Wiesbaden-based Aareal Bank announced it originated new business totalling €9.2 bn in 2016 in its structured property financing segment.
While this was slightly lower than the €9.6 bn originated during 2015, it was well in excess of the targeted €7-8 bn. The bank is again targeting new business of €7-8 bn for the current year, the company said in a press release.
According to preliminary, unaudited figures, Aareal saw consolidated operating profit rise 14% to €366 mln last year. This is the bank's best operating profit to date, despite the still-challenging environment, board chairman Hermann Merkens said.
'We are very satisfied with the financial year under review. We achieved all of our objectives for the year, even exceeding some of them. Thanks to our pronounced operating profitability and very robust capital base, we are not only well-prepared for any regulatory contingencies. We are also in a position to exploit market opportunities in both our segments, from a position of strength.'
Aareal Bank expects the competitive environment to remain challenging during the current financial year, with a continuation of diverging developments in the key economic regions. The low interest rate environment is likely to persist during 2017. 'Whilst financial markets participants expect further interest rate increases in the US, as well as a steepening of the yield curve in the euro area, the scope of such changes – and the resulting volatility on the financial markets – remain difficult to predict,' the bank said.
It added that commercial property is likely to remain a sought-after asset class during the current financial year due to the current 'highly competitive environment'.
