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Press Releases

MünchenerHyp’s new property financing business exceeds € 5 billion for the first time

16.04.2018 - Münchener Hypothekenbank eG set a new record for property financing in its 2017 business year.

The Bank’s new mortgage finance business exceeded the € 5 billion euro mark for the first time and totalled € 5.1 billion. “Our new business results again benefited from the unbroken favourable situation in the property markets. This allowed us to further strengthen our market position as planned,” said Dr. Louis Hagen, Chairman of the Münchener Hypothekenbank’s Board of Management. 

Earnings power rises further

The favourable development of the Bank’s new business results also lifted MünchenerHyp’s earnings as net interest income rose by about 10 percent to € 256.6 million. Commission expenses were at the previous year’s level and contributed to a 14 percent increase in the net interest income and net commission income figure, which climbed to € 182.1 million. Provisions for lending risks were again at a low level reflecting the Bank’s continued risk-aware approach to new business. Results from ordinary business activities rose by 26 percent to € 85.1 million. After allocation of € 5.0 million to the Fund for General Banking Risks, and a tax expense of € 33.8 million, annual net income surged by 45 percent to € 46.3 million.

New business results continue to develop favourably

MünchenerHyp’s good new business results are mainly due to the consistently high level of brokered loans for private residential property since 2014. In this area of business the Bank made € 3.2 billion in new loan commitments in 2017 following € 3.3 billion recorded in the previous year. The figure for loans brokered by banks within the Cooperative Financial Network amounted to € 2.4 billion and was very close to the previous year’s level. The Bank’s business with independent providers of financial services expanded by 8 percent to € 419 million. In contrast, the volume of loans brokered by Swiss PostFinance declined by about € 50 million to € 373 million due to tougher price competition.

The Bank’s new commercial property finance business rose by 13 percent to € 1.9 billion with gains recorded in Germany and other European markets. In addition, the Bank re-entered the US-American market and began to conduct new business there. The Bank also expanded its syndication activities including strengthening efforts to increase the participation of institutions within the Cooperative Financial Network.

The risk situation in the credit business remained stable allowing provisions for risk to remain moderate as in previous years.

Heavy demand for Pfandbrief issues

Investor demand for MünchenerHyp’s Pfandbriefe was also very high last year. Two Benchmark Mortgage Pfandbrief issues the Bank placed in 2017 stand out in particular. The first was a € 500 million Mortgage Pfandbrief with a term of ten years, which was tapped a few months later by an additional € 250 million. The second benchmark issue had a term of nine years and two months, and was greeted by such high demand that MünchenerHyp quickly decided to increase its volume to € 750 million.

Among MünchenerHyp foreign-currency denominated issues a benchmark Mortgage Pfandbrief with a volume of CHF 100 million and a term of 15 years caused a commotion in the markets. The issue’s interest rate discount was 8 basis points below the domestic Swiss franc mid-swap rate making it the highest discount ever achieved by a foreign issuer of covered bonds in the Swiss capital market.

Portfolios expand further – paid-up capital rises to over 1 billion euros

Total assets rose € 0.4 billion to € 38.9 billion on 31 December 2017. The Bank’s portfolio of mortgage loans increased by € 1.4 billion to 29.2 billion. Private residential property financing was the strongest growing segment of our business as it increased by € 1 billion. In accordance with the business and risk strategy of MünchenerHyp, the portfolio of loans and securities related to the business with the public-sector and banks declined further from to € 5.7 billion (previous year € 6.8 billion).

MünchenerHyp’s solid foundation of equity capital improved further in the 2017 business year. For the first time in the history of MünchenerHyp, its members’ paid-up capital rose to over € 1 billion. “This is a great demonstration of the trust our members have in MünchenerHyp’s business policy,” noted Dr. Louis Hagen. Paid-up capital represents a significant portion of the Bank’s Common Equity Tier 1 capital. MünchenerHyp’s Common Equity Tier 1 capital ratio increased by 0.9 percentage points in 2017 to 23.8 percent as of 31 December 2017. The Tier 1 capital ratio was also 23.8 percent on the same date (previous year 22.9 percent) while the total capital ratio was 25.2 percent (previous year 24.5 percent). The leverage ratio was 3.4 percent on 31 December 2017.

Outlook: Continuation on course of growth

MünchenerHyp expects that the good demand seen for property and property financing will continue in the current business year as interest rates will remain attractive. In view of this background the Bank also anticipates that competition in the property finance business will intensify even further, especially in the area of lending conditions. “The overall conditions are becoming more demanding. However, we anticipate that even in this environment we will be able to continue our growth strategy,” said Dr. Louis Hagen.

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MünchenerHyp underwrites Monument Building loan

11.04.2018 - Münchener Hypothekenbank eG has financed the Monument Building, located at 11 Monument Street in London.

The bank was mandated by the Global Real Estate group of Credit Suisse Asset Management to provide the financing for an investment vehicle limited to Swiss investors.

MünchenerHyp acts as sole underwriter for the financing at the end of 2017. The loan-to-value ratio of the financing is 57 percent. Almost half of the loan was syndicated to LBBW with MünchenerHyp acting as the agent for this transaction.

The Monument Building is a 9-storey office building that was completed in 2016 and is situated next to The Monument located in the centre of London. In addition to high-quality Class-A office space, the building also offers space for two shops on the ground floor. The Monument Building meets the highest environmental standards and has a BREEAM rating of “Excellent”.

