difficult market environment, defined by the finan-
cial markets crisis, and is also reflected by the
considerably lower transaction volume on the
markets for commercial property compared with
previous years. Both issues led to lower borrowing
demand in structural terms and to fewer prepay-
ments compared with previous years. Our new
business activities concentrated above all on sup-
porting our existing customers, whose property
expertise we were very familiar with.
We successfully increased the interest margin
achieved on new business over the previous year.
Three-continents strategy
Aareal Bank pursues a "three-continents strategy"
that extends across Europe, North America and
Asia. Europe accounted for 63.8 % of new busi-
ness in 2008, North America for 25.2 % and Asia
for 10.9 %.
Key regional markets
Europe
Western Europe
The volume of new business we achieved in
Western Europe amounted to 1.4 billion in the
2008 financial year. This corresponds to 25.0 %
of our new commitments overall.
We support our clients in Germany through our
branches in Berlin, Hamburg, Munich as well as
our Wiesbaden-based head office. New commit-
ments in Germany amounted to 0.6 billion in
2008.
We established a presence in Paris with our
subsidiary Aareal Bank France S.A., from which
we manage our distribution activities for other
countries, including Switzerland, Belgium and
Luxembourg. We also maintain a presence in
these countries with our Brussels and Zurich
branch offices. We generated new business of
0.4 billion in these three countries.
( 63 million) from the measurement of our
stake held in Deutsche Interhotel Group.
At 347 million, administrative expenses were
down considerably on the previous year's figure of
361 million. The 4.4 % reduction reflects our
strict cost discipline. Administrative expenses
comprise staff expenses of 212 million (2007:
230 million) and non-staff expenses of
135 million (2007: 131 million).
At 34 million, net other operating income and
expenses also exceeded the previous year's figure
of 18 million. The reported result includes
income from a waiver of claims in the amount of
15 million, which was granted by the financing
bank within the scope of the restructuring of a
property investment.
On aggregate, the items resulted in consolidated
operating profit of 117 million (adjusted: 153
million) compared with 380 million for 2007
(adjusted: 159 million).
After deduction of 39 million in taxes (2007:
72 million) and minority interest income of
18 million (2007: 18 million), consolidated
net income attributable to shareholders of Aareal
Bank Group for 2008 amounts to 60 million
(2007: 290 million)
Segments
Structured Property Financing
Business development
During 2008 we continued to apply our orien-
tation strictly towards quality and return, and
concentrated on transactions with attractive risk/
return profiles.
The segment generated 5.5 billion in new busi-
ness in the 2008 financial year, after 11.7 billion
in 2007. We consider this volume corresponds
to the market situation in 2008. It is a sign of the
66 Aareal Bank Group Annual Report 2008 | Group Management Report