Aareal Bank AG

Investor Presentation • Feb 24, 2022

Analyst Conference

Preliminary 2021 results

February 24, 2022 Jochen Klösges (CEO) Marc Hess (CFO)

Agenda

▪ Takeover offer from financial investors

• Achievements and goals
• Preliminary 2021 group results
• Segments
• Capital, funding & liquidity
• ESG
• Outlook 2022
• Appendix

Prologue Takeover offer from financial investors

Aareal Bank did not seek the offer, but, following a legally binding, thorough examination, considered it to be strategically sensible and had to present the offer as an option to its shareholders

Process was open to other interested parties, but no higher bid was received

Aareal Bank's strategy convinced PE investors; due diligence confirmed quality of loan book

Offer process has further highlighted growth potential of Aareal Bank Group in all segments

Agenda

• Takeover offer from financial investors
• Achievements and goals
• Preliminary 2021 group results
• Segments
• Capital, funding & lquidity
• ESG
• Outlook 2022
• Appendix

Achievements 2021

Strategic targets achieved or exceeded

Note: All 2021 figures preliminary and unaudited

Structured Property Financing From ACTIVATE! to GROW!

• "Play the matrix": Use market opportunities in traditional asset classes and regions – with attractive margins and risk parameters
• Possible rounding out: Expand business in CRE and adjacent segments based on our capabilities and risk policy
• Refine portfolio management: Continued evaluation of risk-return metrics incl. correlations and granularity, increase of syndications
• Financing growth internally: Use of the solid capital position and readjustment of the balance between investments and distributions as part of the existing dividend policy

1) Excluding bank levy and contribution to deposit guarantee scheme

ESG: Our goals

Contributing to green transformation of the economy

Growing our impact - mitigating climate change and fostering transition
1	Green expansion of financing business		€ 2 bn by 2024 Additional green loan volume
2	Optimisation of funding mix		€ 1 bn in 2022 New allocation of green funding
3	Providing transparency for global CREF portfolio		20% by 2022 Verified green properties
4	Limiting our own Greenhouse Gas emissions		Carbon neutrality by 2023 Of our business operations worldwide
5	Expansion of innovative solutions with ESG impact (BDS and Aareon)		Growth targets by 2025 Identification of enabler products by 2022

Setting the tone at the TOP - ensuring Aareal is run on strong ESG principles

6

6 ESG governance with enhanced Board's oversight

- ESG integration in business-, credit-, investment-, risk- and refinancing strategies as well as decision making process ⁷

CEO responsibility Regular Board engagement

Banking & Digital Solution From ELEVATE! to LEVERAGE!

• Good opportunities for further continuous customer growth in the housing industry, e.g. in the property management segment
• Focus on core competence, payment transactions: provision of integrated services and products using our Aareal Exchange Payment Platform (AEPP)
• Explore international "win-win" opportunities in the payments space with Aareon
• Pursue selected M&A opportunities and divestment of non-profitable business
• Strong focus on maintaining crisis resilient deposit base e.g. by positioning as the "tenant deposit guarantee bank" in Germany; long-term upside potential in rising rate environment

Aareon ACCELERATE! to be continued

• Implement growth and investment plan developed with Advent: Rule of 40 SaaS company
• Starting April 1st, new CEO: Harry Thomsen
• Acceleration of M&A activities, increase of hunting line by € 100 mn to a total of € 350 mn planned2) by Aareal Bank
• Adj. EBITDA target for 2025 increased to around € 155 mn, of which € ~20 mn from acquisitions already completed; contributions from possible further acquisitions on top

Note: All 2021 figures preliminary and unaudited

Growth strategy is value accretive

1) Excluding any potential acquisitions, and subject to the Covid-19 crisis being fully overcome by then

2) Based on 15% CET1 reference ratio (Basel IV, phase-in, revised IRBA)

Further growth in all segments and a sustained increase in our profitability: this is what we intend to do in the coming years

Agenda

• Takeover offer from financial investors
• Achievements and goals
• Preliminary 2021 group results
• Segments
• Capital, funding & liquidity
• ESG
• Outlook 2022
• Appendix

Highlights 2021 Strong turnaround in 2021 results

	Group Financials	▪ Operating profit of € 155 mn in upper third of guided range benefiting from strong revenue growth ▪ LLPs significantly lower despite further provision for remaining Covid-19 related uncertainties and completion of Italian de-risking ▪ Costs in line with guidance
Business development	Segment Performance	SPF: ▪ Overachieving new business targets – volumes, margins and LTVs ▪ Strong portfolio growth considerably above original target ▪ Major milestones in sustainable finance strategy achieved BDS: ▪ NCI growth according to plan, deposit volume further increased Aareon: ▪ Adj. EBITDA at upper end of targeted range despite sales revenues being impacted by ▫ Longer than originally expected impact from Covid-19 on PS ▫ Transition from license revenue model to subscription-based contracts leading to higher recurring revenues (SaaS and subscription) ▪ Strong execution of M&A activities boosted adj. EBITDA above target
	Outlook 2022	▪ Operating profit in 2022 expected to reach almost pre-pandemic level ▪ Dividend proposal of 1.60 € (0.50 € plus retained tranche of 1.10 €)

