German lender Aareal Bank said on Tuesday that it is raising its forecast for the full-year 2015 after reporting an operating profit of €82 mln in the third quarter, up nearly 25% on the same period a year earlier.
German lender Aareal Bank said on Tuesday that it is raising its forecast for the full-year 2015 after reporting an operating profit of €82 mln in the third quarter, up nearly 25% on the same period a year earlier.
Aareal Bank now expects full-year operating profit to range between €450 mln and €460 mln, up from a previous forecast of €400-430 mln.
Operating profit for the first three quarters amounted to €382 mln, compared to €350 mln for the first nine months of 2014, the bank's record year to date. The 2015 figure also includes €154 mln in preliminary negative goodwill from the acquisition of WestImmo, which was closed at end May.
Aareal said the strong increase in third-quarter operating profit was largely due to the rise in net interest income, which was up 18% to €214 mln largely as a result of stronger effects from early loan repayments, as well as of bigger lending volumes linked to the acquisition of WestImmo, whose results were included in Aareal Bank Group's income statement for the first time in the third quarter.
New business
Aareal Bank originated €2.7 bn in new business during the third quarter, bringing the nine-month figure to €6.3 bn. Against this background, Aareal Bank raised the full-year target corridor for new business to between €8-9 bn, from an original forecast of €6-7 bn.
'Throughout the last years, Aareal Bank has demonstrated - time and again - its ability to readily seize opportunities in its business segments, based on a viable strategy and clearly-defined principles - finding the right answers to the challenges posed by competition and regulation,' said chairman Hermann Merkens.
Despite persistently low interest rates and strong competition, German lenders have posted strong figures in the third quarter. Last week, Berlin Hyp announced a pre-tax profit of €61.7 mln for Q3, versus €47.3 mln in the same period a year earlier.
The bank's new lending volume including long-term extensions rose to over €4 bn compared to €2.7 bn in 2014.
