History of Declaration of Conformity of Aareal Bank

as at  1 December 2006

Current Declaration of Conformity

Declaration of Conformity 

The Management Board and Supervisory Board of Aareal Bank AG declare, in accordance with section 161 of the AktG, that:

Aareal Bank AG has complied with the recommendations of the Government Commission “German Corporate Governance Code” (as amended on 2 June 2005 and, with effect from 12 June 2006, as amended on that date) since the last Declaration of Compliance was issued in December 2005; in each case, except for the recommendations mentioned below:

Pursuant to section 3.8 of the German Corporate Governance Code, a suitable deductible shall be agreed if the company takes out a D&O (directors and officers' liability insurance) policy for the Management Board and Supervisory Board.

For the members of the Management Board and Supervisory Board, there is a directors’ and officers’ liability insurance policy without a deductible. Since it goes without saying that all members of Aareal Bank´s Management Board and Supervisory Board have a duty to act responsibly, no deductible is required.

Pursuant to section 4.2.2 of the Code the full Supervisory Board shall discuss and regularly review the structure of the Management Board compensation system at the proposal of the committee dealing with Management Board contracts.

The Supervisory Board of Aareal Bank AG has transferred responsibility for matters relating to the renumeration of the Management Board to its Executive Committee, which independently resolves upon and deals with them. This procedure has proven to be successful over many years of practice. The Executive Committee discusses the structure of the system of compensation, regularly examines it and determines the amount of compensation for members of the Management Board. It reports to the full Supervisory Board on the discussion and examination of the system of compensation.

In the coming fiscal year, Aareal Bank AG will continue to comply with the recommendations of the German Corporate Governance Code (as amended on 12 June 2006) except with respect to sections 3.8 and 4.2.2 as set out above.

Furthermore, Aareal Bank AG adopted its own Corporate Governance Code as early as 1999. The bank’s Code has been adapted to incorporate amendments to the German Corporate Governance Code; it goes far beyond the recommendation of the Government Commission.

Wiesbaden, 1 December 2006

The Management Board


Dr. Schumacher     Kickum       Merkens      Ortmanns      Schörnig



For the Supervisory Board


Hans W. Reich
(Chairman)