Aareal Bank AG

Earnings Release • Mar 2, 2023

Analyst Conference Call Preliminary 2022 results

March 02, 2023 Jochen Klösges (CEO) Marc Hess (CFO)

Agenda

▪ Highlights 2022

• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Highlights 2022

In a very challenging environment, all major targets achieved

	METRIC	Targets 2022	Actual 2022
p u o Gr	▪ Operating profit ▪ Net income1) ▪ Earnings per share (EPS)	€ 210 - 250 mn € 120 - 150 mn2) 2.502) € 2.00 -	€ 239 mn € 138 mn € 2.32

CIR Bank3): 40% (2021: 50%) – mid-term target of <44% already achieved

		METRIC	(Orig.) Targets 2022	Actual 2022
s nt	Structured Property Financing	▪ REF Portfolio ▪ New business	~ € 31 bn € 7 - 8 bn	€ 30.9 bn € 8.9 bn
e m g e S	Banking & Digital Solutions	▪ Deposit vol. ▪ NCI	~ € 12 bn ~13% CAGR4)	€ 13.4 bn € 31 mn
	Aareon	▪ Revenues ▪ Adj. EBITDA	€ 305 - 325 mn € 72 - 78 mn	€ 308 mn € 75 mn

1) Net income attributable to ordinary shareholders

2) Based on expected FY-tax ratio of ~36%

2

3) Structured Property Financing and Banking & Digital Solutions (excl. bank levy and contributions to the deposit guarantee scheme)

4) 2020 - 2023 Note: All 2022 figures preliminary and unaudited

Highlights 2022 Strong operating performance

Successful financial year with earnings at upper end of targeted range despite Russian related LLP and PTO-related costs

Strong operating performance in all three segments, strategy of growing at low marginal costs effectively executed

Asset quality further improved with major KPIs better than pre-Covid, NPLs significantly reduced despite Russia

Diversification of funding mix continued successfully – comfortable liquidity position

Further improved capital position despite portfolio growth and challenging environment

3

Takeover

Investors expect completion of qualifying holding procedure in spring 2023

Agenda

• Highlights 2022
• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Group Results

Successful financial year with profit at upper end of targeted range despite Russian related LLP and PTO-related costs

€ mn	Q4 '21	Q1 '22	Q2 '22	Q3 '22	Q4 '22	FY '21	FY '22	Comments
Net interest income	162	159	171	184	188	597	702	Increase driven by portfolio growth, higher interest rates and diversified funding mix
Loss allowance	54	49	58	63	22	133	192	Dominated by provision on remaining Russian exposure
Net commission income	71	64	68	67	78	245	277	Aareon and BDS contribute to increase
Derecognition result	8	9	13	2	-23	23	1	Reversal of existing TLTRO hedges in Q4 '22
FV- / hedge-result	-24	2	9	5	8	-35	24	Includes positive effects of elevated market volatility
Admin expenses	135	153	142	128	148	528	571	Reflects Aareon's growth, bank stable excluding PTO one-offs
Others	4	-2	0	-1	1	-14	-2
Operating profit (EBT)	32	30	61	66	82	155	239	Successful financial year with profit at upper end of targeted range despite Russian related LLP and PTO-related costs
Income taxes	20	11	22	24	29	87	86
Minorities	-1	1	0	-1	0	1	0
AT1	4	3	4	4	4	14	15
Consolidated net income allocated to ord. shareholders	9	15	35	39	49	53	138
Earnings per share (€)	0,16	0.25	0.59	0.65	0.83	0.89	2.32
after taxes (%)1) RoE						2.1	5.0
Cost/income ratio (%)2)						49.9	40.3

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) Structured Property Financing and Banking & Digital Solutions (excl. bank levy and contributions to the deposit guarantee scheme)

Net interest income (NII) / Net commission income (NCI)

Strong income momentum

Portfolio growth and positive effects of higher interest rates and diversified funding mix

• SPF
• Strong new business generation
• Funding mix successfully further diversified
• BDS
• NII significantly picking up in H2 with rising interest rate environment
• Higher deposit volume supporting NII and providing stable funding

Aareon and BDS contribute to increase

• Aareon
• NCI supported by healthy growth in recurring revenues
• Shift from license to SaaS/Subscription making further progress
• BDS
• Recurring revenues, which dominate segment NCI, increased as planned
• Licence fees for banking software increased

Admin expenses / Loan loss provisions (LLP)