Preliminary Group Results 2021

Strong turnaround in operating profit

€ mn	Q4 '20	Q1 '21	Q2 '21	Q3 '21	Q4 '21	FY '20	FY '21	FY 2021-Comments
Net interest income	139	138	142	155	162	512	597	Significant increase driven by strong portfolio growth and good margins
Loss allowance	177	7	33	39	54	344	133	LLPs significantly lower despite further provision for remaining Covid-19 related uncertainties and completion of Italian de risking
Net commission income	66	59	59	56	71	234	245	Increase mainly driven by Aareon
Derecognition result	9	0	8	7	8	28	23	Within expected range
FV- / hedge-result	-19	-4	-2	-5	-24	-26	-35	Incl. € -36 mn value adjustments of NPL accounted as fvpl
Admin expenses	117	150	118	125	135	469	528	Costs in line with guidance
Others	-1	-4	-15	1	4	-11	-14	Incl. one-off from tax related provisions (€ -11 mn) as communicated
Operating profit (EBT)	-99	32	41	50	32	-75	155	Strong turnaround
Income taxes	-13	11	29	27	20	-6	87	Tax ratio above normalised level due to one-offs as communicated
Minorities	3	1	1	0	-1	5	1
AT1	4	4	3	3	4	-16	-14
Consolidated net income allocated to ord. shareholders	-93	16	8	20	9	-90	53
Earnings per share (€)	-1.56	0.27	0.13	0.33	0,16	-1.50	0.89

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

Growth in all 3 segments reflected in increasing NII and NCI

Significant increase driven by strong portfolio growth and good margins

• Significant NII increase of 17% yoy, strongly outperforming original guidance of € 550 - 580 mn
• Strong new business generation with good margins well above plan leveraging market opportunities
• Portfolio already increased above original YE-target
• Funding costs improved
• FY-TLTRO contribution at € 26 mn vs. € 11 mn in 2020

NCI Increase mainly driven by Aareon

• Aareon:
  • Increase in revenues (ERP, digital solutions) despite
    • − Covid-19 related burdens with respect to PS
    • − Transition of revenue model
  • License model transitioning to SaaS steadily increasing recurring revenues
  • Successful M&A activities
  • Q4 regularly boosted by seasonal effects
• BDS:
  • NCI in line with FY target

Admin expenses / Loan loss provisions (LLP)

Admin expenses in line with FY-guidance; LLPs significantly lower

Admin expenses Admin expenses in line with full year guidance

Bank: Increase mainly due to

• Lower Covid-19 related underspend
• Positive share price performance, especially in Q4 with respect to share based remuneration
• Increased bank levy / Deposit guaranty fees Aareon:
• Increase mainly driven by investments in organic growth

LLPs significantly lower despite further provision for remaining Covid-19 related uncertainties and completion of Italian de-risking

• Fulfilling expectations
• Q4/21 includes additional scenario weighted LLPs (€ 32 mn) on existing NPLs providing for remaining Covid-19 uncertainties
• Total FY-LLP of € 169 mn incl.
  • € 36 mn value adjustments of NPL accounted as fvpl (2020: € 34 mn)
  • € 13 mn net effect from concluded Italian de-risking

Non performing loans (NPL)

Robust asset quality keeps NPL portfolio largely stable during second year of pandemic

• NPLs reduced yoy in difficult environment
• Further limited volatility expected while post Covid-19 on the way to normalisation
• De-Risking of Italian NPLs successfully concluded
• Single new NPLs arose, mainly cashflow driven, however well collateralized with minor LLP demand

Agenda

• Takeover offer from financial investors
• Achievements and goals
• Preliminary 2021 group results
• Segments
• Capital, funding & liquidity
• ESG
• Outlook 2022
• Appendix

Segment: Structured Property Financing

Overachieving new business targets – volumes, margins and LTVs

Segment: Structured Property Financing

Strong portfolio growth considerably above original target

1) Performing CREF-portfolio only (exposure)

2) Incl. Student housing (UK & Australia only)

Segment: Structured Property Financing

Robust asset quality in second year of pandemic, LTV and YoD recover

Improving KPIs throughout second year of pandemic

• LTV and YoD recovering steadily while demand for liquidity support significantly reduced
• Update on Hotels
  • LTV improved to 60% (from 63% in Q1/21)
  • YoD improved to 5.0% (from 2.0% in Q1/21)
• Update on Retail
  • LTV improved to 59% (from 61% in Q1/21)
  • YoD improved to 9.1% (from 8.9% in Q1/21)

Note: All 2021 figures preliminary and unaudited

Segment: Banking & Digital Solutions

NCI growth according to plan, deposit volume further increased

NCI further increased

• FY NCI increased from € 26 mn in 2020 to € 28 mn in 2021 as expected despite burdens from BGH ruling (of € ~1 mn)
• NCI growth ex BGH one-off in line with FY- and 13% CAGR target

Deposit volume further increased

• Original target of € 11 bn overachieved
• Total deposits increased by € 1 bn yoy
• Deposits from rental guarantees and maintenance reserves increased by € ~0.5 bn mn to € 4.6 bn yoy
• Increase in deposits supporting CREF portfolio growth
• Stable funding source during crisis continuously proven over last decade

Segment: Aareon

Adj. EBITDA above target despite ongoing shift to SaaS and continued Covid-19 impact

