Aareal Bank Group has said it originated EUR 1.6 bn of new estate lending in the second quarter of this year compared to EUR 700 mln in the second quarter of 2009.

Aareal Bank Group has said it originated EUR 1.6 bn of new estate lending in the second quarter of this year compared to EUR 700 mln in the second quarter of 2009.

The consolidated operating profit for the second quarter was also significantly higher at EUR 31 mln compared to EUR 19 mln in Q2 last year.

This brought the result for the first half of 2010 to EUR 61 mln compared with EUR 43 mln in the same period last year. New business is currently expected at the upper end of the range between EUR 4-5 bn in 2010, with a lower share of renewals. The bank's total lending portfolio stood at EUR 22.8 bn at end-June this year a billion euros up on the total at end-2009.

Chairman Dr Wolf Schumacher commented: 'We continue to perform well during the 2010 financial year. Our good results for the second quarter - which was once again characterised by uncertainty and turbulence on the capital markets - is further evidence that our business model is viable and sustainable.'

Against the background of a sound operating performance and the bank's solid capitalisation, Aareal Bank announced at the end of the second quarter that it would repay a first tranche of the silent participation by the German Financial Markets Stabilisation Fund (SoFFin). The EUR 150 mln tranche was repaid on 16 July, making Aareal Bank the first bank to start repaying capital support provided by SoFFin.

Aareal said that its Structured Property Financing segment once again performed well despite having to operate in a 'commercial property market environment that remains challenging'.

For the first six months, new business came to EUR 2.9 bn - a level that is appropriate, considering the state of the sector, Aareal said. Overall, the share of renewals declined in the second quarter, the bank said. Europe accounted for 76% of the new business in the first half of 2010.

At EUR 25 mln, operating profit in the Structured Property Financing segment more than doubled year-on-year (Q2 2009: EUR 12 mln).