Admin: Aareon growing – Bank stable LLP: Dominated by provision on remaining Russian exposure

• 2) Excl. bank levy and contributions to the deposit guarantee scheme
• 3) Incl. interest

7

Bank stable excluding PTO one-offs

Bank1):

• € 327 mn incl. € 11 mn PTO one-off (2021: € 317 mn)
• Growth at low marginal costs
• CIR2) of 40% (2021: 50%): mid-term target of <44% already achieved

Aareon:

▪ Increase to € 244 mn (vs. € 211 mn) driven by investments in growth

Dominated by provision on remaining Russian exposure

• LLP ex Russia is evidence of strong recovery after Covid-crisis
• Russia:

Total of € 134 mn Russian LLP represents 63% of outstanding loan volume (€ 213 mn3))

Segment Highlights

Strong operating performance in all three segments

Structured Property Financing

• Strong new business generation of € 8.9 bn strictly adhering to unchanged, conservative risk standards with LtVs and margins better than plan
• Portfolio further increased to € 30.9 bn (12/2021: € 30.0 bn) in line with plan
• Funding mix successfully further diversified

Banking & Digital Solutions

• NCI increased to € 31 mn (12/2021: € 28)
• Positive impact on NII of rising interest rates in H2
• Avg. deposit volume increased to € 13.4 bn in 2022 (2021: € 12.0 bn)

Aareon

• Run-rate of recurring revenue increased to 74% (2021: 71%)
• Significant growth, especially in SaaS business
• New management continues to implement growth plan while enhancing efficiency of product portfolio

Segment Highlights: Structured Property Financing

Strong new business generation while strictly adhering to unchanged conservative risk standards

1) Pre FX

2) Governed by "Green Finance Framework"

9

Segment Highlights: Banking & Digital Solutions

NII benefitting from rising interest rates

• Growing recurring revenues (banking and software fees)
• New products and services providing growth potential

Deposit volume significantly above target level of € ~12 bn supporting diversification of funding mix

• In H2 rising interest rates generated significant NII increase
• Growth in customer numbers positively impacted deposit volume
• Sticky rental deposits continuously growing

Segment Highlights: Aareon

Healthy recurring run-rate, new management focusing on execution of growth plan and enhancing efficiency of product portfolio

Note: Numbers not adding up refer to rounding

• Switch of revenue model from license to SaaS/ Subscription underpins healthy recurring revenue growth
• SaaS growth accelerated to 25% yoy (2021: 16%)
• Run-rate of recurring revenues successfully increased to 74% (2021: 71%)
• Sales revenues increased by € 39 mn to € 308 mn (+15% yoy)
• Digital revenues up 22%
• ERP revenues up 12%
• Adj. EBITDA increased by € 8 mn to € 75 mn (+13% yoy), adj. EBITDA margin at 24.4% (2021: 24.8%)
• Rule-of-40 in 2022 almost achieved
• Areas of management attention
• Focus on executing growth agenda incl. M&A
• Investments of € ~35 mn to increase long-term profitability
  • − Streamline product portfolio
  • − Adjust facility presence
  • − Implement early retirement program
• Implementation of a partnering platform based on Locoia, acquired in December 2022

Agenda

• Highlights 2022
• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Portfolio

Portfolio volume further increased in line with plan

13

Asset quality

Portfolio KPIs continued to improve, already better than pre-Covid

LtVs reduced by improvements for all property types

%	12 '19	12 '20	12 '21	12 '22
Hotel	56	62	60	56
Logistics	56	56	55	52
Office	58	58	58	57
Retail	58	61	59	56

YoD increased for hotel, logistics and retail

%	12 '19	12 '20	12 '21	12 '22
Hotel	9.3	3.0	5.0	9.0
Logistics	8.5	9.2	8.7	9.0
Office	7.7	8.1	7.6	6.9
Retail	9.6	8.8	9.1	9.8

14

Asset quality Deep dive: Office market faces structural changes

Market	▪ Post Covid ("new work norms") and ESG initiating structural changes ▪ Uncertainties regarding pace and amount of inflation-related interest rate increases
Current trends	▪ Covid caused remote working experience leading to a structural reduction in demand for office space ▪ On average vacant space will take longer to lease and may be at lower rents resulting in lower asset values ▪ Demand is gravitating towards smart buildings that support companies' initiatives regarding environmental, health / wellness and employee experience ▪ Structural changes will call for more refurbishments fulfilling changing priorities and ESG-requirements ▪ Prime locations with the highest connectivity will demand a premium, existing disparity between Class A and Class B assets will get larger
Positioning	▪ Properties financed: High quality in good locations ▪ Clients: Professional, highly committed ▪ Tenants: Strong tenant structure ▪ Loan type: Investment finance incl. refurbishments, no developments ▪ Risk positioning: Conservative with avg. LTV of 57% providing good buffer and clients' support