Note: Numbers not adding up refer to rounding

• 1) PS (Professional Services) = Consulting business
• 2) Adjustments incl. new products, VCP, ventures, M&A and other one-offs
• Sales revenue Sales revenues increased by € 11 mn to € 269 mn (+4% yoy), diluted by ongoing Covid-19 impact on PS1) and the switch of the revenue model from license to subscription based contracts
  • Digital revenues ex PS up 23% yoy (incl. PS up 15%)
  • ERP revenues ex PS up 3% yoy (incl. PS up 1%)
  • Recurring revenue up to 71% (67% in 2020)
    • High share underpins stability of business model
    • Proportion expected to grow as new acquisitions and campaigns show their full potential
  • Adj. EBITDA increased to € 67 mn (incl. € 2 mn contribution from M&A). Thereby at upper end of original guided range € 63 - 65 mn organically
  • Adj. EBITDA margin increased by 100 bps yoy, due to VCP bearing fruit
  • EBITDA 2021 adjusted by € 24 mn (2020: € 9 mn) from ramping-up strategic M&A roadmap and investments in new products and VCP strategy
  • Items included in "Adjustments2)" are expected to reduce in 2022; especially investments in VCP

Note: All 2021 figures preliminary and unaudited

Segment: Aareon is developing into a "Rule of 40" SaaS-company Strong investments in M&A and VCP

Operational business: significantly strengthened

▪ ERP

• Implementation of new ERP product generations
• Competence centres for new technologies in place
• Digital solutions
  • New digital solutions expanding Aareon Smart World
  • Pilot customers running AI-based Virtual Assistant Neela and Digital Agency for entire letting process
  • AiBATROS® Energy- and CO2-analysis for climate efficient renovation

M&A activities: strong execution in 2021

▪ 6 acquisitions financed by hunting line

Value Creation Program: substantial progress

Focus on transforming into a full SaaS company

• SaaS/subscription campaigns developed and initiated leading to higher recurring revenues
• Optimised processes will speed up software implementation
• CRE Competence Centre set up

Agenda

• Takeover offer from financial investors
• Achievements and goals
• Preliminary 2021 group results
• Segments
• Capital, funding & liquidity
• ESG
• Outlook 2022
• Appendix

Capital Solid capital position

and an additional voluntary and preventive capital deduction for regulatory uncertainties from ECB tests were taken into account.

• Very solid capital ratios throughout Covid-19 crisis
• Increased capital ratios (B4 phase-in) in 2021 despite of loan growth mainly due to
  • Improved portfolio quality (sound new business, recovery of LGDs, reduction of NPLs)
  • Sound RWA mgmt. (e.g. consideration of collateral)
  • Improved OCI due to decreased pension provisions
• Planned dividend payout fully deducted from CET1
• B3 CET1 ratio: 22.2% (12/20: 21.5%)
  • Following the publication of the Commission's proposal for European implementation of B4 standards have become more specific
  • To further align internal steering, we currently consider to adjust the calculation of the B3 ratios accordingly from 2022 onwards, as communicated
• Early redemption of € 300 mn Tier 2 Notes in Q1/21 reflected in TC-Ratio
• AT1 as a further measure to optimise capital structure
• Solid T1-Leverage ratio at 5.5% despite TLTRO participation and portfolio growth
• Remaining regulatory uncertainties (models, ICAAP, ILAAP, B4, etc.)

25 1) Underlying RWA estimate in accordance with the current version of the CRR plus revised AIRBA requirements for commercial property lending, based on the European Commission's draft for the European implementation of Basel IV dated 27.10.2021. The calculation also includes a buffer (maintaining the scaling factor of 1.06 for AIRBA risk weights, and the 370% risk weight for the IRBA equity exposure class), to account for the uncertainty surrounding the final wording of CRR III as well as the implementation of further regulatory requirements such as EBA requirements for internal Pillar 1 models. When Basel IV enters into force on 01.01.2025, RWA will be calculated based on the European requirements, which will have been finalised by then, and the higher of the revised AIRBA and the revised CRSA (standardised approach for credit risk) phase-in output floor. The SREP recommendations concerning the NPL inventory and the ECB's NPL guidelines for the regulatory capital of NPLs

Note: All 2021 figures preliminary and unaudited

Funding & Liquidity

Diversified funding sources and distribution channels

• Sustainable and strong housing industry deposits increased by € 1 bn and verified as an important part of well diversified funding mix
• Successful long term funding transactions of € 3.5 bn in 2021 and already € 1.25 bn in Q1 2022 including:
  • Two € 500 mn Pfandbrief Benchmarks (7Y & 7Y)
  • \$ 750 mn Pfandbrief Benchmark (4Y)
  • Inaugural SONIA linked £ 500 mn Pfandbrief (4Y)
  • € 450 mn increase in outstanding Senior preferred Bond (11/2027) to new notional amount of € 750 mn (6Y)
  • € 500 mn Senior Preferred Benchmark (5Y)
  • Q1 2022:
    • − € 750 mn Pfandbrief Benchmark (8Y) and
    • − € 500 mn Senior Preferred Inaugural Green Benchmark (6Y)
• Launch of European Commercial Paper program and successful placements in Q4 2021
  • € 830 mn (€ 405 mn Green)
  • \$ 325 mn (\$ 76 mn Green)
• Liquidity ratios significantly over fulfilled
  • NSFR > 100%
  • LCR >> 100%

Funding & Liquidity

Very successful Senior Preferred Inaugural Green benchmark transaction

Successful announcement of Green Financing Framework and receiving of Second Party Opinion from Sustainalytics supported strong entry into Green debt markets with highly successful Green ECP & Green SP Benchmark transactions:

• € 500 mn Senior Preferred Inaugural Green Benchmark Transaction with maturity of 6 years
• 88% of allocation to ESG related investors
• ECPs € 405 mn Green & \$ 76 mn Green till 12/2021
• Broader investor base

27

"Based on the above, Sustainalytics is confident that Aareal is well-positioned to finance green loans and issue green bonds

and that the Aareal Bank Green Finance Framework - Liabilities is robust, transparent, and in alignment with the four core components of the Green Bond Principles 2021 and Green Loan Principles 2021."

