Analyst Conference Call Q results

Transcription

1 LOCAL EXPERTISE MEETS GLOBAL EXCELLENCE Analyst Conference Call Q results November 11, 2008 Dr. Wolf Schumacher, CEO Hermann J. Merkens, CFO

2 Highlights Q Aareal business model proved itself successful once more 1 2 Making profits despite accelerating financial crisis 2 3 Black figures even without reclassification of securities 3 4 Good operating performance in both business segments 4 5 Growth of core portfolio 5 6 Adequate capital base 6 7 Solid funding position 7 1

3 Business Development

4 Structured Property Financing Risk weighted assets (KSA) New business development yoy bn % bn German % M M 2008 International New business development qoq New business by region 9M 2008 bn 2,5 2,0 1, % % Europe South Asia/Pacific 12% 11% 25% North America 1,0 0,5 0,0 Q Q Q German International Europe 13% North Europe East 17% 22% Europe West 3

5 Consulting / Services Stable customer deposits: mn Term deposits (housing industry) Sight deposits (housing industry) Further acquisition successes in all product lines Stable demand for consulting services Stable earnings independent of financial crisis 9M EBT of 33mn in line with FY guidance ( mn) 4

6 Funds issued matching new commitments mn mn M Senior unsecured issues Mortgage Pfandbrief Issues x New commitments 5

7 Financial Performance

8 Performance Profit before tax and special effects by quarter mn Pre tax one-off effects Q3 2008: Impairments and losses on securities: -44 mn Effects from hedges: +34 mn Shown as operating: provisions for social plan: -8 mn Pre tax one-off effects Q2 2008: Proceeds from Interhotel transaction : +10 mn Pre tax one-off effects Q1 2008: ABS marked-to-market effect: -16 mn Pre tax one-off effects Q4 2007: Bond marked-to-market effect: -16 mn Q Q Q Q Q Goodwill impairment BauGrund: -2 mn Pre tax one-off effects Q3 2007: Proceeds from Interhotel transaction: +63 mn Proceeds from Immoscout : +153 mn Bond marked-to-market effect: -15 mn Special expenses (compensation payments, preparation of legacy portfolio sale): -12 mn 7 Operating profit without one-offs One-off effects

9 Performance Net interest income and allowance for credit losses mn Q Q Q Q Q Q Q NII Sructured Property Financing NII Consulting/Services Allowance for credit losses 8

10 Performance Net commission income mn 40 Positive performance of Consulting/Services balances out reduced commission income in Structured Property Financing (due to substantially reduced fee income from unscheduled repayments) Q Q Q Q Q Commission Income 9

11 Performance Admin expenses mn Measures to raise efficiency paying off First successful steps towards adapting group structure to optimised portfolio structure Q Q Q Q Q Admin Expenses 10

12 Analysis Breakdown net trading income mn Gain from economic hedges Lehman impairment Cost of securitisations ABS mtm Bond mtm Reclassisfication Total 11

13 Analysis Breakdown results from non-trading assets mn 0 Impairments Realised losses Total

14 Performance Development revaluation reserve mn Revaluation reserve Relief by reclassification of securities from AfS to LaR 13

15 Analysis of reclassified securities in Q in mn Without reclassification With reclassification from Trading book Notional Market value Hypothetical P&L effect Hypothetical market value Volume in LaR P&L effect Volume in LaR Q Q ABS Bonds Total AfS book Notional Market value Hypothetical? Reval. Res. Hypothetical market value Volume in LaR? Reval. reserve Volume in LaR Q Q ABS Bonds Total Def. tax on? Reval. reserve 12 Net position -39 No active market in Q for the reclassified securities No impairments were necessary on the reclassified securities in Q

16 Exposure to special asset classes as of Asset Class Exposure Aareal Bank US Subprime and US RMBS None CDOs None ABCPs / SIVs None Exposure insured by Monoliners None Iceland (including Icelandic Banks) None Lehman Brothers < 10 mn ABS portfolio - of which AAA rated - of which US CMBS ~ 610 mn > 90% < 50 mn 15

17 Funding Structure & Capital

18 Adequate capital position 40 Total balance sheet leverage 9,0% Tier 1 ratio (KSA) ,4 30,6 30,7 8,5% 8,0% 7,7% 8,3% 8,0% 25 22,3 22,6 22,5 7,5% 20 7,0% 15 6,5% 10 6,0% 5 5,5% 0 ' ,0% ' Total assets / equity including hybrids 17 Total assets / equity without hybrids