Asset quality

Deep dive: Office portfolio well positioned to face structural changes

• High quality assets in good locations (major US cities, Paris) and very solid LTVs are mitigating factors
• Moderate decline in avg. YoD (12/22: 6.9% vs. 12/21: 7.6%) due to structural changes
• USA: planned refurbishments and temporary vacancies with likely longer reletting periods following new work norms
• France: high share of planned refurbishments into green assets (~1/3 of total office portfolio)
• Call for more "green" refurbishments following structural changes seen as an opportunity

Asset quality NPLs significantly reduced

• NPL portfolio significantly reduced following post Covid recovery, down by € ~450 mn (30%) in 2022 (ex Russia decline would have amounted to € ~670 mn or ~40%)
• Reduction predominantly in the retail and hotel segment witnessing strong recovery
• Aside from Russia, manageable inflow of new NPLs in 2022
• One-off budget of € ~60 mn assigned for a swift NPL reduction to sustainably reduce NPL ratio < 3%

▪ NPE ratio1): 2.8% (12/2021: 3.6%)

1) Acc. to EBA Risk Dashboard

(Non-performing debt instruments (loans and advances & debt securities) other than held for trading / Total gross debt instruments)

Agenda

• Highlights 2022
• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Liquidity Comfortable liquidity position

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

Conservative liquidity management throughout the cycle

• On average long-term funds have longer maturities than finance portfolio
• Substantial buffer in regulatory liquidity ratios (LCR / NSFR) despite strong growth in portfolio and difficult economic and capital markets environment
• NSFR at 119%
• LCR at 210%

▪ Assets:

High quality treasury portfolio with continuous efforts to further improve / optimise structure

▪ Liabilities & equity: Money Market includes retail deposits and ECPs from successfully further diversified funding mix, TLTRO partially repaid in Q4

Funding

Successful further diversification of funding mix, established as green bond issuer

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

Funding further diversified

• Retail deposits as additional funding source by cooperating with Raisin/Weltsparen and Deutsche Bank
• Launch of Commercial Paper Program enables offering ECP in EUR, GBP & USD and also in Green format
• Second issue Rating from Moody's (A3) launched

Funding activities in 2022

• Pfandbrief and Senior unsecured totalling € ~4.7 bn incl.
• 2 Green Senior Benchmarks (€ 1 bn)
• 4 Pfandbrief Benchmarks (€ 2.6 bn)
• € 1.1 bn ECP outstanding in EUR, USD and GBP
• Thereof € ~500 mn Green ECPs
• Strong and proven access to the institutional private placement market (€ >1.1 bn)

Promising start in 2023

• 2 Pfandbriefe (€ 1.5 bn) issued in January and February
• Having further diversified and optimized funding mix, less Senior capital markets funding planned despite targeted CREF-portfolio growth

Capital

Improved capital position despite portfolio growth

Agenda

• Highlights 2022
• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Agenda

• Highlights
• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Outlook 2023

Confident of achieving 2024 target on an operating level one year earlier, enabling one-off budget for additional strategic measures

Strong operating performance enables us to implement strategic measures to further improve corporate resilience. One-off budget of close to € 100 mn assigned

• Budgeted swift NPL reduction
• Strategic goal to sustainably reduce NPL ratio < 3%
• One-off budget of € ~60 mn
• Budgeted Aareon investments € ~35 mn
• Streamline product portfolio
• Adjust facility presence
• Implement early retirement program

to facilitate annual cost savings in the area of lower double-digit millions starting from 2024

1) Operating profit target 2024: up to € 350 mn

Outlook 2023

	METRIC	2022	OUTLOOK 2023
p u o Gr	▪ Net interest income ▪ Net commission income LLP1) ▪ ▪ Admin expenses	€ 702 mn € 277 mn € 192 mn € 571 mn	€ 730 - 770 mn € 315 - 335 mn € 170 - 210 mn incl. € 60 mn budget for a swift NPL reduction € 590 - 630 mn incl. € 35 mn budget for Aareon investments
	▪ Operating profit (adjusted) ▪ Operating profit ▪ Earnings per share (EPS)	€ 239 mn € 2.32	€ ~350 mn € 240 - 280 mn € 2.40 - 2.802)

