Aareal Bank AG

Investor Presentation • Feb 29, 2024

Conference Call

Preliminary Results 2023

29 February 2024

Jochen Klösges (CEO) Marc Hess (CFO)

Agenda

▪ Strategic Achievements in 2023

• Financial Performance
• Business Development
• Funding, Liquidity & Capital
• Outlook
• Appendix

Strategic Achievements 2023

Strong underlying performance at both the Bank and Aareon

Group operating profit at € 149 mn, despite

significant add-on investments and comprehensive provisioning

Strategic Achievements 2023

Long standing partnership strengthened to (i) deepen and expand Aareal's deposit franchise and (ii) build up "Aareon Pay" business

Agenda

• Strategic Achievements in 2023
• Financial Performance
• Business Development
• Funding, Liquidity & Capital
• Outlook
• Appendix

Financial Performance

Strong underlying performance at both Bank and Aareon

1) Incl. positive contribution from long-term partnership agreement with Bank

Financial Performance - Bank

Profit close to prior year despite active NPL management

1) Incl. impact from long-term partnership agreement with Aareon

2) Provision incl. LLP and LLP (FVPL)

• Strong operating performance, increasing operating resilience further demonstrated with pre-provision profit > x2 vs. 2021
• Strong income development
  • 1. Compensates substantial US office LLPs
  • 1. Active NPL management:
    2. Significant reduction of € ~500 mn legacy NPLs in 2023
    3. € ~500 mn US office loans prepared for solution in 2023 with execution Q1 2024
• ➢ Outlook 2024:

Operating profit target for the bank of € 250 - 300 mn

Financial Performance - Aareon

Further investments drive significant improvement in profitability

2021 2022 2023 2024 target

With an adj. EBITDA of € 100 mn and sales revenue of € 344 mn 2023 targets achieved

• 2023 characterized by M&A activities and significant investments into operational efficiency
• On top of the originally announced investments of € 35 mn an additional € 61 mn was invested into efficiency measures and M&A incl. refinancing
  • ➢ Foundation for strong profit performance in 2024
• Based on current run rate, high visibility towards adj. EBITDA in a range of € 160 - 170 mn in 2024, translates into an increase in EBT of € ~120 mn to ~50 mn (adj. EBITDAC to increase from € 75 mn to € 140 - 150 mn in 2024)

7

Financial Performance - Group Profit & Loss

Strong underlying performance thanks to diversified business model

Profit & loss (€ mn)	Q4 '22	Q4 '23	FY '22	FY '23	∆ FY '23/'22
Net interest income (NII)	188	268	702	978	39%
Net commission income (NCI)	78	82	277	307	11%
Loan loss provision (LLP)	22	179	192	441	130%
Admin expenses	148	159	571	645	13%
Other op. income / expenses1)	-14	-18	23	-50	n/a
Operating profit (EBT)	82	-6	239	149	-38%
Profit after tax	53	-52	153	48	-66%

• NII up by 39% supported diversified business model with market leading deposit franchise and loan margins above plan
• Aareon and BDS continued to grow NCI successfully
• Substantial LLP of € 510 mn (incl. € 69 mn FVPL) due to headwinds from US office markets and comprehensive LLP strategy (incl. preparing for solution)
• Increase in admin expenses dominated by significant investments into Aareon of € 96 mn while bank remained on a stable level (CIR Bank2): 32%)
• Strong operating performance allowed an increase in investments spent vs. budget by € 126 mn:

€ mn	Plan	Add-on	Spent
Aareon	35	61	96
Swift NPL reduction	60	55	115
Third-party debt facility Aareon	0	10	10
Total	95	126	221

▪ Depreciation of DTA in connection with takeover by Atlantic BidCo

1) Includes Net derecognition gain or loss, Net gain or loss from financial instruments (fvpl), Net gain or loss from hedge accounting, Net gain or loss from investments accounted for using the equity method, Net other operating income/expenses

2) Segment SPF & BDS, excl. bank levy / deposit guaranty scheme

8

Agenda

• Strategic Achievements in 2023
• Financial Performance
• Business Development
• Funding, Liquidity & Capital
• Outlook
• Appendix

Segment SPF Well diversified portfolio: Target of € 32-33 bn achieved…

…with selective new business generation

1) Governed by "Green Finance Framework"

