF uplift for LBB if we applied a standalone resolution perimeter.

» Upward pressure on the junior senior unsecured debt rating could develop if sufficient amounts of subordinated or junior seniorunsecured debt were to be issued by LBB or Berlin Hyp, or both, which would provide an additional buffer or lower the loss severityfor junior senior debt at the consolidated level of SEG.

» Deposits and the issuer rating, as well as counterparty liabilities, already benefit from the maximum of three notches of uplift fromour Advanced LGF analysis and, hence, can only be upgraded if LBB's Adjusted BCA is upgraded.

Factors that could lead to a downgrade

» A downgrade of LBB's ratings will be subject to a lowering of its a3 Adjusted BCA. In addition, changes in SEG's liability structure,resulting in higher loss-given-failure in resolution and therefore fewer notches in rating uplift derived from our Advanced LGFanalysis, could negatively affect the ratings.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 19 December 2019 Landesbank Berlin AG: Update to credit analysis

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» Downward pressure on LBB's a3 Adjusted BCA could develop from significant weakening of LBB's and Berlin Hyp's financialfundamentals to the extent that the combined credit strength of SEG was adversely affected, particularly if higher asset risks at bothbanks depleted the group's capital resources. A mild deterioration in both entities' credit profiles could be offset by additional cross-sector support. Further, lower creditworthiness of S-Group or a lowering of our Very High sector support assumptions, althoughunlikely, could trigger downward rating pressure.

Key indicators

Exhibit 2

Landesbank Berlin AG (Consolidated Financials) [1]

06-192 12-182 12-172 12-162 12-152 CAGR/Avg.3

Total Assets (EUR Billion) 47.0 43.1 44.8 45.9 47.5 (0.3)4

Total Assets (USD Billion) 53.5 49.2 53.8 48.4 51.6 1.04

Tangible Common Equity (EUR Billion) 2.3 2.3 2.3 2.2 2.1 1.84

Tangible Common Equity (USD Billion) 2.6 2.6 2.7 2.4 2.3 3.24

Problem Loans / Gross Loans (%) -- 1.6 1.7 2.3 2.8 2.15

Tangible Common Equity / Risk Weighted Assets (%) 16.6 16.8 17.8 18.1 17.4 17.36

Problem Loans / (Tangible Common Equity + Loan Loss Reserve) (%) -- 12.3 12.9 15.8 17.6 14.65

Net Interest Margin (%) 1.7 1.7 1.6 1.6 1.4 1.65

PPI / Average RWA (%) 0.7 1.0 1.3 1.2 0.5 0.96

Net Income / Tangible Assets (%) 0.2 0.1 0.2 0.3 0.0 0.25

Cost / Income Ratio (%) 91.1 87.9 85.3 87.8 94.3 89.35

Market Funds / Tangible Banking Assets (%) 23.4 15.1 18.1 20.8 29.1 21.35

Liquid Banking Assets / Tangible Banking Assets (%) 45.1 43.0 47.4 52.1 56.9 48.95

Gross Loans / Due to Customers (%) -- 78.3 74.6 66.8 64.8 71.15

[1]All figures and ratios are adjusted using Moody's standard adjustments. [2]Basel III - fully-loaded or transitional phase-in; LOCAL GAAP. [3]May include rounding differences due toscale of reported amounts. [4]Compound Annual Growth Rate (%) based on time period presented for the latest accounting regime. [5]Simple average of periods presented for the latestaccounting regime. [6]Simple average of Basel III periods presented.Source: Moody's Investors Service; Company Filings

ProfileLBB is a German public sector bank that provides retail banking, corporate banking, and real estate financing services in the Berlin-Brandenburg region. In addition to its local mandate, LBB's remit on a national scale encompasses the provision of certain services forS-Group in the areas of consumer finance, auto loans and credit cards. As of June 2019, the bank reported total assets of €47.0 billionand employed 3,196 staff.

