Aareal Bank AG

Investor Presentation • Aug 10, 2017

Analyst Conference Call Q2 2017 results

August 10, 2017 Hermann J. Merkens, CEO

Agenda

• Highlights
• Group results at a glance
• Segment performance
• Group results
• B/S structure, capital & funding position
• Asset quality
• Outlook 2017
• Appendix
• Definitions and contacts

Highlights Confirming FY-guidance after solid second quarter

Highlights
Operating profit of € 109 mn (Q2/2016: € 120 mn) Quarterly results including one-off effects, operative performance ongoing robust
€ 2.0 bn new business origination in the structured property financing segment in Q2 2017 and a total of € 3.8 bn in H1
Net commission income further improving due to Aareon's positive development
Integration of WestImmo successfully completed
FY-outlook 2017 confirmed: Operating profit in a range of € 310 mn - € 350 mn expected

Group results at a glance

Group results at a glance Q2 includes one-offs, operative performance ongoing robust

€ mn	Q2 '16	Q3 '16	Q4 '16	Q1 '17	Q2 '17	Comments
Net interest income	177	175	169	164	158	Further portfolio reduction, lower effects from early repayments
Allowance for credit losses	29	33	33	2	25	LLP below last year's figure and in line with full year target
Net commission income	47	44	56	48	49	Above previous year's high level
Net result from trading / non-trading / hedge acc.	691)	12	-5	-4	1
Admin expenses	144	127	130	139	129	Include € 24 mn for optimisation of processes and structures acc. to Aareal 2020
Others	0	3	28	4	55	Of which € 50 mn due to reversal of provisions related to acquisition of Corealcredit
Operating profit	120	74	85	71	109	Solid quarter + one-offs = strong result
Income taxes	38	23	44	24	42	FY 2017e: 37% due to reversal of CCB provisions, Tax ratio Q2 2017: 39% (Q1 2017: 34%)
Minorities / AT1	9	9	8	9	5	Savings from redemption of hybrid instrument from Q2 2017 onwards
Consolidated net income allocated to ord. shareholders	73	42	33	38	62
Earnings per share [€]	1.23	0.70	0.55	0.63	1.05

1) Incl. € 61 mn from closing Aqvatrium / Fatburen

Segment performance

Structured property financing

Strong new business margins, WIB integration completed

New business origination € mn Newly acquired business Renewals 622 1,222 2,416 1,507 3,038 2,729 314 552 496 1,048 0 1,000 2,000 3,000 4,000 5,000 Q1 '16 Q1 '17 Q2 '16 Q2 '17 H1 '16 H1 '17 936 1,774 2,003 3,508 4,444 3,777

• H1-margins above plan
• Low CRE transaction volumes => less early repayments
• Newly acquired business:
• Strong North American business (~45% share in H1)
• Gross margins in H1 above 260 bps (> 240 bps after FX)
• FY-margin target expected to be outperformed, the resulting positive NII-effect compensating lower effects from early repayments
• Renewals contractually driven

• € 28.8 bn RE finance portfolio (of which € 27.2 bn CRE)

• 1) Incl. renewals

• 2) Incl. € 61 mn from closing Aqvatrium / Fatburen
• 3) Incl. € 50 mn reversal of provisions set aside within the scope of the acquisition of Corealcredit Bank AG

Consulting / Services Aareon on track

P&L C/S Segment	Q2 '16	Q3 '16	Q4 '16	Q1 '17	Q2 '17
€ mn
Sales revenue	52	47	58	54	55
Own work capitalised	2	1	2	1	1
Other operating income	0	2	4	1	1
Cost material purchased	9	8	11	9	9
Staff expenses	35	36	37	35	36
D, A, impairment losses	3	3	2	3	3
Other operat. expenses	15	14	15	15	15
Others	0	0	0	0	0
Operating profit	-8	-11	-1	-6	-6

• Aareon revenues of € 55 mn (Q2 2016: € 52 mn), EBT of € 8 mn, EBT margin ~15%
• Stronger Aareon revenues resulting from growth in all product lines, digital and additional products with highest growth rates
• Deposit volume acc. to Aareal 2020 at Ø of € 9.6 bn in Q2 '17 (Ø of € 9.5 bn in Q2 '16)
• Focussing on further shift into sustainable deposits