Business generation with stringent low-risk focus leading to improvements in overall asset quality metrics

Note: All 2023 figures preliminary and unaudited

Office markets: European office portfolio has significantly lower LTV than US portfolio with only 3% exceeding LTV of 60%

General structural differences between Europe and US

• Interest rate environment
• Lower vacancy rates in European markets
• Ownership structures in Europe leading to longer investment horizons: willing to downpay debt via new equity injections to preserve their equity positions
• Europe with tighter interest rate hedges
• CRE in Europe generally not financed by different layers of debt leading to lower total LTVs and very limited market for junior and mezz tranches
• Longer commuting time and larger homes in the US, European cities offer more larger mix of attractive areas to live and work

Note: others incl. countries with a portfolio below € 100 mn 1) Performing CREF-portfolio only (exposure)

US office portfolio concentrated on A markets and class A buildings

2) Acc. to Co-Star

After considerable decline in market values and after additional stress scenarios still showing adequate headroom

• Focus on high quality class buildings in A locations will benefit first from market recovery
• Loans are being monitored closely on a regular basis incl. early interaction with borrowers
• Expected interest rate development in 2024 should take pressure out of the market and stabilise values

Performing portfolio as at end of 2023 stressed with

▪ Average LTV up to 88% (from 70% as at 31.12.2023)

additional 20% market value decline

1) Performing CREF-portfolio only (exposure)

▪ (Layered) LTV above 100%: 2% (€ ~75 mn) ▪ (Layered) LTV 80%-100%: 9% (€ ~260 mn)

Note: All 2023 figures preliminary and unaudited

€ ~0.5 bn NPLs prepared for solution in Q1/24 keeping NPL portfolio stable as at 31.03.2024 vs. 2022, significantly below 2021

1) NPE ratio according to EBA Risk Dashboard definition

16

Segment BDS

Diversified business model and normalised interest rate environment supporting increase in NII

NII increase driven by normalised rate environment

• Deposit volume above target level of € ~13 bn
• Granular and sticky deposit structure from ~4,000 clients managing more than 9 mn rental units
• Ongoing shift from sight into term deposits
• Competitive market environment

NCI further increased

• High share of recurring revenues (banking and software fees)
• New products and services providing growth potential

17

Segment Aareon

Strong revenue and EBITDA growth; Rule-of-40 achieved

Note: Numbers not adding up refer to rounding 1) Last Twelve Months

• Sales revenue increased by € 36 mn (+12%)
  • Recurring revenue (LTM1)) represents 81% of total revenues (2022: 74%)
• Adj. EBITDA increased by € 25 mn to € 100 mn (+33%), adj. EBITDA margin increased to 29% (2022: 25%), operating cash flow further improved (adj. EBITDAC)
• Rule-of-40 already achieved
• Investments of € 96 mn into efficiency measures and M&A incl. refinancing
• Major activities:
  • Entry into Spanish market with acquisition of IESA
  • Aareal Bank and Aareon combine their expertise in software development for payments in First Financial
  • Acquisitions of Embrace (CRM) and UTS (shared-ownership property management)
  • Replacement of M&A credit line formerly provided by Aareal with flexible long-term unitranche facility. Group NII impact of low double-digit million per year
  • Positive run-rate impact of € ~20 mn from efficiency measures taken in 2023

Note: All 2023 figures preliminary and unaudited

Agenda

• Strategic Achievements in 2023
• 2023 Financial Performance
• Business Development
• Funding, Liquidity & Capital
• Outlook
• Appendix

Well diversified funding mix – successful funding activities

• Hypothekenpfandbriefe
• Senior Unsecured (SP)
• Senior Unsecured (SNP)
• Retail Deposits (Raisin)
• Public-sector Pfandbriefe
• Subordonated Capital