Developments in the macroeconomic environment remain uncertain

		METRIC	2022	OUTLOOK 2023
s	Structured Property Financing	▪ REF Portfolio ▪ New business	€ 30.9 bn € 8.9 bn	33 bn3) € 32 - € 9 - 10 bn
nt e m g e S	Banking & Digital Solutions	▪ Deposit volume ▪ NCI	€ 13.4 bn € 31 mn	€ ~13 bn ~13% CAGR (2020-2023)
	Aareon	▪ Revenues ▪ Adj. EBITDA	€ 308 mn € 75 mn	€ 325 - 345 mn € 90 - 100 mn

1) Incl. value adjustments from NPL fvpl

2) Based on expected FY-tax ratio of ~33%

3) Subject to FX development

Key takeaways

Excellently positioned in its 100th anniversary year

Strong earnings momentum creating a very good base for the future

Successful strategy with an excellent market position in our three segments, a well diversified funding base and comfortable capital ratios

Strength that enables investments to further improve corporate resilience and flexibility

Agenda

• Highlights
• Financial Performance
• Portfolio & Asset Quality
• Liquidity, Funding & Capital
• ESG
• Outlook
• Appendix

Appendix Group results

Aareal Bank Group Results FY 2022

	01.01.- 31.12.2022	01.01.- 31.12.2021	Change
	€ mn	€ mn
Profit and loss account
Net interest income	702	597	18%
Loss allowance	192	133	44%
Net commission income	277	245	13%
Net derecognition gain or loss	1	2 3	-96%
Net gain or loss from financial instruments (fvpl)	2 6	-30
Net gain or loss on hedge accounting	-2	-5	-60%
Net gain or loss from investments accounted for using the equity method	-2	-2	0 %
Administrative expenses	571	528	8 %
Net other operating income / expenses	0	-12
Operating Profit	239	155	54%
Income taxes	8 6	8 7	-1%
Consolidated net income	153	6 8	125%
Consolidated net income attributable to non-controlling interests	0	1
Consolidated net income attributable to shareholders of Aareal Bank AG	153	6 7	128%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	153	6 7	128%
of which: allocated to ordinary shareholders	138	5 3	160%
of which: allocated to AT1 investors	1 5	1 4	7 %
Earnings per ordinary share (in €)2)	2.32	0.89	161%
Earnings per ordinary AT1 unit (in €)3)	0.15	0.14	7 %

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 2022 figures preliminary and unaudited

30

Results FY 2022 by segments

		Structured Property Financing		Banking & Digital Solutions	A a Aareon r e			Consolidation/ Reconciliation	Aareal Bank Group
	01.01.- 31.12. 2022	01.01.- 31.12. 2021	01.01.- 31.12. 2022	01.01.- 31.12. 2021	01.01.- 31.12. 2022	01.01.- 31.12. 2021	01.01.- 31.12. 2022	01.01.- 31.12. 2021	01.01.- 31.12. 2022	01.01.- 31.12. 2021
€ mn
Net interest income	627	560	9 2	4 3	-17	-6	0	0	702	597
Loss allowance	192	133	0		0	0			192	133
Net commission income	6	8	3 1	2 8	252	221	-12	-12	277	245
Net derecognition gain or loss	1	2 3							1	2 3
Net gain or loss from financial instruments (fvpl)	2 6	-30	0	0	0				2 6	-30
Net gain or loss on hedge accounting	-2	-5							-2	-5
Net gain or loss from investments accounted for using the equity method	0	0	-1	-1	-1	-1			-2	-2
Administrative expenses	260	256	7 9	7 3	244	211	-12	-12	571	528
Net other operating income / expenses	-6	-13	-1	-1	7	2	0	0	0	-12
Operating profit	200	154	4 2	-4	-3	5	0	0	239	155
Income taxes	7 0	8 2	1 4	-1	2	6			8 6	8 7
Consolidated net income	130	7 2	2 8	-3	-5	-1	0	0	153	6 8
Allocation of results
Cons. net income attributable to non-controlling interests	0	0	0	0	0	1			0	1
Cons. net income attributable to shareholders of Aareal Bank AG	130	7 2	2 8	-3	-5	-2	0	0	153	6 7

