Aareal Bank obtains approval for applying the Advanced IRB Approach (A-IRBA) to determine capital requirements for credit risks

Wiesbaden (ots) -
- Tier 1 ratio expected to be 12.9 per cent* as at 31 December
2010 according to the A-IRBA (10.5 per cent* according to the
CRSA)
- Core Tier 1 ratio excluding hybrid capital and SoFFin silent
participation of 8.1 per cent* as at 31 December 2010
- Chief Financial Officer Hermann J. Merkens: "Further improved
market and competitive environment currently offers excellent
potential for exploiting market opportunities"

Aareal Bank will apply the Advanced Internal Ratings-Based
Approach (Advanced IRB Approach, "A-IRBA") to determine its capital
requirements for credit risks, with retrospective effect from 31
December 2010, instead of the Credit Risk Standard Approach (CRSA)
applied to date. Following a detailed audit of Aareal Bank's internal
systems used to determine credit risks, the German Federal Financial
Services Supervisory Authority ("BaFin") has now approved the
application of the A-IRBA. Compared to the Credit Risk Standard
Approach, the Advanced IRB Approach which is based on internal models
allows for a more accurate measurement of credit risks, and hence,
for a more precise and risk-adequate allocation of capital.

Under the A-IRBA, and based on data currently available, Aareal
Bank's Tier 1 ratio stood at 12.9 per cent* as at 31 December 2010.
Calculated according to the CRSA, the bank's Tier 1 ratio would have
amounted to 10.5 per cent* on the same record date (30 Sep 2010: 10.4
per cent). The Core Tier 1 ratio under the A-IRBA - excluding hybrid
capital and the remaining silent participation by the German
Financial Markets Stabilisation Fund (SoFFin) - is expected to amount
to 8.1 per cent* as at the year-end 2010.

Hermann J. Merkens, Aareal Bank's Chief Financial Officer,
explained: "Thanks to the application of the Advanced IRB Approach,
we are in a good position to achieve a target Core Tier 1 ratio under
Basel III between eight and nine per cent by the year 2013. Moreover,
for such a well-positioned institution as Aareal Bank, the improved
market and competitive environment which we observe at present holds
very good potential to increasingly exploit current market
opportunities for our credit business."

* Explanatory notes: Capital ratios were calculated on the basis
of current data available to project the 2010 financial statements in
accordance with German Commercial law (German GAAP - "HGB").

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 20 countries.

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