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Annual Report 2010 - Muenchener Hypothekenbank eG

06 | 07 münchener hypothekenbank eg | annUaL report 2010 Letter from the board of management property loans in germany due to the very low interest rates, compared to long-term average rates, together with growing inflation concerns. We only made loan commitments in the area of commercial property loans if our strict risk standards and interest-yield requirements were met. This meant that new business in this area grew, in absolute terms, at a significantly more moderate pace. our concentration on financing residential properties in ger- many is also linked to our efforts to further improve the already high quality of our mortgage portfolio. We made good prog- ress toward this goal during the past year. Thanks to our strong new business, we were able to expand our portfolio of mort- gages and other property loans by more than 10 percent to € 18.4 billion. According to a review conducted by one of the large national business newspapers, last year we were among germany’s top five largest property financers for the first time. during the past financial year, as planned, we began to reduce our portfolio of loans in the uSA. our objective is to wind down our business in the uSA. however, this can only take place gradually over the next few years. With this in mind, we are satisfied with the results of our proactive monitoring of our uSA portfolio during the past year. a strong repUtation in the capitaL markets overall, the European Central Bank’s covered-bond purchasing programme created a favourable climate for new issues in the covered bond market. in 2010, the Pfandbrief set the standard as a quality product in this environment and was able to distin- guish itself from other covered bonds. our Pfandbriefe were in high demand during the past year. This applied to all Pfandbrief categories and especially to our Jumbo Pfandbrief issues, which we were able to place at very attractive conditions. in addition to the high quality of the cover pools for our Pfandbriefe, we credit Münchenerhyp’s good standing in the capital markets to the intensive support we provide to our investors and the fact that we are embedded in the volksbanken Raiffeisenbanken We see particularly great potential in the private residential property financing area. This is due in part to the extremely stable demand for residential property loans, and partly to the volksbanken Raiffeisenbanken Cooperative financial Network’s (genossenschaftliche finanzgruppe) market penetration in this business area, which is very strong but can still be further ex- panded. our cooperative partner banks enjoy a high level of customer trust because of their expertise and proximity. our goal is to help our cooperative partners offer their customers the best property financing options, regardless of the interest rate situation at any given time. This approach allowed us to achieve a very good placement volume in our business with the cooperative partner banks in the past year. We also want to grow continuously and risk-consciously in the commercial property finance area. To achieve this we are focus- sing even more closely on a few core markets. in addition to germany, these include the strong economic regions in the uK and france in particular. for the Cooperative financial Network in germany, we are pursuing a strategy that focuses on the volksbanken and Raiffeisenbanken. our core business areas are supplemented by our credit business with the public sector and banks. This segment primarily plays a supportive role. on the one hand, it helps us manage liquidi- ty and generate additional income; on the other, we want to maintain our international presence as an issuer of Public Pfand- briefe. A broad investor base is very important for Münchener hypothekenbank because the Pfandbrief is our primary refi- nancing instrument. the fifth-Largest property financer in germany We were able to assert ourselves quite well vis-à-vis our com- petitors as we moved on to a growth path. our new mortgage business amounted to € 3.6 billion, which was nearly twice as much as the same year-ago figure in 2009. The largest portion of this growth came, as planned, from private property loans. Above all, this is the result of intensified market cultivation with our partner banks in the Cooperative financial Network. in ad- dition, we benefitted from the high demand for residential