WIESBADEN (dpa-AFX) - The new owners of Aareal Bank are replacing the Chief Financial Officer as well as the Chief Executive Officer. The Supervisory Board and Chief Financial Officer Marc Hess had "mutually agreed" that the Chief Financial Officer, who has been in office since October 2018, would leave the company when his service contract expires at the end of the current year, the Wiesbaden-based commercial real estate financier announced on Wednesday. The supervisory body will decide on a successor "in the near future".

A change at the top of the Management Board has already been decided: LBBW manager Christian Ricken, who previously worked for Deutsche Bank for a long time, is to take over from current Aareal Bank CEO Jochen Klosges on August 1.

The financial investors Advent and Centerbridge as well as the Canadian pension fund CPPIB took over Aareal Bank last year. The remaining minority shareholders will be squeezed out in a cash settlement following a resolution by the Annual General Meeting in early May 2024. Aareal Bank has already bid farewell to the stock exchange.

Positive quarterly results - but still a mountain of problem loans

In business terms, the bank started the current year with growth. Operating profit climbed by around two-thirds compared to the first quarter of 2023, reaching € 103 million - the highest level since 2018, as Aareal Bank also announced on Wednesday. The bottom-line profit increased from 51 million euros to 71 million euros.

However, persistent problems on the US real estate market continue to force Aareal Bank to set aside significantly higher provisions for potential loan losses. At 83 million euros, allowance for credit losses in the first quarter was significantly higher than the 32 million euros recorded in the same period of the previous year. As the trend towards working from home means that less office space is needed, the market for such properties is under pressure in many countries, especially in the US. Aareal Bank has reportedly further reduced its portfolio of problematic financings of US office properties: at the end of March, impaired loans totaled 1.1 billion euros, compared to 1.6 billion euros at the end of December./ben/DP/zb