Grenke AG — Interim / Quarterly Report 2011

Aug 1, 2011

GRENKELEASING AG Group

Quarterly Financial Report as per June 30, 2011

KEY FIGURES	2
LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS	4
THE GRENKELEASING AG SHARE	5
INTERIM MANAGEMENT REPORT	6
The Group's Growth Strategy	6
Economic Environment	8
Report on the Results of Operations	8
Report on the Financial Position and Net Assets	11
Report on Forecasts and the Outlook for the Group	12
INTERIM FINANCIAL STATEMENTS	15
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS	24
CALENDAR OF EVENTS 2011 AND CONTACT	34

KEY FIGURES GRENKE GROUP

	Jan. 1 to	Change	Jan. 1 to
	June 30, 2011	(%)	June 30, 2010	Units
New business
GRENKE Group incl. franchise partners*	408,955	25.6	325,555	EURk
– of which Germany	157,191	18.9	132,202	EURk
– of which International	215,851	25.9	171,456	EURk
– of which Franchise international	35,913	64.0	21,897	EURk
Leasing business	375,114	21.3	309,120	EURk
– of which Germany	131,045	13.2	115,767	EURk
– of which International	215,851	25.9	171,456	EURk
– of which Franchise international	28,218	28.9	21,897	EURk
Factoring	33,841	105.9	16,435	EURk
– of which Germany	26,146	59.1	16,435	EURk
– of which Franchise international (CH)	7,695	n. a.	0	EURk
Contribution margin 2 (CM2) of New business
GRENKE Group incl. franchise partners*	56,839	13.2	50,196	EURk
– of which Germany	17,650	9.8	16,077	EURk
– of which International	33,675	11.9	30,092	EURk
– of which Franchise international	5,514	36.9	4,027	EURk
Leasing business	55,849	12.0	49,884	EURk
– of which Germany	16,822	6.7	15,765	EURk
– of which International	33,675	11.9	30,092	EURk
– of which Franchise international	5,352	32.9	4,027	EURk
Further Information Leasing business
Number of new contracts	46,816	12.8	41,491	units
Share of IT products in the lease portfolio	89	1.1	88	percent
Share of corporate customers in the lease portfolio	100	0.0	100	percent
Mean acquisition value	8.0	6.7	7.5	EURk
Mean term of contract	46	0.0	46	months
Volume of leased assets	2,061	14.2	1,805	EURm
Number of current contracts	267,332	12.1	238,549	units
GRENKE BANK
Deposits per June 30	145,652	8.2	134,588	EURk
Business start-up financing volume per June 30	131	n. a.	0	EURk

* incl. Factoring

KEY FIGURES GRENKE CONSOLIDATED GROUP

	Jan. 1 to	Change	Jan. 1 to
	June 30, 2011	(%)	June 30, 2010	Units
Key figures income statement
Net interest income	44,645	17.0	38,146	EURk
Settlement of claims and risk provisioning	16,045	–6.8	17,211	EURk
Profit from insurance business	11,879	15.4	10,297	EURk
Profit from new business	15,320	19.4	12,832	EURk
Profit from disposals (income exceeding the calculated residual value)	1,653	86.8	885	EURk
Other operating income	2,118	41.2	1,500	EURk
Costs of new contracts	9,935	10.2	9,012	EURk
Costs of current contracts	3,125	11.3	2,808	EURk
Project costs and basic distribution costs	9,140	1.5	9,005	EURk
Management costs	8,989	32.0	6,808	EURk
Other costs	4,212	120.6	1,909	EURk
Profit from operating business	24,169	52.7	15,831	EURk
Other interest result	–171	–32.7	–254	EURk
Income/expenses from market valuation of financial instruments	74	–86.3	542	EURk
EBT (Earnings before taxes)	24,072	49.3	16,119	EURk
Net profit for the period	18,050	47.6	12,229	EURk
Earnings per share (according to IFRS)	1.32	48.3	0.89	EUR
Further information
Dividend	0.70	16.7	0.60	EUR
Embedded value of the leasing contract portfolio (incl. equity before taxes)	431	14.0	378	EURm
Embedded value of the leasing contract portfolio (incl. equity after taxes)	393	12.9	348	EURm
Cost/income ratio	59.6	–10.1	66.3	percent
Return on equity (ROE) after taxes	12.1	33.0	9.1	percent
Average number of employees	567	7.8	526	persons

LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS

Dear Shareholders, Ladies and Gentlemen,

The GRENKE Group is currently experiencing a particularly successful phase of its development. We maintained the pace of our growth throughout the first half of 2011, increasing new business by 25.6 percent in the Group including franchise partners. With a 61.6 percent increase after 59.4 percent in the previous year, international activities made an increasing contribution to this growth. However, we have also been significantly expanding new business in the German market again for several quarters. Growth of 18.9 percent was generated in the six months under review.We are comfortably on target to achieve the forecast of an increase in new business of more than 20 percent in fiscal year 2011.

We are implementing this growth without compromising our conservative risk orientation or our margins. In the first half of 2011,the contributionmargin2 forleasing businesswas at 14.9 percent after 16.1 percentin theprevious year andwasthus at the normal profitability level before the crisis. In the second quarter of 2011, we increased it to as much as 15.4 percent after 14.3 percent in the first quarter of 2011.

The second quarter of 2011 shows what this means in concrete terms in the income figures: consolidated operating income increased by 24.8 percent, the operating result by as much as 63.6 percent and net profit for the period was up 49.8 percent. Net profit for the period was also increased by almost half to EUR 18.1 million in the first six months of 2011. Roughly half of the income is generated from non-interest-driven income components. This is the result of our contribution margin 2 management and stabilises our operating income even when market interest rates fluctuate.

The positive development should continue on the whole in the second half of the year. We therefore expect to exceed the previous forecast of net profit for the period of EUR 33 million to EUR 36 million and now anticipate net profit of between EUR 36 million and EUR 38 million.

The course has also been set for beyond 2011: in the first half of the year, we strengthened our market presence with another six locations. In addition, we entered in the attractive Turkish market with a franchise partner. Further cell divisions are planned for the second half of the year. Last but not least, in late June we acquired the company of the former Hungarian franchise partner, thus emphasising once again the success of our franchise model.

We are growing rapidly with attractive margins. We are expanding our market presence further and thereby ensuring future growth. Expenses are increasing more moderately than income thanks to economies of scale. All of this gives us cause to look to the future with optimism.

Baden-Baden, August 2011

Wolfgang Grenke Chairman

THE GRENKELEASING AG SHARE

The GRENKELEASING AG share outperformed the market in the first six months of fiscal year 2011. Starting the year with a price on XETRA of EUR 38.65, the share rose by 13.3 percent to end the second quarter at EUR 43.80 on June 30. The share also performed positively in the reporting quarter, rising by 3.7 percent over the quarter as compared to its price of EUR 42.25 on March 31.

The SDAX index climbed by 3.7 percent in the second quarter after a 2.1 percent decline in the first quarter. This corresponds to a slight increase of 1.6 percent for the first half of the year. The DAXsector Financial Services index, which tracks the German financial sector in the Prime Standard, decreased in both the first and the second quarter, falling by 1.0 percent in the first half of 2011.

DEVELOPMENT OF THE SHARE PRICE AND DAILY TURNOVER

INTERIM MANAGEMENT REPORT

THE GROUP'S GROWTH STRATEGY

GRENKELEASING is a growth company. This was highlighted once again by the development of the GRENKELEASING AG Group (below: "GRENKE Group" or "Group") over the past quarters. Although Germany remains our strongest market, since 2010 we have been generating more than half of our new business – i.e. the sum ofthe cost of newly acquired leased assets and the factoring volume – in our international markets.