LBB and its sister company, CRE lender Berlin Hyp, are set up under SEG umbrella and are closely tied via a PLTA agreement withLandesbank Berlin Holding AG (LBBH), a holding entity, which is fully owned by SEG. LBB is delivering its retail banking, corporatebanking, real estate financing services through Berliner Sparkasse, a legal branch of LBB, while other services such as its auto loan andconsumer finance businesses being housed within the S-Kreditpartner GmbH (SKP) subsidiary, and the national credit card business andthe treasury management are being operated by LBB itself.

Weighted Macro Profile of Strong+As of year-end 2018, about 82% of LBB's asset base related to the German market, while other European Union countries accountedfor a further 13%, and other European countries, the US, and supranational organisations comprised most of the remainder. As a resultof the bank's large exposure to its home market, the assigned Weighted Macro Profile of LBB is set at Strong+, in line with the MacroProfile of Germany, which was recently lowered to Strong+ from Very Strong-.

3 19 December 2019 Landesbank Berlin AG: Update to credit analysis

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Detailed credit considerationsCommercial real estate remains the main driver of asset riskWe assign a ba1 Asset Risk score to LBB, six notches below the a1 initial score (which is conditioned by bank's Strong+ Weighted MacroProfile). The assigned score incorporates LBB's geographical concentration and its increasing CRE exposures versus its tangible commonequity (TCE). These risks are not adequately reflected in the currently moderate three-year average (2016-2018) problem loans/grossloans ratio of 1.9% (1.6% as of year-end 2018), which has declined substantially in recent years following the bank's restructuring andreflecting the currently benign operating environment.

Exhibit 3

LBB successfully decreased its legacy exposures

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2015 2016 2017 2018

Problem Loans / Gross Loans (lext axis) Coverage ratio (right axis)

Problem loan ratio as per Moody's definitionSource: Company reports, Moody's Investors Service

Following the spin-off of Berlin Hyp4, LBB's exposures related to CRE have declined materially. Yet, CRE exposures remain substantialand are now concentrated in the Berlin-Brandenburg region. As of year-end 2018, CRE-related credit exposures amounted to €12.6billion, representing 27% of the bank's total exposures at default or 5.6x the bank's TCE, which increased from 4.5x in 2016. In 2018,the bank increased its CRE exposures by €0.7 billion (€1.8 billion in 2017) and we will likely see further growth, given continued strengthin the commercial property market in Berlin (Aa1 stable5).

Further asset risk at LBB arises from the bank's securities portfolio, which stood at €9.0 billion (21% of total assets) as of December2018. LBB has a well-diversified investment portfolio of mostly repo-eligible public sector and private sector bonds, but the size ofits treasury book remains substantial. Finally, the bank's lending to small and medium-sized businesses in the Berlin-Brandenburgregion, as well as its private customer franchise, is a source of asset risk, with the latter being geographically more diversified, given thenational reach of the bank's credit card, auto loan and consumer finance businesses. As of January 2016, LBB no longer runs a tradingbook with its concomitant market risk.

LBB's problem loans amounted to €348 million as of year-end 2018, a 76% reduction from the €1,427 million reported at the endof 2012, reflecting the successful workout of the bank's legacy CRE exposures. In 2018, LBB built up further €82 million of loan lossprovisions (including 340f contingency reserve additions6), which has manifested itself in a strong coverage ratio (loan loss reservesover problem loans), which stood at 162% as of December 2018. In comparison to banks reporting under IFRS, the coverage ratio issomewhat overstated, though, since LBB's undisclosed stock of 340f provisions is included within loan loss reserves.

Capitalisation is adequate in light of limited internal capital generation capacityOur assigned Capital score of aa3, one notch below the aa2 initial score, takes into consideration that LBB does not consolidate itsSKP subsidiary in its external accounts7, while regulatory capitalisation is assessed with SKP being fully consolidated, resulting in lowercapital adequacy metrics. Moreover, we expect that volume growth in certain business lines, such as CRE, will lead to some softening ofcapital ratios from current levels again. Finally, we have factored in the bank's hidden 340f reserves under German GAAP, which provideadditional loss-absorbing capacity.

