Aareal Bank concluded the first half of the year with an adjusted operating profit of EUR 208 million. The actual operating profit, taking into account one-off costs for efficiency measures and investments in IT infrastructure, amounted to EUR 199 million. These figures reflect the strength of the bank's business model, which focuses on two key client areas: real estate financing and deposits from the housing industry.
Dr. Christian Ricken, Chairman of the Management Board of Aareal Bank, commented that the half-year figures demonstrate the robustness of its balanced business model. He highlighted that both new business in real estate financing and the development of deposits from the housing industry showed positive results. Net interest income reached EUR 474 million and thus increased despite a lower interest rate environment compared to the previous year. This increase resulted from a higher loan portfolio and a significantly grown average deposit volume of the bank.
Total risk provisioning, at EUR 127 million, was within expectations for the full-year development. The global macroeconomic environment during the reporting period was characterised by geopolitical tensions but proved resilient. Aareal Bank continues to forecast volatile geopolitical and macroeconomic developments. The active management of non-performing loans (NPLs) was consistently continued. The NPL volume remained almost constant at EUR 1.17 billion as of 30 June 2026. The bank continues to pursue the goal of reducing the NPL volume to less than EUR 1 billion by the end of 2026.
Cost Management and Capitalisation
Thanks to efficient cost control and positive effects from implemented efficiency measures, adjusted administrative expenses were reduced to EUR 155 million. The one-off costs incurred amounted to EUR 9 million in the first half of the year. The bank's cost-income ratio, adjusted for special expenses, was 31 per cent, a figure that is considered low even by international comparison. The result from other components of the income statement, which includes valuation changes and repayments, amounted to EUR 23 million. Net profit after taxes and interest on the AT1 bond amounted to EUR 126 million. Adjusted return on equity after taxes reached 8.3 per cent.
Aareal Bank's capitalisation remains solid. The Common Equity Tier 1 ratio (Basel IV CET1 ratio fully-phased) was 15.6 per cent as of 30 June 2026, and the total capital ratio (Basel IV fully-phased) was 21.1 per cent. In the first half of the year, Aareal Bank was also active in refinancing on the capital market and successfully placed a total of EUR 1.7 billion. This included three covered bond benchmark transactions, among them the bank's first green covered bond with a volume of EUR 625 million. The liquidity ratios LCR and NSFR stood at 201 and 115 per cent respectively, underscoring the robust liquidity position.
Development of Business Segments
In the Banking & Digital Solutions (BDS) segment, the deposit volume from customers in the housing and energy industry exceeded the EUR 15 billion mark for the first time in June. The average volume in the second quarter rose to EUR 14.8 billion, and for the entire first half of the year, it averaged EUR 14.7 billion. Including retail deposits, the average total deposit volume in the first half of the year amounted to EUR 17.5 billion. The strong deposit business strengthens the bank's refinancing base and increasingly establishes BDS as a significant earnings and stability anchor for the group. Net interest income in this segment improved by 10 per cent to EUR 125 million. BDS continues to expand internationally and is opening up new growth opportunities outside the German core market, including through market entry in the Netherlands.
In the Structured Property Financing (SPF) segment, new business and the portfolio developed in line with strategy. The volume of prolongations and newly granted loans amounted to EUR 4.7 billion in the first half of the year. A focus was placed on cross-border portfolios and the hospitality sector. Initial loan disbursements accounted for EUR 2.9 billion at stable margins and low loan-to-value ratios. The average gross margin was 242 basis points, and average loan-to-value ratios were a conservative 55 per cent. New loans were primarily granted in Europe, while in the USA, prolongations were mainly carried out. The portfolio volume reached EUR 34.4 billion as of 30 June 2026, which corresponds to the target value for the full year. The portfolio indicators, with an average loan-to-value ratio of 56 per cent and an average yield-on-debt of 9.9 per cent, signal a conservative risk level.