In the six months under review, we expanded our market presence with even greater momentum. For instance, we extended the network of our locations with cell divisions in Italy (Brescia and Turin), in France (Grenoble) and in Ireland (Cork). In addition, our Spanish franchise partner in Malaga and our Portuguese franchise partner in Leiria each opened an additional location. With the conclusion of a franchise agreement in Turkey, we also implemented expansion into another attractive market. Further cell divisions are planned for the second half of the year. As a result, continued strong and profitable growth can be expected in the future, too.

Alongside regional growth, we are also further broadening our product range and our range of financing solutions on an ongoing basis. Here, our focus is on indirect and online sales channels to commercial customers and on automated contract settlement. With this range we can also offer small contract volumes at attractive conditions for customers, while still generating attractive margins. In order to limit risks, we manage our growth so as to ensure a broad diversification of our portfolio across different customers and sectors and small average financing volumes. We do not compromise on our strategic targets for capital resources and profitability. We also do not make any concessions with regard to maintaining an adequate risk-return profile.

In addition to purchasing lower-volume receivables (factoring) and car rental, since 2010 our new products include the following twonewoffersfromGRENKEBANKAG.Inspring 2010we established a cooperationagreementbetweenNRW.BANK in Düsseldorf, GRENKELEASING AG and GRENKE BANK AG. Thanks to this cooperation agreement, small and medium-sized enterprises and self-employed professionals in North Rhine-Westphalia will be able to obtain development funds if they finance new purchases of operating equipment through leases. This model has proved highly successful in just a very short time, with 1,805 contracts generated by the end of 2010 and an additional 676 contracts in the six months under review.

In spring 2011, GRENKE BANK AG could also look back at its first year of accreditation by KfW-Mittelstandsbank for its business start-up programme "KfW-StartGeld". On the basis of our many years of extensive experience in the field of IT-based contract settlement, our bank subsidiary has developed an innovative Internet platform that offers entrepreneurs quick and simple access to "KfW-StartGeld". New business start-ups, self-employed professionals and small companies that have existed for no more than three years can receive support of up to EUR 50,000 per inquiry from KfW-Mittelstandsbank. This business is developing well. The volume of business start-up financing transferred in the six months under review amounted to EUR 0.1 million after EUR 0.3 million in 2010 as a whole.

Expansion in Europe

* Austria, Belgium, Czech Republic, Denmark, Finland, Hungary, Ireland, Luxembourg, Norway, Romania, Slovakia, Slovenia, Sweden, Turkey

ECONOMIC ENVIRONMENT

The growth of the global economy slowed somewhat in the past months. The earthquake in Japan has set back the country's domestic economy and also obstructed international supply chains for a time. High commodity prices worldwide are also adversely impacting real income. The marked regional differences in growth are still evident: the necessity for further restructuring in the private and public sector and poor conditions on the respective labour markets are continuing to inhibit the recovery in many advanced economies. In contrast, the emerging economies, particularly China, are producing just under or even above their capacity limits.

One European example of the current weak growth in many industrialised nations is the UK. Following a 0.5 percent increase in GDP in the first quarter of 2011, the decline in industrial production in April, the waning confidence in several sectors and continued weak consumption point to a slowdown in the second quarter.

In contrast, real GDP in the euro zone saw strong quarter-on-quarter growth of 0.8 percent in the second quarter of 2011 after 0.3 percent. Recent data indicate an only slightly reduced pace in the second quarter. As before, exports are benefiting from the expansion of the global economy while at the same time domestic demand is also contributing impetus for growth in view of companies' high level of confidence.

Germany remained the driving force behind the development in the euro zone. With a 1.5 percent increase in real terms as against the previous quarter, Germany's growth in the first quarter of 2011 was almost twice as strong as that of the region as a whole. This pace of growth is likely to have continued in the second quarter. For instance, in May 2011 exports were up 19.9 percent year-on-year, driven particularly by the continued boom in exports to non-EU countries, while in the same month sales in the manufacturing industry increased by 6.3 percent year-on-year after adjustment for inflation and calendar effects. At 86 percent, industrial capacity utilisation in June was still considerably higher than the long-term average. Private income also benefited from this: real wages increased by 2.0 percent in the first quarter.

REPORT ON THE RESULTS OF OPERATIONS

In the second quarter of the current fiscal year, the GRENKE Group again generated very high growth in operating income, which jumped 27.8 percent to EUR 57.5 million in the first half of 2011 as compared to the previous year. The strong and above all high-margin new business in the past fiscal year is continuing to lead to a rapid increase in net interest income.

Despite the substantial increase in the business volume, the negative impact from settlement of claims and risk provisioning is still developing positively. Following a significant year-on-year decrease in the first quarter, in the second quarter it even fell slightly further in comparison to the first. The low increase in the reporting quarter as compared to the previous year results from a baseline effect.

Overall, we are satisfied with this development in claims and anticipate a sustained improvement over the further course of the economic upturn. However, this will not take place consistently as the level of claims can be very volatile, particularly on a quarterly basis. Temporary increases in the negative impact from claims are entirely typical for the business.

In the six months under review, net interest income after settlement of claims and risk provisioning was up by a strong 36.6 percentto EUR 28.6 million.

As profit from disposal we show the income exceeding the calculated residual value. As a net amount, it generally makes only a minor contribution to earnings and tends to fluctuate considerably from quarter to quarter. In the first half of 2011, it almost doubled year-on-year to EUR 1.7 million. However, the result in the second quarter of 2011 decreased to a third of the figure for the first quarter of 2011.

Profit from insurance business rose by 15.4 percent year-on year to EUR 11.9 million in the six months under review, with the strong second quarter of 2011 more than compensating for the relatively weak result in the first quarter. In contrast, profit from new business is developing more stably in line with the growth in new business. In the first six months of the current fiscal year, it climbed by 19.4 percent to EUR 15.3 million.

With regard to expenses, we are currently recording significant increases in almost all items as a result of our growth, since expansion in our business is always associated with additional employees, more office space, higher travel expenses and vehicle costs and similar expenses. Accordingly, expense items including the balance from other operating income and expenses increased by a total of 14.3 percent year-on-year to EUR 33.3 million in the first half of the year.

However, the increase in comparison to the previous year levelled out considerably in the second quarter at 4.9 percent. This made a significant contribution to the very strong operating result in the reporting quarter. In the past, we commented on several occasions that certain expenses, particularly in the area of administrative expenses, were of a one-off nature or represented preliminary costs for our further expansion. The lower than proportional increase in these expenses in the reporting quarter now shows that these negative influences are currently lower or have entirely ceased to exist.

Overall, in the first half of 2011 the operating result increased by 52.7 percent year-on-year to EUR 24.2 million, net profit for the period was up 49.3 percent to EUR 24.1 million before taxes and up 47.6 percent to EUR 18.1 million after taxes, and earnings per share rose to EUR 1.32 after EUR 0.89 in the previous year.

In the reporting quarter, we achieved a year-on-year increase in the operating result of an extraordinary 63.6 percent to EUR 12.9 million, net profit for the period was up 59.7 percent to EUR 12.9 million before taxes and up 49.8 percent to EUR 9.7 million after taxes, and earnings per share rose to EUR 0.71 after EUR 0.47 in the previous year.

Report on the development of the segments

The GRENKE Group structures its activities in the segments of Leasing Business, Banking Business and Factoring Business. In managing the Leasing Business, the Group essentially focuses on the individual countries and regions. Thus, the Leasing Business segment represents a combination of several operating segments defined by countries or groups of countries and making up the reportable Leasing Business segment. The Banking Business segment comprises the activities of GRENKE BANK AG, whose business focuses primarily on German customers. The Factoring segment includes the activities of GRENKEFACTORING GmbH, which performs traditional factoring services in Germany as a financial services provider.