• Deposits from housing industry at avg. of € 13.6 bn above targeted level of € ~13 bn, granular and sticky deposit structure from ~4,000 clients managing more than 9 mn rental units
• Issued Pfandbrief and Senior totaling € 2.4 bn in 2023 incl. 3 Pfandbriefe in Benchmark format (€ 1.5 bn)
• Retail term deposits by cooperating with Raisin significantly increased to € 2.6 bn (12/22: € 0.6 bn)
  • ~90% with a contractual maturity >2 years
  • Based on the success in the German market expansion into European countries planned in 2024
  • ➢ No senior preferred capital market funding needs 2023 to 2025 due to further diversified and optimised funding mix
• Senior non-preferred benchmarks as add. instrument to support credit ratings (e.g. Moody's via LGF)
• As at 14.2.24 Fitch removed 3 years existing negative outlook, SP Rating now at BBB+ (Stable): "The Stable Outlook reflects Fitch's expectation that Aareal's pre-impairment operating profit will continue to provide a sufficient buffer for higher loan impairment charges in the coming quarters. It also incorporates Fitch's view that Aareal's funding and liquidity…remains

sound"

20

Liquidity ratios significantly above regulatory requirements

• Substantial buffer in regulatory liquidity ratios (LCR / NSFR) despite strong growth in portfolio and difficult economic and capital markets environment
• On average long-term funds have longer maturities than CRE finance portfolio (~4 years vs ~3 years)
• HQLA: comfortably above € 6 bn

21

Strong Mortgage Cover Pool and Aaa Rating for Pfandbriefe

As at 31.12.2023

22

Pfandbriefe funding cornerstone of wholesale issuance

• Cover pool of € 16.5 bn incl. € 1.2 bn substitute assets diversified over 20 countries
• High quality assets: first-class mortgage loans (mortgage-lending-value 55.7%)
• Mortgage-lending-value with high discount from market-value
• Avg. LTV of the mortgage cover pool 33.5%
• Moody´s has calculated 'Aaa' supporting overcollateralisation ratio of 16.5% on a PV basis
• Aareal's over-collateralisation on a PV basis as of 12/23: 19.6%
• High diversification within property types

Capital

Strong capital ratios slightly increased despite portfolio growth

• B4 CET1 phase-in ratio at 19.4%, based on RWA calculation taking the higher-of from Advanced Internal Rating Based Approach (A-IRBA) and B4 Revised Credit Risk Standard Approach (CRSA@50% output floor)
• CET1 ratio increased despite portfolio growth
• B4 CET1 fully phased ratio at 13.4% (12/22: 13.3%)
• T1-Leverage ratio at 6.6% (12/22: 6.0%)

1) Based on draft version of the European implementation of Basel IV by the European Commission dated 27 October 2021 (CRR III)

23

Agenda

• Strategic Achievements in 2023
• Financial Performance
• Business Development
• Funding, Liquidity & Capital
• Outlook
• Appendix

Outlook 2024

1) Subject to FX development

Key takeaways

Well positioned in the current challenging environment

Diversified banking business delivers strong operating performance and allows for proactive risk management

Sustainably strengthened substance Foundation laid for profitable growth

Confident to more than double group operating profit in 2024

Appendix Financial Performance

Recent Financial Performance – NII & NCI

Strong income development

1) LTM = Last Twelve Months

Both segments contributed to increase

• SPF
  • NII increased to € 776 mn (2022: € 627 mn) supported by portfolio growth, good margins and diversified funding mix
  • ~80% of TLTRO repaid in Q4/22
• BDS
  • NII increased to € 238 mn (2022: € 92 mn)
  • Positive effects from normalised interest rate environment
  • Deposits from housing industry above targeted level

Aareon and BDS continue to grow successfully

• Aareon
  • NCI increased to € 284 mn (2022: € 252 mn) based on strong growth, incl. SaaS, in recurring revenues
  • Recurring revenue now represents 81%1) of total revenues (2022: 74%1))
• BDS
  • NCI further increased to € 33 mn (2022: € 31 mn)

Recent Financial Performance - Admin expenses / LLP

Admin: increase reflects strategic investments into Aareon LLP: elevated due to headwinds from US office market

Dominated by significant investments into Aareon Bank1)

• Stable at € 341 mn (2022: € 339 mn, incl. PTO related one-off € 12 mn)
• CIR2) Bank at 32% (2022: 40%)

Aareon

• Expenses increased to € 320 mn (2022: € 244 mn) e.g. due to investments into efficiency measures and M&A
• Positive effects from efficiency measures of € ~20 mn annually

FY LLP mainly driven by provisions for a swift NPL reduction and headwinds from US office market

• € 441 mn (2022: € 192 mn) Total LLP of € 510 mn incl. € 69 mn FVPL
• Provisions for a swift NPL reduction increased to € 115 mn, thereof € 36 mn for sale of Russian exposure