Group results Q2 2017

Net interest income

Further portfolio reduction and lower effects from early repayments

• Portfolio reduction by € 0.8 bn due to
• Rundown of CCB / WIB portfolio
• Syndication activities
• FX-effects
• Declining effects from early repayments due to lower overall transaction volumes: € 4 mn in Q2 (€ 13 mn in H1 vs. expected FY-range of € 35 mn - € 75 mn)
• Deposit margins further burdened by interest rate environment
• Aareal Bank fulfils future NSFR / LCR requirements

NII without effects from derecognition of financial instruments to be reported separately under IFRS 9 starting 2018 Effects from derecognition of financial instruments to be reported separately under IFRS 9 starting 2018 (mainly effects from early repayments)

1) Newly acquired business

Allowance for credit losses (LLP)

LLP below last year's figure and in line with full year target

Conservative lending policies paying off

Net commission income Above previous year's high level

• Stronger Aareon revenues of € 55 mn (Q2 '16: € 52 mn) resulting from growth in all product lines, digital and additional products with highest growth rates
• Dutch acquisition of Kalshoven Groep B.V. supporting further international growth
• Q4 regularly includes positive seasonal effects

Admin expenses

Including costs for optimisation of processes and structures

• H1 includes
• € 24 mn for optimisation of processes and structures
• € 22 mn for the European bank levy and for the Deposit Protection Guarantee Schemes
• H2 will focus on strategic projects and investments

B/S structure, capital & funding position

RWA development Successful RWA run down

• Reduction from
• Rundown of CCB / WIB portfolio
• Syndication activities
• FX-effects
• Rating improvements in Italy
• Operational risk reduction mainly due to model update caused by regulatory changes in Q1
• Operational risk already based on standardised approach

Capital ratios Strong development

• Regulatory uncertainties buffered by very strong capital ratios
• Instruments assumed to mature until 2019 (planning period) are excluded from the fully phased ratios
• Bail-in capital ratio (acc. to our definition): above 8%
• T1-Leverage ratio as at 30.06.2017: 6.0% (fully phased)

Common Equity Tier 1 (CET1) Additional Tier 1 (AT1) Tier 2 (T2)

Asset- / Liability structure according to IFRS As at 30.06.2017: € 44.1 bn (31.12.2016: € 47.7 bn)

Conservative balance sheet with structural over borrowed position Average maturity of long term funding > average maturity of RSF loans

1) Other assets includes € 1.0 bn private client portfolio and WIB's € 0.6 bn public sector loans

Asset- / Liability structure according to IFRS As at 30.06.2017: € 44.1 bn (30.06.2016: € 50.9 bn)

Conservative balance sheet with structural over borrowed position Average maturity of long term funding > average maturity of RSF loans

1) Other assets includes € 1.0 bn private client portfolio and WIB's € 0.6 bn public sector loans

Capital market funding Sound liquidity position

• Total funding raised in H1 2017: € 1.1 bn mainly Pfandbriefe (€ 0.9 bn)
• Backbone of capital market funding is a loyal, granular, domestic private placement investor base
• Hold-to-maturity investors: ~ 500
• Average ticket size: ~ € 10 mn
• Fulfilling liquidity-KPIs
• NSFR > 1
• LCR >> 1

Refinancing situation

Diversified funding sources and distribution channels

• Aareal Bank has clearly reduced its dependency on wholesale funding
• 2002 long term wholesale funding accounted for 47% of overall funding volumes by 30.06.2017, this share has fallen below 25% (or even below 10% without Pfandbriefe)

As at 30.06.2017

Asset quality

Property finance portfolio1) € 27.2 bn highly diversified and sound

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Property finance portfolio1) Portfolio details

Spotlight: UK property finance portfolio1) € 3.7 bn (~14% of total portfolio)

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Spotlight: Turkey property finance portfolio1) € 0.4 bn (~2% of total portfolio)

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Spotlight: Italian property finance portfolio1) € 3.0 bn (~11% of total portfolio)

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Spotlight Italy Italian NPL: clear going forward strategy

• Restructuring period: vast majority to be solved till 2020
• Current enforcement period 3-4 years, but improving due to new legislation

