Aareal Bank Group (ARLN) investor relations material

Executive summary

• Adjusted operating profit was €326 million after a €55 million US repositioning charge, matching the previous year and within the targeted range; before management actions, profit was €381 million.

• Record new business in Structured Property Financing (SPF) at €12.4 billion, with a strong focus on Europe and reduced US exposure.

• Banking & Digital Solutions (BDS) contributed significantly, with Q4 average deposits rising to €17.8 billion.

• Non-performing loans reduced to €1.1 billion, with a target to fall below €1 billion in H1 2026.

• The Aareal Ambition strategy is progressing, targeting ~13% adjusted post-tax ROE by 2027 through BDS growth and US business repositioning.

Financial highlights

• Net interest income declined 12% year-over-year to €934 million due to lower rates.

• Loan impairment charges dropped 19% to €322 million, including €55 million for US repositioning.

• Adjusted administrative expenses reduced by 8% to €317 million; cost-income ratio at 33%.

• Adjusted operating profit was €381 million (excluding the €55 million charge), €326 million (including).

• Net profit was €137 million, down from €179 million, reflecting a higher tax rate.

Outlook and guidance

• Adjusted operating profit for 2026 expected to approach €400 million.

• Adjusted post-tax ROE expected to approach 8% in 2026; 2027 target is ~13%.

• BDS deposits projected to rise to ~€17.5 billion average in 2026.

• SPF/property financing portfolio to remain around €34 billion; NPLs targeted below €1 billion in H1 2026.

• 2027 targets: ~13% adjusted post-tax ROE, CET1 ratio ≥13.5%, cost-income ratio ~30%, NPL ratio ~3%.