Wiesbaden, 9 November 2016 – Aareal Bank Group has concluded material litigations concerning former Corealcredit Bank, with a ruling in the Bank's favour. Holders of profit-participation rights issued by Corealcredit Bank AG had sued it in connection with a reduction of repayment claims under profit-participation certificates, for the financial years 2005 to 2008. These risks had been fully covered through provisions recognised, and collateral provided. The conclusion of these proceedings will result in a positive non-recurring effect of € 28 million in pre-tax consolidated operating profit, to be recognised in the fourth quarter. Since this positive non-recurring effect will be offset by a corresponding tax expense of virtually the same amount, related to the same issue, said non-recurring effect will have only a minor impact upon results after taxes, amounting to approximately € 1 million.
Aareal Bank raises its forecast for full-year consolidated operating profit in 2016: including the non-recurring effect, and taking into account the results generated during the 2016 financial year to date (including third-quarter consolidated operating profit of € 74 million), Aareal Bank raises its guidance for consolidated operating profit and now expects consolidated operating profit for the 2016 financial year in a range between € 360 million and € 380 million. Adjusted for the non-recurring effect, full-year consolidated operating profit for 2016 is thus expected in a range between € 330 million and € 350 million, compared to an initial guidance of between € 300 million and € 330 million.
Aareal Bank envisages return on equity (RoE) before taxes around 13% for the current year, including said non-recurring effect. Excluding the positive non-recurring effect, this equates to an expected RoE before taxes of approximately 12%. Earnings per share is now targeted between € 3.20 and € 3.43, compared to an original forecast of between € 2.85 and € 3.19.
