Aareal books flat earnings as new business surges

Aareal Bank reported consolidated operating profit rose slightly in the second quarter of 2012 to EUR 45 mln from EUR 44 mln in the year-earlier period. Including taxes and a EUR 5 mln payment to the German stabilisation fund Soffin for its silent participation, consolidated net income came to EUR 24 mln over the period. For the first half of the year, consolidated net income was flat at EUR 45 mln.

For the full year, Aareal is maintaining its forecast that consolidated operating profit will be ‘only slightly below’ last year's figure of EUR 185 mln which marked a 38% increase on the result in 2010.

‘Even though the situation on global financial markets remains tense, thanks to our decidedly robust capital base and refinancing situation, we are in an excellent position to be successful in this challenging environment,’ management board chairman Wolf Schumacher said in a statement.

Following a slow start to the year, Aareal Bank increased its new business origination in the Structured Property Financing segment during the second quarter. New business volume more than doubled to EUR 1.2 bn from EUR 0.5 bn in the first three months and the first-quarter figure related primarily to extensions. The bank is seeking to exploit further market opportunities in the second half of 2012, Schumacher said. For the full year, he expects to generate new business of EUR 4.5 bn to EUR 5.5 bn.

At the end of the second quarter, the bank’s Core Tier 1 ratio stood at 11.7%.