Bond Volksbank 1.25% ( XS1734548644 ) in EUR

Volksbank

99.83 % ▲

Germany

XS1734548644 ( in EUR )

1.25% per year ( payment 1 time a year)

15/12/2025

Prospectus brochure of the bond Volkswagen Bank XS1734548644 en EUR 1.25%, maturity 15/12/2025

15/12/2025 ( In 51 days )

Volkswagen Bank GmbH is a German financial services company offering a range of financial products, primarily focused on financing Volkswagen Group vehicles and related services.

The Bond issued by Volksbank ( Germany ) , in EUR, with the ISIN code XS1734548644, pays a coupon of 1.25% per year.
The coupons are paid 1 time per year and the Bond maturity is 15/12/2025

Dated 6 June 2019

This document constitutes the base prospectus for the purposes of Article 5(4) of the Directive 2003/71/EC of the
European Parliament and the Council of 4 November 2003, as amended, including by Directive 2010/73/EU of the
European Parliament and of the Council of 24 November 2010, or superseded (the "Prospectus Directive") of
Volkswagen Bank GmbH (the "Prospectus").

VOLKSWAGEN BANK GMBH
Braunschweig, Federal Republic of Germany

Issuer

EUR 10,000,000,000
Debt Issuance Programme

(the "Programme")

Arranger

UNICREDIT BANK

Dealers
BANCO BILBAO VIZCAYA
BARCLAYS
BAYERNLB
ARGENTARIA, S.A.
BNP PARIBAS
BofA MERRILL LYNCH
CITIGROUP
COMMERZBANK
CRÉDIT AGRICOLE CIB
DANSKE BANK A/S
DEUTSCHE BANK
GOLDMAN SACHS
HSBC
INTERNATIONAL
J.P. MORGAN
LANDESBANK BADEN-
LLOYDS BANK CORPORATE
WÜRTTEMBERG
MARKETS
WERTPAPIERHANDELSBANK
MUFG
MIZUHO SECURITIES
NATWEST MARKETS
RBC CAPITAL MARKETS
SANTANDER CORPORATE &
SEB
INVESTMENT BANKING
SOCIÉTÉ GÉNÉRALE
TD SECURITIES
UNICREDIT BANK
CORPORATE & INVESTMENT
BANKING

Issuing Agent

CITIBANK, N.A.

- 2 -
Application has been made to the Commission de Surveil ance du Secteur Financier of the Grand Duchy of
Luxembourg (the "Commission") in its capacity as competent authority under the Luxembourg act relating to
prospectuses for securities (loi relative aux prospectus pour valeurs mobilières) (the "Luxembourg Prospectus
Law"), which implements the Prospectus Directive into Luxembourg law, for the approval of this Prospectus. The
Commission assumes no responsibility as to the economic and financial soundness of the transaction or the
quality or solvency of the Issuer pursuant to Article 7 (7) of the Luxembourg Law on Prospectuses for securities.

Application has been made to the Luxembourg Stock Exchange for notes (the "Notes") issued under this
Programme to be admitted to trading on the regulated market of the Luxembourg Stock Exchange (as defined
below) and to be listed on the official list of the Luxembourg Stock Exchange. Notes issued under the Programme
may also be listed and traded on an alternative stock exchange or may not be listed at all.

The Issuer has requested the Commission to provide the competent authorities in the Federal Republic of
Germany, the Netherlands, the United Kingdom of Great Britain and Northern Ireland, the Republic of Ireland, and
the Republic of Austria with a certificate of approval attesting that the Prospectus has been drawn up in
accordance with the Luxembourg Prospectus Law ("Notification"). The Issuer may request the Commission to
provide competent authorities in additional Member States within the European Economic Area with a Notification.

This Prospectus and any supplement thereto wil be published in electronic form on the website of the
Luxembourg Stock Exchange (www.bourse.lu) and the website of Volkswagen Financial Services
Aktiengesellschaft (www.vwfs.com). This Prospectus is valid for a period of twelve months from its date of
approval.

