Aareal Bank Group maintains solid results in the third quarter of 2009, despite a difficult market environment

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- Operating profit before taxes of EUR 25 million in line with the
previous quarter
- Structured Property Financing: allowance for credit losses remains
at a clearly manageable level
- Consulting/Services showing robust business development, despite
interest rates at historical lows
- Forecasts for key financial indicators affirmed

Wiesbaden, 10 November 2009 - Against the background of a market
environment that continued to be challenging, Aareal Bank Group
maintained its robust business development and once again generated a
solid positive result - as it has done in every quarter since the
outbreak of the financial markets crisis in summer 2007. The Group's
profit before taxes and appropriation/attribution of results for the
period from July to September was EUR 25 million, after EUR 25
million in the second quarter and EUR 17 million in the first three
months of the current year. The corresponding figure for the third
quarter 2008 was EUR 31 million.

"Clearly, we have been holding our course during the current
financial year. The fact that we posted another set of satisfactory
results - in a challenging market environment - once again emphasises
the coherence, sustainability, and crisis-proof performance of our
business model, incorporating the two strong pillars of Structured
Property Financing and Consulting/Services. The Group's profitability
remains high enough, not only to absorb the various difficulties
thrown up by the financial markets crisis and the consequences of the
weak economy but also to bear the additional costs incurred within
the scope of the agreement with SoFFin", said Dr Wolf Schumacher,
Chairman of the Management Board of Aareal Bank AG.

Structured Property Financing: sustainable business policy
continues to bear fruit

Aareal Bank's Structured Property Financing segment once again
posted a solid positive result, in spite of the continued challenges
on the commercial property markets. At EUR 19 million, (Q3 2008: EUR
20 million), the segment's operating profit was slightly higher than
in the previous quarter (EUR 18 million).

Aareal Bank's approach to lending from July to September remained
very risk-aware, as it has been in the past. New business amounted to
EUR 2.4 billion in the first nine months of 2009. Within the scope of
new business, Aareal Bank continued to focus on its existing client
base and particularly on loan extensions for existing financing
projects.

Net interest income, which accounts for the most important share
of segment income, amounted to EUR 98 million in the third quarter of
2009, after EUR 99 million in the comparable period of the previous
year and EUR 101 million in the second quarter of 2009. Higher
margins in the lending business continued to have a positive effect.
Given the volatile market environment, the bank has maintained a very
comfortable level of liquidity reserves: this had a slightly negative
effect on net interest income, owing to extremely low short-term
interest rates.

Despite the impact of the economic crisis, allowance for credit
losses remained at a clearly manageable level: the EUR 36 million
recognised during the third quarter of 2009 was lower than in the
previous quarter (EUR 42 million), and remains within projections.
Expected at EUR 150 million for the current financial year, it is
therefore at the upper end of the forecasted target corridor, as has
been communicated to date. Given the prevailing market environment,
it is however impossible to fully exclude unexpected losses.

"In the third quarter, Aareal Bank Group once again proved that
the commercial property finance business is profitable, even in the
most severe economic crisis experienced for decades - provided that
it is conducted in a sustainable and prudent manner. This clearly
confirms our approach, and we will maintain our conservative business
policy. This also applies to our tried and tested three-continent
strategy to ensure regional diversification of our business: in
particular, we have no plans to cut back our international branch
network. Our local presence plays a key role in the segment's
success", Schumacher noted.

Consulting/Services: robust segment result

Against a background of difficult general economic conditions, the
segment's performance was satisfactory. Despite the low interest rate
level that was very unfavourable for the deposit-taking business, the
segment posted a positive result for the third quarter as well. At
EUR 6 million, operating profit was close to the previous quarter
(EUR 7 million), even though it fell short of the figure for the same
quarter of the previous year (EUR 11 million), which had benefited
from a more favourable interest rate environment.