Agenda

• Takeover offer from financial investors
• Achievements and goals
• Preliminary 2021 group results
• Segments
• Capital, funding & liquidity
• ESG
• Outlook 2022
• Appendix

Real Estate is transitioning to a more sustainable, digitised and connected future

Fostering this transition

ESG1) is (and has always been) fundamental to our business	▪ Lasting value of our properties is in our own interest ▪ No financing of controversial industry sites / projects ▪ Environmental quality is a major consideration in business origination and quality deficiencies will have an impact on the structuring of the loan or may reject the transaction
Integration of ESG in decision making initiated group-wide	▪ 2011: Introduction of corporate ESG compliance ▪ 2017: Focus on developing sustainability performance of core business ▪ September 2020: ESG@Aareal initiative initiated - "ESG Integration" throughout the group embedding ESG strongly into the business and decision-making processes
Strategic sustainability management based on five criteria	▪ Measurable contribution to sustainability transformation [AMBITION] ▪ Investable on the asset and liability side [INVEST] ▪ Retain existing customers and attract new ones [CLIENT] ▪ Manage relevant ESG risks [RISK] ▪ Comply with regulatory requirements [REGULATION]
We have impact!	▪ Contributing to the transition to a low carbon economy with every green financing ▪ Enabling customers to improve their sustainability performance with every smart digital solution connecting multiple parties and equipment

Major Milestones in Sustainable Finance Strategy achieved

Green loans for green properties refinanced by green funding instruments

Significant progress1) in ESG transparency and performance:

Verified2) ESG-Transparency for

~40%

of our portfolio through documentation of proof in IT systems

94% transparency based on client information

Since the launch in June 2021

€ ~430 mn

in Green Loans

have been issued

Verified2), individual Green Properties

17%

Since implementation of Green Finance Framework – Funding

€ ~1 bn

has been issued via our inaugural Senior Preferred Green Bond as well as via the green Commercial Paper Program

1) Portfolio data as at 31.12.2021

30

of CREF portfolio

with more potential subject to ongoing validation

Agenda

• Takeover offer from financial investors
• Achievements and goals
• Preliminary 2021 Group Results
• Segments
• Capital, Funding & Liquidity
• ESG
• Outlook 2022
• Appendix

Outlook 2022

	METRIC	2021		OUTLOOK 2022
p u o Gr	▪ Net interest income ▪ Net commission income LLP1) ▪ ▪ Admin expenses	€ 597 mn € 245 mn € 169 mn € 528 mn		€ 600 - 630 mn € 270 - 290 mn € 100 - 140 mn € 540 - 570 mn
	▪ Operating profit ▪ Net income2) ▪ Earnings per share (EPS)	€ 155 mn € 53 mn € 0.89		€ 210 - 250 mn 150 mn3) € 120 - € 2.00 - 2.503)
		METRIC	2021	OUTLOOK 2022
s nt e	Structured Property Financing	▪ REF Portfolio ▪ New business	€ 30.0 bn € 8.5 bn	€ ~31 bn4) € 7 - 8 bn
m g e S	Banking & Digital Solutions	▪ Deposit volume ▪ NCI	€ 12.4 bn € 28 mn	€ ~12 bn ~13% CAGR (2020-2023)
	Aareon	▪ Revenues ▪ Adj. EBITDA	€ 269 mn € 67 mn	€ 305 - 325 mn € 73 - 78 mn

1) Incl. value adjustments from NPL fvpl

2) Net income attributable to ordinary shareholder

3) Based on expected FY-tax ratio of 34%

4) Subject to FX development

32

Note: All 2021 figures preliminary and unaudited

Acceleration of our successful strategy 'Aareal Next Level' based on strong and crisis resilient capital base

▪ SPF: From ACTIVATE! to GROW!

➔ Grow REF portfolio to € ~33 bn in 2024

▪ BDS: From ELEVATE! to LEVERAGE!

➔ Segment and independent value proposition established; cross- and upselling of payment services and digital products well advanced

▪ Aareon: continue to ACCELERATE!

➔ Adj. EBITDA target 2025 raised from € ~135 mn to € ~155 mn

▪ Maintaining Aareal's strong funding and capital position

Aareal Next Level Our KPIs and targets

	Our KPIs and targets
	2023	2024	2025
Aareal Bank Group
▪ Operating profit	€ ~300 mn1)	Up to € 350 mn
RoE post tax group2) ▪	~8%1)
▪ Dividend policy	50% base dividend plus potential supplementary dividend3)
Aareal Bank
▪ REF portfolio YE	€ ~32 bn	€ ~33 bn
▪ CIR SPF4)	<40%
Aareon
▪ Revenue	>10% CAGR (2020-2025)
			€ ~135 mn plus € ~20 mn closed M&A
▪ Adj. EBITDA	Contribution from additional future M&A on top
▪ Rule of 40			Achieve rule of 40

1) Excluding any potential acquisitions, and subject to the Covid-19 crisis being fully overcome by then

2) Based on 15% CET1 reference ratio (Basel IV, phase-in, revised IRBA)

34 3) Subject to ECB approval; Balanced growth investments and shareholders' remuneration in line with existing dividend policy

• ▪All strategic goals achieved or exceeded
• ▪So far, pandemic-related risks well managed
• ▪Course set for further growth

We want to and will grow. More strongly than previously planned. With and for our customers. In all segments.