4 19 December 2019 Landesbank Berlin AG: Update to credit analysis

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For regulatory purposes, capitalisation requirements are assessed by the European Central Bank (ECB) under the Single SupervisoryMechanism (SSM) at the level of LBB's ultimate parent company, SEG, which reported a transitional 13.4% Tier 1 ratio and a 15.0%total capital ratio as of June 2019 (13.1% and 14.8% as of year-end 2018 respectively). These metrics included SKP, as well as LBB andBerlin Hyp, on a consolidated basis. Conversely and as outlined above, LBB's Common Equity Tier 1 (CET1) capital ratio of 16.3% asof June 2019 (16.8% as of year-end 2018) and our TCE ratio (TCE over risk-weighted assets) of 16.6% as of June 2019 (16.9% as ofyear-end 2018) did not include the consolidated SKP subsidiary. LBB's leverage ratio (TCE over tangible assets) of 4.9% as of June 2019(5.3% as of year-end 2018) would also have been somewhat lower if SKP were consolidated.

Exhibit 4

LBB's capital ratios decreased, but still substantially above capital requirements

17.8%

16.9% 16.6%17.4%

16.8% 16.3%

5.1% 5.3% 4.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2017 2018 H1 2019

TCE ratio CET1 ratio TCE leverage

TCE = Tangible common equity (Moody's calculation), CET1 = Common Equity Tier 1.Source: Company reports, Moody's Investors Service

During the first six months of 2019, capitalisation softened somewhat, mainly reflecting a temporary €0.8 billion increase in interbanklending, with LBB taking advantage of carry opportunities in the market (interbank liabilities increased by €2.9 billion), as well as a€1.0 billion increase in CRE lending and business with private customers. The interbank positions are expected to be reigned in againby year-end 2019. Hence, we still regard LBB's capitalisation as adequate at present, and we note that over a longer-term horizon,capitalisation has markedly improved from the 14.1% Tier 1 ratio reported as of year-end 2012, driven by the resizing of the bank'sprofile to that of a savings bank. With changes to the Basel framework being phased-in from 2022 and consequent decrease of thecapital ratios, we expected LBB to further bolster its capital base in the years to come, as the bank will be affected by the introductionof output floors, since it applies the internal ratings based approach (IRBA) to derive risk-weights for the bulk of its assets. On accountof LBB's profit and loss sharing agreement with LBBH, the only option for the bank to retain earnings, though, is through the build-upof reserves for general banking risks (called 340g under German GAAP) or through the creation of the aforementioned hidden reserves(called 340f). This arrangement might limit profit retention to a certain extent.

Profitability has improved following the right-sizing into a savings bankFor the Profitability score, we assign a ba3, one notch above the b1 initial score, which is derived from the 0.2% return on assets(adjusted net income over tangible assets) in the first six months of 2019. For our assigned score, we exclude the bank's 340f reservebuild-up/release.

Since LBB operates under a profit and loss transfer agreement, it does not have to pay any taxes on its domestic income, but has toupstream its entire net profit to its parent LBBH, where domestic taxes are paid, utilising remaining tax loss carryforwards generatedby the former Bankgesellschaft Berlin. As a result of this setup, the reported net profit of LBB is zero. Hence, in order to gauge theunderlying earnings power of the bank, we assume a normalized tax rate of 30% that we apply to the Moody's-adjusted pre-taxincome, which resulted in an adjusted net profit of €44 million and €58 million in 2018 and the first half of 2019, respectively, whichrepresented an adjusted return on assets of 0.1% and 0.2% in those periods. Not reflected in these metrics was the strengthening ofthe bank's 340f reserve, which understated our adjusted earnings.