At EUR 50 million, third quarter segment revenue was down slightly
on the previous quarter (EUR 52 million), and also year-on-year (Q3
2008: EUR 54 million). The decline was largely due to the low
interest rate environment, which is unfavourable for the
deposit-taking business with the institutional housing industry.
Moreover, the economic weakness resulted in a certain degree of
investor reticence regarding new investment in specific customer
segments of the Aareon AG subsidiary. Aareon's new Wodis Sigma
product, which was launched in the second quarter, was met with great
interest.

However, the deposit volume originated from the Institutional
Housing Unit clients, which averaged EUR 3.9 billion in the third
quarter and also represents a key refinancing source for Aareal Bank,
remained largely stable, irrespective of the unfavourable interest
rate environment. This demonstrates the high level of confidence
clients keep placing in Aareal Bank, and the solid market position
that the Group enjoys in the German institutional housing industry.

"Aareal Bank has been the lead bank for the German institutional
housing industry for more than five decades. We maintain long-term
contracts in this sector that are backed by long-term customer
relationships. This approach is paying off especially in a market
environment defined by uncertainties. The Consulting/Services segment
is the Group's second strong pillar, and a reliable source of income
- which requires lower capital backing relative to the lending
business", Schumacher explained.

Solid refinancing situation and good capitalisation

Aareal Bank Group conducted its funding activities successfully
during the first nine months of the year, thereby securing its good
liquidity situation. The bank raised EUR 5 billion in long-term funds
up until the end of September, with Pfandbriefe accounting for EUR
2.2 billion and uncovered issues for EUR 2.8 billion. In the third
quarter the bank placed several very successful issues with an
aggregate volume of EUR 730 million on the capital markets, by way of
both public and private placements. This included a EUR 200 million
bearer bond issue placed in September. Aareal Bank invests available
liquidity in a conservative manner and to ensure quick access, in
order to provide continued financing support to its existing clients
as well as being well equipped to deal with a potential deterioration
of the situation on financial markets, which cannot be excluded.

As at 30 September 2009, Aareal Bank's Tier 1 ratio - measured in
accordance with the credit risk standardised approach (CRSA) - was
10.7%, which is high by international standards.

Notes to consolidated results

Net interest income for the third quarter of 2009 was EUR 111
million (Q3 2008: EUR 117 million), thus amounting to EUR 339 million
for the first nine months of the year (9m 2008: EUR 338 million). Net
interest income after allowance for credit losses for the first nine
months totalled EUR 224 million (9m 2008: EUR 278 million).

Net commission income totalled EUR 28 million for the third
quarter (Q3 2008: EUR 34 million), and thus EUR 94 million for the
first nine months of the year (9m 2008: EUR 102 million). Net
commission income includes expenses of EUR 11 million for the
guarantee facility extended by SoFFin for the period from April to
September. Adjusted for this, net commission income was up slightly
year-on-year.

Net trading income contributed EUR 19 million to third-quarter
results (Q3 2008: EUR 25 million), amounting to a total of EUR 44
million for the first nine months of the year. This item was largely
attributable to the measurement of stand-alone derivatives; in
particular, a recovery in the value of credit derivatives +EUR 36
million).

The result from non-trading assets for the third quarter was -EUR
3 million (Q3 2008: -EUR 37 million) and -EUR19 million for the first
nine months (9m 2008: -EUR 36 million).

Administrative expenses amounted to EUR 88 million in the third
quarter (Q3 2008: EUR 84 million). Taking into account the special
charges of EUR 6 million incurred by Aareon AG, which were already
communicated in the first quarter, administrative expenses of EUR 266
million for the first nine months of 2009 were stable compared with
the previous year (EUR 261 million).

Net other operating income and expenses for the third quarter was
-EUR 3 million (Q3 2008: -EUR 5 million). The figure of -EUR 8
million for the first nine months includes project expenditure
(including legal and advisory costs) of EUR 6 million incurred in the
first quarter in conjunction with the support measures agreed between
SoFFin and the Bank. Last year's figure of EUR 17 million included
non-recurring income of EUR 7 million from the Interhotel exposure.