1) Segment SPF & BDS

2) Excl. bank levy/deposit guarantee scheme

Appendix Business Development

Segment SPF: CREF portfolio by country

€ 32.5 bn well diversified

1) Performing CREF-portfolio only (exposure)

Segment SPF: CREF portfolio by property types

€ 32.5 bn well diversified

Segment SPF NPL

1) NPE ratio according to EBA Risk Dashboard

Appendix Funding, Liquidity & Capital

Funding & Liquidity Comfortable liquidity position

1) Other assets includes € 0.2 bn private client portfolio and WIB's € 0.2 bn public sector loans

Treasury portfolio of € 7.1 bn ensures comfortable liquidity buffer

• Strong liquidity profile due to high-rated SSA and Covered Bond focus
• Asset-swap purchases ensure low interest-rate risk exposure
• Well-balanced maturity profile

Diversified funding sources and distribution channels

MREL ratios well above regulatory requirements

Senior Preferred have significant protection from subordinated liabilities and own funds

• Ample buffer to MREL requirements
• Senior Preferred remains the predominant senior product, though Senior Non-Preferred remains a key element of the funding strategy
• The rundown remains manageable with a number of long-term liabilities providing significant levels of subordination

• 8% TLOF is the bank's binding MREL requirement, to be met with 100% subordinated liabilities

• 1) 8% TLOF with 100% subordinated debt (i.e. Own Funds and SNP). MREL requirements are only updated once a year

• 2) MREL-eligible Senior Non-Preferred Debt >1Y acc. to contractual maturities
• 38 3) Considering regulatory adjustments

Note: All 2023 figures preliminary and unaudited

• 4) CET1 assumed to be constant over time
• 5) Senior Preferred, excluding structured unsecured issuances
• 6) Based on nominal amounts

Funding & Liquidity Rating profile

Financial Ratings
Fitch Ratings		Moody's
Issuer default rating (Stable)	BBB	Issuer rating (Negative)	A3
Short-term issuer rating	F2	Short-term issuer rating	P-2
Deposit rating	BBB+	Senior preferred	A3
Senior preferred	BBB+	Senior non preferred	Baa2
Senior non preferred	BBB	Bank deposit rating	A3
Viability rating	BBB	BCA	Baa3
Subordinated debt	BB+	Mortgage Pfandbriefe	Aaa
Additional Tier 1	BB

	ESG-Ratings
MSCI		AA
ISS-ESG		prime (C)
Sustainalytics		Low (20-10)
CDP		Awareness Level B

Financial Ratings

▪ Ratings reflect strong credit profile based on solid capital and liquidity position

ESG-Ratings

Aareal's ESG performance has been rewarded by the rating agencies:

• MSCI: Aareal is in the best 34% of 61 diversified financials
• ISS ESG: Prime Status confirms ESG performance above sector-specific Prime threshold
• Sustainalytics: Still "Low" risk classification", Rank 211 of 1031 in Sector Banks, 18 of 102 in Thrifts and Mortgages
• MOODY's ESG Solutions: Above sector average results in Environment, Social and Governance

