WIESBADEN (dpa-AFX) – The real estate financier Aareal Bank surprisingly closes 2020 in the red due to the tightened corona lockdowns in many countries. A negative operating result in the double-digit million range is expected, the MDAX-listed financial institution surprisingly announced on Sunday evening in Wiesbaden.
The cause is increased risk provisioning for possible loan defaults.
The bank is heavily involved in the financing of commercial real estate such as hotels, offices and shopping centers. It was only in mid-November that the board had cut its targets for 2020, but still promised an operating profit in the mid double-digit million range. Because shops in many countries were closed for months because of the pandemic and tourism has collapsed, many borrowers from the industries are under great pressure.
“We are ticking off the pandemic year 2020 with a comprehensive precautionary measure for Covid-19-related risks,” said CFO Marc Hess. For the current year, Aareal Bank expects a “clearly positive operating result”.
The top management currently assumes that it will be able to distribute the dividend in two tranches. Aareal shareholders went away empty-handed for 2019 after supervisory authorities such as the European Central Bank called for a dividend freeze.
Meanwhile, CFO Hess is fueling the hope that the real estate financier will again make significant profits in the coming years. In 2023, the bank wants to generate a group operating profit of around 300 million euros. Possible takeovers are not yet included.
The return on equity should reach around eight percent.
In order to increase profits as planned, the management board wants to expand the structured real estate financing business and reach a loan portfolio of around 30 billion euros by the end of 2022. He also wants to improve the structures for capital and fundraising, strengthen the commission business and reduce costs in the core business.
The re, the ratio of costs to income is to drop to 40 percent.
The in-house IT service provider Aareon should also contribute its part to profit growth. Last year, the financial investor Advent joined the Aareal subsidiary as a co-owner./stw/edh