Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WIESBADEN, GERMANY-Aareal Bank said it has done new property lending of €2.4 billion in the first nine months of 2009, concentrating on its existing client base and particularly on loan extensions. This, plus good structured finance and other results, brought in operating profit in the third quarter at €25 million, unchanged from the second quarter, and down slightly from the €31 million in Q3 2008.

“We have been holding our course during the current financial year,” said Aareal Chairman Wolf Schumacher. “The fact that we posted another set of satisfactory results – in a challenging market environment – once again emphasises the coherence, sustainability, and crisis-proof performance of our business model… Profitability remains high enough not only to absorb various difficulties thrown up by the financial markets crisis and the consequences of the weak economy.” It is also adequate to bear additional costs incurred by the agreement with the German government’s financial support fund SoFFin.

Net interest income, which accounts for the most significant share of Q3 2008, and only slightly below the €101 million in the second quarter. “Higher margins in the lending business continued to have a positive effect,” Schumacher said. “Given the volatile market environment, the bank has maintained a very comfortable level of liquidity reserves: this had a slightly negative effect on net interest income owing to extremely low short-term interest rates.”

Credit losses remained at a manageable level of €36 million this third quarter, down from prior quarters and within projections. They are expected at €150 million for the full year, at the upper end of forecast corridor. In the third quarter, Aareal, “once again proved that the commercial property finance business is profitable, even in the most severe economic crisis experienced for decades – provided that it is conducted in a sustainable and prudent manner… This also applies to our tried and tested three-continent strategy to ensure regional diversification of our business: in particular, we have no plans to cut back our international branch network,” Schumacher added. Aareal confirmed projections for key financial indicators. Consolidated net interest income is expected to be around €455 million for the year.

Allan Saunderson is a managing editor of Property Finance Europe and a contributor to GlobeSt.com.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


GlobeSt. Multifamily Fall 2022Event

Join the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2022 ALM Global, LLC. All Rights Reserved.