Aareal Hyp AG concludes 2004 with a major increase in profit (DE)

Aareal Hyp AG continues on its successful course in its second financial year. With a balance sheet total of 4.8 billion € (an increase of just under 50%), a surplus on interest and commission earnings of 21.9 million € (+141% in comparison to the previous year 9.1 million €) and an annual net profit, before transfer of profit, of 16.1 million € (previous year 3.9 million €) Aareal Hyp AG has also closed its second financial year on a very successful assessment.

The market-active mortgage bank, founded at the beginning of 2003, has succeeded in expanding further its position in the capital market. Thus it was that in the period under review, a volume of more than 1.1 billion € in bonds was issued. The overall issuing volume as per 31.12.2004 reached around 3.3 billion €.

“Thanks to our flexible issuing strategy oriented towards demand, the bonds continued to be sought-after securities in the bond market even in the second financial year and contributed towards a considerable reduction in the refinancing costs of the Aareal Bank Group“ according to Dr. Bernd Bach, the Management Board Member of Aareal Hyp responsible for the Treasury.

The basis for the successful issuing activities was a noticeable increase in the real estate financing business amongst other factors, in which the activities were extended to additional European countries. The result is that Aareal Hyp is now offering loans in seven countries throughout Europe. Overall, the mortgage lending volume rose by 60% to 1.6 billion €.

During the period under review, the cost-cover quota improved to a pleasing 25% compared with 51% in the previous year.

“Some of the most decisive factors for these successful results in 2004 are, amongst others, the close organisational co-operation with Aareal Bank AG, the favourable cost structure with efficient work procedures and a flat organisational structure with correspondingly short decision-making lines“ says Aareal Hyp Management Board Member, Sven-Peter Eisenblätter. “Aareal Hyp will continue to concentrate exclusively on first mortgage loans in its lending decisions regarding German and international financing transactions, and is thus one of the few “purely initial financiers” in the German banking sector” adds Eisenblätter.

On the basis of the Group strategy Aareal Hyp will continue to resolutely pursue the objective of reducing the refinancing costs of the Aareal Bank Group in 2005. In this respect, the Management Board assumes a positive development of business despite the difficult overall economic climate. Consequently, the international lending business is to be further expanded. Additionally, the issuing of bonds with a volume of 1.5 to 2 billion € is planned.

Source: Aareal Bank

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