Preliminary Group Results 2021

Preliminary results 2021

	01.01.- 31.12.2021	01.01.- 31.12.2020	Change
	€ mn	€ mn
Profit and loss account
Net interest income	597	512	17%
Loss allowance	133	344	-61%
Net commission income	245	234	5 %
Net derecognition gain or loss	2 3	2 8	-18%
Net gain or loss from financial instruments (fvpl)	-30	-32	-6%
Net gain or loss on hedge accounting	-5	6	-183%
Net gain or loss from investments accounted for using the equity method	-2	1	-300%
Administrative expenses	528	469	13%
Net other operating income / expenses	-12	-11	9 %
Operating Profit	155	-75	-307%
Income taxes	8 7	-6	-1550%
Consolidated net income	6 8	-69	-199%
Consolidated net income attributable to non-controlling interests	1	5	-80%
Consolidated net income attributable to shareholders of Aareal Bank AG	6 7	-74	-191%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	6 7	-74	-191%
of which: allocated to ordinary shareholders	5 3	-90	-159%
of which: allocated to AT1 investors	1 4	1 6	-13%
Earnings per ordinary share (in €)2)	0.89	-1.50	-159%
Earnings per ordinary AT1 unit (in €)3)	0.14	0.16	-13%

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 2021 figures preliminary and unaudited

Preliminary results 2021 by segments

	Structured Property Financing			Banking & Digital Solutions	A a r e	Aareon		Consolidation/ Reconciliation	Aareal Bank Group
	01.01.- 31.12. 2021	01.01.- 31.12. 2020	01.01.- 31.12. 2021	01.01.- 31.12. 2020	01.01.- 31.12. 2021	01.01.- 31.12. 2020	01.01.- 31.12. 2021	01.01.- 31.12. 2020	01.01.- 31.12. 2021	01.01.- 31.12. 2020
€ mn
Net interest income	560	474	4 3	3 9	-6	-1	0	0	597	512
Loss allowance	133	344		0	0	0			133	344
Net commission income	8	8	2 8	2 6	221	213	-12	-13	245	234
Net derecognition gain or loss	2 3	2 8							2 3	2 8
Net gain or loss from financial instruments (fvpl)	-30	-32	0	0		0			-30	-32
Net gain or loss on hedge accounting	-5	6							-5	6
Net gain or loss from investments accounted for using the equity method	0	2	-1		-1	-1			-2	1
Administrative expenses	256	227	7 3	6 8	211	188	-12	-14	528	469
Net other operating income / expenses	-13	-14	-1	0	2	4	0	-1	-12	-11
Operating profit	154	-99	-4	-3	5	2 7	0	0	155	-75
Income taxes	8 2	-14	-1	-1	6	9			8 7	-6
Consolidated net income	7 2	-85	-3	-2	-1	1 8	0	0	6 8	-69
Allocation of results
Cons. net income attributable to non-controlling interests	0	0	0	0	1	5			1	5
Cons. net income attributable to shareholders of Aareal Bank AG	7 2	-85	-3	-2	-2	1 3	0	0	6 7	-74

Preliminary results – quarter by quarter

	Structured Property Financing			Banking & Digital Solutions			Aareon				Consolidation / Reconciliation					Aareal Bank Group
	Q4	Q3 2021	Q2	Q1	Q4 2020	Q4	Q3 2021	Q2	Q1	Q4 2020	Q4	Q3 2021	Q2	Q1	Q4 2020	Q4	Q3 2021	Q2	Q1	Q4 2020	Q4	Q3 2021	Q2	Q1	Q4 2020
€ mn
Net interest income	154	146	133	127	129	10	11	11	11	10	- 2	- 2	- 2	0	0	0	0	0	0	0	162	155	142	138	139
Loss allow ance	54	39	33	7	177	0				0	0	0	0		0						54	39	33	7	177
Net commission income	2	2	2	2	4	8	7	6	7	8	64	50	54	53	58	- 3	- 3	- 3	- 3	- 4	71	56	59	59	66
Net derecognition gain or loss	8	7	8	0	9																8	7	8	0	9
Net gain / loss from fin. instruments (fvpl)	-23	- 3	- 3	- 1	-21	0									0						-23	- 3	- 3	- 1	-21
Net gain or loss on hedge accounting	- 1	- 2	1	- 3	2																- 1	- 2	1	- 3	2
Net gain / loss from investments acc. for using the equity method	0				2	0		- 1			- 1	0	0	0	- 1						- 1	0	- 1	0	1
Administrative expenses	63	59	50	84	54	20	17	17	19	18	55	52	54	50	50	- 3	- 3	- 3	- 3	- 5	135	125	118	150	117
Net other operating income / expenses	8	- 1	-15	- 5	- 3	- 1	0	0	0	0	- 2	2	1	1	3	0	0	0	0	- 1	5	1	-14	- 4	- 1
Operating profit	31	51	43	29	-109	- 3	1	- 1	- 1	0	4	- 2	- 1	4	10	0	0	0	0	0	32	50	41	32	-99
Income taxes	14	28	30	10	-18	0	0	- 1	0	1	6	- 1	0	1	4						20	27	29	11	-13
Consolidated net income	17	23	13	19	-91	- 3	1	- 1	- 1	- 1	- 2	- 1	- 1	3	6	0	0	0	0	0	12	23	12	21	-86
Cons. net income attributable to non controlling interests	0	0	0	0	0	0	0	0	0	0	- 1	0	1	1	3						- 1	0	1	1	3
Cons. net income attributable to ARL shareholders	17	23	13	19	-91	- 3	1	0	- 1	- 1	- 1	- 1	- 2	2	3	0	0	0	0	0	13	23	11	20	-89

