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Aareal Bank AG

Investor Presentation • Feb 20, 2013

11_ip_2013-02-20_d783b5c9-fabc-4749-a7af-e9cc0a1e8d94.pdf

Investor Presentation

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February 20, 2013Dr. Wolf Schumacher, CEO – Hermann J. Merkens, CFO

Agenda

  • Environment 2012
  • Preliminary 2012 results at a glance
  • Segment performance
  • B/S structure, capital & funding position
  • Preliminary group figures 2012
  • Asset quality
  • Outlook 2013
  • Midterm outlook
  • Appendix
  • Definitions and Contacts

Environment 2012 Our assumptions became reality

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Preliminary 2012 results at a glance

2012 at a glance Strong results in volatile markets

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1) Advanced internal ratings-based approach (advanced IRBA)

2012 results at a glance Strong Q4 operating profit despite environment

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Segment performance

Structured property financing New business with attractive risk-return profile

Structured property financing New business target overachieved

Consulting / ServicesSolid in IT & volumes – weak in deposit margins

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  • Aareon improved over the last years, sales revenue increased from € 160 mnin 2011 to € 165 mn in 2012
  • Aareon EBIT margin stable at ~16%
  • Housing industry deposits generate a stable funding base, crisis-proof
  • Low interest environment burdens segment results

Consulting / Services

Aareon within plan – deposit taking business burdened

Consulting / Services

Solid in IT & volumes – weak in deposit margins

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  • Performance of Aareonwithin guidance
  • Lower than expected interest rate environment burdens segment results
  • Deposit volume of the housing industry has increased to
  • € 5.6 bn on average in '12 (Ø € 4.7 bn in 2011)
  • € 6.2 bn on average Q4 '12 (Ø € 4.9 bn in Q4 2011)
  • The strategic importance of the housing industry deposits as an additional source of funding exceeds the importance of the margins shown in the segment

B/S structure, capital & funding position

Strong capital ratios & stable capital structure

  • Strong capital ratios enable us to take new business on board
  • Strong capital ratios in line with business model, company size and capital market expectations
  • Full repayment of remaining SoFFinsilent participation possible without further capital increase
  • § 340f (HGB1))-reserve recognised as Tier II improves total capital position and helps to absorb potential intra-year adverse market development of GIIPS countries.The majority of the § 340f-reserve retained in 2012 reflects the reversal of mark-to-market losses accounted for in the revaluation reserve according to IFRS.
    • As a result HGB and IFRS total capital ratios are aligned and will show parallel development in the future

Core Tier 1 under Basel III fully loaded1) Target 01.01.2016: Tier1 11,5%

Simulation: estimated Basel III effects per 31.12.20122)

3) Estimated impact of Basel III implementation due to capital deductions and counterparty credit risk

Note: All 2012 figures preliminary and unaudited

Asset- / Liability structure according to IFRSAs at 31.12.2012: € 45.7 bn (31.12.2011: € 41.8 bn)

Note: All 2012 figures preliminary and unaudited

Asset- / Liability structure according to IFRSAs at 31.12.2012: € 45.7 bn (30.09.2012: € 45.0 bn)

Note: All 2012 figures preliminary and unaudited

Net stable funding- / Liquidity coverage ratio Fulfilling Basel III requirements

  • Aareal Bank already fulfils future requirements
  • NSFR > 1.0
  • LCR >> 1.0
  • Basel III and CRD IV require specific liquidity ratios starting end 2018(still not agreed on CRD IV)
  • NSFR (net stable funding ratio) reflects long term funding situation
  • LCR (liquidity coverage ratio) reflects short term liquidity
  • High NSFR ratio due to successful funding activities in H1
  • NSFR 12/2012 including repayment of € 1 bn LTRO

Refinancing situation 2012Successful funding activities

Total funding of € 4.5 bn in 2012

  • Pfandbriefe: € 2.3 bnthereof two € 500 mn benchmark mortgage Pfandbriefe
  • Senior unsecured: € 2.1 bnthereof one € 500 mn Senior unsecured benchmark
  • Subordinated debt (LT2): € 0.1 bn
  • Fitch confirmed the AAA-rating of our covered bonds even after significant changes of the rating methodology

Refinancing situationDiversified 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 31.12.2012, this share has fallen to 25% (or even below 10% without Pfandbriefe)