All Italian NPL are fully covered despite being in different workout-stages

Property finance portfolio1) Stable NPL volume but declining portfolio volume

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Property finance portfolio NPL exposure fully covered including collaterals

	30.06.2017
Coverage ratio specific allowance	35%	NPL exposure Portfolio allowance
Coverage ratio including portfolio allowance	42%	Specific allowance Collaterals

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Treasury portfolio € 8.7 bn of high quality and highly liquid assets

Outlook 2017

Outlook 2017 Confirming guidance

	2017
Net interest income	 € 620 mn - € 660 mn incl. planned effects from early repayments (€ 35 mn - € 75 mn)
Allow. for credit losses1)	 € 75 mn - € 100 mn
Net commission income	 € 195 mn - € 210 mn
Admin expenses	 € 470 mn - € 510 mn incl. expenses for projects and investments / effects from integration
Operating profit	 € 310 mn - € 350 mn
Pre-tax RoE	 11% - 12.5% (9% - 10.5% excl. one-off from reversal of provisions related to CCB acquisition)
EpS	 € 2.85 - € 3.30
Target portfolio size	 € 25 bn - € 28 bn
New business origination2)	 € 7 bn - € 8 bn
Operating profit Aareon3)	 € 34 mn - € 35 mn

1) As in 2016, the bank cannot rule out additional allowances for credit losses

2) Incl. renewals

3) After segment adjustments

Conclusion Well positioned to continue our successful development

Key takeaways We deliver on our promises – both financially and strategically Once again, good second quarter results demonstrate that we are implementing our program "Aareal 2020" from a position of strength With this combination we establish the basis for sustainable success in a rapidly changing environment Focusing on two pillars: Further development of the operating business and further optimisation of structures and processes

Appendix Aareal 2020

Aareal 2020 – Adjust. Advance. Achieve. Our way ahead

Adjust

Safeguard strong base in a changing environment

• Enhance efficiency
• Optimise funding
• Anticipate regulation

As published February 23, 2017

Achieve

Create sustainable value for all stakeholders

• Realise strategic objectives for the Group and the segments
• Consistently implement required measures
• Achieve ambitious financial targets

Aareal 2020 – Adjust. Advance. Achieve.

We successfully started – in our operational business …

	Achievements so far	Focus 2017	Targets 2020 Plus
Structured Property Finance	 US-portfolio enhanced  Non-core assets reduced  Syndication volume increased  Servicing platform, cooperation signed	 Further enhancing of attractive markets, e.g. USA  Further reduction of non-core assets  Further increasing syndication, enhancing investor bases and product scope  Digitalisation of internal processes as well as clients' interface	 Expansion in markets with attractive risk return profile  Strengthened portfolio- and balance sheet management  New (digital) opportunities taken by enhancing value chain
Consulting/ Services	 Core business successfully enhanced  Digital platform developed and new digital solutions launched  International cross-selling increased  Network with start-ups enlarged, first cooperation signed	 Enlarging digital solutions portfolio  Tapping joint markets and customer groups, e.g. utilities and CRE  Intensifying cooperation, in particular with start-ups	 Eco system housing industry and utilities expanded  Existing platform products for the B2C business for the housing industry further developed  Further development of our payment transaction system and IT products as well as enlarging our customer base

As published February 23, 2017

Aareal 2020 – Adjust. Advance. Achieve … and investing in our organisation and IT

Achieve. Keep RoE on an attractive level despite difficult environment

RoE-Development (%)

Further medium-term increase is possible on the basis of a positive development of interest rate levels

Payout ratio 2013 - 2019 2013 48% 51% 52% 60% 70-80% 70-80% Base dividend We intend to distribute approx. 50% of the earnings per ordinary share (EpS) as base dividend Supplementary dividend In addition, we plan to distribute supplementary dividends, from 10% increasing up to 20-30% of the EpS Prerequisites: No material deterioration of the environment (with longer-term and sustainably negative effects) Nor attractive investment opportunities neither positive growth environment 2014 2015 2016 2017 2018 70-80% 2019

1) The future dividend policy applies provided that the dividend payments resulting from it are consistent with a long-term and sustained business development of Aareal Bank AG. In addition, the dividend payments are subject to the proviso that corresponding dividend proposals have been made by the Management Board and the Supervisory Board for the respective year.