- 3 -
Table of Contents
Page

Responsibility Statement ........................................................................................................................... 5
Notice ......................................................................................................................................................... 5
Summary .................................................................................................................................................... 7
Section A Introduction and warnings ...................................................................................................... 7
Section B Issuer and any Guarantors ...................................................................................................... 8
Section C Securities ............................................................................................................................. 11
Section D Risks .................................................................................................................................... 17
Section E Offer ..................................................................................................................................... 21
German Translation of the Summary ....................................................................................................... 22
Abschnitt A Einleitung und Warnhinweise .............................................................................................. 22
Abschnitt B Emittent und etwaige Garantiegeber ................................................................................... 23
Abschnitt C Wertpapiere ....................................................................................................................... 27
Abschnitt D Risiken .............................................................................................................................. 33
Abschnitt E Angebot ............................................................................................................................. 38
Risk Factors ............................................................................................................................................. 40
Risk Factors regarding Volkswagen Bank ................................................................................................ 40
Risk Factors regarding the Notes ............................................................................................................. 62
Volkswagen Bank GmbH.......................................................................................................................... 72
General Description of the Programme ................................................................................................... 81
1. General ............................................................................................................................................... 81
2. Description of the Notes ....................................................................................................................... 82
3. Issue Procedures................................................................................................................................. 86
English Language Terms and Conditions ............................................................................................... 88
Option I Terms and Conditions for Notes with fixed interest rates ........................................................... 88
Option II Terms and Conditions for Notes with floating interest rates ..................................................... 107
Option III Terms and Conditions for Notes with fixed to floating interest rates ........................................ 129
Option IV Terms and Conditions for subordinated Notes with fixed to fixed reset rate ............................ 153
Deutsche Fassung der Anleihebedingungen......................................................................................... 170
Option I Anleihebedingungen für Schuldverschreibungen mit fester Verzinsung .................................... 170
Option II Anleihebedingungen für Schuldverschreibungen mit variabler Verzinsung .............................. 192
Option III Anleihebedingungen für Schuldverschreibungen mit fester zu variabler Verzinsung ............... 218
Option IV Anleihebedingungen für nachrangige Schuldverschreibungen mit fester zu fester Reset-
Verzinsung ............................................................................................................................................ 246
Form of Final Terms ............................................................................................................................... 266
PART I CONDITIONS
TEIL I BEDINGUNGEN ....................................................................................................................... 269
Option I Terms and Conditions for Notes with fixed interest rates
Option I Anleihebedingungen für Schuldverschreibungen mit fester Verzinsung .................................... 270
Option II Terms and Conditions for Notes with floating interest rates
Option II Anleihebedingungen für Schuldverschreibungen mit variabler Verzinsung .............................. 276
Option III Terms and Conditions for Notes with fixed to floating interest rates
Option III Anleihebedingungen für Schuldverschreibungen mit fester zu variabler Verzinsung ............... 288
Option IV Terms and Conditions for Subordinated Notes with fixed to fixed reset rates
Option IV Anleihebedingungen für Nachrangige Schuldverschreibungen mit fester zu fester Reset-
Verzinsung ............................................................................................................................................ 289
PART II OTHER INFORMATION
TEIL II WEITERE INFORMATIONEN .................................................................................................. 294
Use of Proceeds ..................................................................................................................................... 304

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Taxation .................................................................................................................................................. 305
Subscription and Sale ............................................................................................................................ 315
General Information ............................................................................................................................... 320
1. Listing and Admission to Trading ........................................................................................................ 320
2. Consent to use Prospectus ................................................................................................................ 320
3. Interest of Natural and Legal Persons involved in the Issue/Offer ........................................................ 320
4. Authorisations .................................................................................................................................... 320
5. Documents on Display ....................................................................................................................... 321
6. Clearing Systems............................................................................................................................... 321
7. Ratings .............................................................................................................................................. 321
8. Third party information ....................................................................................................................... 322
Documents Incorporated by Reference ................................................................................................. 323
Address List ........................................................................................................................................... 326

- 5 -
Responsibility Statement

Volkswagen Bank GmbH ("Volkswagen Bank" or the "Issuer", together with its consolidated subsidiaries
"Volkswagen Bank Group"), with its registered office in Braunschweig, Federal Republic of Germany, accepts
responsibility for the information given in this Prospectus. Volkswagen Bank hereby declares that, having taken al
reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of its
knowledge, in accordance with the facts and contains no omission likely to affect its import.

Notice

This Prospectus should be read and understood in conjunction with any supplement thereto and with any other
document incorporated herein by reference. Full information on Volkswagen Bank and any Tranche of Notes is
only available on the basis of the combination of the Prospectus and the relevant final terms (the "Final Terms").

