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31.08.2016

DG HYP continues its successful business performance during the first half of 2016

New business in DG HYP’s Commercial Real Estate Finance division increases to € 3.4 Billion - Marked increase in operating profit

DG HYP continued its favourable business development during the first half of 2016, increasing its new Commercial Real Estate Finance business volume year-on-year – to approximately € 3.4 billion (H1 2015: € 2.2 billion). Joint lending with German cooperative banks was also intensified and amounted to € 1.1 billion as at 30 June 2016, improving upon the previous year’s level (H1 2015: € 972 million). DG HYP does business jointly with more than 400 cooperative banks in regional markets throughout Germany.

DG HYP’s financial performance reflects its successful operating performance during the period under review. At € 134.1 million, net interest income was in line with the previous year’s figure, whilst the net commission result increased to € 17.4 million, driven by higher income from the lending business (30 June 2015: € 12.9 million). At the same time, administrative expenses declined to € 71.7 million, after € 75.4 million in the previous year. This figure includes the bank levy of € 15.4 million – which is € 9.6 million lower than in the previous year. DG HYP's credit portfolio continues to benefit from an absence of any obvious risks, leading to a minor net release of loan loss provisions for the first half of 2016. Risk provisioning of € -13.4 million therefore reflects a considerable addition to general risk provisions pursuant to section 340f of the German Commercial Code (HGB). Given the absence of any non-recurring charges to the net financial result (as was the case in the first half of 2015, with a write-down on claims against HETA Asset Resolution AG), operating profit increased markedly, to € 69.6 million (30 June 2015: € 39.3 million).

Dr Georg Reutter, Chairman of DG HYP’s Management Board, emphasised: “We are pleased that DG HYP continued to show solid and robust development in the first half of 2016, despite the challenging market environment. We were thus able to successfully reinforce our position as one of the leading real estate banks in Germany. As a traditional real estate finance house we follow a conservative business strategy and meet the dynamic market development with caution and increased awareness.”

DG HYP expects a continued positive business performance for the financial year 2016 – in terms of new business as well as profitability. Given the European Central Bank’s ongoing low interest rate policy, investors keep focusing on tangible assets. “We are looking to leverage the bullish state of the real estate markets to successfully do business with our direct clients as well as with the cooperative banks during the second half of the year”, Reutter added.

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