Results Q4 2022

	01.10.- 31.12.2022	01.10.- 31.12.2021	Change
	€ mn	€ mn
Profit and loss account
Net interest income	188	162	16%
Loss allowance	2 2	5 4	-59%
Net commission income	7 8	7 1	10%
Net derecognition gain or loss	-23	8
Net gain or loss from financial instruments (fvpl)	4	-23
Net gain or loss on hedge accounting	4	-1
Net gain or loss from investments accounted for using the equity method	0	-1
Administrative expenses	148	135	10%
Net other operating income / expenses	1	5	-80%
Operating Profit	8 2	3 2	156%
Income taxes	2 9	2 0	45%
Consolidated net income	5 3	1 2	342%
Consolidated net income attributable to non-controlling interests	0	-1
Consolidated net income attributable to shareholders of Aareal Bank AG	5 3	1 3	308%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	5 3	1 3	308%
of which: allocated to ordinary shareholders	4 9	9	444%
of which: allocated to AT1 investors	4	4
Earnings per ordinary share (in €)2)	0.83	0.16	419%
Earnings per ordinary AT1 unit (in €)3)	0.04	0.04

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 2022 figures preliminary and unaudited

32

Results Q4 2022 by segments

		Structured Property Financing		Banking & Digital Solutions	A a r e	Aareon		Consolidation/ Reconciliation		Aareal Bank Group
	01.10.- 31.12. 2022	01.10.- 31.12. 2021	01.10.- 31.12. 2022	01.10.- 31.12. 2021	01.10.- 31.12. 2022	01.10.- 31.12. 2021	01.10.- 31.12. 2022	01.10.- 31.12. 2021	01.10.- 31.12. 2022	01.10.- 31.12. 2021
€ mn
Net interest income	152	154	4 3	1 0	-7	-2	0	0	188	162
Loss allowance	2 2	5 4	0	0	0	0			2 2	5 4
Net commission income	1	2	8	8	7 2	6 4	-3	-3	7 8	7 1
Net derecognition gain or loss	-23	8							-23	8
Net gain or loss from financial instruments (fvpl)	4	-23	0	0	0				4	-23
Net gain or loss on hedge accounting	4	-1							4	-1
Net gain or loss from investments accounted for using the equity method	0	0		0	0	-1			0	-1
Administrative expenses	6 0	6 3	2 5	2 0	6 6	5 5	-3	-3	148	135
Net other operating income / expenses	-2	8	0	-1	3	-2	0	0	1	5
Operating profit	5 4	3 1	2 6	-3	2	4	0	0	8 2	3 2
Income taxes	1 8	1 4	8	0	3	6			2 9	2 0
Consolidated net income	3 6	1 7	1 8	-3	-1	-2	0	0	5 3	1 2
Allocation of results
Cons. net income attributable to non-controlling interests	0	0	0	0	0	1			0	-1
Cons. net income attributable to shareholders of Aareal Bank AG	3 6	1 7	1 8	-3	-1	-1	0	0	5 3	1 3