“We are very pleased to have been given this mandate to finance this highly modern, BREEAM certified office building in the heart of London. It is an excellent fit to our strategy of further growth in the international markets,” said Dr. Jan Peter Annecke, MünchenerHyp’s Head of Commercial Real Estate Finance.

Rafael Scholz, the Head of Treasury at MünchenerHyp, adds, “The building’s high environmental standards make the Monument Building ideally suited for MünchenerHyp’s ESG Pfandbrief Programme.” This programme is consistent with Green Bond Principles and used by MünchenerHyp to finance properties that meet high environmental and sustainability criteria.

MünchenerHyp finances commercially used properties in Germany, France, Spain, the Netherlands, Belgium, Luxembourg, Great Britain, and the USA.

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MünchenerHyp hires Thomas Völker to lead the commercial real estate financing activities for international clients

09.01.2018 - Münchener Hypothekenbank eG has hired Thomas Völker as head of commercial real estate international clients.

In his new role at MünchenerHyp he started January 1, 2018. He will be responsible for the expansion of the German lending business with non-German clients. Furthermore, he will be responsible for the commercial lending business with non-German clients in the Bank’s international target markets UK, France, Spain and Benelux as well as expansion into other European real estate markets.

Bernhard Heinlein, member of the board of management of MünchenerHyp: “I am very pleased that Thomas Völker has opted for Münchener Hypothekenbank. With his experience with international customers and markets, we intend to further expand the commercial financing business.”

Völker left Landesbank Hessen-Thüringen at the end of last year after 13 years at the bank. Before that he was working for 5 years for Aareal Bank. During this time he was able to gain experience in most of the European real estate lending markets.

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MünchenerHyp sets record in Swiss Pfandbrief market

27.10.2017 - Münchener Hypothekenbank eG’s most recent Swiss franc denominated Mortgage Pfandbrief set a record in the Swiss capital market.

It marked the first time ever that a foreign covered bond issuer obtained a higher interest rate discount vis-a-vis the Swiss domestic Pfandbrief interest rate curve. The issue was placed at a price 8 basis points below the Swiss franc mid-swap rate.

The Pfandbrief (ISIN CH 0386949314, Series 1778) has a volume of 100 million Swiss francs, a coupon of 0.55 percent and a term of 15 years. The volume issued was placed in Switzerland. Asset managers were the biggest group of buyers and accounted for 40 percent of the volume placed, followed by banks, insurance companies and pension funds.

“We are pleased that the Swiss capital market views us with such high regard as an issuer. The issue is an ideal way for us to obtain matching funds in Swiss francs to refinance our solid and stable mortgage business in Switzerland”, said Dr. Louis Hagen, Chairman of the Münchener Hypothekenbank Board of Management. 

UBS AG served as the sole lead manager for the transaction.

The rating agency Moody’s has given its highest rating of Aaa to MünchenerHyp’s Mortgage Pfandbriefe.

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MünchenerHyp: Earnings and new business rise further

25.10.2017 - Münchener Hypothekenbank eG has successfully continued on its course of growth.

During the nine months ending 30 September 2017 the Bank’s interest income rose by 13 percent over the same year-ago period to € 190.3 million (30 September 2016: € 168.5 million). “Thanks to our unbroken favourable new business results we are once again able to strengthen our earnings power as planned”, said Dr. Louis Hagen, the Chairman of the Board of Management of MünchenerHyp commenting on the Bank’s performance as at 30 September 2017. 

In comparison to the same year-ago period the cooperative property financer’s new business grew by 14 percent as at 30 September 2017 and totalled € 3.9 billion (30 September 2016: € 3.4 billion). Loans for private residential housing accounted for € 2.5 billion. This means that new business results for this segment remained at the record level posted in the previous year. In addition, MünchenerHyp posted substantial gains of more than 50 percent in its commercial property finance business as it provided a total of € 1.4 billion (30 September 2016: € 0.9 million) in new financing for commercial property projects during the first nine months. Dr. Louis Hagen noted: “We were able to strengthen our competitive position by expanding our presence in the market, especially outside of Germany, and by further intensifying our customer relationships.”

The Bank is satisfied with the risk situation in its credit business as provisions for lending risks remain at a low level. Results from normal business operations rose by € 10.8 million to € 56.3 million. After tax deductions, the pro rata temporis annual net income for the year rose by € 5.5 million to € 32.6 million.

Total assets rose during the first nine months by € 0.5 billion to € 39.0 billion. MünchenerHyp was once again able to substantially increase its portfolio of mortgage loans as it rose by € 1.2 billion to € 29.1 billion. In contrast, the Bank further reduced its capital markets portfolio in line with its strategic policy.

MünchenerHyp caused a stir in the Pfandbrief market during the summer months when it issued a € 750 million benchmark Mortgage Pfandbrief. “The great interest shown by investors demonstrated that there is still a high level of liquidity in the covered bond market”, said Dr. Louis Hagen. The Pfandbrief has a term of 9 years and two months and a coupon of 0.625 percent. It was placed at a price 13 basis points below the mid-swap rate.

The Bank’s equity resources further improved during the current year as the amount of paid-up capital in the form of shares in the cooperative grew by € 43 million since the start of the year to        € 999.0 million on 30 September 2017. “Meanwhile we have more than € 1 billion in paid-up capital. This clearly reflects the trust our owners have in our performance capabilities and underlines the significance of the MünchenerHyp within the Cooperative Financial Network”, said Dr. Louis Hagen.

Against the background of the favourable results recorded thus far in the current business year, MünchenerHyp views the final quarter with confidence and anticipates that its net income for the full year will be moderately higher than last year’s figure.

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