DGAP-News: Aareal Bank AG / Key word(s): Development of Sales/Preliminary Results 
Following a loss-making year as a result of the pandemic, Aareal Bank anticipates a triple-digit million-euro positive 
operating result again for 2021 
2021-02-24 / 07:04 
The issuer is solely responsible for the content of this announcement. 
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Following a loss-making year as a result of the pandemic, Aareal Bank anticipates a triple-digit million-euro positive 
operating result again for 2021 
- Aareal Bank expects to return to profit in the current year, with considerably higher net interest income and net 
commission income, as well as significantly lower loss allowance 
- Double-digit negative consolidated operating loss of EUR 75 million in the 2020 financial year, as announced 
- Significantly higher loss allowance in 2020 due to Covid-19, thus ensuring comprehensive loss allowance is recognised 
for all currently identifiable risks 
- Dividend plans reaffirmed: Subject to approval by the Supervisory Board and a commensurate economic situation, a 
total dividend distribution of EUR 1.50 per share is planned in two stages - in a first step, a dividend proposal of EUR 
0.40 per share is intended to be submitted to the Annual General Meeting in May 
- Further details published on the review of "Aareal Next Level": Additional growth opportunities identified in all 
three segments, and EUR 300 million target confirmed for consolidated operating profit in 2023 
- CFO Marc Hess: "There is no need to reinvent ourselves. We have set out a clear plan showing how we can exploit 
opportunities in all our segments." 
Wiesbaden, 24 February 2021. Following a loss-making year in 2020 owing to the Covid-19 pandemic, Aareal Bank Group 
expects to generate a positive consolidated operating profit again - in a triple-digit million-euro range - for 2021. 
The extent of the turnaround in the operating result will depend primarily on how quickly the anticipated economic 
recovery gains traction, and how loss allowance develops accordingly. From today's perspective, Aareal Bank expects 
loss allowance for 2021 to fall significantly from 2020's levels to between EUR 125 million and EUR 200 million, but still 
remaining above the long-term average. Based on a strong operating performance, the Bank is projecting a consolidated 
operating profit for 2021 in a broad range of EUR 100 million to EUR 175 million, taking into account the uncertainties 
that currently prevail. 
The Company concluded the previous financial year 2020 with a consolidated operating loss in a double-digit million 
euro amount, as announced. On a preliminary, unaudited basis, it amounted to minus EUR 75 million (2019: EUR 248 million). 
After taxes, non-controlling interest income and AT1 costs, consolidated net income allocated to ordinary shareholders 
was minus EUR 90 million (2019: EUR 145 million). Earnings per share declined to minus EUR 1.50 (2019: EUR 2.42). In the 
context of the financial results, it must be taken into consideration that the net gain of approximately EUR 180 million 
from the sale of the minority stake in Aareon has not been recognised in income but directly in equity. 
The annual loss for 2020 is largely attributable to significantly higher loss allowance of EUR 344 million (2019: EUR 90 
million), with the fourth quarter alone accounting for EUR 177 million. Based on the extended and further tightened 
global lockdown measures and the resulting deteriorated economic outlook, the Bank generally classified as stage 2 all 
loans for which liquidity support measures were granted, as already communicated on 17 January 2021 - thus recognising 
loss allowance for default risks which are possible but have not yet materialised. In addition, stage 3 allowance for 
loans which are potentially or actually non-performing was also raised. Overall, the Bank has thus comprehensively 
taken account of the recent intensification of the pandemic. 
Chief Financial Officer Marc Hess commented: "In our financial statements for 2020, we have comprehensively dealt with 
all the Covid-19 risks that are evident today, having already made important adjustments to our loan portfolio as part 
of the successful de-risking exercise over recent years. We are therefore now looking beyond the current crisis and 
believe we are well positioned for the economic recovery phase that we expect to materialise and be gradually 
reinforced this year. This affords us the opportunity to continue to consistently exploit the opportunities that arise 
in a changed environment." 