The Issuer has confirmed to the Dealers (as defined herein) that this Prospectus contains all information with
regard to Volkswagen Bank and the Notes which is material in the context of the Programme and the issue and
offering of Notes thereunder; that the information contained in the Prospectus is accurate and complete in al
material respects and is not misleading; that any opinions and intentions expressed herein are honestly held and
based on reasonable assumptions; that there are no other facts with respect to the Issuer or the Notes, the
omission of which would make the Prospectus as a whole or any statement, whether fact or opinion, in this
Prospectus misleading in any material respect; and that al reasonable enquiries have been made to ascertain al
facts and to verify the accuracy of al statements contained herein.

No person has been authorised to give any information which is not contained in or not consistent with this
Prospectus or any other information supplied in connection with the Programme and, if given or made, such
information must not be relied upon as having been authorised by or on behalf of the Issuer or any of the Dealers.

This Prospectus is valid for twelve months following its date of approval and this Prospectus and any supplement
hereto as well as any Final Terms reflect the status as of their respective dates of issue. Notwithstanding that the
Issuer may be required to provide a supplement pursuant to Article 13 of the Luxembourg Prospectus Law, the
delivery of this Prospectus or any Final Terms and the offering, sale or delivery of any Notes may not be taken as
an implication that the information contained in such documents is accurate and complete subsequent to their
respective dates of issue or that there has been no adverse change in the financial situation of the Issuer since
such date or that any other information supplied in connection with the Programme is accurate at any time
subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the
same.

The Issuer has undertaken with the Dealers to supplement this Prospectus or publish a new Prospectus in the
event of any significant new factor, material mistake or inaccuracy relating to the information included in this
Prospectus which is capable of affecting the assessment of the Notes and which arises or is noted between the
time when this Prospectus has been approved and the final closing of any Tranche of Notes offered to the public
or, as the case may be, when trading of any Tranche of Notes on a regulated market begins.

Neither the arranger as set forth on the cover page (the "Arranger") nor any Dealer nor any other person
mentioned in this Prospectus, excluding the Issuer, is responsible for the information contained in this Prospectus
or any supplement hereto, or any Final Terms or any other document incorporated herein by reference, and
accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these persons accepts
any responsibility for the accuracy and completeness of the information contained in any of these documents.

The distribution of this Prospectus and any Final Terms and the offering, sale and delivery of Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus or any Final Terms come
are required to inform themselves about and observe any such restrictions. For a description of the restrictions
applicable in the United States of America, the European Economic Area, the United Kingdom and the Republic
of Austria see "Subscription and Sale". In particular, the Notes have not been and will not be registered under the
United States Securities Act of 1933, as amended, and are subject to tax law requirements of the United States of
America; subject to certain exceptions, Notes may not be offered, sold or delivered within the United States of
America or to U. S. persons. This Prospectus may only be communicated or caused to be communicated in
circumstances in which Section 21(1) of the Financial Services and Markets Act 2000 ("FSMA") does not apply.

The language of the Prospectus is English. Where parts of the Prospectus are drafted in a bilingual format
reflecting both an English language version and a German language version the English language version shal
be the control ing language for reading and construing the contents of the Prospectus, provided that certain parts
of the Prospectus reflect documents which have been, or wil be, executed as separate documents with the
German language version being control ing and binding. Consequently, in respect of the issue of any Tranche of
Notes under the Programme, the German language version of the Terms and Conditions may be control ing and
binding if so specified in the relevant Final Terms.

- 6 -

This Prospectus may only be used for the purpose for which it has been published.

This Prospectus and any Final Terms may not be used for the purpose of an offer or solicitation by
anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it
is unlawful to make such an offer or solicitation.

This Prospectus, any supplements thereto and any Final Terms do not constitute an offer or an invitation
to subscribe for or purchase any of the Notes.

In connection with the issue of any Tranche of Notes under the Programme, the Dealer or Dealers (if any)
named as stabilisation manager(s) in the applicable Final Terms (or persons acting on behalf of any
stabilisation manager(s)) may over-allot Notes or effect transactions with a view to supporting the market
price of the Notes at a higher level than that which might otherwise prevail. However, stabilisation may
not necessarily occur. Any stabilisation action may begin on or after the date on which adequate public
disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at
any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of
Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation
action or over-allotment must be conducted by the relevant stabilisation manager(s) (or person(s) acting
on behalf of any stabilisation manager(s)) in accordance with all applicable laws and rules.