19 Asset/Liability structure as at bn Cash and interbank 10.6 Treasury portfolio 2.1 Public sector loans 23.0 Real estate structured finance loan book 5.0 Interbank 5.1 Client deposits 22.1 Long-term funds Non-interest-bearing assets 3.2 Non-int.-bearing liab. + equity Assets 4.4 Deposits from the housing industry Liabilities 18

20 Maturity profiles Loan portfolio vs. long term liabilities (as at ) mn Solid liquidity situation: Long term funding average maturity: 5.0 years Loan portfolio average maturity: 3.5 years Contractual repayments of the loan portfolio Long term funding volume to mature Of which: Mortgage Pfandbriefe Surplus (cumulative) 19

21 Asset Quality

22 Total property finance portfolio as at Total volume outstanding : 23.7 bn North America Europe East Europe North 12% Europe South 11% 12% Developments by region 5% 17% Asia/Pacific Europe 22% West (ex Ger) 21% Germany Other Other / Mixed Logistics Hotel by property type 9% 15% Residential 12% 15% 12% 3% 12% 4% 30% 19% by product type by LTV ranges 1) > 80% 60-80% Office Shopping Centre 85% Investment finance 84% < 60% 21 1) Mortgage collateralised business only; value does not take into account any collateral other than mortgages

23 Facts and Figures

24 Group P&L Q Q Q Change mn mn % Net interest income % Net loan loss provisions % Net interest income after net loan loss provisions % Net commission income % Net result on hedge accounting Net trading income Results from non-trading assets Results from companies accounted for at equity % Results from investment properties Administrative expenses % Net other operating income % Impairment of goodwill - Operating Profit % Income taxes % Consolidated net income / loss % Allocation of results Consolidated net income / loss attributable to minority interests Consolidated net income / loss attributable to % shareholders of Aareal Bank AG % 23

25 Segment reporting Q Quarter mn mn mn mn Quarter Quarter Quarter Quarter Quarter Quarter Net interest income Provision for loan losses Net interest income after net loan loss provisions Net commission income Net result on hedge accounting Net trading income / expenses Results from non-trading assets Results from companies accounted for at equity Results from investment properties Administrative expenses Net other operating income / expenses Impairment of goodwill Structured Property Financing Consulting/ Services Consolidation/ Reconciliation/ Other Aareal Bank Group Operating profit Income taxes Consolidated net income / loss Quarter Allocation of results Consolidated net income / loss attributable to minority interests Consolidated net income / loss attributable to shareholders of Aareal Bank AG Allocated equity ,320 1,154 Cost/income ratio in % RoE after taxes in %

26 Definitions and Contacts

27 Definitions Property Financing Portfolio Paid-out financings on balance sheet Incl. remaining property loans on DEPFA books New Business Newly acquired business incl. renewals (excl. interest rate extensions) Contract is signed by costumer Fixed loan value and margin Net RoE = Group net income after minority interests Allocated (average) equity Allocated Equity Average of: Equity minus minorities and revaluation surplus (start of period less dividends) and Equity minus minorities and revaluation surplus (end of period less expected dividends) CIR = Admin expenses + other operating expenses Net income Net Income net interest income +net commission income + net result from hedge accounting + net trading income + results from nontrading assets + results from investments accounted for at equity + results from investment properties + other operating income 26

28 Contacts Jürgen Junginger Managing Director Investor Relations Phone: Alexandra Beust Director Investor Relations Phone: Nicole Schüttforth Investor Relations Phone:

29 Disclaimer Aareal Bank AG. All rights reserved. This document has been prepared by Aareal Bank AG, exclusively for the purposes of a corporate presentation by Aareal Bank AG. The presentation is intended for professional and institutional customers only. It must not be modified or disclosed to third parties without the explicit permission of Aareal Bank AG. Any persons who may come into possession of this information and these documents must inform themselves of the relevant legal provisions applicable to the receipt and disclosure of such information, and must comply with such provisions. This presentation may not be distributed in or into any jurisdiction where such distribution would be restricted by law. This presentation is provided for general information purposes only. It does not constitute an offer to enter into a contract on the provision of advisory services or an offer to purchase securities. Aareal Bank AG has merely compiled the information on which this document is based from sources considered to be reliable without, however, having verified it. Therefore, Aareal Bank AG does not give any warranty, and makes no representation as to the completeness or correctness of any information or opinion contained herein. Aareal Bank AG accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation. This presentation may contain forward-looking statements of future expectations and other forward-looking statements or trend information that are based on current plans, views and/or assumptions and subject to known and unknown risks and uncertainties, most of them being difficult to predict and generally beyond Aareal Bank AG s control. This could lead to material differences between the actual future results, performance and/or events and those expressed or implied by such statements. Aareal Bank AG assumes no obligation to update any forward-looking statement or any other information contained herein.