As published February 23, 2017

Appendix Group results

Aareal Bank Group Results Q2 2017

	01.04.- 30.06.2017	01.04.- 30.06.2016	Change
	€ mn	€ mn
Profit and loss account
Net interest income	158	177	-11%
Allowance for credit losses	25	29	-14%
Net interest income after allowance for credit losses	133	148	-10%
Net commission income	49	47	4%
Net result on hedge accounting	-3	0
Net trading income / expenses	4	8	-50%
Results from non-trading assets	0	61
Results from investments accounted for at equity		0
Administrative expenses	129	144	-10%
Net other operating income / expenses	55	0
Operating Profit	109	120	-9%
Income taxes	42	38	11%
Consolidated net income	67	82	-18%
Consolidated net income attributable to non-controlling interests	1	5	-80%
Consolidated net income attributable to shareholders of Aareal Bank AG	66	77	-14%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	66	77	-14%
of which: allocated to ordinary shareholders	61	73	-16%
of which: allocated to AT1 investors	4	4	0%
Earnings per ordinary share (in €)2)	1.05	1.23	-15%
Earnings per ordinary AT1 unit (in €)3)	0.04	0.04	0%

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.

41

Aareal Bank Group Results Q2 2017 by segments

	Financing	Structured Property	Services	Consulting /		Consolidation/ Reconciliation		Aareal Bank Group
	01.04.- 30.06. 2017	01.04.- 30.06. 2016	01.04.- 30.06. 2017	01.04.- 30.06. 2016	01.04.- 30.06. 2017	01.04.- 30.06. 2016	01.04.- 30.06. 2017	01.04.- 30.06. 2016
€ mn
Net interest income	160	181	0	0	-2	-4	158	177
Allowance for credit losses	25	29					25	29
Net interest income after allowance for credit losses	135	152	0	0	-2	-4	133	148
Net commission income	2	1	46	43	1	3	49	47
Net result on hedge accounting	-3	0					-3	0
Net trading income / expenses	4	8		0			4	8
Results from non-trading assets	0	61					0	61
Results from investments accounted for at equity				0				0
Administrative expenses1)	77	94	53	51	-1	-1	129	144
Net other operating income / expenses	54	0	1	0	0	0	55	0
Operating profit	115	128	-6	-8	0	0	109	120
Income taxes	44	41	-2	-3			42	38
Consolidated net income	71	87	-4	-5	0	0	67	82
Allocation of results
Cons. net income attributable to non-controlling interests	0	4	1	1			1	5
Cons. net income attributable to shareholders of Aareal Bank AG	71	83	-5	-6	0	0	66	77

1) € 24 million in provisions for staff-related measures recognised during the first half of 2017, resulting from the optimisation of processes and structures within the scope of the "Aareal 2020" programme for the future, was allocated to the Structured Property Financing segment in full.

Aareal Bank Group Results H1 2017

	01.01.- 30.06.2017	01.01.- 30.06.2016	Change
	€ mn	€ mn
Profit and loss account
Net interest income	322	357	-10%
Allowance for credit losses	27	31	-13%
Net interest income after allowance for credit losses	295	326	-10%
Net commission income	97	93	4%
Net result on hedge accounting	-6	1
Net trading income / expenses	3	17	-82%
Results from non-trading assets	0	61
Results from investments accounted for at equity		0
Administrative expenses	268	290	-8%
Net other operating income / expenses	59	-1
Operating Profit	180	207	-13%
Income taxes	66	65	2%
Consolidated net income	114	142	-20%
Consolidated net income attributable to non-controlling interests	6	10	-40%
Consolidated net income attributable to shareholders of Aareal Bank AG	108	132	-18%
Earnings per share (EpS)
Consolidated net income attributable to shareholders of Aareal Bank AG1)	108	132	-18%
of which: allocated to ordinary shareholders	100	124	-19%
of which: allocated to AT1 investors	8	8	0%
Earnings per ordinary share (in €)2)	1.68	2.08	-19%
Earnings per ordinary AT1 unit (in €)3)	0.08	0.08	0%

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.