Preliminary results – quarter by quarter

		Structured Property Financing					Banking & Digital Solutions				Aareon					Consolidation / Reconciliation			Aareal Bank Group
	Q4	Q3 2022	Q2	Q1	Q4 '21	Q4	Q3 2022	Q2	Q1	Q4 '21	Q4	Q3 2022	Q2	Q1	Q4 '21	Q4	Q3 2022	Q2	Q1	Q4 '21	Q4	Q3 2022	Q2	Q1	Q4 '21
€ mn
Net interest income	152	162	163	150	154	43	26	11	12	10	- 7	- 4	- 3	- 3	- 2	0	0	0	0	0	188	184	171	159	162
Loss allow ance	22	63	58	49	54	0	0		0		0	0	0	0	0						22	63	58	49	54
Net commission income	1	1	2	2	2	8	8	8	7	8	72	61	61	58	64	- 3	- 3	- 3	- 3	- 3	78	67	68	64	71
Net derecognition gain or loss	-23	2	13	9	8																-23	2	13	9	8
Net gain / loss from fin. instruments (fvpl)	4	4	12	6	-23	0	0	0		0	0		0								4	4	12	6	-23
Net gain or loss on hedge accounting	4	1	- 3	- 4	- 1																4	1	- 3	- 4	- 1
Net gain / loss from investments acc. for using the equity method	0				0			- 1	0	0	0	0	- 1	0	- 1						0	0	- 2	0	- 1
Administrative expenses	60	54	61	85	63	25	17	19	18	20	66	60	65	53	55	- 3	- 3	- 3	- 3	- 3	148	128	142	153	135
Net other operating income / expenses	- 2	- 2	1	- 3	8	0	0	- 1	0	- 1		1	2	1	- 2	0	0	0	0	0	1	- 1	2	- 2	5
Operating profit	54	51	69	26	31	26	17	- 2	1	- 3	2	- 2	- 6	3	4	0	0	0	0	0	82	66	61	30	32
Income taxes	18	18	24	10	14	8	6	0	0	0	3	0	- 2	1	6						29	24	22	11	20
Consolidated net income	36	33	45	16	17	18	11	- 2	1	- 3	- 1	- 2	- 4	2	- 2	0	0	0	0	0	53	42	39	19	12
Cons. net income attributable to non controlling interests	0	0	0	0	0	0	0	0	0	0	0	- 1	0	1	- 1						0	- 1	0	1	- 1
Cons. net income attributable to ARL shareholders	36	33	45	16	17	18	11	- 2	1	- 3	- 1	- 1	- 4	1	- 1	0	0	0	0	0	53	43	39	18	13

Appendix Asset Quality

CREF portfolio by country

€ 30.5 bn highly diversified

CREF portfolio by property types

€ 30.5 bn highly diversified

Implications of the Russian war against Ukraine

Russian exposure 63% provisioned

Russian operations

• Rep office with 2 employees in Moscow
• Russia defined as non-core market about a decade ago
• Last newly acquired business in 2012
• From more than € 1 bn in 2010 portfolio significantly reduced to an exposure of around € ~200 mn

Russian exposure

• One loan; outstanding € 213 mn (EURO denominated)
• Office complex in Moscow
• Nearly fully let to international and Russian tenants
• Client able and willing to pay
• Currently Russian sanctions hinder cash transfer out of Russia
• ➢ € 134 mn LLP booked in 2022
• ➢ Remaining net exposure of € 78 mn equals ~30% of 10/2021 market value of the financed property

As of today impacts from geopolitical and macroeconomic environment are not predictable. However the markdown reflects volatility seen in other crisis in the past.

Non performing loans (NPL ex Russia)

Deep dive

• NPL classification depends on a variety of triggers (e.g. arrears, NOI, DSCR, LtVs, yields, prices, marketability, …)
• NPL classification might be triggered even if no nominal loss will be made but contractual payments are or potentially will not be received in line with the agreement (timing / amounts)
• Current NPL portfolio (ex Russian NPL):
• 33% of NPL portfolio with LtV <100%
• 14% of NPL portfolio with DSCR >100%

➔ Only 60% of NPL portfolio with LtV >100% and DSCR <100%

1) Based on current market values

2) Based solely on asset performance (not including sponsor support)

Appendix Aareon

Segment: Aareon 2022 P&L and other KPIs

P&L Aareon segment - Industry format1) € mn	Q4'21	FY'21	Q4'22	FY'22	∆ Q4 '22/'21	∆ FY '22/'21
Sales revenue ▪ Thereof ERP ▪ Thereof Digital	75 54 20	269 200 70	87 63 25	308 224 85	17% 15% 21%	15% 12% 22%
Costs2) ▪ Thereof material	-57 -11	-227 -48	-66 -16	-255 -57	15% 45%	13% 17%
EBITDA	18	43	22	53	23%	24%
Adjustments2)	-8	-24	-7	-22	-7%	-7%
Adj. EBITDA	25	67	29	75	14%	13%
EBITDA	18	43	22	53	23%	24%
D&A / Financial result	-13	-38	-19	-56	42%	48%
EBT / Operating profit	4	5	2	-3	-42%	<-100%

R&D, RPU and operating cashflow
Revenue per unit (RPU) – LTM (€)	22
R&D spend as % of software revenue	24%
Operating Cash Flow (€ mn)	36

• RPU (last 12 months) at 22 €. With cross-selling opportunities to be harvested
• R&D spend slightly above 24%, still close to communicated pattern of 25% threshold
• Operating Cash Flow at € 36 mn (2021: € 36 mn)