EU Benchmark Regulation: Article 29 (2) statement on benchmarks

Amounts payable under the Notes may be calculated by reference to EURIBOR, which is provided by European
Money Markets Institute ("EMMI"), LIBOR, which is provided by ICE Benchmark Administration ("IBA") or any
other benchmark in each case as specified in the Final Terms. As at the date of this Prospectus, IBA appears and
EMMI does not appear on the register of administrators and benchmarks established and maintained by the
European Securities and Markets Authority ("ESMA") pursuant to article 36 of the Benchmark Regulation
(Regulation (EU) 2016/1011). As far as the Issuer is aware, the transitional provisions in Article 51 of the BMR
apply, such that EMMI is currently not required to obtain authorisation or registration (or, if located outside the
European Union, recognition, endorsement or equivalence).

Product Governance

The Final Terms in respect of any Notes may include a legend entitled "MiFID II Product Governance" which will
outline the target market assessment in respect of the Notes and which channels for distribution of the Notes are
appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take
into consideration the target market assessment; however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the Notes (by either adopting or refining the target
market assessment) and determining appropriate distribution channels. A determination wil be made in relation to
each issue about whether, for the purpose of the MiFID Product Governance rules under EU Delegated Directive
2017/593 (the "MiFID Product Governance Rules"), any Dealer subscribing for any Notes is a manufacturer in
respect of such Notes, but otherwise neither the Arranger nor the Dealers nor any of their respective affiliates wil
be a manufacturer for the purpose of the MiFID Product Governance Rules.

Notification under Section 309B of the Securities and Futures Act, Chapter 289 of Singapore

In connection with Section 309B of the Securities and Futures Act, Chapter 289 of Singapore as modified or
amended from time to time including by any subsidiary legislation as may be applicable at the relevant time
(together, the SFA), each Issuer has determined, and hereby notifies al relevant persons (as defined in Section
309(A)(1) of the SFA), that the Notes are 'prescribed capital markets products' (as defined in the Securities and
Futures (Capital Markets Products) Regulations 2018) and 'Excluded Investment Products' (as defined in MAS
Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on
Recommendations on Investment Products).

In this Prospectus, al references to "EUR" are to the euro, the single currency of the member states participating
in the European Monetary Union, to "GBP" are to British pounds sterling, the official currency of the United
Kingdom, to "USD" are to U.S. dollar, the official currency of the United States of America, to "YEN" are to
Japanese yen, the official currency of Japan and to "TRY" are to Turkish Lira, the official currency of Turkey and
the Turkish Republic of Northern Cyprus.

Information relating to the diesel issue described herein with regards to Volkswagen Group is based on public
information and is subject to change. The Issuer has not independently verified any such information.

- 7 -
Summary
Summaries are made up of disclosure requirements known as `Elements'. These elements are numbered
in Sections A E (A.1 E.7).
This summary contains all the Elements required to be included in a summary for this type of securities
and Issuer. Because some Elements are not required to be addressed, there may be gaps in the
numbering sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of
securities and Issuer, it is possible that no relevant information can be given regarding the Element. In
this case a short description of the Element is included in the summary with the mention of "not
applicable".
[The following Summary contains options and blank spaces, marked by square brackets or bold
script, relating to the Notes that may be issued under the Prospectus. The summaries for the
individual issues of Notes will be included in the Final Terms and will contain only those options that
are relevant for the respective issue of Notes. In addition, the placeholders ("") contained in the
following Summary that are relevant for the particular issue will be completed in the summary for the
individual issue.]1
Section A Introduction and warnings
A.1
Warning that:

this Summary should be read as an introduction to the Prospectus;

any decision to invest in the Notes should be based on consideration of the Prospectus as a
whole by the investor;

where a claim relating to the information contained in the Prospectus is brought before a court,
the plaintiff investor might, under the national legislation of the Member States, have to bear
the costs of translating the Prospectus, before the legal proceedings are initiated; and
civil liability attaches only to the Issuer who has tabled the Summary including any translation thereof,
but only if the Summary is misleading, inaccurate or inconsistent when read together with the other
parts of the Prospectus or it does not provide, when read together with the other parts of the
Prospectus, key information in order to aid investors when considering whether to invest in the Notes.
A.2
Consent to the use of [Not applicable. No consent has been given.][The Issuer consents to the
the prospectus
use of the Prospectus by al credit institutions (general consent) and accepts
responsibility for the content of the Prospectus also with respect to
subsequent resale or final placement of the Notes by any credit institution
which was given consent to use the Prospectus, provided however, that the
Prospectus is stil valid in accordance with Article 11 of the Luxembourg act
relating to prospectuses for securities (Loi relative aux prospectus pour
valeurs mobilières) which implements Directive 2003/71/EC of the European
Parliament and of the Council of 4 November 2003 (as amended by
Directive 2010/73/EU of the European Parliament and of the Council of 24
November 2010).
Such general consent for the subsequent resale or final placement of the
Notes by the credit institution is given in relation to public offers in
[Luxembourg][,] [and] [Germany][,] [and] [The Netherlands][,] [and] [the
United Kingdom][,] [and] [Ireland][,] [and] [Austria] (the "Offer State[s]")
only.
The subsequent resale or final placement of Notes by credit institutions can
be made during the period commencing from[, and including,] [specify
date] [to[, and including,] [specify date]] (the "Offer Period").
[Additional y, the Issuer may grant its consent to the use of the Prospectus