As at 31.12.2012

Preliminary group figures 2012

Net interest income

Reflecting low interest rate environment as well as cautious investment strategy

NII Consulting / ServicesNII Structured Property Financing

  • 2012 development reflects cautious investment strategy and low interest rate environment – offsetting higher margins from CRE business
  • Payout of 2012 new business partly in 2013
  • Aareal Bank already fulfils future NSFR / LCR requirements
  • Due to market volatility a considerable part of liquidity is still parked with central banks (Ø Q4-position: € 4.1 bn) instead of being invested into new business and treasury assets
  • NII Consulting / Services burdened by lower than expected interest rate environment
  • One-offs:
  • Q1 2012: positive € 2 mn impact
  • Q4 2011: boosted by € 9 mn

Note: All 2012 figures preliminary and unaudited

Loan loss provisionsFY 2012-LLP below guided range

  • Full year result of € 106 mn below guided range of € 110 mn to € 140 mnproves high portfolio quality
  • € 39 mn LLP in Q4 2012 within normal quarterly variation during the year, Q4 2012 incl. € 10 mn general loan loss provisions
  • Close monitoring of our loan portfolio and successful restructuring efforts resulted in only 44 bp risk costs on average loan book in 2012

FY guidance

Loan loss provisionsManageable loan loss provisions during the crisis

Average risk costs

  • Very moderate LLP-peak at 65 bps at the height of the crisis in the CRE business in 2009
  • Despite ongoing challenging environment LLP is down to 44 bps in 2012

Note: All 2012 figures preliminary and unaudited

Loan loss provisions

Net commission incomeRelief from costs of SoFFin guarantees

  • Last guarantee fee payments of € 3 mn made in Q1 2012
  • No more burdens from SoFFinguaranteed bonds from Q2 2012 onwards

Total net commission incomeBurden from fees paid for Soffin guarantees

Note: All 2012 figures preliminary and unaudited

Net result: trading/non trading/hedge accountingResult reflects volatile markets

  • High market volatility reflected in net result from trading, non-trading and hedge accounting
  • Q1 2012: positive market development results in tightening basis spreads of the derivatives used to hedge interest and currency risks

Admin expensesBenefits from efficiency measures throughout 2012

  • Q4 2011 includes € 12 mn one-off costs for efficiency measures
  • Positive effects from efficiency measures throughout the year
  • 2012 includes ~ € 13 mn costs for external projects:
  • ~ € 5 mn due diligence costs e.g. portfolios analyses, sale of own properties, etc.
  • ~ € 5 mn for regulatory projects
  • ~ € 3 mn others

Asset quality

Total property finance portfolio High diversification and sound asset quality

Total property finance portfolio Continuing conservative approach

L
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1) Incl. property finance portfolio still on DEPFA's balance sheet

2) Portfolio allowances mainly reflect Basel II expected losses which

are calculated on the bases of specific loans in most cases

Treasury portfolio€ 12.1 bn of high quality and highly liquid assets

As at 31.12.2012 – all figures are nominal amounts1) Composite Rating

Treasury portfolio€ 9.6 bn Public Sector Debtors

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1) Incl. exposure of € 50 mn which is additionally guaranteed by the Sovereign

2) Incl. securities of the AfS- and the LaR-category after tax

313) Incl. securities of the LaR-category after tax

Treasury portfolio€ 2.2 bn Financials

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1) Incl. securities of the AfS- and the LaR-category after tax

2) Incl. securities of the HtM- and the LaR-category after tax

Note: All 2012 figures preliminary and unaudited

Outlook 2013

Outlook 2013

2
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1) As in 2012, the bank cannot rule out additional allowances for credit losses

Net interest income-snapshotCRE margin overcompensate EURIBOR/ECB rate decline

  • Relatively low exposure to interest rate changes
  • Hence predominant part of our assets are EURIBOR based
  • Deposit margins are at their bottom
  • Spreads between deposit rate and EURIBOR / ECB rate turned negative
  • Additionally lower returns on investments of residual non interest bearing liabilities

Higher CRE margins overcompensate these effects so that net interest income 2013 will be "slightly above 2012 level"

Note: All 2012 figures preliminary and unaudited

Loan loss provisions-snapshot (1)Expected market value changes1) to be reflected in portfolio allowances in 20132)

  • 1) Here shown average market value changes across all property types and regions
  • 2) The individual market value of a single property may vary, change end 2012 to end 2013

