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Aareal Next Level: profitable growth in all segments

Aareal Bank Group’s strategy focuses on sustainable business success: we want to continue our long track record of success in the German banking sector in the future whilst generating value for all of our stakeholders.

The process of transformation within the property industry opens up a whole host of potential for us to continue on, and forge further ahead with, our successful growth trajectory in each and every one of our business segments. We have defined exactly how we intend to seize these opportunities and what objectives we have set as part of our strategy in our “Aareal Next Level” concept.

The core element of this strategy is our objective of achieving consolidated operating profit of around €300 million in 2023. We are aiming for another marked increase to up to €350 million in 2024. This is, of course, subject to the assumption that the pandemic will have been fully overcome by then, and that the risk situation will have returned to normal.

In our quest to achieve these goals, we are focusing on tapping into new growth opportunities and on an expanded range of strategic options. Moreover, we will optimise our funding mix and capital structure, implementing a range of measures to make us more efficient. Our aim is to achieve a cost/income ratio of below 40 per cent in the Bank’s financing business by 2023. Aareal Bank will leverage its solid capital position to finance growth and investments for the future – whereby a change in the balance between distributions and investments will be examined within the framework of its existing dividend policy.

Grow! Leverage! Accelerate!

Our three business segments are subject to different overall conditions, meaning that their growth potential varies, too. As a result, they are pursuing different goals and have different focal points within the context of our Group strategy.

  • Structured Property Financing: from ACTIVATE! to GROW!
    Our aim is to increase our portfolio volume by €1 billion a year to arrive at a figure of around €33 billion by the end of 2024. We are seeking to grow in our core sectors and regions in particular. We will also be looking at opportunities to expand into new areas where our expertise can be deployed.
     
  • Banking & Digital Solutions: from ELEVATE! to LEVERAGE
    We are aiming to achieve growth in net commission income averaging around 13 per cent a year between now and 2023. We want to achieve this mainly by expanding our product range, in particular in the digital arena, and through further strategic partnerships.We are aiming to keep deposit volumes – which are important for our funding – stable at the current level of more than €12 billion up to 2024.
     
  • Aareon: continue to ACCELERATE!
    Aareon is to become a “Rule of 40” SaaS company by 2025, with Aareon’s combined EBITDA margin and revenue growth rate to exceed 40 per cent in the long run. At the same time, adjusted EBITDA is to increase to around €155 million, including earnings of around €20 million contributed by the acquisitions already completed to date. This does not yet include the positive effects of possible further acquisitions over the coming years. In order to achieve this objective, we will continue to grow organically with our ERP systems and digital solutions, while also implementing the Value Creation Programme and expanding the software-as-a-service business. We will be ­further accelerating Aareon's inorganic growth at the same time by making targeted acquisitions.