Preliminary results Q4 2021

	01.10.- 31.12.2021	01.10.- 31.12.2020	Change
	€ mn	€ mn
Profit and loss account
Net interest income	162	139	17%
Loss allowance	5 4	177	-69%
Net commission income	7 1	6 6	8 %
Net derecognition gain or loss	8	9	-11%
Net gain or loss from financial instruments (fvpl)	-23	-21	10%
Net gain or loss on hedge accounting	-1	2	-150%
Net gain or loss from investments accounted for using the equity method	-1	1	-200%
Administrative expenses	135	117	15%
Net other operating income / expenses	5	-1	-600%
Operating Profit	3 2	-99	-132%
Income taxes	2 0	-13	-254%
Consolidated net income	1 2	-86	-114%
Consolidated net income attributable to non-controlling interests	-1	3	-133%
Consolidated net income attributable to shareholders of Aareal Bank AG	1 3	-89	-115%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	1 3	-89	-115%
of which: allocated to ordinary shareholders	9	-93	-110%
of which: allocated to AT1 investors	4	4
Earnings per ordinary share (in €)2)	0.16	-1.56	-110%
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 2021 figures preliminary and unaudited

Preliminary results Q4 2021 by segments

	Structured Property Financing			Banking & Digital Solutions	A a Aareon r e			Consolidation/ Reconciliation	Aareal Bank Group
	01.10.- 31.12. 2021	01.10.- 31.12. 2020	01.10.- 31.12. 2021	01.10.- 31.12. 2020	01.10.- 31.12. 2021	01.10.- 31.12. 2020	01.10.- 31.12. 2021	01.10.- 31.12. 2020	01.10.- 31.12. 2021	01.10.- 31.12. 2020
€ mn
Net interest income	154	129	1 0	1 0	-2	0	0	0	162	139
Loss allowance	5 4	177	0	0	0	0			5 4	177
Net commission income	2	4	8	8	6 4	5 8	-3	-4	7 1	6 6
Net derecognition gain or loss	8	9							8	9
Net gain or loss from financial instruments (fvpl)	-23	-21	0			0			-23	-21
Net gain or loss on hedge accounting	-1	2							-1	2
Net gain or loss from investments accounted for using the equity method	0	2	0		-1	-1			-1	1
Administrative expenses	6 3	5 4	2 0	1 8	5 5	5 0	-3	-5	135	117
Net other operating income / expenses	8	-3	-1	0	-2	3	0	-1	5	-1
Operating profit	3 1	-109	-3	0	4	1 0	0	0	3 2	-99
Income taxes	1 4	-18	0	1	6	4			2 0	-13
Consolidated net income	1 7	-91	-3	-1	-2	6	0	0	1 2	-86
Allocation of results
Cons. net income attributable to non-controlling interests	0	0	0	0	-1	3			-1	3
Cons. net income attributable to shareholders of Aareal Bank AG	1 7	-91	-3	-1	-1	3	0	0	1 3	-89

Asset quality

CREF portfolio by country

€ 29.5 bn highly diversified

Note: All 2021 figures preliminary and unaudited

CREF portfolio by property types

€ 29.5 bn highly diversified

Note: All 2021 figures preliminary and unaudited

Western Europe (ex Germany) CREF portfolio

Total volume outstanding as at 31.12.2021: € 10.9 bn

Note: All 2021 figures preliminary and unaudited

2) Performing CREF-portfolio only (exposure)

German CREF portfolio

Total volume outstanding as at 31.12.2021: € 2.9 bn

1) Performing CREF-portfolio only (exposure)

Southern Europe CREF portfolio

Total volume outstanding as at 31.12.2021: € 2.6 bn

Central- and East Europe CREF portfolio

Total volume outstanding as at 31.12.2021: € 1.8 bn

Northern Europe CREF portfolio

Total volume outstanding as at 31.12.2021: € 1.4 bn

Note: All 2021 figures preliminary and unaudited

North America CREF portfolio

Total volume outstanding as at 31.12.2021: € 8.7 bn

1) Performing CREF-portfolio only (exposure)

Asia / Pacific CREF portfolio

Total volume outstanding as at 31.12.2021: € 1.2 bn

B/S & Treasury Portfolio

B/S structure according to IFRS

Well balanced

1) Other assets includes € 0.3 bn private client portfolio and WIB's € 0.3 bn public sector loans

