COREALCREDIT BANK AG holds its ground in the financial market crisis

• Net profit increased to EUR 12.5 m (previous year: EUR 3.3 m)
• New real estate financing business increased to EUR 1.4 bn
(previous year: EUR 1.1 bn)
• Solid business model – core capital ratio of 12.1%
• Refinancing base strengthened – commitment for framework guarantee of
EUR 500 m from the Financial Market Stabilization Fund (SoFFin)

Frankfurt / Main, 23 April 2009 - COREALCREDIT BANK AG was able to sustain the previous year's positive trend and report an increased net profit after tax of EUR 12.5 m (previous year: EUR 3.3 m), thereby holding its own in the financial market crisis.

Dr. Claus Nolting, Chairman of the Management Board of COREALCREDIT BANK AG, comments: “COREALCREDIT is of course feeling the effects of the financial market crisis, though to a lesser degree than other banks. The Bank was able to adapt quickly and flexibly to the new market conditions. This was helped by the fact that it has a solid business model, concentrates on Germany – one of the more stable markets – and as a result of the restructuring does not hold any securities that are in severe danger of defaulting. All of this helps us to remain competitive.”

Despite the difficult market environment, the Bank was able to increase its new business (new business transactions and extensions) by some 25% to EUR 1.4 bn. The original, higher new business targets were deliberately lowered as part of a conservative corporate strategy to concentrate on sustainable attractive properties of target clients and also because the market-related liquidity bottlenecks limited opportunities for expansion.

By reducing assets as planned, the Bank was further able to improve its core capital ratio to 12.1% (previous year: 9.8%). Liable equity capital was nearly unchanged at EUR 1.047 bn (previous year: EUR 1.028 bn).

The portfolio streamlining that took place in previous years resulted in a considerable increase in net interest income to EUR 37.3 m (previous year: EUR -18.7 m). Net commission income rose from EUR 1.6 m to EUR 9.5 m. The Bank succeeded in considerably reducing administrative expenses by EUR 22.2 m to EUR 64.5 m.

Net risk provisions of EUR -15.2 m were the result of positive net income from securities, positive net income from credit risk provisions and the allocation to reserves in accordance with section 340f of the German Commercial Code (HGB). The latter serves to protect the Bank against potential negative effects from uncertain future economic developments.

The positive tax result of EUR 24.7 m and the positive balance for operating income and expenses of EUR 19.9 m are primarily the result of a tax refund and related interest from previous assessment periods.

The availability of liquidity will continue to be a limiting factor for the business performance of all banks in the 2009 financial year. COREALCREDIT will continue to conduct its conservatively oriented new business activities from a comparatively strong starting point. These will focus on the ability to refinance individual transactions. In order to further strengthen its refinancing base, the Bank filed a successful application with SoFFin requesting that a framework guarantee for bonds be granted in the amount of EUR 500 million. The commitment is subject to requirements to be met by the main shareholder, who is currently working to meet these requirements in consultation with SoFFin.

Dr Claus Nolting adds: “The systemic crisis presents all banks with unprecedented challenges. However, even if the financial market crisis were to continue for some time, COREALCREDIT has a comfortable capital base which will enable it to successfully hold its own on the market, even in the face of persistently difficult economic developments.”

Performance in the first quarter of 2009 was in line with the Bank’s expectations and demand from real estate and Pfandbrief investors was positive. However, in light of the high level of uncertainty about future economic developments, it is not possible today to make a reliable statement about the results expected for the 2009 financial year.

COREALCREDIT BANK AG is a specialist German bank focusing on commercial real estate financing for professional real estate customers in its core market of Germany. The Bank offers financing, risk management and individual advisory services from a single source. In addition to its headquarters in Frankfurt, the Bank has offices in five other German cities.

COREALCREDIT BANK AG
Axel Leupold
Corporate Communications Manager
Grüneburgweg 58-62
D-60322 Frankfurt / Main
Phone: +49 69 7179-543
Email: axel.leupold@corealcredit.de

This release was published on openPR.