5 19 December 2019 Landesbank Berlin AG: Update to credit analysis

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Exhibit 5

LBB's earnings improved after the reorganization

704721 715 752 733

244 234 282 271 233

221361

130 113 255

-1,045 -1,099-917 -1,000 -988

-1,500

-1,000

-500

0

500

1,000

1,500

2015 2016 2017 2018 2019E

€ m

illio

n

Net interest Income Net fees and commissions income Trading & other income Operating Expenses

Risk provisions Extraordinary income and expense Pre-tax profit

Source: Company reports, Moody's Financial Metrics, Moody's estimation

Both adjusted and underlying earnings, excluding the 340f reserve build-up, improved in 2018 and first half of 2019, and we expectthat profitability has sustainably advanced from the very weak levels reported in the years prior to 2016, when LBB was transformingand right-sizing itself into a savings bank. In 2018, LBB's net interest income, which represented 66% of the bank's adjusted revenues,increased by 5.2% or €37 million year-on-year to €752 million. However, the bank's fee and commission income decreased slightly by€11 million, which resulted in €271 million on the back of increased fee and commission expenses caused by higher credit volume. Loanloss provisioning requirements (excluding the 340f reserve build-up) remained modest, while the cost base increased, mainly due tothe change in the discount rate for pension obligations.

During the first half of 2019, net interest income decreased by 8% year-on-year to €366 million, as a consequence of lower incomefrom the treasury business. On the other side, increased income from real estate business and participations supported the result.Commission income likewise decreased by 21% to €117 million mainly due to less fees from the credit cards business. The deteriorationin revenues was further driven by a higher cost base, reflecting a lower discount rate in the calculation of pension obligations. Thesenegative developments were offset by lower loan loss provisions (excluding the 340f reserve build up of €52 million in 1H19 and €48million in 1H18) and by higher other operating income. As a result, the adjusted pre-tax income increased by 32% year-on-year to €83million, which translated into a return on assets of 0.2%.

Strong deposit franchise with limited need for additional market fundingOur assigned a3 Funding Structure, in line with the initial score, reflects our assumption that LBB's market funds ratio will stay around20% in the medium term, owing to the bank's strong deposit franchise and thus limited need for additional market funding. However,as of June 2019, the market funds ratio temporarily jumped to 23.4% from 15.1% six months earlier, as the bank ratcheted up itsinterbank funding to take advantage of the carry opportunities mentioned above. By year-end 2019, we should see the market fundsratio decline again.

6 19 December 2019 Landesbank Berlin AG: Update to credit analysis

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Exhibit 6

LBB decreased its dependence on market fundsComposition of market funding sources

29%

21%

18%

15%

23%

10%

15%

20%

25%

30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 H1 2019

Equity Other liabilities Issued securities Interbank Deposits Market Funds Ratio* (right axis)

*Market funds ratio = market funds/tangible banking assets.Source: Company reports, Moody's Investors Service

In general, LBB's funding profile has improved materially over the last few years, as the bank transformed itself into a savings bank andfocused on its deposit-gathering franchise. Customer deposits, most of them being retail deposits, amounted to €29 billion as of June2019 and now fund around 63% of the bank's balance sheet, which results in a sizeable deposit overhang, given net customer loansof €23 billion (loan/deposit ratio of 78%). In addition to its stable retail deposit base, the bank has access to market funding from thesavings bank sector and the wider interbank market, as well as from Pfandbriefe (covered bonds), junior senior unsecured bonds andpromissory note loans.

Very strong liquidity buffer despite asset encumbranceOur view of LBB's a1 assigned Liquid Resources score, one notch below the aa3 initial score, takes into account the bank's cash position,interbank loans and still sizeable securities portfolio, adjusted for encumbered assets and lending to related entities. We also take intoaccount that we expect the bank to decrease the current extremely comfortable liquidity buffer to manage leverage and to allow forrenewed growth in customer lending.

Exhibit 7

LBB's levels of liquidity declined, but still remain strongComposition of liquid assets

57%

52%

47%

43%45%

35%

40%

45%

50%

55%

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 H1 2019

Cash Interbank Securities/Investments Loans Other assets Liquid Banking Asset Ratio (right axis)

*Liquid banking assets ratio = liquid assets/tangible banking assets.Source: Company reports, Moody's Investors Service

LBB's liquid banking assets ratio (liquid banking assets to tangible assets) stood at 43.0% as of December 2018 and rose to 45.0% atthe June 2019 stage. The bank's Liquidity Coverage Ratio (LCR) reached 233% as of June 2019, a slight improvement from the 181%

7 19 December 2019 Landesbank Berlin AG: Update to credit analysis

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

as of December 2018. While the bank does not yet publish a Net Stable Funding Ratio (NSFR), its own, very similar internal measureremained above 100% throughout 2018 and the first half of 2019, highlighting the bank's solid liquidity position.