Note: ESG-Ratings and Benchmarks as of 22/01/2024

Funding & Liquidity Aareal Bank`s outstanding Benchmark Transactions

Pfandbriefe, Senior Unsecured and AT1
Product	Ratings2)	Currency	Volume	Maturity 	Coupon	ISIN
Pfandbriefe	Aaa	USD	750,000,000	02/14/25	0.625%	XS2297684842
Pfandbriefe	Aaa	GBP	500,000,000	04/29/25	SONIA + 100bps	XS2337339977
Pfandbriefe	Aaa	EUR	750,000,000	02/01/24	0.125%	DE000AAR0249
Pfandbriefe	Aaa	EUR	500,000,000	07/30/24	0.375%	DE000AAR0207
Pfandbriefe	Aaa	EUR	500,000,000	07/15/25	0.375%	DE000AAR0215
Pfandbriefe	Aaa	EUR	750,000,000	02/13/26	3,125%	DE000AAR0389
Pfandbriefe	Aaa	EUR	500,000,000	05/18/26	3,875%	DE000AAR0397
Pfandbriefe	Aaa	EUR	500,000,000	08/03/26	0.010%	DE000AAR0272
Pfandbriefe	Aaa	EUR	500,000,000	02/01/27	2.250%	DE000AAR0348
Pfandbriefe	Aaa	EUR	500,000,000	07/08/27	0.010%	DE000AAR0256
Pfandbriefe	Aaa	EUR	750,000,000	10/11/27	3.000%	DE000AAR0371
Pfandbriefe	Aaa	EUR	500,000,000	02/01/28	0.010%	DE000AAR0280
Pfandbriefe2)	Aaa	EUR	500,000,000	05/10/28	2.875%	DE000AAR0405
Pfandbriefe	Aaa	EUR	500,000,000	09/15/28	0.010%	DE000AAR0306
Pfandbriefe	Aaa	EUR	750,000,000	02/01/29	1.375%	DE000AAR0330
Pfandbriefe	Aaa	EUR	625,000,000	09/14/29	2.375	DE000AAR0363
Pfandbriefe	Aaa	EUR	750,000,000	02/01/30	0.125%	DE000AAR0314
Senior Preferred	A- / A3	EUR	500,000,000	04/10/24	0.375%	DE000A2E4CQ2
Senior Preferred green	A- / A3	EUR	500,000,000	07/25/25	4.500%	DE000AAR0355
Senior Preferred	A- / A3	EUR	500,000,000	09/02/26	0.050%	DE000AAR0298
Senior Preferred	A- / A3	EUR	500,000,000	04/07/27	0.050%	DE000AAR0264
Senior Preferred	A- / A3	EUR	750,000,000	11/23/27	0.250%	DE000A289LU4
Senior Preferred green	A- / A3	EUR	500,000,000	04/18/28	0.750%	DE000AAR0322
Additional Tier 1	BB	EUR	300,000,000	PERP_NC_5-1	10.897%	DE000A1TNDK2

1) Pfandbriefe are rated by Moody´s, AT1 by Fitch Ratings and Senior Unsecured by Fitch Ratings and Moody´s

2) Issued in 2024

Capital SREP (CET 1) requirements

• P2R relief by using possibility of partially fulfilling requirements with AT1 and T2 capital
• Total capital requirement (Overall Capital Requirement (OCR)) amounts to 14.0% compared to 23.5% total capital ratio

Pillar 1 Requirement Pillar 2 Requirement Capital Conservation Buffer Countercyclical / Systemic Risk Buffer

41

(in %)

Capital

German CRE-lender	Sample	Min. CET1 ratio	Min. Leverage ratio
Bank A	SSM	CET1R ≥ 14%	LR ≥ 6%
Aareal Bank	SSM	11% ≤ CET1R< 14%	4% ≤ LR< 5%
Bank B	SSM	8% ≤ CET1R < 11%	4% ≤ LR< 5%
Bank C	EBA	8% ≤ CET1R < 11%	LR < 4%
Bank D	EBA	8% ≤ CET1R < 11%	LR < 4%
Bank E	EBA	8% ≤ CET1R < 11%	LR < 4%
Bank F	EBA	8% ≤ CET1R < 11%	LR < 4%
Bank G	EBA	CET1R < 8%	LR < 4%
Bank H	EBA	CET1R < 8%	LR < 4%

Risk driver stress test 2023

• Intensification of geopolitical tensions, partial de-globalisation
• Gas supply cuts, higher commodity prices and wage increases via large second round effects leading to persistently high inflation
• Higher current and expected inflation leading to higher interest rates, further exacerbating the contraction in output
• Significant and abrupt price adjustment in the real estate market (approx. 30% discount) given a severe tightening in financing conditions and a weak economic outlook
• Tighter financing conditions, deteriorated economic activity and high levels of government debt raising sovereign debt sustainability concerns

Aareal Bank's Results

• Stressed CET1 ratio comfortably within 11-14% range above EBA / ECB (SSM) average (10.4%) and well above regulatory requirements
• Stressed leverage ratio above 4%
• ➢ Good stress test results demonstrating healthy risk profile and operating resilience of Aareal Bank

ESG in our daily business

Putting sustainability at the core of our decisions since Q2 2021

ESG in our lending business ESG in our funding activity

Aareal Bank "Green Finance Framework – Lending" put into place

• Aareal Bank's Green Finance Framework Lending confirmed through a Second Party Opinion (SPO) by Sustainalytics
• Ambition to extend ESG assessment in our day-to-day lending activities
• Explicit customer demand for Aareal Bank's green lending approach identified internationally and interest is high for the new product
• Green lending within a regularly updated framework provided