Note: All 2012 figures preliminary and unaudited

Loan loss provisions-snapshot (2)Staying with previous cautious guidance, due to portfoliogrowth and recessive economies: € 110 mn - € 150 mn

Average risk costs guidance 2013

  • Slightly wider range of € 110 mn –€ 150 mn due to portfolio growth and recessive economies
  • Lower end translates to approx. 44bps, upper end to approx. 60bps (< peak in 2009)
  • From today's perspective expected at the lower end of this range

Note: All 2012 figures preliminary and unaudited

LLP guidance 2013

Admin expenses-snapshot€ 360 mn - € 370 mn

€
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Midterm Outlook

Current environment and a "New Normal" for CRE banks

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Perspective until 2015 / 2016

1. Funding strategy: 1.

Improve deposit ratio and covered bond (CB) ratio further avoiding capital market dependency

2. CRE new business: 2.

Focus on markets with LTV ratios of 60-70%, resulting in lower RWA consumption and higher CB-funding share

3. Origination capacity: 3.

Strengthen client relationships by leveraging new business through stronger cooperation via club deals and syndication

4. Aareon: 4.

Enhance profit contribution

5. Cost base:5.

Continue cost discipline

6. Capital structure: 6.

Optimise capital structure once technical regulatory guidelines are in place and markets are pricing instruments adequately

7. Dividends: 7.

Plan to start active dividend policy in 2014 (for FY 2013, depending on market conditions)

8. RoE:8.

Pre-tax RoE target of approx.12% in 2015 / 2016

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Summary and Prerequisits

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(
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t
n
e		 1
0
1
1
%
–

Prerequisites

  • No Eurozone break up
  • Normalised asset valuations
  • Healthy world GDP growth beside some European peripherals
  • Regulation will be introduced according to today's timeline and framework
  • No additional burdens
  • Interest rate environment starts to reflect the recovery with moderate increase

Appendix

Aareal Bank GroupKey figures 2012

0
1.
0
1.-
3
1.
1
2.
2
0
1
2		 0
1.
0
1.-
3
1.
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1
1		 C
ha
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mn		 Eu
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mn
Pr
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a
cc
ou
n
Ne
in
inc
t
te
t
res
om
e		 4
8
6		 4
5
7		 1
1
%
-
A
l
low
for
d
i
los
t
an
ce
c
re
se
s		 1
0
6		 1
1
2		 5
%
-
Ne
in
in
f
l
lo
fo
d
i
lo
t
te
t
te
t
re
s
co
m
e
a
r a
w
an
ce
r c
re
ss
es		 3
8
0		 4
3
5		 -1
3
%
Ne
iss
ion
inc
t c
om
m
om
e		 1
6
9		 1
4
4		 1
7
%
Ne
l
he
dg
ing
t r
t o
t
es
u
n
e a
cc
ou
n		 -4 6 -
/ e
Ne
d
ing
inc
t
tra
om
e
xp
en
se
s		 -1
0		 1
4		 -
Re
l
fro
d
ing
ts
tra
ts
su
m
no
n-
a
ss
e		 1 2
9
-		 -
Re
l
fro
ies
d
for
i
ts
te
t e
ty
su
m
co
mp
an
a
cc
ou
n
a
q
u		 0 1 -
Re
l
fro
inv
ies
ts
tm
t p
t
su
m
es
en
rop
er		 5 1
0		 5
0
%
-
A
dm
in
is
ive
tra
t
ex
p
en
se
s		 3
8
5		 3
8
2		 6
%
-
Ne
he
ing
inc
/ e
t o
t
t
r o
p
era
om
e
xp
en
se
s		 -7 1
4
-		 -
Im
irm
f g
dw
i
l
l
t o
p
a
en
oo		 - 0 -
f
Op
in
Pr
i
t
t
er
a
g
o		 1
7
6		 1
8
5		 -5
%
Inc
tax
om
e
es		 5
2		 5
2		 0
%
/
Ne
in
lo
t
co
m
e
ss		 1
2
4		 1
3
3		 -7
%
A
l
lo
io
f r
l
t
ts
ca
n
o
es
u
Ne
inc
/
los
i
bu
b
le
l
l
ing
in
t
t
tr
ta
to
tro
te
ts
om
e
s
a
no
n-c
on
res		 1
9		 1
9		 0
%
Ne
inc
/
los
i
bu
b
le
ha
ho
l
de
f
Aa
l
Ba
k
A
G
t
t
tr
ta
to
om
e
s
a
s
re
rs
o
rea
n		 1
0
5		 1
1
4		 8
%
-
Ap
ia
io
f p
f
i
t
ts
p
ro
p
r
n
o
ro
S
i
len
h
ip
i
bu
ion
by
So
F
F
in
t p
tn
tr
t
ar
ers
co
n		 2
0		 2
1		 5
%
-
Co
/ a
l
i
da
d
in
d
f
i
la
d
lo
te
ta
t
te
ns
o
re
e
p
ro
cc
um
ss
u		 8
5		 9
3		 -9
%

