Press Information

30.05.2007

Following the successful turnaround, Aareal Bank's Annual General Meeting passes resolution to resume dividend payments for the first time since 2004

  • Dr. Wolf Schumacher, Chairman of the Management Board: “The Group has built a solid foundation for sustained and profitable growth”
  • Six-point realignment programme completed ahead of schedule – FUTURE 2009 growth programme launched successfully
  • International expansion will be expedited
  • Targets for 2007 affirmed

Wiesbaden, 30 May 2007 – Following its successful turnaround, Aareal Bank AG will resume dividend payments to its shareholders for the 2006 financial year, after two years without distribution. The General Meeting of the international property finance specialist today approved the proposed distribution of € 0.50 per share, passing the resolution with a majority of 99.99% of the capital represented. Shareholders also approved the other proposals on the agenda with a large majority (for detailed voting results please click here).

At the General Meeting, Dr. Wolf Schumacher, Chairman of the Management Board, expressed strong confidence for the future development of Aareal Bank Group. He praised the strong team effort, thanks to which a sound basis for Aareal Bank Group had been built – in record speed, and in a smooth and efficient manner. “The bank has defined a clear-cut strategy for the future”, Schumacher emphasised, explaining that Aareal Bank Group will now focus all its efforts on implementing its FUTURE 2009 growth initiative launched in March, having completed its six-point realignment programme 18 months ahead of schedule. Schumacher added that “the combination of continued internationalisation in the bank’s Structured Property Financing business and improved profitability in its Consulting/Services segment will provide the basis for sustained and profitable growth over the next three years, and will further enhance the competitive strength of Aareal Bank Group.”

Continued positive operating performance

Aareal Bank restored its profitability in 2006, with operating profit of € 160 million – a positive swing of € 250 million compared to the previous year. The positive trend continued into the first quarter of 2007: at € 79 million, operating profit doubled compared to the same quarter of the previous year. Excluding special effects, the result was up by 16.7%.

“Looking at the positive results of the first quarter, we remain confident that we will achieve our targets for the current financial year”, Schumacher stressed. Return on equity after taxes is targeted at a minimum level of 13%. The Consulting/Services segment is set to continuously enhance profitability, to contribute approx. € 22-28 million to the target Group results before taxes.

Realignment shows results

The target for new business generated in 2007 is € 10 billion; at over € 3.2 billion for the first four months of the current year, business is developing fully in line with projections. The targeted expansion of international activities in particular – covering three continents: Europe, North America, and the Asia/Pacific region – is showing signs of success, and will further diversify the bank's portfolio. With an aggregate volume of around € 800 million, new business in the North American market has been growing at above-average rates. The bank has entered the Chinese market during recent months, winning two arranger mandates with an aggregate volume of USD 150 million from international investors. Citing substantial growth potential in China, Aareal Bank Group plans to open an office in Shanghai during the current year. The bank has been actively providing finance in the Asia/Pacific region since the end of 2006. For the current year, it expects to generate around € 500 million in new business in the region – a key milestone in Aareal Bank’s drive to consistently increase the international focus of its business still further.

Aareal Bank’s business with the institutional housing sector, conducted by its Consulting/Services segment, has also developed positively, as seen by the favourable market response to the multi-product strategy launched by Aareon AG, the IT services provider, in 2006. Aareon was thus able to win key new client accounts for its SAP-based Blue Eagle software during the first quarter of 2007, including GAGFAH Group, Germany’s largest listed residential property management company, and Treureal Group, a fast-growing company also in the property management sector. Stepped-up sales activities in the payments and deposit-taking businesses have also had a positive impact: the bank succeeded in acquiring approximately one-third of those Aareon AG clients operating the ‘Wodis’ SME solution as clients of the bank. This highlights the efficient use of synergies between the sectors within the Consulting/Services segment.

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