Aareal Bank "Green Finance Framework – Liabilities" forms basis for Green Bonds

• In addition to the lending framework, Aareal Bank has implemented an accompanying and regularly updated liability-side / use-of-proceeds framework - confirmed through SPO by Sustainalytics - that allows issuance of green financing instruments
• "Green Finance Framework Liabilities" is intended to not only reflect our sustainable lending activities but also our strategic approach towards sustainability
• Bond issuances under this framework invite open discussion and engagement with investors on the progress we have made and, on the path, forward

Continue to enlarge climate transparency in the portfolio

• Portfolio transparency and data accumulation significantly improved for both existing and new lending and to be continued
• Aareal Bank involved in international initiatives to calculate financed emissions (PCAF)

Aareal's 'credible and impactful' Green Finance Framework

1) All buildings within a financing have to qualify as green buildings according to Aareal GFF

2) Partnership for Carbon Accounting Financials

3) Chapter 7.2 "Renovation of existing buildings"

Note: All 2023 figures preliminary and unaudited

28% of CREF portfolio classified as Green Property Financings

2) Valid certificate is documented

€ 9.0 bn1) (28%) of total CREF portfolio fulfilling Aareal's Green Finance Framework and are classified as "Green Property Financings", thereof

• € 5.8 bn included in green asset pool for underlying of Green bond issues
• € 3.2 bn green property financings not (yet) included

Note: All 2023 figures preliminary and unaudited

46

ESG@Aareal target setting

On the "Road to Paris" we are supporting our clients and enhancing our own ambition

Consistently positive rating results

Rewarding Aareal's ESG performance

Appendix ADI of Aareal Bank

Interest payments and ADI of Aareal Bank AG

Available Distributable Items (as of end of the relevant year)

	31.12. 2020	31.12. 2021	31.12. 2022	31.12. 2023
€ mn
Net Retained Profit ▪ Net income ▪ Profit carried forward from previous year ▪ Net income attribution to revenue reserves	90 90 - -	96 30 66 -	61 61 - -	391 391 61 -
+ Other revenue reserves after net income attribution	840	840	936	936
Total dividend potential before amount blocked1) =	930	936	997	1.388
./. Dividend amount blocked under section 268 (8) of the German Commercial Code ./. Dividend amount blocked under section 253 (6) of the German Commercial Code	320 43	386 36	466 24	487 6
= Available Distributable Items1)	566	515	507	895
+ Increase by aggregated amount of interest expenses relating to Distributions on Tier 1 Instruments1)	21	20	21	29
= Amount referred to in the relevant paragraphs of the terms and conditions of the respective Notes as being available to cover Interest Payments on the Notes and Distributions on other Tier 1 Instruments1)	588	535	529	924

Note: Calculation refers to unrounded numbers 1) Unaudited figures for information purposes only

Appendix Group Results

Aareal Bank Group

Results FY 2023 by segments

		Bank1) (SPF & BDS)		Aareon		Consolidation/ Reconciliation	Aareal Bank Group
	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022
€ mn
Net interest income	1,014	719	-36	-17	0	0	978	702
Loss allowance	441	192	0	0			441	192
Net commission income1)	3 9	3 7	284	252	-16	-12	308	277
Net derecognition gain or loss	2 3	2					2 3	1
Net gain or loss from financial instruments (fvpl)	-71	2 6	0	0			-71	2 6
Net gain or loss on hedge accounting	1	-2					1	-2
Net gain or loss from investments accounted for using the equity method	3	-1		-1			3	-2
1) Administrative expenses	341	339	320	244	-16	-12	645	571
Net other operating income / expenses	-6	-7	0	7	0	0	-6	0
Operating profit	221	242	-72	-3	0	0	149	239
Income taxes	9 4	8 4	7	2			101	8 6
Consolidated net income	127	158	-79	-5	0	0	4 9	153
Allocation of results
Cons. net income attributable to non-controlling interests	-1	0	-22	0			-23	0
Cons. net income attributable to shareholders of Aareal Bank AG	128	158	-57	-5	0	0	7 1	153