Aareal Bank Group Results H1 2017 by segments

	Financing	Structured Property		Consulting / Services	Consolidation/ Reconciliation		Aareal Bank Group
	01.01.- 30.06. 2017	01.01.- 30.06. 2016	01.01.- 30.06. 2017	01.01.- 30.06. 2016	01.01.- 30.06. 2017	01.01.- 30.06. 2016	01.01.- 30.06. 2017	01.01.- 30.06. 2016
€ mn
Net interest income	327	363	0	0	-5	-6	322	357
Allowance for credit losses	27	31					27	31
Net interest income after allowance for credit losses	300	332	0	0	-5	-6	295	326
Net commission income	3	3	91	85	3	5	97	93
Net result on hedge accounting	-6	1					-6	1
Net trading income / expenses	3	17		0			3	17
Results from non-trading assets	0	61					0	61
Results from investments accounted for at equity				0				0
Administrative expenses1)	166	189	104	102	-2	-1	268	290
Net other operating income / expenses	58	-1	1	0	0	0	59	-1
Operating profit	192	224	-12	-17	0	0	180	207
Income taxes	70	71	-4	-6			66	65
Consolidated net income	122	153	-8	-11	0	0	114	142
Allocation of results
Cons. net income attributable to non-controlling interests	4	8	2	2			6	10
Cons. net income attributable to shareholders of Aareal Bank AG	118	145	-10	-13	0	0	108	132

1) € 24 million in provisions for staff-related measures recognised during the first half of 2017, resulting from the optimisation of processes and structures within the scope of the "Aareal 2020" programme for the future, was allocated to the Structured Property Financing segment in full.

Aareal Bank Group Results – quarter by quarter

	Structured Property Financing				Consulting / Services					Consolidation / Reconciliation					Aareal Bank Group
	Q2	Q1	Q4	Q3	Q2	Q2	Q1	Q4	Q3	Q2	Q2	Q1	Q4	Q3	Q2	Q2	Q1	Q4	Q3	Q2
	2017	2017	2016	2016	2016	2017	2017	2016	2016	2016	2017	2017	2016	2016	2016	2017	2017	2016	2016	2016
€ mn
Net interest income	160	167	174	179	181	0	0	0	0	0	-2	-3	-5	-4	-4	158	164	169	175	177
Allowance for credit losses	25	2	33	33	29											25	2	33	33	29
Net interest income after
allowance for credit losses	135	165	141	146	152	0	0	0	0	0	-2	-3	-5	-4	-4	133	162	136	142	148
Net commission income	2	1	5	2	1	46	45	47	39	43	1	2	4	3	3	49	48	56	44	47
Net result on hedge accounting	-3	-3	-4	3	0											-3	-3	-4	3	0
Net trading income / expenses	4	-1	-2	4	8					0						4	-1	-2	4	8
Results from non-trading assets	0		0	5	61			1								0		1	5	61
Results from results accounted
for at equity								0	0	0								0	0	0
Administrative expenses	77	89	80	77	94	53	51	51	51	51	-1	-1	-1	-1	-1	129	139	130	127	144
Net other operating income /
expenses	54	4	26	2	0	1	0	2	1	0	0	0	0	0	0	55	4	28	3	0
Negative goodwill
Operating profit	115	77	86	85	128	-6	-6	-1	-11	-8	0	0	0	0	0	109	71	85	74	120
Income taxes	44	26	45	27	41	-2	-2	-1	-4	-3						42	24	44	23	38
Consolidated net income	71	51	41	58	87	-4	-4	0	-7	-5	0	0	0	0	0	67	47	41	51	82
Cons. net income attributable to
non-controlling interests	0	4	3	5	4	1	1	1	0	1						1	5	4	5	5
Cons. net income attributable to
shareholders of Aareal Bank AG	71	47	38	53	83	-5	-5	-1	-7	-6	0	0	0	0	0	66	42	37	46	77

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)

	31.12. 2016	31.12. 2015	31.12. 2014	31.12. 2013
€ mn
Net Retained Profit  Net income  Profit carried forward from previous year  Net income attribution to revenue reserves	122 122 - -	99 99 - -	77 77 - -	50 50 - -
+ Other revenue reserves after net income attribution	720	720	715	710
= Total dividend potential before amount blocked1)	842	819	792	760
./. 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	287 -	240 -	156 -
= Available Distributable Items1)	579	532	552	604
+ Increase by aggregated amount of interest expenses relating to Distributions on Tier 1 Instruments1)	46	46	57	57
= 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	578	609	661