LBB's credit profile is restrained by the close contractual links within the SEG groupBased on our analysis of LBB's Financial Profile, the unconstrained outcome of our Scorecard is baa1. However, the assigned baa2 BCAof LBB is constrained by one notch by the somewhat weaker credit profile of the bank's sister company, Berlin Hyp. Following thereorganisation of LBB, the direct financial links between the two banks are very limited. Nonetheless, we believe that the close linkswithin the group, illustrated by the aforementioned profit and loss transfer agreements, result in meaningful risk correlation betweenthe two key subsidiaries of SEG. This correlation affects their probability of default, as captured in our BCA.

Environmental, social and governance (ESG) considerationsIn line with our general view on the banking sector, LBB has a low exposure to environmental risks (see our environmental riskheatmap8 for further information).

For social risks, we also place LBB in line with our general view for the banking sector, which indicates a moderate exposure (see oursocial risk heatmap9).

Corporate Governance10is highly relevant for LBB, as it is to all players in the banking industry. Corporate governance weaknesses canlead to a deterioration in a company’s credit quality, while governance strengths can benefit its credit profile. Governance risks arelargely internal rather than externally driven, and for LBB we do not have any particular governance concern. Nonetheless, corporategovernance remains a key credit consideration and requires ongoing monitoring.

Detailed credit considerationsAffiliate supportLBB benefits from cross-sector support from S-Group. Cross-sector support materially reduces the probability of default, as it would beavailable to stabilise a distressed member bank, and not just compensate for losses in resolution.

We continue to consider the readiness of the sector to support its core members to be Very High. This particularly applies to LBB, givenits 100% indirect ownership by the sector's savings banks. Cross-sector support provides two notches of rating uplift from the bank'sbaa2 BCA, resulting in an a3 Adjusted BCA.

Loss Given Failure analysisLBB is subject to the EU Bank Recovery and Resolution Directive (BRRD), which we consider to be an operational resolution regime.We, therefore, apply our Advanced LGF analysis, where we consider the risks faced by the different debt and deposit classes across theliability structure should the bank enter resolution (the analysis is performed at the level of SEG, the consolidating entity of the group'skey subsidiaries LBB and Berlin Hyp).

Our Advanced LGF analysis follows the revised insolvency legislation in Germany that became effective on 21 July 2018. Following thechange in law, the legal hierarchy of bank claims in Germany is now consistent with most other European Union (EU) countries, wherestatutes do not provide full preference to deposits over senior unsecured debt. However, in our Advanced LGF analysis we now considernot only the results of both the formal legal position (pari passu, or 'de jure' scenario), to which we assign a 75% probability, but alsoan alternative liability ranking, reflecting resolution authority discretion to prefer deposits over senior unsecured debt (full depositorpreference, or 'de facto' scenario), to which we assign a 25% probability.

We further assume residual tangible common equity of 3% and losses post-failure of 8% of tangible banking assets, a 25% run-off in“junior” wholesale deposits and a 5% run-off in preferred deposits. These ratios are in line with our standard assumptions. In addition,we assume that only a very small percentage (10%) of the deposit base can actually be considered junior and qualify as bail-in-ableunder the BRRD.

The results of our Advanced LGF analysis are:

8 19 December 2019 Landesbank Berlin AG: Update to credit analysis

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

» For deposits and senior unsecured debt (the anchor for LBB's issuer rating), as well as CRR liabilities, our LGF analysis indicates anextremely low loss-given-failure, leading us to position their Provisional Rating Assessments at aa3, three notches above the a3Adjusted BCA.

» For junior senior unsecured debt, our LGF analysis indicates a low loss-given-failure, leading us to position its Provisional RatingAssessment at a2, one notch above the a3 Adjusted BCA.

