DGAP-News

Aareal Bank Group remains on course during the second quarter of 2016 (news with additional features) - Seite 2

income - fell short of the previous year's figure (Q2 2015: EUR 191
million), as expected. This was due to the ongoing reduction of non-
strategic portfolios, as well as to lower year-on-year effects from early
repayments. Allowance for credit losses returned to normal levels,
following the unusually low level seen in the first quarter of 2016: at EUR
29 million, it was slightly lower year-on-year (Q2 2015: EUR 31 million),
and thus in line with our expectations. Aareal Bank affirms the forecast
range of EUR 80 million to EUR 120 million for the full financial year
2016.

At EUR 3.5 billion (of which approximately EUR 2.4 billion in newly-
originated loans), new business generated in the Structured Property
Financing segment showed strong momentum during the second quarter. In line
with the strategic "Aareal 2020" programme for the future presented in
February, a focus in new business origination is on the US market, which
has accounted for a share in newly-originated loans of approximately 40 per
cent during the first half of 2016. Aareal Bank maintains its new business
target of between EUR 7 billion and EUR 8 billion for the 2016 financial
year.

In the Consulting/Services segment which - in the "Aareal 2020" framework -
constitutes the Group's material growth driver, IT subsidiary Aareon once
again developed positively. Aareon increased sales revenues by more than 10
per cent, boosting operating results by roughly one-third year-on-year.
During the period under review, Aareon especially pursued international
cross-selling of its products, and the development and/or market launch of
new digital services. Results in the banking business with the housing
industry continue to be shaped by historically low interest rates. At an
average of EUR 9.5 billion, the volume of deposits remained at a high
level.

"Aareal Bank Group continues to show a very strong performance, in a
challenging market and competitive environment", said Hermann J. Merkens,
Chairman of the Management Board. "We enjoy an excellent position in both
our business segments; and we are pursuing our corporate strategy
consistently, in order to ensure the durability of our success story for
the future."

Structured Property Financing segment: Strong increase in new business in
Europe and the US

In its Structured Property Financing segment, Aareal Bank Group generated
operating profit of EUR 128 million during the second quarter (Q2 2015: EUR
236 million, including EUR 150 million negative goodwill from the
acquisition of WestImmo).

In a business environment that continues to be highly competitive, and a