On balance, consolidated operating profit for the third quarter
amounted to EUR 25 million (Q3 2008: EUR 31 million). After deduction
of EUR 3 million in income taxes and EUR 4 million in income
attributable to non-controlling interests, consolidated net income
after non-controlling interests amounted to EUR 18 million. After
deduction of the return on the SoFFin contribution, consolidated net
income stood at EUR 6 million.

Aareal Bank's consolidated operating profit for the first nine
months of 2009 totalled EUR 67 million (9m 2008: EUR 106 million).
Taking into consideration taxes of EUR 10 million and income
attributable to non-controlling interests of EUR 13 million, net
income attributable to shareholders of Aareal Bank AG amounted to
EUR 44 million. After deduction of the return on the SoFFin deposit,
consolidated net income stood at EUR 20 million.

Outlook: expectations for key financial indicators confirmed

Also at the end of the third quarter, Aareal Bank Group confirmed
its projections for key financial indicators communicated to date.
More concrete guidance is provided regarding certain indicators.
Consolidated net interest income is expected to be around EUR 455
million, and hence at the lower end of the EUR 455 - EUR 475 million
range. Taking into account the EUR 35 million interest expense for
the silent participation of SoFFin that is recognised under
appropriation of profits, this equates to full-year net interest
income of EUR 420 - EUR 440 million projected so far.

Allowance for expected credit losses is anticipated at EUR 150
million for the current year and therefore at the upper end of the
forecasted target corridor, as has been communicated to date. It is,
however, impossible to exclude additional impairments from unexpected
losses for 2009. Administrative expenses are expected in the region
of EUR 360 million and are therefore almost the same as the previous
year.

From today's perspective, new business generated in the Structured
Property Financing segment is expected to amount to EUR 3 billion for
the year as a whole. Aareal Bank's particular focus is on extensions
of existing exposures, and on financing requirements of existing
clients. The bank will also exploit selected market opportunities
going forward.

Aareal Bank expects net commission income in the Consulting /
Services segment to rise again in the fourth quarter, with increased
revenues generated by Aareon through the new Wodis Sigma product line
as one contributing factor. The bank affirms its forecast of EUR 25 -
EUR 30 million for the operative segment result before taxes and
non-recurring effects - the forecast however remains dependant upon
interest rate developments.

Aareal Bank Group anticipates its business environment to remain
challenging in 2010: this expectation reflects the ongoing burdens on
the real economy, which will impact with a time lag on some property
markets, and the assessment that the financial markets crisis has yet
to be fully remedied. "Nonetheless, we are convinced that Aareal Bank
Group's coherent business model and conservative business policy -
and also thanks to the precautionary usage of the measures agreed
with SoFFin - has put the best possible prerequisites in place to
enable us to endure the crisis in the financial markets and the
accompanying economic downturn. At the same time, our company is in a
good starting position to deal with the period after the crisis has
been overcome. We will then be able to swiftly gain momentum, and to
benefit from a competitive situation that has changed to our
advantage, due to the crisis", Schumacher said.

Aareal Bank

Aareal Bank AG is one of the leading international specialist
property banks. The Aareal Bank share is included in Deutsche Börse's
mid-cap MDAX index. Aareal Bank operates on three continents:
leveraging its successful European business model, the bank has
established similar platforms in North America and in the
Asia-Pacific region. It provides property financing solutions in more
than 25 countries.

Originaltext: Aareal Bank
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Contact:
Aareal Bank AG
Corporate Communications

Sven Korndörffer
phone: +49 611 348 2306
sven.korndoerffer@aareal-bank.com

Christian Feldbrügge
phone: +49 611 348 2280
christian.feldbruegge@aareal-bank.com

Investor Relations

Jürgen Junginger
phone: +49 611 348 2636
juergen.junginger@aareal-bank.com