Aareal Bank Group: Segment Reporting Key figures 2012 by operating units

S
tru
c
Pr
op
F
in
an		 d
tu
re
ty
er
in
c
g		 Co
ns
u
Se
rv		 l
in
/
t
g
ice
s		 Co
l
i
ns
o
Re
co
nc		 da
io
/
t
n
i
l
ia
io
t
n		 Aa
re
a
Gr		 l
Ba
k
n
ou
p
0
1.
0
1.-		 0
1.
0
1.-		 0
1.
0
1.-		 0
1.
0
1.-		 0
1.
0
1.-		 0
1.
0
1.-		 0
1.
0
1.-		 0
1.
0
1.-
3
1.
1
2.
2
1
2		 3
1.
1
2.
2
1
1		 3
1.
1
2.
2
1
2		 3
1.
1
2.
2
1
1		 3
1.
1
2.
2
1
2		 3
1.
1
2.
2
1
1		 3
1.
1
2.
2
1
2		 3
1.
1
2.
2
1
1
Eu
ro
mn		 0 0 0 0 0 0 0 0
Ne
in
inc
t
te
t
res
om
e		 4
6
3		 5
0
8		 0 0 2
3		 3
9		 4
8
6		 5
4
7
A
l
low
for
d
i
los
t
an
ce
c
re
se
s		 1
0
6		 1
1
2		 1
0
6		 1
1
2
Ne
in
in
f
l
low
fo
d
i
lo
t
te
t
te
t
re
s
co
me
a
r a
an
ce
r c
re
ss
es		 3
9
6		 0 0 2
3		 3
9		 3
8
0		 4
3
5
Ne
iss
ion
inc
t c
om
m
om
e		 2
1		 2 1
3
7		 1
8
3		 2
5
-		 4
1
-		 1
6
9		 1
4
4
Ne
l
he
dg
ing
t r
t o
t
es
n
e a
cc
ou
n
u		 -4 6 -4 6
Ne
d
ing
inc
/ e
t
tra
om
e
xp
en
se
s		 -1
0		 1
4		 -1
0		 1
4
Re
l
fro
d
ing
ts
tra
ts
su
m
no
n-
a
ss
e		 1 2
9
-		 1 2
9
-
fro
for
Re
l
ies
d
i
ts
te
t e
ty
su
m
co
mp
an
a
cc
ou
n
a
q
u		 0 0 1 0 1
Re
l
fro
inv
ies
ts
tm
t p
t
su
m
es
en
rop
er		 5 1
0		 5 1
0
A
dm
in
is
ive
tra
t
ex
p
en
se
s		 1
9
1		 2
1
7		 1
6
9		 1
6
7		 2
-		 2
-		 3
5
8		 3
8
2
Ne
he
ing
inc
/ e
t o
t
t
r o
p
era
om
e
xp
en
se
s		 9
-		 1
7
-		 2 3 0 0 7
-		 1
4
-
Im
irm
f g
dw
i
l
l
t o
p
a
en
oo		 0 0
Op
in
f
i
t
t
er
a
g
p
ro		 1
7
0		 1
6
5		 6 2
0		 0 0 1
7
6		 1
8
5
Inc
tax
om
e
es		 5
1		 4
6		 1 6 5
2		 5
2
in
/
Ne
t
lo
co
me
ss		 1
1
9		 1
1
9		 5 1
4		 0 0 1
2
4		 1
3
3
A
l
lo
io
f r
l
t
ts
ca
n
o
es
u
/
Ne
inc
los
i
bu
b
le
l
l
ing
in
t
t
tr
ta
to
tro
te
ts
om
e
s a
no
n-c
on
res		 1
7		 1
7		 2 2 1
9		 1
9
Ne
inc
/
los
i
bu
b
le
ha
ho
l
de
f
Aa
l
Ba
k
A
G
t
t
tr
ta
to
om
e
s a
s
re
rs
o
rea
n		 1
0
2		 1
0
2		 3 1
2		 0 0 1
0
5		 1
1
4

