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ePaper created 2012-04-20, 15:08:32 | version 1.23.0
50 Management Report – münchener Hypothekenbank eg l annual Report 2011 Corporate planning and outlook Corporate planning MünchenerHyp is continuing a growth strategy focused on residential and commercial property financing. Our successful implementation of this strategy in 2012 will also depend on taking advantage of market opportunities while maintaining an appropriate cost-income ratio. The overarching strategic goal will remain the sustainable improvement of our earning power. Our approval as an IRBA bank by the supervisory authority puts MünchenerHyp in a position to achieve core capital rates and total capital rates in line with the market, even for a growing volume of risk-associated assets. As a result, we should have sufficient equity capital to implement our strategy. The annual adjustment of our business and risk strategy provides the formal planning framework for this. Our integrated planning process will play a key role in the context of operational plan- ning and management. This process synchronises operational sales goals, supervision of the decentral and central components of administrative expenses – including our project portfolio – with profit and loss plans as they develop during the course of the year. All of the income and expense items as well as the abil- ity to bear risk are continually monitored, respectively planned on a continuous basis, thereby enabling the Bank to respond appropriately to shifts in earnings or costs. Outlook – opportunities and risks Economic development and financial markets Expectations for a global economic recovery clouded over at the start of 2012 as fears rose that Europe’s sovereign debt cri- sis would spread to the global economy. As a result, the World Bank lowered its forecast for global economic growth in 2012 by more than 1 percentage point, to 2.5 percent. For 2013, it is assuming a reduced growth rate of 3.1 percent. The International Monetary Fund (IMF) also adjusted its expectations for an eco- nomic recovery downward, but is anticipating slightly higher growth rates. Both institutions are forecasting that the euro- zone will enter a recession in 2012, with negative growth between 0.3 and 0.5 percent, due to the effects of the sovereign debt cri- sis and the state of many European national economies. The eurozone economy is expected to see slight growth again in 2013. However, in order for the economic recovery to gain traction in Europe, as well as around the world, the industrialised nations that were particularly affected by the debt crisis will need to regain the trust of the capital markets and strengthen their refinancing capabilities. In general, uncertainty surrounding economic development will remain high. “The economy will weaken in 2012 due to the effects of the sovereign debt crisis.” Germany will also see the pace of its economic growth slow substantially. However, a recession is not expected. In its annual economic report presented in January 2012, the Federal Govern- ment estimates that Germany’s gross domestic product (GDP) will grow by 0.7 percent. It is expected that the economy will begin to recover over the course of the year, after initially weak- ening. The growth dynamic is expected to be solely driven by domestic demand. Imports are expected to post stronger growth than exports in 2012. It is therefore anticipated the export sec- tor will make a slightly negative contribution to the development of GDP. Positive growth should also come from construction investments. The German construction industry is projecting revenues to grow at a nominal rate of 2.5 percent. The main growth driver will be residential construction, as the level of interest rates will remain relatively low and residential properties will continue to be in demand as safe capital investments. The number of buil- ding permits could therefore increase once again in 2012. Due to the robust nature of the German economy, forecasts for the job market are also positive. The Federal Government ex- pects the unemployment rate to continue to drop to 6.8 percent in 2012. Income levels are also expected to rise. Inflation had al- ready eased slightly by the end of 2011, with further declines projected in 2012 by the German Bundesbank, which expects that the average rate of inflation will be 1.8 percent for the year. The dampened growth prospects also influence measures taken by central banks, which will continue their policy of low inter-