Leasing Business is the GRENKE Group's main source of income. The comments on the Group's earnings performance presented in the previous chapter (Report on the results of operations) therefore also apply to the Leasing Business segment to a significant extent. Here, we increased operating segment income by 27.3 percent year-on-year to EUR 54.8 million in the six months under review, while the segment result rose by 34.7 percent to EUR 22.4 million.

TheBanking and Factoring Businesssegments are relatively newactivitiesthat are stillin thedevelopmentstage and are also much smaller. However, they are now also recording encouraging growth and are turning a profit. In the Banking Business segment, operating segment income rose by 28.8 percent year-on-year to EUR 2.0 million and the segment result amounted to EUR 1.7 million after a loss of EUR 0.6 million in the previous year. In the Factoring Business segment, income doubled in comparison to the previous year to almost EUR 0.6 million, with the result totalling EUR 0.1 million after a loss of EUR 0.2 million in the previous year.

The earnings contributions of the individual regions in Leasing Business vary depending on the level of maturity of our activities there. The growth rates in well-established markets are also naturally lower than in markets where we are still in the development phase. When considering the Germany segment it should be noted that part of the administrative functions of the GRENKE Group are located at headquarters in Baden-Baden and the costs of these are therefore incurred in this segment.

In the six months under review, operating segment income in Germany declined slightly by 2.4 percent. The segment result dropped by 25.2 percent to EUR 4.9 million, primarily due to the reasons specified above. However, the development in the current fiscal year shows that we were able to considerably improve the results of the Germany segment in the second quarter of 2011 following a relatively weak start of EUR 1.5 million in the first quarter. New business has also picked up again significantly now, as shown below.

We have also had a well-established market position in Switzerland for many years. Here, segment income increased by 10.6 percent year-on-year to EUR 2.5 million in the six months under review, while the segment result remained at the previous year's level of EUR 1.1 million. After a strong first quarter of 2011, income and the result in the second quarter were both considerably lower than in the previous year. In France, we also generated lower income and a lower result in the second quarter as compared to the prior-year period. In the six months under review, income therefore increased by 7.1 percent to EUR 9.8 million and the result was up by 7.3 percent to EUR 5.7 million.

Persistently high contributions were generated on the Italian markets and our activities grouped together in the "Other regions" segment also developed very well. In Italy, segment income rose by 78.3 percent to EUR 7.5 million and the segment result jumped by a full 110.3 percent to EUR 4.6 million. In the Other regions segment, income saw an even greater increase of 163.6 percent to EUR 13.1 million and the result more than tripled to EUR 6.1 million.

The development of operating segment income and of the segment results in the individual regions still strongly reflects the different level of new business in that past financial crisis and shortly afterwards. A more significant indicator of our success in the individual regions is the current growth in new business and the development of its contribution margin 2. This will gradually impact on our income statement as the terms of the contracts progress.

New leasing business documents the Group's persistent strong development. For instance, we not only increased new business by 20.8 percent year-on-year to EUR 346.9 million in the first half of the year, but we even achieved a 9.0 percent rise in the second quarter of 2011 as compared to the first quarter of 2011. At 14.6 percent in the first half of the year and 15.0 percent in the second quarter, the contribution margin 2 is slightly lower than the equivalent levels of 16.0 percent and 15.9 percent in the previous year. However, the margin was increased considerably in the second quarter of 2011 in comparison to its level of 14.1 percent in the first quarter of 2011 despite accelerated growth.

On the whole, these trends apply to all countries in which we operate, meaning that the weaker development of segment income and results in the reporting quarter should be relativised in the future. It is particularly encouraging that we are also continuing to grow significantly in our German market, increasing new business by 18.9 percent year-on-year in the six months under review. Our major international market France is in line with the general trend with growth of 15.4 percent, Switzerland was still experiencing a decline of 7.0 percent in the first half of the year but saw growth in the second quarter of 2011 as compared to the first, and Italy remains our fastest-growing market with growth of 76.2 percent.

The very positive development in the UK and in Poland should also be emphasised. In the UK, we increased our new business by 33.4 percent year-on-year in the six months under review and by as much as 39.9 percent in the second quarter of 2011 as compared to the first quarter. The contribution margin 2 rose in both comparison periods and amounted to 21.5 percent in the second quarter.

In Poland we have now completed the integration of this former franchise company. In the first half of the year, growth in new business was still relatively moderate at 12.8 percent year-on-year, but in the second quarter of 2011 it increased by 50.2 percent in comparison to the first quarter. At the same time, the contribution margin 2 almost doubled quarter-onquarter, amounting to 10.6 percent in the reporting quarter.

In the Factoring Business segment, the volume of new business in the GRENKE Group including franchisees continued to grow extremely rapidly by 105.9 percent year-on-year to EUR 33.8 million in the six months under review. The profit margin was 2.4 percent.

REPORT ON THE FINANCIAL POSITION AND NET ASSETS

As a result of the expansion of our new business in the first half of 2011, lease receivables climbed by 9.1 percent to EUR 1,448.8 million after EUR 1,328.2 million at the end of fiscal year 2010. Overall, total assets increased in line with this by 8.7 percent to EUR 1,816.2 million after EUR 1,671.0 million.

During the past financial crisis still, in the second half of 2009, we shifted our focus back towards growth, gradually increasing the expansion rates in new business. Since the beginning of 2010, we have been growing again at a rapid rate. This is still reflected in only a slight decline in our equity ratio. In the reporting quarter, the equity ratio decreased to 16.4 percent after 17.2 percent at the end of fiscal year 2010, but this decline was primarily due only to the fact that the annual distribution to the shareholders is scheduled to take place in the second quarter.

We are thus gradually reducing the slight overcapitalisation that we had deliberately established in the financial crisis to protect against risks and are investing these funds in operating business. Nonetheless, the equity ratio still remained above our target level of 16 percent in the reporting quarter.

To finance the lease receivables, we made use of our wide range of refinancing sources in the reporting quarter. After somewhat more extensive transactions were successfully concluded in the first quarter of 2011, there were no further significant maturities in the second quarter and none are foreseeable in the rest of this fiscal year.

The refinancing measures in the second quarter of 2011 included in particular replacing a maturing debenture with a new variable-rate debenture in the same amount and replacing a maturing promissory note loan with a new variable-rate loan in the same amount. In addition, two further promissory note loans with a total volume of EUR 30 million were issued and two revolving credit facilities with a total volume of EUR 60 millionwere extended until March and April 2012 respectively.

In addition to this, we used deposit business via our bank subsidiary and increased the corresponding liabilities by EUR 23.4 million as against December 31, 2010 to EUR 145.7 million. Available cash and cash equivalents, which had declined moderately over the course of the first quarter of 2011, amounted to EUR 79.9 million as of the reporting date June 30, 2011 and were thus back at the level at the end of fiscal year 2010 of EUR 78.3 million.

Cash flow from operating activities increased significantly to EUR 38.9 million in the six months under review due to the earnings situation and as a result of borrowing to refinance lease receivables in the reporting quarter, after negative cash flow of EUR –16.2 million in the previous year. After taxes and the still immaterial net interest, net cash flow from operating activities amounted to EUR 15.7 million after EUR –24.0 million in the previous year.

Therewas an outflowoffundstotalling EUR 2.3 million forthe acquisition ofthe company of ourformerHungarian franchise partner. In the first half of 2011, cash flow from investing activities amounted to EUR –4.4 million after EUR –0.5 million in the same period of the previous year. Primarily due to the dividend payments following the 2011 Annual General Meeting, there was a cash outflow from financing activities totalling EUR 9.9 million after EUR 8.3 million in the previous year. In total, cash flows therefore amounted to EUR 1.4 million in the first half of 2011, compared with EUR –32.8 million in the previous year.

REPORT ON FORECASTS AND THE OUTLOOK FOR THE GROUP

Opportunities and Risks

This opportunities and risks report relates to both the Group and the segments. The risks for the GRENKE Group described in the 2010 annual report are still relevant. No new risks have arisen. In general, we continue to see considerably more opportunities than risks for our business development.

