DGAP-News

Aareal Bank Group remains on course during the second quarter of 2016 (news with additional features) - Seite 3

very challenging general framework, Aareal Bank originated new business of
EUR 3.5 billion - nearly four times the figure for the previous quarter (Q1
2016: EUR 0.9 billion). Newly-originated loans accounted for around 69 per
cent of new business in the second quarter. Approximately 76 per cent of
aggregate new business was originated in Europe, where Aareal Bank
benefited from several large portfolio financings; around 20 per cent was
originated in the US. Germany accounted for approximately 18 per cent.

Consulting/Services segment: Aareon generated strong Q2 sales revenue and
results

At EUR -8 million (Q2 2015: EUR -7 million), operating profit generated by
the Consulting/Services segment showed a slight improvement over the
previous quarter (Q1 2016: EUR -9 million).

The Aareon AG subsidiary generated strong sales revenue and results during
the quarter under review, in line with projections. Operating profit of EUR
8 million (Q2 2015: EUR 6 million) exceeded the previous quarter's results
by EUR 1 million.

The volume of deposits in the segment's banking business averaged EUR 9.5
billion during the quarter under review (Q1 2016: EUR 9.3 billion), thus
remaining at a high level. The persistently low interest rate environment
burdened income generated from the deposit-taking business, and therefore
the segment result. Nonetheless, the importance of this business goes way
beyond the interest margin generated from the deposits - which is under
pressure in the current market environment. Deposits from the housing
industry are a strategically important additional source of funding for
Aareal Bank.

Sound funding situation and strong capitalisation

Aareal Bank remained very solidly funded during the second quarter of 2016,
maintaining its long-term funding inventory at a high level. Total long-
term funding as at 30 June 2016 amounted to approximately EUR 29.0 billion
(31 December 2015: EUR 30.9 billion).

Aareal Bank Group raised EUR 0.9 billion on the capital markets during the
first half of 2016, comprising EUR 0.8 billion in senior unsecured, and EUR
0.1 billion in secured issues.

Aareal Bank continues to have a very solid capital base. As at 30 June
2016, the Bank's Tier 1 ratio was 16.9 per cent, which is comfortable on an
international level. Assuming full implementation of Basel III, the Bank's
pro-forma Common Equity Tier 1 (CET1) ratio would be 13.2 per cent.

Notes to Group financial performance

Net interest income amounted to EUR 177 million in the quarter under