» For subordinated debt, our LGF analysis indicates a high loss-given-failure, leading us to position its Provisional Rating Assessmentat baa1, one notch below the a3 Adjusted BCA.

Government support considerationsFollowing the introduction of the BRRD, we have lowered our expectations about the degree of support the government might provideto a bank in Germany in the event of need. Owing to its size on a consolidated basis, we consider S-Group as systemically relevantand, therefore, attribute a Moderate probability of German government support for all members of the sector, in line with supportassumptions for other systemically relevant banking groups in Europe. We, therefore, still include one notch of government supportuplift in our CRRs, senior unsecured debt and deposit ratings of S-Group member banks that are incorporated in Germany, includingLBB. For junior securities, we continue to believe that the likelihood for government support is Low and these ratings do not include anyrelated uplift.

In particular for junior senior unsecured debt, the legal change to the German banks’ insolvency rank order has lowered the likelihoodof government support being available for these instruments, because legally they rank pari passu with the majority of outstanding(statutorily subordinated) senior unsecured instruments issued up until 20 July 2018. This pari passu ranking of new junior seniorunsecured debt with legacy (statutorily subordinated) senior unsecured instruments makes it less likely that German authoritieswould selectively support the legacy instruments (which we reclassified into junior senior unsecured debt), following clarification thatthe German authorities expect these liabilities to bear losses in a resolution. As a result, we have reduced our government supportassumption for these instruments to Low from Moderate.

Counterparty Risk RatingsCounterparty Risk Ratings (CRR) are opinions of the ability of entities to honour the uncollateralised portion of non-debt counterpartyfinancial liabilities (CRR liabilities) and also reflect the expected financial losses in the event such liabilities are not honoured. CRR aredistinct from ratings assigned to senior unsecured debt instruments and from issuer ratings because they reflect that, in a resolution,CRR liabilities might benefit from preferential treatment compared with senior unsecured debt. Examples of CRR liabilities include theuncollateralised portion of payables arising from derivatives transactions and the uncollateralised portion of liabilities under sale andrepurchase agreements.

LBB's CRR are positioned at Aa2/P-1The CRR, prior to government support, are positioned three notches above the Adjusted BCA of a3, reflecting the extremely low loss-given-failure from the high volume of instruments, primarily junior senior unsecured debt, that are subordinated to CRR liabilities inour Advanced LGF analysis. LBB's CRR also benefit from one notch of rating uplift provided by government support, in line with ourModerate support assumption on deposits and senior unsecured debt.

Counterparty Risk AssessmentThe Counterparty Risk Assessment (CR Assessment) is an opinion of how counterparty obligations are likely to be treated if a bank failsand is distinct from debt and deposit ratings in that it (1) considers only the risk of default rather than both the likelihood of default andthe expected financial loss suffered in the event of default; and (2) applies to counterparty obligations and contractual commitmentsrather than debt or deposit instruments. The CR Assessment is an opinion of the counterparty risk related to a bank's covered bonds,contractual performance obligations (servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities.

LBB's CR Assessment is positioned at Aa2(cr)/P-1(cr)The bank's CR Assessment is positioned four notches above the a3 Adjusted BCA, incorporating 1) three notches of LGF-uplift derivedfrom the buffer against default provided by more subordinated instruments, primarily junior senior unsecured debt, to the seniorobligations represented by the CR Assessment; and 2) one notch of government support uplift, assuming a Moderate level of support.

9 19 December 2019 Landesbank Berlin AG: Update to credit analysis

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To determine the CR Assessment, we focus purely on subordination in our Advanced LGF analysis, taking no account of the volume ofthe instrument class.

Methodology and scorecardMethodologyThe principal methodology we used in rating LBB was Banks Methodology, published in November 2019.

About Moody's Bank ScorecardOur Bank Scorecard is designed to capture, express and explain in summary form our Rating Committee's judgment. When readin conjunction with our research, a fulsome presentation of our judgment is expressed. As a result, the output of our scorecardmay materially differ from that suggested by raw data alone (though it has been calibrated to avoid the frequent need for strongdivergence). The scorecard output and the individual scores are discussed in rating committees and may be adjusted up or down toreflect conditions specific to each rated entity.