For instance, demand for lease finance – measured in terms of the number of inquiries received and the average value per lease – remains high. This allows us to increase new business strongly with attractive margins while nonetheless maintaining our conservative risk management policy. Additional locations, branches and franchise partners will also contribute to continued high growth in the future.

There are sufficient funds available to refinance our growth. The capital markets provide sufficient funds for issuers of good standing. We successfully made use of this in the reporting quarter as part of our current requirements. Access to banking deposits at GRENKE BANK AG offers us an additional, very attractive source of refinancing that we employ flexibly.

There are still risks to income development arising in particular from the growth in losses due to the recession. The development of losses traditionally shows a certain degree of fluctuation during the year. However, the general development of losses confirms our expectations that the loss rate has passed its high point and is likely to decrease further on the whole over the course of 2011 as a result of the improving macroeconomic conditions.

For the European economy, all signs are currently pointing towards growth, meaning that from this perspective further support for our growth can fundamentally be expected. However, this assumes that there will be no further shocks on the financial markets. After the financial crisis subsided and the recession triggered by it was surmounted, the probability of such shocks has increased again as a result of the current European debt crisis and the euro crisis which could result from this. However, European politicians have recognised these risks and are currently working on joint solutions to counter further shocks.

In addition, the risk of rising interest rates remains significant for the earnings performance. Our assessment last year that, in light of the extreme global increase in liquidity, rising inflation rate expectations and therefore also increasing interest rates were to be expected, has been confirmed in that the fluctuation range for interest in Germany has since increased significantly over the course of the current debt crisis. However, this does not result in any increased risks for our refinancing needs, as these needs are only very limited in the current fiscal year. In fact, there are no further major refinancing measures pending for the rest of the year.

With regard to refinancing lease receivables, the Group is subject to interest rate risks to only a limited extent as the refinancing – if subject to a floating rate at all – is hedged using derivatives. In new business, however, risks may arise in general as a result of changes in interest rates and spreads. The time lag with which we pass on interest rate changes to customers can therefore have a temporary impact on the profitability of new business.

Overall economic outlook

According to Deutsche Bundesbank, the prospects for further global expansion remain intact. However, the growth of some emerging economies that are already fairly economically advanced is likely to slow down. Some economies, particularly China, are even displaying signs of overheating. In contrast, factors boosting the economy in industrialised nations are likely to assert themselves more and more against the long-term effects of the global financial crisis. The tragic events in Japan are not expected to have any lasting effects on the global economy. Overall, Deutsche Bundesbank forecasts that global economic growth could amount to a good 4 percent in both 2011 and 2012.

The German economy is benefiting from a broad-based upturn with a normal level of utilisation of overall economic production capacity. Companies are confident and are preparing for further expansion of their activities by increasing their workforces, making new investments in equipment and constructing new buildings. At the same time, structural unemployment is decreasing further and private households are increasing their consumption.

Therefore, according to Deutsche Bundesbank, there are growing prospects of a sustained expansion phase for the German economy. Following a 3.6 percent rise in the economic performance in 2010, growth of 3.1 percent is forecast for the current year. The high momentum in global trade means that exports will remain the most important pillar of the economy. However, thanks to the improved overall state of the German economy and thus in clear contrast to the upturn period in the past decade, the domestic economy is much more significant this time.

Expected business development

We continued our strong growth in the second quarter of the fiscal year. In the first half of 2011, we generated growth in new business of 25.6 percent year-on-year to EUR 409.0 million in the GRENKE Group including franchise partners. This puts us comfortably on target to achieve our forecast of growth of more than 20 percent in fiscal year 2011.

We are continuing to take advantage of the differing prospects of the different European countries in a targeted way and are focusing primarily on the regional target markets where competitive intensity is lower than average. In this way, we can generate high growth with an attractive contribution margin 2 and a conservative risk management policy. The continued high growth expected not least for this reason should also continue to positively impact net interest income in the future. This also still applies to the previous years' high-margin new business, which will contribute to consolidated earnings more strongly as the term of these agreements progresses.

Our positive expectations for the development of expenses were more than confirmed in the second quarter. For instance, the loss rate remained at the level of the first quarter, and the increase in expenses – particularly selling and administrative expenses – as a result of our current very rapid expansion was already much more moderate than the increase in operating income in the second quarter. We therefore exceeded our planning in the first six months of the current fiscal year.

We anticipate that these developments will generally continue in the second half of the year and therefore expect to exceed our previous forecast of net profit for the period of EUR 33 million to EUR 36 million. We now expect to generate net profit of between EUR 36 million and EUR 38 million.

CONSOLIDATED INCOME STATEMENT FOR THE PERIOD JANUARY 1 TO JUNE 30, 2011

	3-month report		6-month report
	April 1 to	April 1 to	Jan. 1 to	Jan. 1 to
EURk	June 30, 2011	June 30, 2010	June 30, 2011	June 30, 2010
Interest and other income from financing business	35,500	30,556	69,697	59,843
Expenses from interest on refinancing and on deposit business	13,015	11,042	25,052	21,697
Net interest income	22,485	19,514	44,645	38,146
Settlement of claims and risk provision	7,900	7,725	16,045	17,211
Net interest income after settlement of claims and risk provision	14,585	11,789	28,600	20,935
Profit from insurance business	6,170	4,376	11,879	10,297
Profit from new business	7,929	6,708	15,320	12,832
Profit from disposal	413	441	1,653	885
Income from operating business	29,097	23,314	57,452	44,949
Personnel expenses	9,179	8,019	17,817	15,390
Depreciation	682	697	1,328	1,361
Selling and administration expenses (excl. personnel expenses)	5,954	5,988	13,221	11,550
Other operating expenses	1,598	1,468	3,035	2,317
Other operating income	1,233	752	2,118	1,500
Profit/loss from operating business	12,917	7,894	24,169	15,831
Expenses/income from the fair value measurement	4	294	74	542
Other interest income	117	97	195	262
Other interest expenses	158	220	366	516
Earnings before taxes (EBT)	12,880	8,065	24,072	16,119
Income taxes	6,176	5,972	11,874	9,488
Deferred taxes	–2,960	–4,360	–5,852	–5,598
Net profit for the period	9,664	6,453	18,050	12,229
Earnings per share (basic) in EUR	0.71	0.47	1.32	0.89
Earnings per share (diluted) in EUR	0.71	0.47	1.32	0.89
Average shares outstanding (basic)	13,684,099	13,684,099	13,684,099	13,684,099
Average shares outstanding (diluted)	13,684,099	13,684,099	13,684,099	13,684,099

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD JANUARY 1 TO JUNE 30, 2011

	3-month report		6-month report
	April 1 to	April 1 to	Jan. 1 to	Jan. 1 to
EURk	June 30, 2011	June 30, 2010	June 30, 2011	June 30, 2010
Net profit for the period	9,664	6,453	18,050	12,229
Allocation/reduction of the hedging reserve (before taxes)	312	661	789	1,090
Income taxes	–43	5	–65	–95
Allocation/reduction of the hedging reserve (after taxes)	269	666	724	995
Allocation/reduction of reserve for actuarial profits and losses
(before taxes)	46	8	80	64
Income taxes	–11	–3	–19	–16
Allocation/reduction of reserve for actuarial profits and losses
(after taxes)	35	5	61	48
Change of currency translations	1,109	762	422	2,029
Other comprehensive income for the period	1,413	1,433	1,207	3,072
Total comprehensive income	11,077	7,886	19,257	15,301