Aareal Bank GroupKey figures Q4 2012

Qu
4
te
ar
r		 Qu
4
te
ar
r		 C
ha
ng
e
2
0
1
2		 2
0
1
1
Eu
ro
mn
6
1
4
6
9
3
4
7
1
1
2
0
4
5
3
4
7
0
3
1
1
-
0
0
0
3
8
1
0
2
-6
4
-
0
-
6
4
7
9
1
3
7
3
4
4
5
3
2
9
5
5
8
2
4
Eu
ro
mn
Pr
f
i
d
lo
t a
t
o
n
ss
a
cc
ou
n
Ne
in
inc
t
te
t
res
om
e		 1
1		 2
1
%
-
A
l
low
for
d
i
los
t
an
ce
c
re
se
s		 3 1
%
5
Ne
in
in
f
l
lo
fo
d
i
lo
t
te
t
te
t
re
s
co
m
e
a
r a
w
an
ce
r c
re
ss
es		 7 -3
1
%
Ne
iss
ion
inc
t c
om
m
om
e		 5 1
1
%
Ne
l
he
dg
ing
t r
t o
t
es
u
n
e a
cc
ou
n		 2
5
%
-
/ e
Ne
d
ing
inc
t
tra
om
e
xp
en
se
s		 -
fro
Re
l
d
ing
ts
tra
ts
su
m
no
n-
a
ss
e		 -
Re
l
fro
ies
d
for
i
ts
te
t e
ty
su
m
co
mp
an
a
cc
ou
n
a
q
u		 -
Re
l
fro
inv
ies
ts
tm
t p
t
su
m
es
en
rop
er		 -
A
dm
in
is
ive
tra
t
ex
p
en
se
s		 8 1
4
%
-
/ e
Ne
he
ing
inc
t o
t
t
r o
p
era
om
e
xp
en
se
s		 -
f g
Im
irm
dw
i
l
l
t o
p
a
en
oo		 -
Op
in
Pr
f
i
t
t
er
a
g
o		 4 -2
%
Inc
tax
om
e
es		 1 4
6
%
Ne
in
/
lo
t
co
m
e
ss		 2 -2
1
%
A
l
lo
io
f r
l
t
ts
ca
n
o
es
u
Ne
inc
/
los
i
bu
b
le
l
l
ing
in
t
t
tr
ta
to
tro
te
ts
om
e
s
a
no
n-c
on
res		 2
0
%
-
Ne
inc
/
los
i
bu
b
le
ha
ho
l
de
f
Aa
l
Ba
k
A
G
t
t
tr
ta
to
om
e
s
a
s
re
rs
o
rea
n		 2 2
1
%
-
ia
io
f p
f
i
Ap
t
ts
p
ro
p
r
n
o
ro
S
So
i
len
h
ip
i
bu
ion
by
F
F
in
t p
tn
tr
t
ar
ers
co
n		 0
%
Co
l
i
da
d
in
d
f
i
/ a
la
d
lo
te
ta
t
te
ns
o
re
e
p
ro
cc
um
u
ss		 1 -2
5
%