1) Calculation refers to unrounded numbers

2) Incl. New product, VCP, Ventures, M&A and one-offs

Appendix ESG

ESG in our daily business

Putting sustainability at the core of our decisions

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 the new framework provided since Q2 2021

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

• In addition to the lending framework, Aareal Bank has implemented an accompanying liability-side/use-ofproceeds framework that allows issuance of green financing instruments
• The "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

43

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 demanding Green Finance Framework

Aareal Green Finance Framework (GFF) in place
Green Property Financing: ▪ Meets EU Taxonomy criteria and / or ▪ and / or ▪ defined in Aareal GFF	Requirements to qualify as green property Certified with an above-average ratings Classified as nearly zero-energy building (nZEB) / thresholds as	+ Green Loan Rider: Customer agrees to Maintaining "Aareal Green Finance Framework" requirements during the term of the loan			Green Loan: Combination of ▪ Green property1) and ▪ Agreement
Eligibility category Eligibility criteria (alternatives)
Green Buildings	1. EU taxonomy compliant: Buildings meet the EU Taxonomy criteria according to the EU Commission Delegated Regulation, Chapter 7.7 "Acquisition and ownership of existing buildings"	2. Green building certification: ▪ BREEAM: "Very Good" and above ▪ LEED: "Gold" and above ▪ DGNB: "Gold" and above ▪ Green Star: "5 Stars" and above ▪ NABERS: "4 Stars" and above ▪ HQE: "Excellent" and above		3. Energy efficiency: Classified as a nearly zero-energy building (nZEB) and / or property falls below the maximum energy reference values 75 kWh/m² p.a. Residential 140 kWh/m² p.a. Office, Hotel, Retail 65 kWh/m² p.a. Logistics
Energy efficiency upgrades	1. EU taxonomy compliant: Modernisation measures meet the EU Taxonomy criteria acc. EU Commission Delegated Regulation3)		2. Upgrade to Green Building: Completion of the measure brings the property up to the green building standard defined above.		3. Energy efficiency improvement: Completion of the measure results in an energy efficiency improvement of at least 30%.

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"

44

21% of CREF portfolio classified as Green Property Financings

€ 6.5 bn1) (21%) of total CREF portfolio fulfilling Aareal's Green Finance Framework and are classified as "Green Property Financings", thereof

• € 4.3 bn included in green asset pool for underlying of Green bond issues
• € 2.2 bn green property financings mainly for technical reasons not (yet) included

45 2) Valid certificate is documented

ESG@Aareal Phase 1: Mission accomplished

	We have laid the foundation…	…achieved our 2022 goals…	… and will continue to follow our path
	Green expansion of financing business € 2 bn by 2024 additional green loan volume	Achieved	On track for 2024
ct a p m	Optimisation of funding mix € 1 bn in 2022 - new allocation of green funding	€ 1 bn long-term funding + € 0.5 bn green CPs	+ € 0.5 green long-term funding in 2023
ur i o g n	Providing transparency for global CREF portfolio 20% by 2022 – Verified green properties	> 21 % screening almost completed	Grow share of verified green properties PCAF report on financed emissions by '24
wi o Gr	Limiting our own Greenhouse Gas emissions Carbon neutrality by '23 of our business operations worldwide	Achieved	On track for 2023
	Expansion of innovative solutions with ESG impact Growth targets by 2025 – Identification of enabler products by 2022	Achieved	On track for 2025
e n o p e t o	ESG governance with enhanced Board's oversight CEO responsibility – Regular Board engagement	Achieved	Achieved and continuing
e t h g t h at t n etti S	ESG integration in business, credit, investment, risk and refinancing strategies and decision making process Targeting of ESG initiatives in individual / group targets	15 % ESG component in Management Bords variable remuneration	Increased to 25% of our Management Board's variable remuneration in 2023

Additional Highlights

• Green Finance Frameworks Lending & Liabilities established and signed off by second party opinion (SPO)
• Strengthened investability for green investors through consistently positive ESG rating results
• Strong performance in ECB climate stress test, which assessed our portfolio for its vulnerability to physical and transitory risks

ESG@Aareal

Our mission for phase 2: On the "Road to Paris" we are supporting our clients

On-going transparency initiatives to reach and surpass to highest market standards

Consistently positive rating results

Rewarding Aareal's ESG performance

Note: Results and Benchmarks as of 17/02/2023

48

Appendix Treasury Portfolio, Funding & Liquidity

Treasury portfolio

€ 6.7 bn of highly rated, quality liquid assets providing collateral and additional liquidity