Aareal Bank Group set this course already in the second half of 2020 and, among other things, expanded its loan 
portfolio to the upper end of the target range of EUR 26 billion to EUR 28 billion - adhering to its risk standards, and 
continuing to achieve margins for new business originated that exceed expectations. At EUR 7.2 billion, attractive 
opportunities were exploited so that the volume of new business was close to that of the previous year (EUR 7.7 billion), 
despite the pandemic - largely thanks to strong performance during the second half of the year. IT subsidiary Aareon 
also demonstrated its growth potential and resilience to a crisis in the year under review with renewed growth in sales 
revenue. 
Against the background of the successful performance of its operating business, the Group's sound prospects for the 
future and its solid capital resources, Aareal Bank affirms its intention to distribute dividends totalling EUR 1.50 per 
share in 2021 for the 2020 financial year, in two stages. The Management Board intends to propose to the Annual General 
Meeting on 18 May 2021 to distribute a dividend of EUR 0.40 per share. This is in line with the requirements published by 
the European Central Bank (ECB) on 15 December 2020. Depending on further economic developments, regulatory 
requirements, the Bank's capital position and its risk situation, an extraordinary Annual General Meeting, which could 
possibly take place during the fourth quarter of 2021, could then decide on the intended remaining payout of EUR 1.10 per 
share. Aareal Bank has taken the intended payout - totalling approximately EUR 90 million - into account as a deduction 
from regulatory capital as at 31 December 2020, as already communicated. 
Strategic review: profitable growth opportunities in all segments 
The Management Board's fundamental confidence is supported by the 360-degree review of the "Aareal Next Level" 
strategic framework, which has meanwhile been concluded. The Company already published the first cornerstones on 17 
January 2021. 
The essential results were confirmed as the project continued: firstly, the strategy and business model remain viable 
in a normalised environment, once the pandemic has been overcome. However, adjustments will be made in order to fully 
exploit the opportunities that arise, and to further enhance efficiency. Secondly, adjusting the strategy will allow 
the Bank to generate consolidated operating profit in the range of EUR 300 million - excluding any potential acquisitions 
- as early as 2023, provided the pandemic has been fully overcome by then and the risk situation has returned to 
normal. Assuming a CET1 reference ratio of around 15 per cent (Basel IV, phased-in, revised IRBA) which would exceed 
the market average, this translates into a return on equity (RoE) after taxes of approximately 8 per cent (both for the 
Group and for the Bank), in line with the cost of capital. 
The Company sees opportunities for profitable growth in all three segments: 
In the Structured Property Financing segment, the controlled expansion of the portfolio volume - adopting a flexible 
approach with regard to countries, asset classes and financial structures - is aimed at making better use of the 
existing platform. A figure of around EUR 29 billion is targeted for the end of 2021 and of approximately EUR 30 billion 
for the end of 2022 - with positive effects for net interest income, which is expected to rise sharply already in the 
current year. For the post-Covid period, Aareal Bank anticipates enhanced opportunities for high-margin business whilst 
maintaining its conservative risk standards. 
In the Consulting/Services Bank segment, Aareal Bank intends in particular to extend the 'equity-light' business and 
therefore increase net commission income, which is set to double to approximately EUR 50 million by 2025. Aareal Bank 
intends to achieve this mainly by expanding the product range, in particular in the digital arena, and through further 
strategic partnerships. Following the strategic review, the Bank also wants to continue with its deposit-taking 
business, with a volume projected to remain above EUR 11 billion over the medium term. Deposits not only represent a 
stable, attractive additional source of funding, but also offer considerable potential for increasing income in case of 
a turnaround in interest rates - which, however, the Bank does not anticipate during the planning period. In order to 
highlight the new ambition of the segment, it will be renamed "Banking & Digital Solutions" with effect from 1 January 
2021. 
The Bank aims to further strengthen the market position of its successful IT subsidiary Aareon in the coming years as a 
leading software company for the European property industry, and to significantly increase the value and earnings 
contribution for the Group and its shareholders. Together with its partner Advent International, which acquired a 
minority stake in Aareon in August 2020, the Bank intends to further intensify the company's pace of growth, 
organically as well as through new, digital products and solutions in particular, and through greater up- and 
cross-selling in the existing client base. It is also planning further related acquisitions. Previously, Aareon had 
targeted a doubling of adjusted EBITDA to a level of EUR 110 million by 2025: based on the value creation programme

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