1) Excl. consolidation between SPF and BDS business

Aareal Bank Group Results FY 2023

	01.01.- 31.12.2023	01.01.- 31.12.2022	Change
	€ mn	€ mn
Profit and loss account
Net interest income	978	702	39%
Loss allowance	441	192	130%
Net commission income	307	277	11%
Net derecognition gain or loss	2 3	1	2200%
Net gain or loss from financial instruments (fvpl)	-71	2 6
Net gain or loss on hedge accounting	1	-2
Net gain or loss from investments accounted for using the equity method	3	-2
Administrative expenses	645	571	13%
Net other operating income / expenses	-6	0
Operating Profit	149	239	-38%
Income taxes	101	8 6	17%
Consolidated net income	4 8	153	-69%
Consolidated net income attributable to non-controlling interests	-23	0
Consolidated net income attributable to shareholders of Aareal Bank AG	7 1	153	-54%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	7 1	153	-54%
of which: allocated to ordinary shareholders	4 2	138	-70%
of which: allocated to AT1 investors	2 9	1 5	93%
Earnings per ordinary share (in €)2)	0.69	2.32	-70%
Earnings per ordinary AT1 unit (in €)3)	0.29	0.15	93%

1) The allocation of earnings is based on the assumption that net interest payable on the AT1 bond is recognised on an accrual basis.

2) Earnings per ordinary share are determined by dividing the earnings allocated to ordinary shareholders of Aareal Bank AG by the weighted average of ordinary shares outstanding during the financial year (59,857,221 shares). Basic earnings per ordinary share correspond to diluted earnings per ordinary share.

3) Earnings per AT1 unit (based on 100,000,000 AT1 units with a notional amount of 3 € each) are determined by dividing the earnings allocated to AT1 investors by the weighted average of AT1 units outstanding during the financial year. Earnings per AT1 unit (basic) correspond to (diluted) earnings per AT1 unit.

Note: All 2023 figures preliminary and unaudited

53

Aareal Bank Group

Results FY 2023 by segments

		Structured Property Financing		Banking & Digital Solutions	A a Aareon r e			Consolidation/ Reconciliation		Aareal Bank Group
	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022	01.01.- 31.12. 2023	01.01.- 31.12. 2022
€ mn
Net interest income	776	627	238	9 2	-36	-17	0	0	978	702
Loss allowance	441	192	0	0	0	0			441	192
Net commission income	6	6	3 3	3 1	284	252	-16	-12	307	277
Net derecognition gain or loss	2 3	1							2 3	1
Net gain or loss from financial instruments (fvpl)	-71	2 6	0	0	0	0			-71	2 6
Net gain or loss on hedge accounting	1	-2							1	-2
Net gain or loss from investments accounted for using the equity method	1	0	2	-1		-1			3	-2
Administrative expenses	231	260	110	7 9	320	244	-16	-12	645	571
Net other operating income / expenses	-4	-6	-2	-1	0	7	0	0	-6	0
Operating profit	6 0	200	161	4 2	-72	-3	0	0	149	239
Income taxes	4 4	7 0	5 0	1 4	7	2			101	8 6
Consolidated net income	1 6	130	111	2 8	-79	-5	0	0	4 8	153
Allocation of results
Cons. net income attributable to non-controlling interests	-1	0	0	0	-22	0			-23	0
Cons. net income attributable to shareholders of Aareal Bank AG	1 7	130	111	2 8	-57	-5	0	0	7 1	153