Aareal Bank Group: Segment Reporting Key figures Q4 2012 by operating units

S
tru
c
Pr
F
in		 d
tu
re
Co
l
in
/
Co
l
i
da
io
/
t
t
ns
u
g
ns
o
n
ty
op
er
Se
ice
Re
i
l
ia
io
t
rv
s
co
nc
n
in
an
c
g		 Aa
l
Ba
k
re
a
n
Gr
ou
p
0
1.
1
0.-
3
1.
1
2.
2
0
1
2		 0
1.
1
0.-
3
1.
1
2.
2
0
1
1		 0
1.
1
0.-
3
1.
1
2.
2
0
1
2		 0
1.
1
0.-
3
1.
1
2.
2
0
1
1		 0
1.
1
0.-
3
1.
1
2.
2
0
1
2		 0
1.
1
0.-
3
1.
1
2.
2
0
1
1		 0
1.
1
0.-
3
1.
1
2.
2
0
1
2		 0
1.
1
0.-
3
1.
1
2.
2
0
1
1
Eu
ro
mn
Ne
in
inc
t
te
t
res
om
e		 1
1
3		 1
3
6		 0 0 3 1
0		 1
1
6		 1
4
6
for
A
l
low
d
i
los
t
an
ce
c
re
se
s		 3
9		 3
4		 3
9		 3
4
in
in
f
fo
i
Ne
t
te
t
te
l
low
d
t
lo
re
s
co
me
a
r a
an
ce
r c
re
ss
es		 7
4		 1
0
2		 0 0 3 1
0		 7
7		 1
1
2
Ne
iss
ion
inc
t c
om
m
om
e		 5 5 4
9		 5
1		 4
-		 1
1
-		 5
0		 4
5
Ne
l
he
dg
ing
t r
t o
t
es
u
n
e a
cc
ou
n		 3 4 3 4
/ e
Ne
d
ing
inc
t
tra
om
e
xp
en
se
s		 7 0 7 0
Re
l
fro
d
ing
ts
tra
ts
su
m
no
n-
a
ss
e		 3 1
1
-		 0 3 1
1
-
Re
l
fro
ies
d
for
i
ts
te
t e
ty
su
m
co
mp
an
a
cc
ou
n
a
q
u		 0 0 0 0
fro
Re
l
inv
ies
ts
tm
t p
t
su
m
es
en
rop
er		 0 3 0 3
A
dm
in
is
ive
tra
t
ex
p
en
se
s		 4
4		 8
5		 4
5		 4
5		 1
-		 1
-		 8
8		 1
0
2
/ e
Ne
he
ing
inc
t o
t
t
r o
p
era
om
e
xp
en
se
s		 4
-		 6
-		 2
-		 2 0 0 6
-		 4
-
Im
irm
f g
dw
i
l
l
t o
p
a
en
oo		 0 0
Op
in
f
i
t
t
er
a
g
p
ro		 4
4		 3
9		 2 8 0 0 4
6		 4
7
Inc
tax
om
e
es		 1
9		 1
0		 0 3 1
9		 1
3
Ne
in
/
lo
t
co
me
ss		 2
5		 2
9		 2 5 0 0 2
7		 3
4
A
l
lo
io
f r
l
t
ts
ca
n
o
es
u
Ne
inc
/
los
i
bu
b
le
l
l
ing
in
t
t
tr
ta
to
tro
te
ts
om
e
s a
no
n-c
on
res		 4 5 0 0 4 5
/
G
Ne
inc
los
i
bu
b
le
ha
ho
l
de
f
Aa
l
Ba
k
A
t
t
tr
ta
to
om
e
s a
s
re
rs
o
rea
n		 2
1		 2
4		 2 5 0 0 2
3		 2
9