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MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Rating methodology and scorecard factors

Exhibit 8

Landesbank Berlin AG

Macro FactorsWeighted Macro Profile Strong + 100%

Factor HistoricRatio

InitialScore

ExpectedTrend

Assigned Score Key driver #1 Key driver #2

SolvencyAsset RiskProblem Loans / Gross Loans 1.9% a1 ←→ ba1 Sector concentration Geographical

concentrationCapitalTangible Common Equity / Risk Weighted Assets(Basel III - transitional phase-in)

16.6% aa2 ←→ aa3 Expected trend Risk-weightedcapitalisation

ProfitabilityNet Income / Tangible Assets 0.2% b1 ←→ ba3 Earnings quality Expected trend

Combined Solvency Score a2 baa2LiquidityFunding StructureMarket Funds / Tangible Banking Assets 15.1% a3 ←→ a3 Extent of market

funding relianceExpected trend

Liquid ResourcesLiquid Banking Assets / Tangible Banking Assets 43.0% aa3 ←→ a1 Asset encumbrance Expected trend

Combined Liquidity Score a2 a2Financial Profile baa1Qualitative Adjustments Adjustment

Business Diversification 0Opacity and Complexity 0Corporate Behavior 0

Total Qualitative Adjustments 0Sovereign or Affiliate constraint Baa2BCA Scorecard-indicated Outcome - Range baa1 - baa3Assigned BCA baa2Affiliate Support notching 2Adjusted BCA a3

De Jure waterfall De Facto waterfall NotchingDebt ClassInstrumentvolume +

subordination

Sub-ordination

Instrumentvolume +

subordination

Sub-ordination

De Jure De FactoLGF

NotchingGuidance

vs.Adjusted

BCA

AssignedLGF

notching

AdditionalNotching

PreliminaryRating

Assessment

Counterparty Risk Rating - - - - - - - 3 0 aa3Counterparty Risk Assessment - - - - - - - 3 0 aa3 (cr)Deposits - - - - - - - 3 0 aa3Junior senior unsecured bank debt - - - - - - - 1 0 a2Dated subordinated bank debt - - - - - - - -1 0 baa1

11 19 December 2019 Landesbank Berlin AG: Update to credit analysis

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Instrument Class Loss GivenFailure notching

Additionalnotching

Preliminary RatingAssessment

GovernmentSupport notching

Local CurrencyRating

ForeignCurrency

RatingCounterparty Risk Rating 3 0 aa3 1 Aa2 Aa2Counterparty Risk Assessment 3 0 aa3 (cr) 1 Aa2(cr)Deposits 3 0 aa3 1 Aa2 Aa2Junior senior unsecured bank debt 1 0 a2 0 A2Dated subordinated bank debt -1 0 baa1 0 Baa1[1]Where dashes are shown for a particular factor (or sub-factor), the score is based on non-public information.Source: Moody’s Investors Service

Ratings

Exhibit 9

Category Moody's RatingLANDESBANK BERLIN AG

Outlook StableCounterparty Risk Rating Aa2/P-1Bank Deposits Aa2/P-1Baseline Credit Assessment baa2Adjusted Baseline Credit Assessment a3Counterparty Risk Assessment Aa2(cr)/P-1(cr)Issuer Rating Aa2Junior Senior Unsecured -Dom Curr A2Subordinate -Dom Curr Baa1

BERLINER SPARKASSE

Outlook StableCounterparty Risk Rating Aa2/P-1Bank Deposits Aa2/P-1Counterparty Risk Assessment Aa2(cr)/P-1(cr)Issuer Rating -Dom Curr Aa2

LBB FINANCE (IRELAND) PLC

Outlook StableBkd Subordinate -Dom Curr Aa1

Source: Moody's Investors Service

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MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Endnotes1 The ratings shown are S-Group's corporate family rating and outlook, and its BCA.