Treasury portfolio

€ 7.4 bn of high rating quality and highly liquid assets

As at 30.12.2021 – all figures are nominal amounts 1) Composite Rating

Segment: Aareon

Segment: Aareon P&L and other KPIs

P&L Aareon segment - Industry format1) € mn	Q4'20	FY'20	Q4'21	FY'21	∆ Q4 '21/'20	∆ FY '21/'20
Sales revenue ▪ Thereof ERP ▪ Thereof Digital	70 53 17	258 197 61	75 54 20	269 200 70	7% 2% 24%	4% 1% 15%
Costs2) ▪ Thereof material	-53 -12	-205 -45	-57 -11	-227 -48	9% -7%	11% 7%
EBITDA	17	53	18	43	4%	-20%
Adjustments2)	-4	-9	-8	-24	74%	>100%
Adj. EBITDA	21	62	25	67	18%	8%
EBITDA	17	53	18	43	4%	-20%
D&A / Financial result	-6	-26	-13	-38	>100%	45%
EBT / Operating profit	10	27	4	5	-61%	-82%

R&D, RPU and operating cashflow
Revenue per unit (RPU) – LTM (€)	23
R&D spend as % of software revenue – YTD	25%
YTD Operating Cash Flow (€ mn)	36

• RPU (last 12 months) at 23 € (9M/21: 22 €)
• R&D spend picking up in line with communicated pattern of gradual increase in the short term up to 25% of revenue
• VCP- and M&A-related investments led to higher costs as planned, VCP investments expected to fade out in the future
• Operating Cash Flow at € 36 mn (12M/20: € 55 mn) mainly driven by higher investments

1) Calculation refers to unrounded numbers

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

Fostering Real Estate's ESG transition

Consistently positive rating results

Rewarding Aareal's ESG performance

Aareal Green Finance Framework: Eligibility criteria

Building on our modern portfolio and extensive know-how

Eligibility category	Eligibility criteria (alternatives)
	1. Classification as EU taxonomy compliant	2. Green building certification (type: "level")	3. Energy efficiency of the property
Green Buildings	Buildings meet the EU Taxonomy criteria according to the COMMISSION DELEGATED REGULATION (EU) 2021/2139, Chapter 7.7. "Acquisition and ownership of buildings"	▪BREEAM: "Outstanding", "Excellent", "Very Good" ▪LEED: "Platinum", "Gold" ▪DGNB: "Platinum", "Gold" ▪Green Star: "6 Stars", "5 Stars" ▪NABERS: "6 Stars", "5 Stars", "4 Stars" ▪HQE: "Exceptional" and "Excellent"	energy building (nZEB) commitment and / or The property falls below 75 kWh/m² p.a. 140 kWh/m² p.a. 65 kWh/m² p.a.	The property meets the national requirements for a nearly zero valid at the time of the financing the maximum energy reference values Residential Office, Hotel, Retail Logistics
	1. Classification as EU taxonomy compliant To qualify, energy-efficient	2. Upgrade to Green Building Completion of the measure brings the property up to the green building	3.Siginificant energy efficiency improvement Completion of the measure results
Energy efficiency upgrades	modernisation/renovation measures need to meet the EU Taxonomy criteria according to the COMMISSION DELEGATED REGULATION (EU) 2021/2139, Chapter 7.2 "Renovation of existing buildings".	standard defined above.	of at least 30%.	in an energy efficiency improvement

Increasing demand for future oriented, energy efficient buildings

Already € 1.5 bn newly acquired business in 2021 met green criteria1)

ESG-Data as at 10.02.2022.

Note: All 2021 figures preliminary and unaudited

Aareal Bank Group – Set for Growth!

Structured Property Financing From ACTIVATE! to GROW!

GROW! Structured Property Financing Targets

Growth of REF portfolio from € 30 bn to € ~33 bn in 2024 in line with current risk policy based on strong capital base…

• Significant attractive market opportunities available in our "home turf" with a strong focus on Green Properties and Green Loans
• Expand business in CRE and adjacent segments based on our capabilities and risk policy
• Continued evaluation of risk-return metrics incl. correlations and granularity
• Maintaining strict cost discipline and implementing efficiency measures
• …and highly attractive marginal RoE above cost of equity, supported by continuous management of back book
• Continued focused syndication efforts

REF portfolio:

• € ~1 bn growth p.a.
• YE 2024: € ~33 bn

Additional Green Loan volume:

▪ Until YE 2024: € ~2 bn

SPF CIR:

▪ YE 2023: <40%1)

1) Excluding bank levy and contribution to deposit guarantee scheme

Banking & Digital Solutions From ELEVATE! to LEVERAGE!

LEVERAGE! Banking & Digital Solutions Targets

Strong and independent value proposition of housing and adjacent business to be leveraged – increase cross selling and NCI

• Expand payments platform with software solutions and financial products
• Explore international "win-win" opportunities in the payments space with Aareon
• Focus on core-competencies and value-add products
• Pursuing selected M&A opportunities

Strong focus on maintaining crisis resilient deposit base

▪ Long-term upside potential in rising rate environment

Grow NCI:

• CAGR of ~13% (2020-2023)
• Ambition to double NCI until 2025

Deposit volume:

▪ Ø 2024: € >12 bn

Aareon ACCELERATE! to be continued

ACCELERATE! Aareon Targets

Fully on track to develop Aareon to a "Rule of 40" company by 2025

• VCP initiatives started in 2021, driving Go-To-Market excellence and operational excellence
• Appointment of SAP's Harry Thomsen as Dr. Manfred Alflen's successor, effective 1 April 2022

Highly attractive M&A platform

• Opportunity to further scale internationally based on execution of attractive M&A pipeline
• Aareal hunting line for M&A to be increased by € 100 mn to € 350 mn throughout the entire planning period and thus, retain full (strategic) flexibility and NII-synergies within the Group
• Option to tap institutionalized third-party debt markets to refinance hunting line in medium term

