Aareal Bank Group is well-positioned for the future

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- Market environment is expected to gradually improve, returning
to normal as of 2012
- Outlook for 2010 confirmed - first-quarter performance on schedule
- Sound results achieved in 2009
- CEO Dr Wolf Schumacher: "We are well-positioned to master the
current challenges we face, and to consistently exploit future growth
opportunities."

Aareal Bank Group expects a gradual improvement in the market
environment, both during the current year and in 2011. The bank
assumes that markets will return to normal again as of 2012.
Commenting on the results, the Chairman of Aareal Bank's Management
Board, Dr Wolf Schumacher, explained that Aareal Bank Group will
derive above-average benefits, thanks to a lending policy that is
focused on soundness and sustainability, the bank's dedicated
proximity to clients and markets, a prudent funding policy and a
sound balance sheet structure. He added that Aareal Bank Group
survived the crisis relatively unscathed, pointing out that it is one
of the few finance providers to have retained its flexibility to act
- both strategically and in operative terms. "Thanks to our coherent
and viable business model, we are in a good position to deal with
current challenges, to further sustainably expand our market position
in key markets and to establish ourselves as a leading player in our
business", Schumacher added.

Allowance for credit losses remains manageable

Aareal Bank Group affirmed its outlook for the current year.
Accordingly, the property financing specialist - active on three
continents - sees good potential for improving consolidated operating
profit. Net interest income is expected to increase to between EUR
460 million and EUR 480 million. Allowance for credit losses
recognised in income is expected to range between EUR 117 million and
EUR 165 million, which means that it will remain at a clearly
manageable level. From today's perspective, new business generated in
the Structured Property Financing segment is expected to increase to
between EUR 4 billion and EUR 5 billion - with a reduction in the
share of loan renewals. Operating profit in the Consulting/Services
segment is expected to increase slightly over adjusted 2009 operating
profit. Consolidated administrative expenses are expected to remain
in line with the previous year, reflecting the Group's continued
strict cost discipline.

This outlook is confirmed by the business development to date in
the current year: Aareal Bank's performance was on schedule during
the first months of 2010, in spite of a market environment that
continued to be challenging.

Against the background of a sound operating performance and a very
satisfactory capitalisation, the Management Board is aiming to
already start repaying the silent participation from the German
Financial Markets Stabilisation Fund (SoFFin) by early 2011.

The Management Board anticipates a further improvement in
consolidated operating profit for the 2011 financial year, with both
segments expected to contribute to this result. Net interest income
is expected to continue to rise next year; at present, allowance for
credit losses and administrative expenses are both expected to remain
roughly at 2010 levels.

Significant increase in return on equity targeted in the
medium-term

"We believe in the future of commercial property financing, and
expect markets to return to normal from 2012 onwards. This view is
supported by the long-term increase in demand for property and
property financings, as well as the changes in the competitive
environment and client behaviour as a consequence of the crisis.
Against this background, our competitive advantages - proximity to
clients, flexibility provided by our mid-sized structure, sector
expertise and our two-pillar business model - will be particularly
effective", Dr Schumacher stated.

Aareal Bank Group is aiming for sustained profitable growth and a
significant improvement in its financial indicators, expecting a
return to normal conditions in the markets. For the Structured
Property Financing segment, consistent implementation of its
three-continent growth strategy will lead to significant growth in
the credit portfolio, and accordingly, in income. Contributions from
the Consulting/Services segment are also expected to increase
significantly, thanks to anticipated improvement in the interest rate
environment for its deposit-taking business. Exploring new client
groups, for example in the energy sector, will contribute to this
scenario. All in all, the Management Board expects that as of 2012,
enhanced cost-efficiency amongst others will allow the bank to
generate a consolidated return on equity before taxes of at least 12
to 13 per cent.

"The winners in the crisis will be those banks that combine
property-specific expertise with prudent judgement in their risk
policy. We have proven our success in this respect in the past, and
will continue to consistently exploit the growth opportunities
presented to us in the future", Dr Schumacher continued.

Successful crisis management in the 2009 financial year; sound
results generated at Group level

Despite the difficult market environment, Aareal Bank Group posted
a sound result for the 2009 financial year. Having achieved a
positive result in all quarters since the outbreak of the financial
markets crisis in summer of 2007, the bank remained on course, even
in conditions that continue to remain challenging for the financial
services industry. According to the audited figures, Aareal Bank
Group concluded the 2009 financial year with a pre-tax result of EUR
87 million (2008: EUR 110 million). This means that Aareal Bank will
service all of its subordinated refinancing vehicles for the 2009
financial year. This includes the silent participation by SoFFin.

Comparative figures for the full year 2008 differ from the values
published in the 2008 Annual Report. This marks the successful
conclusion of an IFRS accounting project Aareal Bank has conducted
over several years: the related accounting change required minor
adjustments to prior periods' results.

Net interest income for the 2009 financial year amounted to EUR
460 million (2008: EUR 500 million). Higher margins in the lending
business were offset by the impact of the low interest rate
environment on the very comfortable liquidity reserve. Moreover, the
unfavourable interest rate environment for the deposit-taking
business with institutional housing industry clients had a negative
effect on results. The figure for the previous year was characterised
by an extraordinarily strong net interest income for the fourth
quarter, reflecting the favourable interest rate environment at the
time.