Aareal Bank Group

Preliminary results – quarter by quarter

	Structured Property Financing					Banking & Digital Solutions				Aareon					Consolidation / Reconciliation					Aareal Bank Group
	Q4	Q3 2023	Q2	Q1	Q4 '22	Q4	Q3 2023	Q2	Q1	Q4 '22	Q4	Q3 2023	Q2	Q1	Q4 '22	Q4	Q3 2023	Q2	Q1	Q4 '22	Q4	Q3 2023	Q2	Q1	Q4 '22
€ mn
Net interest income	212	199	189	176	152	68	59	59	52	43	-12	-10	- 8	- 6	- 7	0	0	0	0	0	268	248	240	222	188
Loss allow ance	179	102	128	32	22	0	0	0	0	0	0	0	0	0	0						179	102	128	32	22
Net commission income	0	5	1	0	1	9	8	8	8	8	77	70	70	67	72	- 4	- 7	- 2	- 3	- 3	82	76	77	72	78
Net derecognition gain or loss	5	6	12	0	-23																5	6	12	0	-23
Net gain / loss from fin. instruments (fvpl)	-13	-17	-35	- 6	4	0	0	0	0	0	0	0	0	0	0						-13	-17	-35	- 6	4
Net gain or loss on hedge accounting	3	- 2	- 4	4	4																3	- 2	- 4	4	4
Net gain / loss from investments acc. for using the equity method	1				0		2								0						1	2			0
Administrative expenses	58	53	46	74	60	35	23	20	32	25	70	75	79	96	66	- 4	- 7	- 2	- 3	- 3	159	144	143	199	148
Net other operating income / expenses	-11	0	7	0	- 2	- 1	0	- 1	0	0	- 2	1	0	1	3	0	0	0	0	0	-14	1	6	1	1
Operating profit	-40	36	- 4	68	54	41	46	46	28	26	- 7	-14	-17	-34	2	0	0	0	0	0	- 6	68	25	62	82
Income taxes	16	3	10	15	18	12	15	14	9	8	22	4	-15	- 4	3						50	22	9	20	29
Consolidated net income	-56	33	-14	53	36	29	31	32	19	18	-29	-18	- 2	-30	- 1	0	0	0	0	0	-56	46	16	42	53
Cons. net income attributable to non controlling interests	- 1	0	0	0	0	0	0	0	0	0	- 9	- 4	0	- 9	0						-10	- 4	0	- 9	0
Cons. net income attributable to ARL shareholders	-55	33	-14	53	36	29	31	32	19	18	-20	-14	- 2	-21	- 1	0	0	0	0	0	-46	50	16	51	53

Appendix Definitions and contacts

Definitions

New Business	=	New business = Newly acquired business + renewals
Common Equity Tier 1 ratio	=	CET 1 Risk weighted assets
CIR	=	Admin expenses (excl. bank levy, et al.) Net income
Net income	=	Net interest income + Net commission income + Net derecognition gain or loss + Net gain or loss from financial instruments (fvpl) + Net gain or loss on hedge accounting + Net gain or loss from investments accounted for using the equity method + Net other operating income / expense
Net stable funding ratio	=	Available stable funding Required stable funding
Liquidity coverage ratio	=	Total stock of high quality liquid assets Net cash outflows under stress
Earnings per share	=	operating profit ./. income taxes ./. income/loss attributable to non controlling interests ./. AT1 coupon Number of ordinary shares
Yield on Debt	=	NOI x 100 (Net operating income, 12-months forward looking) (without developments) Outstanding incl. prior/pari-passu loans
CREF-portfolio	=	Commercial real estate finance portfolio excl. private client business and WIB's public sector loans
REF-portfolio	=	Real estate finance portfolio incl. private client business and WIB's public sector loans
Exposure (performing)	=	Maximum [actual commitment (performing) or Outstanding (performing)]

Contacts

Jürgen Junginger

Head of Investor Relations Managing Director Phone: +49 611 348 2636 juergen.junginger@aareal-bank.com

Sebastian Götzken

Director Investor Relations Phone: +49 611 348 3337 sebastian.goetzken@aareal-bank.com

Carsten Schäfer

Director Investor Relations Phone: +49 611 348 3616 carsten.schaefer@aareal-bank.com

Frank Finger

Head of Treasury Managing Director Phone: +49 611 348 3001 frank.finger@aareal-bank.com

Christopher Linnert

Head of Funding Director Treasury Phone: +49 611 348 3889 christopher.linnert@aareal-bank.com

Sandro Wieandt

Assistant Vice President Treasury Phone: +49 611 348 3883 sandro.wieandt@aareal-bank.com

Disclaimer

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This presentation may contain forward-looking statements. Forward looking statements are statements that are not historical facts; they include statements about Aareal Bank AG's beliefs and expectations and the assumptions underlying them; and they are subject to known and unknown risks and uncertainties, most of them being difficult to predict and generally beyond Aareal Bank AG's control. This could lead to material differences between the actual future results, performance and/or events and those expressed or implied by such statements.

Aareal Bank AG assumes no obligation to update any forward-looking statement or any other information contained herein.

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