CONSOLIDATED BALANCE SHEET AS PER JUNE 30, 2011

EURk	June 30, 2011	Dec. 31, 2010
Assets
Current Assets
Cash	79,854	78,297
Financial instruments with positive market value (short term portion)	1,420	1,255
Lease receivables	538,090	508,325
Other current financial assets	87,104	77,434
Trade receivables	4,804	3,845
Lease assets for sale	7,974	8,159
Tax receivables	2,434	572
Other current assets	72,417	54,913
Total current assets	794,097	732,800
Non-current assets
Lease receivables	910,743	819,899
Financial instruments with positive market value (long term portion)	574	1,115
Other non-current financial assets	39,279	43,831
Property, plant and equipment	36,856	35,645
Goodwill	14,006	12,985
Other intangible assets	1,805	1,660
Deferred tax assets	18,180	22,575
Other non-current assets	611	483
Total non-current assets	1,022,054	938,193
Total assets	1,816,151	1,670,993

CONSOLIDATED BALANCE SHEET AS PER JUNE 30, 2011

EURk	June 30, 2011	Dec. 31, 2010
Liabilities and equity
Liabilities
Current liabilities
Refinancing liabilities	315,325	320,582
Liabilities from deposit business	101,564	87,624
Short-term debt	744	684
Financial instruments with negative market value (short term portion)	3,030	5,449
Trade payables	9,247	6,194
Tax liabilities	5,321	14,795
Deferred liabilities	3,637	4,713
Provisions	3,476	3,452
Other current liabilities	5,146	7,411
Deferred lease payments	71,573	67,300
Total current liabilities	519,063	518,204
Non-current liabilities
Refinancing liabilities	923,014	786,961
Liabilities from deposit business	44,088	34,615
Long term debt	2,750	3,094
Financial instruments with negative market value (long term portion)	1,620	1,583
Deferred tax liabilities	26,365	36,361
Pensions	1,561	1,566
Other non-current liabilities	239	836
Total non-current liabilities	999,637	865,016
Equity
Capital stock	17,491	17,491
Capital reserve	60,166	60,166
Retained earnings	148,926	89,054
Other components of equity	2,382	1,175
Balance sheet profit	68,486	119,887
Total equity	297,451	287,773
Total liabilities and equity	1,816,151	1,670,993

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, 2011

		Jan. 1 to	Jan. 1 to
	EURk	June 30, 2011	June 30, 2010
	Earnings before taxes	24,072	16,119
	Non-cash items contained in net profit for the period and
	reconciliation to cash flow from operating activities
+/–	Amortisation/depreciation	1,328	1,361
–/+	Profit/loss from the disposals of equipment and intangible assets	–23	–15
–/+	Investment income	171	255
–/+	Non-cash changes in equity	1,120	3,714
+/–	Increase/decrease deferred liabilities, provisions and pensions	–1,074	4,953
–	Additions of lease receivables	–386,382	–319,651
+	Payments by lessees	279,967	244,177
+	Disposals/reclassifications of lease receivables at residual carrying values	58,896	51,570
–	Interest and other income from financing business	–69,697	–59,843
–	Increase in other receivables from lessees	–2,589	–2,900
+/–	Currency translation differences	1,594	–8,044
=	Change in lease receivables	–118,211	–94,691
+	Additions of liabilities from refinancing	663,815	732,407
–	Payment of annuities to refinancers	–127,058	–134,189
–	Disposal of liabilities from refinancing	–432,850	–584,529
+	Expenses from interest on refinancing and on deposit business	25,052	21,697
+/–	Currency translation differences	196	3,144
=	Change in refinancing liabilities	129,155	38,530
+/–	Increase/decrease in liabilities from deposit business	23,413	27,941
–/+	Increase/decrease in loans to franchisees	8,427	11,072
	Changes in other assets/liabilities
–/+	Increase/decrease in other assets	–30,732	–13,056
+/–	Increase/decrease in deferred lease payments	4,273	–18,210
+/–	Increase/decrease in other liabilities	–2,982	5,836
=	Cash flow from operating activities	38,937	–16,191

continued on next page

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, 2011: CONTINUED

		Jan. 1 to	Jan. 1 to
	EURk	June 30, 2011	June 30, 2010
–/+	Taxes paid / received	–23,074	–7,520
–	Interest paid	–366	–516
+	Interest received	195	261
=	Net cash flow from operating activities	15,692	–23,966
–	Purchase of equipment and intangible assets	–2,125	–469
–/+	Payments / proceeds from acquisition of subsidiaries	–2,343	0
+	Proceeds from sale of equipment and intangible assets	109	15
=	Cash flow from investing activities	–4,359	–454
+/–	Raising / repayment of bank liabilities	–333	–128
–	Dividend payment	–9,579	–8,210
=	Cash flow from financing activities	–9,912	–8,338
	Cash funds at the beginning of the period
	Cash on hand and balances with banks	78,297	109,865
–	Bank liabilities from overdrafts	–113	–1,131
=	Cash and cash equivalents at the beginning of the period	78,184	108,734
+/–	Change due to currency translation	86	–594
=	Cash funds after currency translation	78,270	108,140
	Cash funds at the end of the period
	Cash on hand and balances with banks	79,854	76,437
–	Bank liabilities from overdrafts	–163	–1,055
=	Cash and cash equivalents at the end of the period	79,691	75,382
	Change in cash and cash equivalents during the period (=Total cash flows)	1,421	–32,758
	Net cash flow from operating activities	15,692	–23,966
+	Cash flow from investing activities	–4,359	–454
+	Cash flow from financing activities	–9,912	–8,338
=	Total cash flow	1,421	–32,758

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY

					Reserve for
	Capital	Capital	Retained	Hedging	actuarial profits	Currency	Total
EURk	stock	reserve	earnings	reserve	and losses	translation	equity
Equity as per
Jan. 1, 2011	17,491	60,166	208,941	–1,005	–172	2,352	287,773
Total comprehensive
income			18,050	724	61	422	19,257
Dividend in 2011
for 2010			–9,579				–9,579
Equity as per
June 30, 2011	17,491	60,166	217,412	–281	–111	2,774	297,451
Equity as per
Jan. 1, 2010	17,491	60,166	189,315	–2,941	–112	–1,035	262,884
Total comprehensive
income			12,229	995	48	2,029	15,301
Dividend in 2010
for 2009			–8,210				–8,210
Equity as per
June 30, 2010	17,491	60,166	193,334	–1,946	–64	994	269,975

SEGMENT INFORMATION FOR THE PERIOD JANUARY 1 TO JUNE 30, 2011

The Group structures its activities in the segments of Leasing Business, Banking Business and Factoring Business. The Leasing Business segment accounts for all activities performed by GRENKELEASING AG and its subsidiaries until the acquisition of GRENKE BANK AG and GRENKEFACTORING GmbH. In managing the Leasing Business, the Group essentially focuses on the individual regions and countries. Thus, the Leasing Business segment is a combination of several operative segments defined by countries or groups of countries which together define the reportable Leasing Business segment. The Banking Business segment comprises the activities of GRENKE BANK AG, which has mainly focused on its internet presence and the associated sales activities since its acquisition by GRENKELEASING AG. The bank's business focuses mainly on German customers. The Factoring segment includes the activities of GRENKEFACTORING GmbH, which performs traditional factoring services in Germany and is a financial services provider.