2 The rating shown is the Government of Germany's issuer rating and outlook

3 The ratings shown are Berlin Hyp's long-term deposit rating / senior unsecured rating and outlook, and its BCA.

4 In December 2012, the German Savings Banks Association (the umbrella organisation of S-Group) announced its intention to transform LBB from auniversal German Landesbank into a savings bank focused on retail banking in Berlin. To facilitate the realignment of activities, LBB's customer-orientedcapital market activities, including the asset management company LBB-INVEST, were transferred to DekaBank Deutsche Girozentrale (Deka, Aa2 stable/Aa2 stable, baa2) as of January 2014. Moreover, LBB's international and national CRE activities outside of Berlin were concentrated in the bank's subsidiaryBerlin Hyp, while LBB remained responsible for most local CRE lending in the Berlin-Brandenburg region. Berlin Hyp was then spun off and set up as a sistercompany of LBB, under the SEG umbrella, as of January 2015, with both LBB and Berlin Hyp remaining closely tied via a profit and loss transfer agreementwith Landesbank Berlin Holding AG (LBBH), a holding entity, which is fully owned by SEG. Finally, the bank changed its market presence from LBB toBerliner Sparkasse as of January 2014, with the exception of its treasury management, the national credit card business, and its auto loan and consumerfinance businesses, which are housed within the S-Kreditpartner GmbH (SKP) subsidiary. The commercial and legal status of LBB remained unaffected bythis rebranding exercise, with Berliner Sparkasse being set up as a legal branch of LBB. As of autumn 2016, LBB had completed the bulk of its realignmentprojects.

5 The rating shown is the Land of Berlin's issuer rating and outlook.

6 The fully taxed 340f reserve under German GAAP enables companies to smooth their earnings over the cycle. For banks, it is created by booking provisionson loans and securities in excess of what is economically required, thereby understating reported profitability. Conversely, the release of 340f provisionsoverstates profitability. In the first half of 2019, LBB created a further €52 million in 340f provisions, while the amount of 340f additions for the full year2018 was not disclosed (€48 million were built-up in the first half). The stock of 340f reserves is likewise not disclosed.

7 LBB holds 66.67% of S-Kreditpartner GmbH (SKP), a joint venture with Deutsche Sparkassen Leasing AG & Co. KG, which provides a service platformto German savings banks to supply car and consumer loans. As SKP is considered an atypical subsidiary under German GAAP (HGB), which cannotbe dominated by LBB, it is accounted for at equity within LBB’s accounts and within its regulatory capital ratios. To reach domination and thus fullconsolidation, a 75% shareholding would be required. SKP is, however, fully consolidated within the regulatory capital ratios of LBB's ultimate parent SEG.

8 Environmental risks can be defined as environmental hazards encompassing the impacts of air pollution, soil/water pollution, water shortages and naturaland man-made hazards (physical risks). Additionally, regulatory or policy risks, like the impact of carbon regulation or other regulatory restrictions,including the related transition risks like policy, legal, technology and market shifts, that could impair the evaluation of assets are an important factor.Certain banks could face a higher risk from concentrated lending to individual sectors or operations exposed to the aforementioned risks.

9 Social risk considerations represent a broad spectrum, including customer relations, human capital, demographic and societal trends, health and safetyand responsible production. The most relevant social risks for banks arise from the way they interact with their customers. Social risks are particularly highin the area of data security and customer privacy, which is partly mitigated by sizeable technology investments and banks’ long track record of handlingsensitive client data. Fines and reputational damage because of product mis-selling or other types of misconduct is a further social risk. Societal trends arealso relevant in a number of areas, such as shifting customer preferences toward digital banking services increasing information technology costs, ageingpopulation concerns in several countries affecting demand for financial services or socially driven policy agendas that may translate into regulations thataffect banks’ revenue bases.

10 Corporate governance is a well-established key driver for banks and related risks are typically included in our evaluation of the banks' financial profile.Further factors like specific corporate behaviour, key person risk, insider and related-party risk, strategy and management risk factors and dividend policymay be captured in individual adjustments to the BCA.

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14 19 December 2019 Landesbank Berlin AG: Update to credit analysis