1 To be deleted for the summary of an individual issue of Notes.

- 8 -
for any resale or final placement of the relevant Notes in the Offer State[s]
until the end of such Offer Period to any financial intermediary (individual
consent), the name and address of which shall be published on the website
of Volkswagen Financial Services Aktiengesellschaft (www.vwfs.com).]
In the event of a public offer being made by a credit institution, this credit
institution wil provide information to investors on the terms and conditions of
the offer at the time the offer is made.
Any credit institution using the Prospectus based on the general
consent for public offerings has to state on its website that it uses the
Prospectus in accordance with the consent and the conditions
attached thereto.]
Section B Issuer
B.1
Legal and commercial The legal and commercial name of the issuer is Volkswagen Bank GmbH
name
("Volkswagen Bank").
B.2
Domicile, legal form, Domicile
legislation, country of
incorporation
Volkswagen Bank's domicile is Braunschweig, Federal Republic of
Germany.
Legal form
Limited liability company (Gesel schaft mit beschränkter Haftung) under
German law
Legislation
German law
Country of incorporation
Volkswagen Bank is incorporated in the Federal Republic of Germany.
B.4b
Known trends affecting The business development of Volkswagen Bank Group is closely linked to
the Issuer and the the development of sales of the Volkswagen Group. The development of
industries in which it the automotive sector remains dependent on the global economic
operates
development, which continues to be shrouded in considerable uncertainty.
The financial markets still entail risks resulting above all from the strained
debt situation of many countries. The economic environment is expected to
remain uncertain and volatile in the upcoming months. Additional
requirements from increased regulations and legislations to prevent future
financial crisis may materially affect Volkswagen Bank's business.
On 18 September 2015 and on 2 November 2015, the U.S. Environmental
Protection Agency ("EPA") publicly announced in "Notices of Violation" of
the U.S. Clean Air Act that irregularities had been discovered in emissions
tests on certain Volkswagen Group vehicles with diesel engines. Also on 2
November 2015, and additional y on 25 November 2015, the California Air
Resources Board ("CARB") published allegations that legal requirements for
NOx emissions were circumvented through the use of engine management
software under test conditions. Fol owing the publication of the EPA's
"Notices of Violation" of the U.S. Clean Air Act, Volkswagen AG and other
Volkswagen Group companies have been the subject of intense scrutiny,
ongoing investigations (civil and criminal) and civil litigation.The ongoing and
future investigations and litigation also resulted and may continue to result in
actions being taken against certain members of the Volkswagen Group or
some of its employees. Any of these actions could also have negative
effects on Volkswagen Bank Group's business. The Volkswagen Group is
working intensively to eliminate the emissions deviations through technical
measures and is cooperating with the relevant agencies.
Various repercussions could result for Volkswagen Bank Group from the
diesel issue. In turn, the diesel issue may have a negative impact on the

- 9 -
future business and financial results of VW Bank Group, the effect of which
remains uncertain.
B.5
Description of the Group Volkswagen Bank is a whol y-owned subsidiary of Volkswagen
and the Issuer's position Aktiengesellschaft ("VWAG" or "Volkswagen AG") and as such part of the
within the Group
Volkswagen Group ("VW Group" or "Volkswagen Group"). Controlling
company of the VW Group is Volkswagen Aktiengesellschaft.
Dated 1 September 2017, Volkswagen Financial Services Aktiengesellschaft
("VWFSAG") completed a reorganisation of its structures under company
law. The European lending and deposits business has been separated from
the other financial services activities and pooled under Volkswagen Bank,
now being a direct subsidiary of VW AG. The intention of the restructuring
was to increase transparency and clarity for supervisory authorities, optimize
the use of equity and reduce complexity.
B.9
Profit
forecasts
or Not applicable. No profit forecasts or estimates are made in the Prospectus.
estimates
B.10
Qualifications in the Not
applicable.
PricewaterhouseCoopers
GmbH
audit report on the Wirtschaftsprüfungsgesellschaft, Hannover, Federal Republic of Germany
historical
financial audited the consolidated financial statements for the financial years 2017
information
and 2018 and have given their unqualified auditors' report for each of these
years.
B.12
Selected historical key The fol owing table sets forth selected financial information as at and for the
financial
information financial years ended 2017 and 2018 which has been extracted from the
regarding the Issuer, published audited consolidated financial statements of Volkswagen Bank
statement
regarding Group prepared in accordance with International Financial Reporting
trend information and Standards as adopted in the European Union (IFRS).
significant changes in
the financial or trading Balance sheet data
position of the Issuer