							Banking	Factoring
							Business	Business	Total	Consoli
				Leasing Business segment			segment	segment	segments	dation	Group
			Switzer
As per June30, 2011	Germany	France	land	Italy	Other
(EURk)	region	region	region	region	regions	Total
Operating segment income	21,966	9,791	2,501	7,476	13,089	54,823	2,037	592	57,452	0	57,452
Segment result	4,937	5,704	1,147	4,582	6,057	22,427	1,666	76	24,169	0	24,169
Reconciliation to consoli
dated financial statements
Operating result											24,169
Other financial income											–97
Taxes											6,021
Net profit for the period
according to consolidated
income statement											18,050
Segment assets	639,443	377,582	47,307	150,059		536,128 1,750,519	199,203		8,925 1,958,647		–163,110 1,795,537
Reconciliation to consoli
dated financial statements
Unallocated items											20,614
Total assets according to
consolidated balance sheet											1,816,151

SEGMENT INFORMATION FOR THE PERIOD JANUARY 1 TO JUNE	30, 2010
------------------------------------------------------	----------

							Banking	Factoring
							Business	Business	Total	Consoli
				Leasing Business segment			segment	segment	segments	dation	Group
			Switzer
As per June30, 2010	Germany	France	land	Italy	Other
(EURk)	region	region	region	region	regions	Total
Operating segment income	22,514	9,137	2,261	4,192	4,966	43,070	1,581	298	44,949	0	44,949
Segment result	6,603	5,316	1,108	2,179	1,439	16,645	–581	–233	15,831	0	15,831
Reconciliation to consolidat
ed financial statements
Operating result											15,831
Other financial income											288
Taxes											3,890
Net profit for the period
according to consolidated
income statement											12,229
Segment assets	716,484	326,490	45,789	65,862		361,465 1,516,090	175,303		2,992 1,694,385		–145,659 1,548,726
Reconciliation to consolidat
ed financial statements
Unallocated items											16,975
Total assets according to
consolidated balance sheet											1,565,701

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES

The interim consolidated financial statements of GRENKELEASING AG (hereafter referred to as "Company") as at June 30, 2011 meet the requirements of the International Financial Reporting Standards (IFRSs) published by the International Accounting Standards Board (IASB) and assumed by the EU, as did the consolidated financial statements of December 31, 2010.

The provisions on interim reporting set out in IAS 34 were applied accordingly. All of the interim financial statements of the companies included in GRENKELEASING AG's consolidated financial statements have been prepared using uniform accounting policies.

As interim reporting is based on the consolidated financial statements, detailed information on accounting and consolidation policies can be found in the notes to the consolidated financial statements for the year ended December 31, 2010.

The accounting policies used are the same as those used in the previous year with the exception of the new standards that have become mandatory, which are presented briefly below.

The interim consolidated financial statements and the interim management report for the period ended June 30, 2011 have not been audited or reviewed by an auditor.

MANDATORY NEW ACCOUNTING STANDARDS

The first-time application of the standards adjusted as part of the Annual Improvement Project 2010 ("AIP 2010") and of IAS 24 "Related Party Disclosures", IAS 32 "Financial Instruments: Presentation" (February 10, 2010), IFRIC 14 "IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction" and IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments" (July 1, 2010) did not result in any material changes in recognition and measurement in Group reporting.

The new or amended statements and interpretations published by the International Accounting Standards Board (IASB) that are not yet required to be applied have not been applied in advance.

The newly published IFRS 10 "Consolidated Financial Statements", which supersedes the consolidation requirements of IAS 27 "Consolidated and Separate Financial Statements" and SIC 12 "Consolidation – Special Purpose Entities", is required to be applied for financial years beginning on or after January 1, 2013. The Company is currently assessing the impact of the new standard on the consolidated financial statements. The following new or amended standards that have been published but that are not yet required to be applied are expected to have little to no impact on the consolidated financial statements:

• IAS 19 "Employee Benefits"
• IFRS 11 "Joint Arrangements"
• IFRS 12 "Disclosure of Interests in Other Entities"
• IFRS 13 "Fair Value Measurement"

USE OF ASSUMPTIONS AND ESTIMATES

The main estimation uncertainties and the associated disclosure requirements relate to the following areas:

• Measurement of non-performing lease receivables on the basis of the recoverability rate.
• Use of estimated residual values at the end of the lease term to determine the present value of lease receivables.
• Recognition of lease assets for sale at estimated residual values.

Non-performing lease receivables are carried at nominal value less appropriate bad debt allowances. The amounts of bad debt allowances are determined using percentages and processing categories. Percentages are calculated using statistical methods. They are reviewed once a year for validity. Processing statuses are grouped together in processing categories set up with a view to risk. The following table lists the processing categories:

Category	Description
0	Current contract not in arrears
1	Current contract in arrears
2	Terminated contract with serviced instalment agreement
3	Terminated contract (recently terminated or court order for payment applied for)
4	Legal action (pending or after objection to court payment order)
5	Order of attachment issued/Debt collection agency commissioned
6	Statement in lieu of oath (applied for or issued) and insolvency proceedings instituted but not completed
7	Derecognised
8	Being settled (not terminated)
9	Discharged (paid in full)

A decrease in value is assumed for categories 2 to 7 as the contracts have been terminated due to defaults in payment. The allowance rates range from 5 percent to 100 percent.

Estimated residual values are used to determine the present value of lease receivables. Non-guaranteed residual values are used to calculate lease receivables in accordance with the definition set out in IAS 17. Estimated residual values comprise anticipated sales proceeds and any revenues generated in a given renewal period. They are determined on the basis of past experience and statistical methods.

Based on past experience, the residual values of additions up to and including fiscal year 2006 range from 11 percent to 15 percent of historical cost, depending on the term of the lease. In fiscal year 2007, this allocation was broken down further into more detailed maturity groups on account of the increased forecastability of the statistical population.

For additions from 2007 to 2008, the residual values range from 7.7 percent to 28.4 percent of historical cost, depending on the term of the lease. Residual values of between 6.5 percent and 28.4 percent were applied for additions from 2009 onwards. For additions after April 1, 2011, residual values of between 6.5 percent and 23.5 percent were applied. Proceeds are a best estimate based on statistical analyses. If the post-transaction recoverable amount (from sale and subsequent lease) is lower than expected, the lease receivables are written down. However, any increase in the recoverable amount is not recognised.

Lease assets for sale are measured on the basis of the average sales proceeds per age group realised in the past fiscal year in relation to the original acquisition cost. Lease assets for sale are measured at historical residual values, taking into account their actual saleability. As of the balance sheet date, the residual values applied amounted to between 3.0 percent and 17.8 percent of the historical cost (previous year: between 4.1 percent and 18.6 percent). If a sale is considered unlikely due to the condition of the asset, the asset is written off and expensed.

EURk	June 30, 2011	June 30, 2010
Changes in performing lease receivables
Balance at beginning of period	1,241,374	1,048,550
+ Change during the period	117,626	91,798
Lease receivables (current + non-current) from current contracts at end of period	1,359,000	1,140,348
Changes in non-performing lease receivables
Gross receivables at beginning of period	170,346	169,389
– Accumulated valuation allowances at beginning of period	–83,496	–83,060
= Non-performing lease receivables at beginning of period	86,850	86,329
+ Additions to gross receivables during the period	16,814	16,406
– Disposals of gross receivables during the period	11,548	11,871
+ Disposal of accumulated valuation allowances during the period	9,601	6,030
– Addition of accumulated valuation allowances during the period	11,884	7,665
Non-performing lease receivables at end of period	89,833	89,229
Lease receivables (carrying amounts of current and non-current receivables) at beginning of
period	1,328,224	1,134,879
Lease receivables (carrying amounts of current and non-current receivables) at end of period	1,448,833	1,229,577

FINANCIAL LIABILITIES

GRENKELEASING's financial liabilities comprise liabilities from the refinancing of the leasing business, bank liabilities and liabilities from deposit business.

