Aareal Bank expects consolidated operating loss in a double-digit million euro amount for the 2020 financial year – dividend payments in a total amount of € 1.50 per share targeted in the current year for financial year 2020
Based on current insights, Aareal Bank Group will post a consolidated operating loss in a double-digit million euro amount for the 2020 financial year. This is due to an increase in loss allowance, compared to original expectations. Based on the extended and further tightened global lockdown measures, the Bank has generally classified all loans for which liquidity support measures (payment deferrals and liquidity facilities) were granted as stage 2 – thus recognising forward-looking additional loss allowance to a significant extent. In addition, stage 3 allowance has been raised in individual cases. Overall, with these measures, the Bank is therefore comprehensively taking account of the recent intensification of the pandemic.
Aareal Bank will publish full preliminary figures for the 2020 financial year on 24 February 2021, as announced.
Based on its strong capitalisation, Aareal Bank plans to offer its shareholders the prospect of a total dividend payout of € 1.50 per share in 2021 for the financial year 2020. This is of course subject to the applicable supervisory and regulatory requirements. The payout would need to be made in two steps. In compliance with the requirements published by the European Central Bank (ECB) on 15 December 2020, the current status of preparation of the financial statements indicates a distributable amount of between approximately € 0.35 and € 0.40 per share. Subject to the preparation and audit of the financial statements and the regulatory authority’s approval for inclusion of profits, the Management Board plans to submit a corresponding proposal for the appropriation of profits to the ordinary Annual General Meeting in May 2021. The Bank will be able to pay out the remaining amount of between approximately € 1.10 and € 1.15 per share in the fourth quarter of 2021, provided that regulatory requirements concerning uncertainty surrounding the Covid-19 crisis will have been fulfilled at that time.
Aareal Bank will take the intended payout totalling approximately € 90 million into account as a deduction from regulatory capital as at 31 December 2020. In addition, calculation of regulatory capital is based on the assumption that the AT1 bond is serviced in full. In agreement with the supervisory authority, there are no plans to terminate the AT1 bond in the current financial year.