As at 31.12.2022 – all figures are nominal amounts 1) Composite Rating

Funding Strong Mortgage Cover Pool and Aaa Rating for Pfandbriefe

As at 31.12.2022

Pfandbriefe funding cornerstone of wholesale issuance

• Cover pool of € 15.2 bn incl. € 1.1 bn substitute assets diversified over 19 countries
• High quality assets: first-class mortgage loans (mortgage-lending-value 55.5%)
• Mortgage-lending-value with high discount from market-value
• Avg. LtV of the mortgage cover pool 32.0%
• Moody´s has calculated a 'Aaa' supporting overcollateralisation ratio of 18.0% on a PV basis
• Over-collateralisation on a PV basis as of FY 2022 20.7%
• High diversification within property types
• No assets in the covered pool from Russia and Ukraine

Funding & Liquidity

Diversified funding sources and distribution channels

Funding & Capital

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 upcoming 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 according to contractual maturities
• 3) Considering regulatory adjustments
• 4) CET1 assumed to be constant over time
• 53 5) Senior Preferred, excluding structured unsecured issuances Note: All 2022 figures preliminary and unaudited

Appendix Regulation

Capital - SREP (CET 1) requirements

Demonstrating conservative and sustainable business model

55

Appendix AT1: ADI of Aareal Bank AG

Interest payments and ADI of Aareal Bank AG

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

€ mn	31.12. 2016	31.12. 2017	31.12. 2018	31.12. 2019	31.12. 2020	31.12. 2021	31.12. 2022
Net Retained Profit ▪ Net income ▪ Profit carried forward from previous year ▪ Net income attribution to revenue reserves	122 122 0 -	150 147 3 -	126 126 - -	120 120 - -	90 90 - -	96 30 66 -	61 61 - -
+ Other revenue reserves after net income attribution	720	720	720	720	840	840	936
Total dividend potential before amount blocked1) =	842	870	846	840	930	936	997
./. Dividend amount blocked under section 268 (8) of the German Commercial Code ./. Dividend amount blocked under section 253 (6) of the German Commercial Code	235 28	283 35	268 42	314 40	320 43	386 36	466 24
= Available Distributable Items1)	580	552	536	486	566	515	507
+ Increase by aggregated amount of interest expenses relating to Distributions on Tier 1 Instruments1)	46	32	25	23	21	20	21
= 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)	626	584	560	509	588	535	529

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

Appendix Definitions and contacts

Definitions

New Business	=	New business = Newly acquired business + renewals
Common Equity Tier 1 ratio	=	CET 1 Risk weighted assets
NPE ratio (acc. EBA Risk Dashboard)	=	Non-performing debt instruments (loans and advances & debt securities) other than held for trading Total gross debt instruments
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 ./. net 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
NPL ratio	=	NPL-exposure acc. CRR (excl. exposure in cure period) Total REF Portfolio

Contacts Disclaimer

Jürgen Junginger

Managing Director Investor Relations 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

Karin Desczka

Manager Investor Relations Phone: +49 611 348 3009 karin.desczka@aareal-bank.com

Robin Weyrich

Group Sustainability Officer Phone: +49 611 348 2335 robin.weyrich@aareal-bank.com

Leonie Eichhorn

Sustainability Management Phone: +49 611 348 3433 leonie.eichhorn@aareal-bank.com

Disclaimer

© 2023 Aareal Bank AG. All rights reserved.

This document has been prepared by Aareal Bank AG, exclusively for the purposes of a corporate presentation by Aareal Bank AG.

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.

This presentation includes information with respect to the voluntary public takeover offer published by Atlantic BidCo GmbH on 26 April 2022. These references are provided for general information purposes only and do not constitute an offer to enter into a contract for the provision of advisory services or an offer to purchase securities. Any decisions by investors in relation to Aareal Bank shares should be based on the public tender offer documentation published by Atlantic BidCo GmbH.

As far as this presentation contains information from Atlantic BidCo GmbH or other third parties, this information has merely been compiled without having been verified. Therefore, Aareal Bank AG does not give any warranty, and makes no representation as to the completeness or correctness of any such information or opinion contained herein. Aareal Bank AG accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation.

The securities of Aareal Bank AG are not registered in the United States of America and may not be offered or sold except under an exemption from, or pursuant to, registration under the United States Securities Act of 1933, as amended.

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

Thank you.