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Annual Report 2010 - Muenchener Hypothekenbank eG

the high liquidity needs of the public sector and government- guaranteed issuers. The increased offer of these bonds could lead to widening spreads. The coming years will be shaped by the new requirements arising from Basel iii and MaRisk (liquid- ity buffer); the costs associated with these measures are still unknown. The Pfandbrief will remain the most important refinancing product for Münchenerhyp in the future. We will continue to issue jumbo Pfandbriefe with a volume of € 1 billion and higher. our refinancing needs for 2011 will remain at about the same level as in the year under review. Two public jumbo Pfandbriefe will mature in 2011: one in April with a volume of € 1.95 billion and one in September worth € 1 billion. Most of the funding volume will be met using Pfandbrief issues. Two to three jumbo Pfandbriefe may be issued this year. in addition, our refinancing will include specifically tailored registered and bearer securities. The volksbanken Raiffeisenbanken Cooperative financial Net- work will remain our most important partner in the area of unsecured refinancing. We also expect to see increased inter- est from several insurance companies in this segment, which reflects the high level of trust our investors place in us and which helps us to broaden our refinancing base. our issuing activity here will involve small and large-volume transactions across all maturity bands. Based on our growth objectives and the good new business results we booked during the year under review, we will strive to achieve higher net interest income from operating activities in 2011. We also plan to have our capital-market activities make an appropriate contribution towards the achievement of our total net interest income target. Because of our long-term approach to the mortgage banking business, the favourable figures for new business will only become gradually noticeable in our future results. Thus we continue to anticipate a positive trend for the development of our net interest income, and starting in 2012 we expect to see further improvement in our earnings situation. We expect a slight increase in administrative expenses for 2011 as we will incur additional expenses for projects, espe- cially for projects to adjust our equity capital requirements in accordance with the iRBA guidelines, as well as the imple- mentation of a trading and risk management system. Added to these factors are the ongoing technical adjustments to control instruments required for regulatory and business administration reasons. Based on current information, given the risk provisions we have made for our lending business, we anticipate that the burdens we will face in 2011 will be slightly below the previous year‘s level. We are striving to achieve annual net profits for the current year that are about the same as the year under review. 52 | 53 münchener hypothekenbank eg | annUaL report 2010 management report “the pfandbrief will remain as our central refinancing instrument. in this context we want to take further steps to ensure that our good standing in the capital market remains intact.”