Aareal Bank Group: Segment Reporting Key figures - quarter by quarter

Str
ed
Pr
tur
ert
uc
op
y
Fin
cin
an
g		 Co
ltin
/ S
ice
nsu
g
erv
s		 lid
ati
nso
ilia
co
nc		 /
on
tio
n		 Aa
l B
k G
rea
an
rou
p
Q4 Q3 Q2 Q1 Q4 Q4 Q3 Q2 Q1 Q4 Q4 Q3 Q2 Q1 Q4 Q4 Q3 Q2 Q1 Q4
20
12		 20
12		 20
12		 20
12		 20
11		 20
12		 20
12		 20
12		 20
12		 20
11		 20
12		 20
12		 20
12		 20
12		 20
11		 20
12		 20
12		 20
12		 20
12		 20
11
Eu
ro
mn
Ne
t in
in
ter
est
com
e		 113 114 115 121 136 0 0 0 0 0 3 5 7 8 10 116 119 122 129 146
All
e fo
red
it lo
ow
anc
r c
sse
s		 39 30 25 12 34 39 30 25 12 34
Ne
t in
in
af
ter
est
ter
co
me		 74 84 90 109 102 0 0 0 0 0 3 5 7 8 10 77 89 97 117
all
fo
red
it l
ow
an
ce
r c
oss
es		 112
Ne
mis
sio
n in
t c
om
com
e		 5 6 6 4 5 49 39 41 44 51 4
-		 6
-		 7
-		 8
-		 11
-		 50 39 40 40 45
Ne
lt o
n h
edg
ing
t re
unt
su
e a
cco		 3 2
-		 5 10
-		 4 3 2
-		 5 10
-		 4
Ne
adi
inc
e /
t tr
ng
om
ex
pen
ses		 7 6 7
-		 16
-		 0 7 6 7
-		 16
-		 0
Re
lts
fro
din
-tra
ts
su
m
non
g a
sse		 3 1 -3 0 -11 0 3 1 -3 0 -11
Re
lts
fro
ani
su
m
co
mp
es		 0 0
ted
fo
r at
uity
acc
oun
eq		 0 0
Re
lts
fro
inv
est
nt
su
m
me		 0 0 2 3 0 0 2 3
rtie
pro
pe
s		 3 3
Ad
min
istr
ativ
e e
xpe
nse
s		 44 51 47 49 58 45 40 42 42 45 1
-		 1
-		 0 0 1
-		 88 90 89 91 102
e /
Ne
t o
the
atin
inc
r o
per
g
om
exp
ens
es		 -4 2
-		 2
-		 1
-		 6
-		 2
-		 1 2 1 2 0 0 0 0 0 6
-		 1
-		 0 0 4
-
Imp
airm
of
dw
ill
ent
goo		 0 0 0 0 0 0
Op
tin
rof
it
era
g p		 44 42 44 40 39 2 0 1 3 8 0 0 0 0 0 46 42 45 43 47
Inc
e t
om
axe
s		 19 10 11 11 10 0 0 0 1 3 19 10 11 12 13
t in
/ l
Ne
co
me
oss		 25 32 33 29 29 2 0 1 2 5 0 0 0 0 0 27 32 34 31 34
All
ati
of
lts
oc
on
re
su
e /
Ne
t in
los
ttri
but
abl
e t
com
s a
o		 4 5 4 4 5 0 0 1 1 0 4 5 5 5 5
olli
inte
ntr
ts
non
-co
ng
res
Ne
t in
e /
los
ttri
but
abl
e t
com
s a
o		 21 27 29 25 24 2 0 0 1 5 0 0 0 0 0 23 27 29 26 29
sha
reh
old
of
Aa
l B
ank
AG
ers
rea

Development property finance portfolioDiversification continuously strengthened (in € mn)

Property finance under management

Note: All 2012 figures preliminary and unaudited

Western Europe (ex Ger) credit portfolioTotal volume outstanding as at 31.12.2012: € 6.8 bn

Southern Europe credit portfolioTotal volume outstanding as at 31.12.2012: € 4.3 bn

German credit portfolio

Total volume outstanding as at 31.12.2012: € 3.5 bn1)

Eastern Europe credit portfolio Total volume outstanding as at 31.12.2012: € 2.7 bn

Northern Europe credit portfolio Total volume outstanding as at 31.12.2012: € 2.5 bn

North America credit portfolio Total volume outstanding as at 31.12.2012: € 3.1 bn

Asia credit portfolioTotal volume outstanding as at 31.12.2012: € 0.6 bn

Total Structured Property Financing Portfolio€ 24.2 bn of high quality real estate assets

Trading, non trading and hedge accountingResult reflects volatile markets

  • Respective high volatility in trading and non-trading assets throughout the year
  • Volatility 2012 on a manageable level

Revaluation surplusChange mainly driven by asset spreads

Note: All 2012 figures preliminary and unaudited

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

1) Excl. of market risk

63

2) Exposure to Retail amounts to € 23 mn

3) Exposure to Sovereigns amounts to € 18 mn

4) Exposure to investment shares amounts to € 14 mn

Definitions and contacts

Definitions

Structured Property Financing Portfolio

  • Paid-out financings on balance sheet
  • Incl. remaining property loans on DEPFA books

New Business

  • Newly acquired business incl. renewals
  • Contract is signed by customer
  • Fixed loan value and margin
  • Core Tier I Ratio = Tier 1 capital ./. hybrids ./. SoFFin silent participation
  • Risk weighted assets
  • Pre tax RoE = Operating profit ./. Net income/loss attributable to non-controlling interests

Allocated (average) equity

Allocated Equity

Average of:

  • Equity (excluding minorities and revaluation surplus but including silent participation by SoFFin) start of period less dividends and
  • Equity (excluding minorities and revaluation surplus but including silent participation by SoFFin) end of period less expected 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

\n- Net stable funding ratio =
$$
\frac{\text{Available stable funding}}{\text{Required stable funding}} \geq 100\%
$$
\n- Total stock of high quality liquid asset
\n

Liquidity coverage ratio = ≥ 100%Total stock of high quality liquid assetsNet cash outflows under stress

Contacts

Sebastian Götzken

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

Disclaimer

© 2013 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. 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.
  • 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.
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