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Annual Report 2010 - Muenchener Hypothekenbank eG

our portfolio of commercial property loans remained stable and has a volume of € 5.0 billion. our total lending portfolio thus amounts to € 18.4 billion. international loans had a volume of € 5.9 billion (previous year € 4.4 billion) and represented about one-third of our mortgage loan portfolio. of these loans 44 percent were made in Switzer- land, 42 percent in the uSA and 14 percent in countries within the European union; € 14.6 billion of the mortgage loan port- folio serves as cover for Pfandbriefe we issued. our portfolio of loans and securities generated by our business with public-sector lenders and banks mirrored our business and risk strategy in this area of business and declined from € 14.4 billion to € 13.6 billion. This figure contains € 6.3 billion of securities and promissory notes of which almost all are carried as fixed assets in our accounts. As at the end of 2010 we held a portfolio of mortgage backed securities worth € 125 million (previous year € 191 million). As we are not making any further investments in mortgage backed securities the portfolio will shrink commensurate to the maturity profile of the securities. At the end of 2010 our portfolio of securities had unrealised losses of € 331 million (previous year € 175 million). following a detailed examination of these securities we determined that the loss in value is not permanent in all cases. Therefore, write- downs to the lower of cost or market value were not necessary. The widening gap in credit spreads seen in 2010 led to greater unrealised losses in almost all market segments. our investments in countries particularly affected by the European debt crisis currently consist of either securities guaranteed by the so-called “Euro Rescue umbrella” or are covered bonds issued by banks. for this reason we do not believe these securities involve spe- cial risk. Balance sheet structure Total assets amounted to € 35.2 billion on december 31, 2010 following € 35.7 billion recorded on the same year-ago date. Total assets declined despite the increase in our mortgage port- folio as we reduced the volume of our outstanding bonds by € 1.8 billion. during the previous year we were able to substantially expand our portfolio of mortgage and other property finance loans by € 1.8 billion. The increase was solely driven by residential prop- erty finance where we hold a loan portfolio of € 13.4 billion. EARNINgS, fINANcIAL ANd ASSET SITUATION “We were able to notably expand our portfolio of mortgage loans in 2010.” residential housing commercial property germany / other property finance loans commercial property abroad / other property finance loans portfoLio deveLopment münchenerhyp 2004 – 2010 in € million 16000 14000 12000 10000 8000 6000 4000 2000 0 2004 2005 2006 2007 2008 2009 2010 1516 9398 587 9374 1572 890 9261 1704 1152 10792 2095 3117 10194 2015 1867 11631 2119 2934 18000 13439 1996 3020