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Aareal Bank AG

Investor Presentation • Feb 22, 2015

11_ip_2015-02-22_d719a2c5-d31c-414e-a4ba-10f37d0fbc73.pdf

Investor Presentation

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February, 22nd 2015Dr. Wolf Schumacher, CEO – Hermann J. Merkens, CFO

Agenda

  • Strategic rationale
  • Transaction structure
  • Financials
  • Next steps
  • Appendix: Westdeutsche ImmobilienBank AG (WestImmo)at a glance
  • Contacts

Acquisition of WestImmoStrategic rationale

Strategic rationale

Attractive opportunity to pursue inorganic growth

Strategic rationale

Value enhancing transaction in line with business strategy

Transaction represents attractive opportunity for Aareal Bank to pursue inorganic growth as it is EpS accretive and creating shareholder value from day one while mid-term targets unchanged

Acquisition using existing excess capital demonstrates strength and strategic capacity while generating further excess capital and therefore dividend distribution potential at the same time

Immediate (inorganic) growth of interest earning asset base in times of increasing competition

Perfect overlap to Aareal's core business further strengthens position as a specialised commercial real estate lender

International well experienced staff and platform maintained despite currently not being allowed to write new business (acc. to EU-regulations) and therefore in run-down mode

High diversification of CRE portfolio and conservative risk profile remains unchanged

Optimisation of capital structure in line with communicated strategy

Strategic rationale

Business ability even without new business origination

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Acquisition of WestImmoTransaction structure

Transaction structure Attractive terms and conditions

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1)Subject to further adjustments

Acquisition of WestImmoFinancials

Financials

Impact on capital ratios, EpS, and RoE1)

  • All cash transaction
  • -Allocation of excess capital
  • RWA increase partly compensated by negative goodwill
  • Expected pro forma CET1 as at 31.12.2015: 11.8%
  • Bail in capital ratio expected above target (~8%)

EpS

  • Transaction is EpS accretive from day 1
  • Expected cumulative EpS for the next three years > 3 €
  • Substantial part of the capital currently absorbed by acquired RWA already to be released until 2017
  • No capital relief from switch of rating model (WestImmo already on AIRBA)

RoE

  • Transaction in line with mid term RoE target
  • Pre-tax RoE target confirmed at ~12%

Reconfirming active dividend policy with payout ratios of ~50% (excl. negative goodwill)

1)Pro forma extrapolated, assumed closing 31.03.2015

Dividend policy

FinancialsPurchase price illustration1)

1)Pro forma extrapolated, assumed closing 31.03.2015

Acquisition of WestImmoNext steps

Next steps Closing envisaged for H1 2015

WestImmo at a glance

Asset- / Liability structure according to IFRSPro forma extrapolated as at 31.03.2015: € 8.1 bn

CRE lending portfolio1)

Total volume of € 4.3 bn with average LtV < 60%

Private client loans and Public sector loans1)

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Treasury portfolio1)

€ 1.2 bn of high quality and highly liquid assets

Contacts

Jürgen Junginger Managing Director Investor Relations Phone: +49 611 348 [email protected]

Carsten Schäfer

Director Investor RelationsPhone: +49 611 348 [email protected]

Sebastian Götzken

Senior Manager Investor RelationsPhone: +49 611 348 [email protected]

Karin Desczka

Investor RelationsPhone: +49 611 348 [email protected]

Disclaimer

© 2015 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 notbe 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 anyinformation 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.

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