Allowance for credit losses was recognised in an amount of EUR 150
million (2008: EUR 80 million), in line with projections. Additional
allowance for credit losses in an amount of EUR 34 million,
recognised in 2008 on account of the difficult market environment,
was not utilised in the financial year under review; in fact, it was
increased by an additional EUR 14 million, bringing the total
additional allowance to EUR 48 million.

Net commission income of EUR 133 million (previous year: EUR 149
million) reflected - amongst other things - EUR 17 million in running
costs for the guarantee facility extended by SoFFin.

Net trading income/expenses of EUR 44 million (2008: EUR -31
million) was mainly accounted for by the measurement of financial
instruments in the trading portfolio. This figure was due primarily
to a recovery in the value of credit derivatives.

Restructuring the securities portfolio - conducted at the
beginning of 2009 within the scope of the conservative risk policy
adopted - was a main influencing factor upon the result from
non-trading assets of EUR -22 million (2008: EUR -102 million). No
further material burdens to non-trading assets were recognised during
the remainder of 2009.

Administrative expenses of EUR 361 million were virtually
unchanged year-on-year (2008: EUR 364 million). This reflects the
strict cost discipline pursued within the Group.

Taking into account net other operating income and expenses of EUR
-14 million (2008: EUR 30 million), consolidated operating profit for
the 2009 financial year totalled EUR 87 million, after EUR 110
million in 2008. Taking into account taxes of EUR 20 million and
non-controlling interest income of EUR 18 million, net income
attributable to shareholders of Aareal Bank AG amounted to EUR 49
million (2008: EUR 47 million). After deduction of the net EUR 26
million cost of the SoFFin silent participation (taking into account
the related tax effects), consolidated net income stood at EUR 23
million.

Both of the business segments contributed to Aareal Bank Group's
satisfactory results for 2009 in the face of difficult market
conditions.

In the Structured Property Financing segment, Aareal Bank
continued to pursue its conservative policy, with a strict focus on
quality. A positive result was achieved here, despite the impact of
the crisis affecting financial markets and the economy.

The focus for originating new business was on the existing client
base, and on renewing facilities for existing financing projects. At
EUR 3.8 billion, the volume of new business, including loan renewals,
exceeded the target corridor of EUR 2 to 3 billion originally
announced.

Net interest income posted by the segment for the financial year
under review amounted to EUR 410 million (2008: EUR 431 million).

Overall, operating profit for the Structured Property Financing
segment was EUR 67 million, and thus slightly higher than last year's
figure of EUR 66 million. Taking into consideration tax expenses of
EUR 13 million and EUR 16 million attributable to non-controlling
interests, the segment result was EUR 38 million (2008: EUR 19
million).

The Consulting/Services segment also highlighted its importance as
Aareal Bank Group's second pillar in the difficult environment during
2009. The volume of deposits from the institutional housing industry
remained virtually stable, averaging around EUR 4.0 billion in the
2009 financial year. This reflects the high level of confidence that
institutional housing industry clients in Germany have been placing
in Aareal Bank - as their long-standing, sound and reliable banking
partner - for decades.

Sales revenue amounted to EUR 209 million in the 2009 financial
year (2008: EUR 229 million). The decline was largely due to the low
interest rate environment, which impacted unfavourably on
profitability of the deposit-taking business with the institutional
housing industry. Revenue generated by the Aareon Group subsidiary
remained stable, thanks to its continued successful multi-product
strategy, and despite the general economic weakness, which led to
lower volumes of project tenders in the market - especially in the
first half-year. The new Wodis Sigma product, which was launched in
the second quarter, was met with great interest.

On balance, operating profit for the Consulting/Services segment
was
EUR 20 million (2008: EUR 44 million). The year-on-year decline was
on the one hand due to the effects of the historically low interest
rate environment, which significantly impacted on the results
generated in the deposit-taking business. On the other hand,
non-recurring expenses for capacity adjustments at Aareon, as well as
expenditure for the suspension of non-core activities, also affected
results. Taking into account these non-recurring effects, which
amounted to an aggregate EUR 6 million, the segment's operating
profit was within the communicated range of EUR 25-30 million.

After deduction of EUR 7 million in taxes and EUR 2 million in
non-controlling interest income, the segment result stood at EUR 11
million (2008: EUR 28 million).

Solid refinancing situation and good capitalisation

Aareal Bank continued to adhere to its forward-looking refinancing
policy during the year under review. Several private placements as
well as public issues were successfully distributed to a broad
investor base over the course of the year. Pfandbriefe totalling EUR
2.3 billion were issued during the 2009 financial year. Aareal Bank
benefited from an easing of market sentiment that was evident from
mid-year onwards, to increase its placements of unsecured bonds and
promissory note loans. The issuing volume for the year as a whole
amounted to EUR 1.1 billion, plus a EUR 2 billion unsecured bond
issue guaranteed by SoFFin.

As at 31 December 2009, Aareal Bank's Tier 1 ratio - measured in
accordance with the Credit Risk Standard Approach (CRSA) - was 11.0
%, which is high by international standards. The Tier 1 ratio is thus
clearly above the medium-term target ratio of 10 %, as defined by the
Management Board. Good capitalisation provides Aareal Bank with the
necessary scope to continue to act as a reliable financing partner
for its existing clients, and also to increasingly exploit the market
opportunities presented to it.

Note to editors: the full 2009 Annual Report is available for
download at http://www.aareal-bank.com/financialreports.

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