EURk	June 30, 2011	June 30, 2010
Financial liabilities
Current financial liabilities
Liabilities from the refinancing of the leasing business	315,325	320,582
ABS/ABCP-related liabilities	92,735	70,362
Bonds, revolving facilities, debentures and private placements	190,435	219,635
Committed development loans	84	187
Sales of receivables agreements	32,071	30,398
Current liabilities from deposit business	101,564	87,624
Current portion of bank liabilities	744	684
thereof current account liabilities	163	113
Total current financial liabilities	417,633	408,890

EURk	June 30, 2011	June 30, 2010
Non-current financial liabilities
Liabilities from the refinancing of the leasing business	923,014	786,961
ABS/ABCP-related liabilities	243,891	214,602
Bonds, debentures and private placements	632,912	528,689
Committed development loans	15,309	15,000
Sales of receivables agreements	30,902	28,670
Non-current liabilities from deposit business	44,088	34,615
Non-current bank liabilities	2,750	3,094
Total non-current financial liabilities	969,852	824,670
Total financial liabilities	1,387,485	1,233,560

ABS bond

On February 4, 2010, a new ABS bond amounting to EUR 160,000k was placed via the special-purpose entity GOALS FINANCING 2009 LIMITED (GOALS 2009-1). The contracts with GOALS FINANCING 2009 LIMITED allow GRENKELEASING to sell further lease agreements on a revolving basis for a total of 3 years and up to a maximum volume of EUR 300,000k. The interest rate is variable at three-month EURIBOR plus a spread ranging from 1.25 to 3.5 percent depending on the tranche.

The wholly-owned subsidiary of GRENKELEASING AG, GRENKE FINANCE Plc., Dublin, Ireland, subscribed on a pro rata basis to the second tranche and subscribed fully to the last tranche (nominal amount: EUR 24,200k) of the ABS bond. As a result, the Group only received a cash inflow of EUR 135,800k. The carrying amount of the total liability was EUR 136,612k at the balance sheet date.

ABCP programmes

The GRENKELEASING AG Group has several asset-backed commercial paper programmes (ABCPs) with a total volume of EUR 400,000k as of the reporting date (previous year: EUR 452,200k). The overview of the programmes as of the reporting date is as follows:

			Programme volume
ABCP programme/SPE	Initiating bank	Refinanceable lease receivables	in EURk
Compass Variety Funding Limited	WestLB	German and Austrian lease receivables	40,000
Kebnekaise Funding Limited	SEB AB	German and French lease receivables	110,000
CORAL PURCHASING Limited	DZ-Bank	German lease receivables	150,000
Arabella Finance Limited	UniCredit	French lease receivables	100,000
Total			400,000

The ABCP programmes grant the company the right to sell receivables to the respective programmes for a certain period or to refinance the receivables through these programmes. The cap on the purchase volume is determined by the volume of the programme, which is normally backed by a liquidity commitment in the corresponding amount by the organising bank. The CompassVariety Funding LimitedABCPprogrammewithWestLBwasfixed at EUR40,000kandextended until January22, 2012. The programme commitment for the Kebnekaise Funding Limited ABCP programme was also extended and will now run until November 30, 2011.

The programme commitment for the CORAL PURCHASING Limited ABCP programme will run until September 9, 2011, while the programme commitment for the Arabella Finance Limited ABCP programme will run until July 30, 2011.

A further FCT (Fonds Commun de Titrisation à Compartments II/French issuer) used by GRENKELEASING for French securitisation in line with the current general conditions for securitisation was established in order to purchase French lease receivables via the SPE initiated by UniCredit, Arabella Finance Limited ("Arabella"), from November 24, 2010. The sole purpose of this FCT is to securitise French lease receivables under the ABCP programme through Arabella Finance Limited. The first sale of French lease receivables to Arabella took place on January 18, 2011.

49.64 percent of the refinancing framework of the ABCP programmes was utilised as at the reporting date. The corresponding amount of receivables is thus assigned by way of collateral.

Sales of receivables agreements

Sales of receivables agreements are currently in place with Sparkasse Baden-Baden Gaggenau, Sparkasse Karlsruhe, Commerzbank AG, Norddeutsche Landesbank for the United Kingdom, UBS AG in Switzerland and the Commerzbank subsidiary BRE-Bank SA in Poland. The agreements with Commerzbank AG and BRE-Bank SA in Poland were terminated in 2009. Repayments are being made in line with the contracted portfolios and new acquisitions are not possible at present.

Bonds, debentures and private placements

A new fixed-interest promissory note loan with a volume of EUR 10,000k was issued on February 11, 2011 with a term until August 13, 2012.

On March 9, 2011, a new fixed-interest bullet bond with a volume of EUR 75,000k was issued as part of the debt issuance programme. The bond has a term of four years.

Promissory note loans worth EUR 38,000k that had matured were repaid in full on March 10, 2011 as scheduled.

A debenture of EUR 10,000k issued as part of the debt issuance programme was repaid in full on April 20, 2011. On the same date, a new variable-rate debenture with a volume of EUR 10,000k and a term until July 21, 2014 was issued as part of the debt issuance programme.

A fixed-interest promissory note loan with a volume of EUR 40,000k maturing on April 30, 2011 was replaced by a new variable-interest promissory note loan with the same volume maturing on April 30, 2014. The repayments are due in equal instalments of EUR 6,667k on October 30 and April 30 of each year.

On June 8, a fixed-interest bullet promissory note loan with a volume of EUR 25,000k and a term until June 6, 2014 and a further fixed-interest promissory note loan with a volume of EUR 10,000 and a term until June 8, 2014 were issued. The repayments for the promissory note loan with a volume of EUR 10,000k are due in equal installments of EUR 1,667k on June 8 and December 8 of each year.

Development loans

On February 18, 2010, GRENKELEASING AG and GRENKE BANK AG entered into a cooperation agreement with NRW.Bank, the development bank of the state of North Rhine-Westphalia. This opens up a new opportunity for incorporating development funding into lease financing. The refinancing of lease agreements, which is available exclusively for investment plans in North Rhine-Westphalia initiated by commercial enterprises and members of self-employed professions with annual sales of up to EUR 500,000k, takes place through the purchase of receivables by GRENKE BANK AG.

GRENKE BANK AG was granted a global loan of EUR 15,000k by NRW.Bank for this specific purpose. The loan was drawn down for the first time in the amount of EUR 7,500k on March 22, 2010; the interest rate was based on 6-month EURIBOR plus a margin of 0.21 percent and a term of three years. The second draw-down of a further EUR 7,500k on November 25, 2010 also had a reference interest rate of 6-month EURIBOR and a bullet maturity of three years, with a margin of only 0.19 percent in this case.

Revolving credit facility and money market facility

In the context of revolving credit facilities with a total volume of EUR 120,000k and a money market facility totalling EUR 25,000k available to GRENKE FINANCE Plc., Dublin/Ireland, the Group has the option of taking on short-term funds with a minimum amount of EUR 5,000k and a term of at least one month at any time. The revolving credit facilities totalling EUR 120,000k are arranged with four banks each with a volume of EUR 30,000k. As in previous years, all four of the existing credit facilities with a total volume of EUR 120,000k have again been extended by one year. Due to their early extension, the facility with SEB will run until March 2012, while the facility with WestLB will run until April 2012. The facilities with DZ-Bank and Deutsche Bank have not yet been extended. The facility with DZ-Bank is arranged until October 2011, while the facility with Deutsche Bank is scheduled to run until September 2011.

A non-guaranteed money market facility of EUR 20,000k available to GRENKE FINANCE Plc., Dublin/Ireland, was agreed with Bayerische Landesbank in April 2010. In April 2011, this non-guaranteed money market facility was increased by EUR 5,000k to a total of EUR 25,000k.

As of June 30, 2011, these credit facilities had been utilised in the total amount of EUR 95,000k (previous year: EUR 60,000k). Utilisation is disclosed under current liabilities from refinancing of the leasing business.