1) Unaudited figures for information purposes only

Appendix SREP

SREP (CET 1) requirements

Demonstrating conservative and sustainable business model

• SREP requirement 2017 conceptual adjusted from CET1 approach to total SREP capital requirements (TSCR) approach
• Corresponding total capital requirement 2017 (Overall Capital Requirement (OCR) incl. buffers, phase-in) amounts to 11.03%. As of 31 Dec 2016 total capital ratio (phase-in) amounts to 27.5%

Pillar 1 Requirement Pillar 2 Requirement Capital Conservation Buffer

Current CET 1 ratio Countercyclical Buffer

1) SREP-CET1 Requirements incl. buffers (Capital Conservation and Countercyclical) As published February 23, 2017

Appendix Development property finance portfolio

Development property finance portfolio1) Diversification continuously strengthened (in € mn)

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Western Europe (ex Germany) credit portfolio1) Total volume outstanding as at 30.06.2017: € 8.6 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

German credit portfolio1) Total volume outstanding as at 30.06.2017: € 4.1 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Southern Europe credit portfolio1) Total volume outstanding as at 30.06.2017: € 4.2 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Eastern Europe credit portfolio1)

Total volume outstanding as at 30.06.2017: € 2.0 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Northern Europe credit portfolio1) Total volume outstanding as at 30.06.2017: € 1.6 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

North America credit portfolio1) Total volume outstanding as at 30.06.2017: € 6.4 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Asia credit portfolio1) Total volume outstanding as at 30.06.2017: € 0.3 bn

1) CRE-business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included

Appendix Revaluation surplus

Revaluation surplus

Appendix RWA-split

From asset to risk weighted asset (RWA) Essential factors affecting volume of RWA

Effective date 30/06/2017

1) Amounts to € 34 mn

2) Amounts to € 1 mn

Sustainability Performance

Aareal Bank Group Stands for solidity, reliability and predictability

• 1) Full Basel III implementation, as at 30.06.2017
• 2) CRE business only, private client business (€ 1.0 bn) and WIB's public sector loans (€ 0.6 bn) not included, as at 30.06.2017
• 64 3) Mortgage Pfandbriefe and Public-sector Pfandbriefe rated AAA by Fitch; Mortgage Pfandbriefe rated Aaa by Moody's
• 4) At our main locations in Wiesbaden and Mainz, selected other German and international sites

Sustainability data Extends the financial depiction of the Group

Key takeaways at a glance

Transparent Reporting – facilitating informed investment decisions

• 5 th Report "#THINKING AHEAD. ACTING CONSCIOUSLY." and "SUSTAINABILITY DISCLOSURES 2016" published¹
• "SUSTAINABILITY DISCLOSURES 2016", structured according to requirements of EU Directive 2014/95/EU "Disclosure of non-financial and diversity information", is based on Global Reporting Initiative (GRI) G4 guidelines, in compliance with "in accordance - core" option
• PricewaterhouseCoopers AG prepared a limited assurance engagement on materiality analysis / selected data

1) https://www.aareal-bank.com/en/responsibility/reporting-on-our-progress/sustainability-reporting/

Definitions and contacts

Definitions

• Structured Property Financing Portfolio = Paid-out financings on balance sheet
• New Business = Newly acquired business incl. renewals + Contract is signed by customer + Fixed loan value and margin
• Common Equity Tier 1 ratio = CET1 Risk weighted assets
• Pre tax RoE = Operating profit ./. income/loss attributable to non-controlling interests ./. AT1 cupon Average IFRS equity excl. non-controlling interests, other reserves, AT1 and dividends
• CIR = Admin expenses 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 = ≥ 100% Available stable funding Required stable funding
• Liquidity coverage ratio = ≥ 100% Total stock of high quality liquid assets Net cash outflows under stress
• Bail-in capital ratio = Equity + subordinated capital (Long + short term funding) – (Equity + subordinated capital)
• Earnings per share = operating profit ./. income taxes ./. income/loss attributable to non controlling interests ./. net AT1 cupon Number of ordinary shares
• Yield on Debt = Net operating income (NOI) x 100 Current commitment incl. prior / pari-passu loans

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

Disclaimer

© 2017 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.
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