YE 2025 Adj. EBITDA:

• € ~135 mn plus € ~20 mn from companies already acquired in 2021
• Contribution from add. M&A on top

Achieve "Rule of 401)" performance

1) Rule of 40: Sum of Aareon's annual revenue growth and adj. EBITDA margin will at least reach 40%

Strong funding and capital position – key growth enablers

Funding and capital	Targets
Further enhancing Aareal's funding platform	€ ~1 bn Green Financing in 2022
▪ Sophisticated strategy to meet funding requirements from portfolio growth and ESF reform
▪ Expansion of green funding activities
▪ Further diversification of funding sources
▪ Continues optimization of our regulatory capital structure and funding costs
Maintaining Aareal's strong funding and capital position
▪ Strong and crisis resilient capital base
▪ Continues active portfolio management to optimise equity consumption
▪ Balance of growth investments and shareholders' remuneration in-line with existing dividend policy

Regulation

SREP (CET 1) requirements

Demonstrating conservative and sustainable business model

• Capital ratios significant above SREP requirements
• P2R increase in 2022 (2.75%; 2021: 2.25%) due to Corona impacting especially commercial real estate markets
• P2R relief by using possibility of partially fulfilling requirements with AT1 and T2 capital
• Total capital requirement 2021 (Overall Capital Requirement (OCR)) amounts to 12.8% compared to 28.9% total capital ratio
• All ratios already include TRIM effects as well as prudential provisioning

Pillar 1 Requirement Pillar 2 Requirement Capital Conservation Buffer Countercyclical Buffer

Dividend Policy

Dividend Policy and BVPS-development

Distribute approx. 50% of the earnings per ordinary share (EpS) as base dividend

Potential Supplementary Dividend1)

A supplementary dividend up to 20 - 30% of the EpS to be considered, if

• No material deterioration of the environment (with longer-term and sustainably negative effects) and
• No material changes in regulation incl. sufficient capital buffers in a forward looking perspective and
• No attractive investment opportunities and
• No positive growth environment beyond current planning

For FY 2021, payable in 2022: Further development of Covid-19 and above-mentioned factors to be considered regarding supplementary dividend

1) ECB approval required

Attractive dividend policy and significant book value growth created sustainable value for Aareal and hence our shareholders

Note: All 2021 figures preliminary and unaudited

AT1: ADI of Aareal Bank AG

Interest payments and ADI of Aareal Bank AG

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

	31.12. 2016	31.12. 2017	31.12. 2018	31.12. 2019	31.12. 2020	31.12. 2021
€ mn
Net Retained Profit ▪ Net income ▪ Profit carried forward from previous year ▪ Net income attribution to revenue reserves	122 122 - -	147 147 - -	126 126 - -	120 120 - -	90 90 - -	30 90 66 -
+ Other revenue reserves after net income attribution	720	720	720	720	840	840
Total dividend potential before amount blocked1) =	842	870	846	840	930	936
./. Dividend amount blocked under section 268 (8) of the German Commercial Code	235	283	268	314	320	386
./. Dividend amount blocked under section 253 (6) of the German Commercial Code	28	35	42	40	43	36
= Available Distributable Items1)	579	552	536	486	566	515
+ Increase by aggregated amount of interest expenses relating to Distributions on Tier 1 Instruments1)	46	32	24	23	21	20
= 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)	625	584	560	509	587	535

1) Unaudited figures for information purposes only

Definitions and contacts

Definitions

= New Business	New business = Newly acquired business + renewals
Common Equity = Tier 1 ratio	CET 1 Risk weighted assets
= Pre tax RoE	Operating profit/income ./. loss attributable to non-controlling interests ./. AT1 coupon Average IFRS equity excl. non-controlling interests, AT1 and dividends
= CIR	Admin expenses (excl. bank levy, et al.) Net income
= Net income	net interest income + net commission income + net result on hedge accounting + net trading income + results from non-trading assets + results from investments accounted for at equity + results from investment properties + net other operating income
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) Outstanding incl. prior/pari-passu loans (without developments)
= 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

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

Julia Taeschner

Group Sustainability Officer Director Investor Relations Phone: +49 611 348 3424 julia.taeschner@aareal-bank.com

Daniela Thyssen

Manager Sustainability Management Phone: +49 611 348 3554 daniela.thyssen@aareal-bank.com

Leonie Eichhorn

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

Robin Weyrich

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

Disclaimer

© 2022 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. The presentation is intended for professional and institutional customers only.

It must not be modified or disclosed to third parties without the explicit permission of Aareal Bank AG. Any persons who may come into possession of this information and these documents must inform themselves of the relevant legal provisions applicable to the receipt and disclosure of such information, and must comply with such provisions. This presentation may not be distributed in or into any jurisdiction where such distribution would be restricted by law.

This presentation is provided for general information purposes only. It does not constitute an offer to enter into a contract on the provision of advisory services or an offer to purchase securities. Aareal Bank AG has merely compiled the information on which this document is based from sources considered to be reliable – without, however, having verified it. 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. Therefore, Aareal Bank AG does not give any warranty, and makes no representation as to the completeness or correctness of any 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.

This presentation may contain forward-looking statements of future expectations and other forward-looking statements or trend information that are based on current plans, views and/or assumptions and 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.

Thank you.