DIVIDEND PAYMENT

The Annual General Meeting on May 10, 2011 adopted the resolution on the appropriation of GRENKELEASING AG's profits for fiscal year 2010 in the amount of EUR 41,832,253.42. The Annual General Meeting approved the proposal of the Board of Directors and the Supervisory Board resolving to appropriate the balance sheet profit for 2010 as follows:

Balance sheet profit for 2010	EUR 41,832,253.42
Distribution of a dividend of EUR 0.70 per share for a total of 13,684,099 shares	EUR 9,578,869.30
Appropriation to other revenue reserves	EUR 29,000,000.00
Profit carryforward (to new account)	EUR 3,253,384.12

The dividend was paid to the shareholders of GRENKELEASING AG on May 11, 2011.

In the previous year, the Annual General Meeting adopted the proposal of the Board of Directors and the Supervisory Board resolving to appropriate, and appropriating, the balance sheet profit for 2009 as follows:

Balance sheet profit for 2009	EUR 23,263,815.44
Distribution of a dividend of EUR 0.60 per share for a total of 13,684,099 shares	EUR 8,210,459.40
Appropriation to revenue reserves	EUR 0.00
Profit carryforward (to new account)	EUR 15,053,356.04

The dividend was paid to the shareholders of GRENKELEASING AG on May 12, 2010.

BUSINESS COMBINATIONS

Business combinations in fiscal year 2011

By way of a purchase agreement dated June 6, 2011, GRENKELEASING AG acquired 100 percent of the voting shares in GRENKELEASING Magyarország Kft., Budapest/Hungary. The date on which control over the acquired company was obtained was June 21, 2011.

Prior to the acquisition, the acquired company was active within GRENKELEASING AG's franchise system, specialising in the sale of small-ticket leases with a strong focus on IT equipment. As the relevant information for final purchase price allocation was not yet available in full, the fair values of the assets and liabilities are preliminary and may be required to be adjusted if additional information is obtained in the course of the acquisition process.

The following table presents the preliminary fair values of the identifiable assets and liabilities at the acquisition date of the company:

EURk	Fair value
Intangible assets	362
Property, plant and equipment	214
Trade receivables	784
Lease receivables	2,398
Cash and cash equivalents	57
Deferred tax assets	67
Other assets	74
Total assets	3,956

EURk	Fair value
Liabilities from the refinancing of lease receivables	1,641
Trade payables	224
Deferred tax liabilities	200
Other liabilities	136
Deferred income	444
Total liabilities	2,645
Total identified net assets	1,311
Goodwill arising on acquisition	1,089
Total consideration	2,400

The total consideration paid for the business combination with GRENKELEASING Magyarország Kft. amounted to EUR 2,400k and consisted solely of cash.

EURk
Consideration
Purchase price in cash	2,400
Total consideration	2,400
EURk
Cash outflow due to business combination
Net cash acquired with the subsidiary	57
Cash paid	2,400
Actual cash outflow	2,343

The intangible assets relate entirely to measured relationships with resellers. This reseller base is scheduled to be written down over a useful life of six years starting from the acquisition date.

The preliminary fair value of trade receivables amounted to EUR 784k; this figure corresponds to the gross amount. These receivables are expected to be collectible in full. The preliminary fair value of lease receivables amounted to EUR 2,398k. The gross amount of these receivables was EUR 2,656k. Valuation allowances have been recognised for EUR 258k of these lease receivables, which are not expected to be collectible.

GRENKELEASING Magyarország Kft.'s liabilities for the refinancing of lease receivables relate entirely to loans from GRENKE FINANCE Plc., Dublin/Ireland. These loans were granted to the former franchise company for the purpose of refinancing its lease receivables. The loans, some of which are denominated in foreign currency, are measured at the closing rate at both companies and eliminated as part of consolidation, meaning that they are not reported in the consolidated balance sheet. Due to the short term and negligible change in the interest rate of the liabilities, there was no significant deviation between the amount measured at the reporting date and the fair value.

Goodwill arising on acquisition was attributable to the forecast business growth in Hungary and other benefits arising from the full integration of the assets and activities within the Group. The goodwill recognised is not tax-deductible. As the acquired company was only included in the Group for a short time between the acquisition date and the reporting date, it did not contribute to consolidated earnings for the period under review.

RELATED PARTY DISCLOSURES

Mr. Gilles Christ acquired a total of 1,600 shares in GRENKELEASING AG via the stock exchange (Xetra) in February 2011.

Dr. Uwe Hack acquired a total of 2,500 shares in GRENKELEASING AG via the stock exchange (Xetra) in May 2011. Mr. Wolfgang Grenke also acquired 9,000 shares in GRENKELEASING AG via the stock exchange (Frankfurt/Main) in May.

On July 11, 2011, Prof. Ernst-Moritz Lipp acquired 2,000 shares in GRENKELEASING AG via the stock exchange (Frankfurt/Main).

By way of signature dated June 29, 2010 and July 13, 2010, the Supervisory Board of GRENKELEASING AG concluded phantom stock agreements with Board of Directors members Dr. Uwe Hack and Mr. Gilles Christ.

Under these agreements, Dr. Uwe Hack and Mr. Gilles Christ receive entitlements to payment equal to the increase in value of 30,000 and 15,000 shares respectively in GRENKELEASING AG in relation to a defined basic share price for the fiscal years 2010, 2011 and 2012. The share price is the arithmetic mean of the Xetra closing prices on all trading days from December 1 to December 23 of the respective prior year. The basic share price for 2010 was EUR 28.68. The basic share price for 2011 is EUR 37.72. The maximum payment arising from this agreement is limited to EUR 600,000 or EUR 300,000 for the period of three years. Under the program, Dr. Uwe Hack and Mr. Gilles Christ are required to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares. A pro rata calculation was applied to Mr. Gilles Christ's first year of membership on the Board of Directors.

The value of the phantom stock agreements granted for 2011 totalled EUR 316k as at June 30, 2011. As payment is not due until the end of 2011, a proportionate amount of EUR 158k has been expensed for the first six months of the year.

For 2010, a total of EUR 374k was paid out on the basis of the phantom stock agreements for Dr. Uwe Hack and Mr. Gilles Christ.

EMPLOYEES

In the reporting period, the GRENKELEASING AG Group had an average of 567 employees (previous year: 526), excluding the Board of Directors.

EVENTS AFTER THE BALANCE SHEET DATE

A new bullet promissory note loan with a volume of EUR 12,500k and a term of three years was issued on July 4, 2011.

On July 4, 2011, a variable-rate debenture issued as part of the debt issuance programme in the amount of EUR 11,750 was repaid on schedule. A new variable-rate debenture with a volume of EUR 6,900k and a term of two years was also issued as part of the debt issuance programme on July 4, 2011.

Two new promissory notes of EUR 5,000k each (payment on July 28, 2011) and a term of three and a half years each were issued under agreements dated July 21, 2011.

On July 28, 2011, GRENKELEASING AG and GRENKE BANK AG together with NRW.Bank, the development bank of the state of North Rhine-Westphalia, continued and expanded the cooperation concluded on February 18, 2010 by issuing another global loan totalling EUR 15,000k. The funds have not yet been drawn down.

RESPONSIBILITY STATEMENT

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair value of the assets, liabilities, financial position and profit or loss of the Group and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

CALENDAR OF EVENTS 2011

August 1, 2011 Publication Quarterly Financial Report as per June 30, 2011 November 3, 2011 Publication Quarterly Financial Report as per September 30, 2011

CONTACT

Renate Hauss Corporate Communications

Tel.: +49 (0) 7221 5007-204 Fax: +49 (0) 7221 5007-112

E-mail: investor@grenke.de

Figures in this quarterly financial report are usually presented in thousands and millions of euro. Due to rounding, differences as against the actual number in euro may emerge in individual figures. Naturally, such differences are not of a significant nature.

The report is published in German and as an English translation. In the event of any conflict or inconsistency between the English and the German versions, the German original shall prevail.

GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden Germany

Phone: +49 7221 5007-204 Fax: +49 7221 5007-112

www.grenke.de www.grenkebank.de www.grenkefactoring.de

E-mail: investor@grenke.de