31 December

31 December 2018
2017

in mil ion

Total assets
83,042
78,747
Receivables arising from

Retail financing
29,882
28,032
Dealer financing
12,162
12,430
Leasing business
18,829
18,858
Liabilities to customers
39,602
41,066
Equity
11,639
11,301

Income statement data

1 January - 31 December

2018
2017

in mil ion
Profit before tax
978
992
Taxes on income and
earnings
-275
-336
Profit after tax
703
656
There has been no material adverse change in the prospects of
Volkswagen Bank Group since the date of its last published audited

- 10 -
consolidated financial statements as at 31 December 2018.
The diesel issue as well as other expenses or provisions in connection with
diesel vehicles, including but not limited to residual values of cars or a
potential deterioration of the credit standing of dealers in context to the
chal enging market situation arising from the current debate surrounding the
use of Diesel engines and the debate about the prohibition of the use of
diesel vehicles may have a negative impact on the future business and
financial performance of Volkswagen Bank Group, the effect of which
remains uncertain.
A future transfer of assets and/or subsidiaries in context of the
reorganisation of the corporate structure increased litigation and legal risks,
including but not limited to the area of consumer credit law, which would be
reflected in corresponding provisions as well as geopolitical tensions and
conflicts, protectionist tendencies, turmoil in financial markets, structural
deficits in individual countries as well as uncertainties regarding future
developments in the euro area, such as the uncertain impacts of the United
Kingdom's planned exit from the EU, may have a negative impact on the
future business and the financial performance of Volkswagen Bank Group.
Volkswagen Bank Group anticipates a slight increase in funding costs,
greater levels of cooperation with the individual Group brands, increased
cost optimization under the efficiency program, higher overhead cost
caused by investments into the digitalization as wel as a high degree of
uncertainty regarding macroeconomic conditions in the real economy and
its impact on factors such as risk costs.
Not applicable; there has been no significant change in the financial position
of Volkswagen Bank Group since the date of its last published audited
consolidated financial statements as at 31 December 2018.
In 2017, the Italian Competition Authority initiated proceedings to investigate
B.13
Recent developments
potential competition law infringements al eged agreements in restraint of
competition (alleged exchange of competitively sensitive information) and
abuse of dominant position by a number of captive automotive finance
companies, including Volkswagen Bank GmbH. The proceedings were later
extended to the relevant parent companies, including Volkswagen AG. On
10 October 2018, Volkswagen AG and Volkswagen Bank GmbH have
received a statement of objections summarising the findings and describing
the al eged infringement. On 9 January 2019 Volkswagen Bank GmbH and
Volkswagen AG have been served an administrative order in connection
with the ongoing antitrust proceedings of the Italian competition authority.
The administrative order states that Volkswagen Bank GmbH is deemed to
have violated competition law. Volkswagen Bank GmbH and its sole
shareholder Volkswagen AG were therefore ordered to pay a fine of EUR
163 mil ion. On 11 March 2019 Volkswagen Bank GmbH has appealed
against the fine notice.
B.14
Dependence
of
the see Element B.5.
Issuer
upon
other
entities within the group
The business development of Volkswagen Bank Group is closely linked to
the development of sales of the Volkswagen Group.
A profit and loss transfer agreement (Ergebnisabführungsvertrag) entered
into between Volkswagen Bank and VWFSAG came into effect on 4
September 2002. In addition, on 23 May 2017 Volkswagen Bank and
VWFSAG entered into a domination agreement (Beherrschungsvertrag)
which was registered in the commercial register and became effective on 2
June 2017. Both agreements have been transferred from VWFSAG to VW
AG by operation of law as a result of the spin-off in the context of the
reorganization with effect as of 1st September 2017.

According to the domination agreement VW AG, as the parent company, is
entitled to instruct VW Bank's management board. According to the profit