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ePaper created 2012-04-20, 15:08:32 | version 1.23.0
53Management Report Münchener Hypothekenbank eG ness will only become gradually visible in our future results. Thus for 2012 we expect to see a slight improvement at first, which will continue to grow in the following years. In terms of our net interest income targets, this means that we again count on an appropriate contribution from capital market activities for the current year. “MünchenerHyp’s Pfandbriefe will continue to be held in very high esteem by investors.” We anticipate that our administrative expenses will show stable development in 2012. We will still incur relatively high expenses for projects. In particular, this includes the full assumption of risk assets into our equity capital backing in accordance with the IRBA guidelines, as well as the implementation of an improved trading and risk management system. Added to these factors are the ongoing adjustments to our systems to optimise the processing of loan applications. MünchenerHyp is very carefully monitoring the development of all regulatory adjustments, and we are also taking part in the ongoing Basel III monitoring of banking supervision. One step we have already taken in order to fulfil the stricter equity capital requirements was to implement the calculation of equity capital backing in accordance with the IRBA guide- lines. In the next years, we will take further measures to re- inforce core capital. It has not yet been determined whether the leverage ratio will be introduced as an upper limit. A corre- sponding project was carried out during the year under review to calculate the future liquidity requirements according to Basel III – Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The specifications and action mecha- nisms for the new liquidity figures are now being actively integrated into our liquidity management system in prepara- tion for the upcoming requirements. In particular, the classifi- cation of the liquidity buffer will affect individual investment decisions. While income and risk criteria were previously the primary decision-making factors, the Bank’s portfolio and cash-flow structures will be increasingly significant in the future. To this end, MünchenerHyp has created an integrated Thereby in doing so we will focus on the metropolitan areas in Germany, as well as our core markets of France, the UK and the Benelux countries. Our property focus will be on multi-use commercial properties, particularly in the office and retail sec- tors, and also on logistics properties, which are generally rented for long periods of time and are in good locations. We consider the potential for new-business growth to be good, since our core markets are stable and the commercial property financing business has consolidated since the outbreak of the financial market crisis. We also anticipate that our domestic business will see another increase in the area of commercial housing port- folio financing. We finance housing cooperatives and housing companies in this segment in Germany whose core expertise is managing and renting residential properties. We anticipate that our volume of new business generated by our lending business with the public sector and banks will de- cline. This is driven by the shift in risk aspects noted since the outbreak of the sovereign debt crisis, as well as by future reg- ulatory requirements. The Pfandbrief will remain the most important refinancing product for MünchenerHyp in the future. Two of the Bank’s Jumbo issues mature in 2012. The first, a Jumbo Public Pfand- brief with a volume of € 1.75 billion, was repaid in mid-January. We are planning to issue at least one Jumbo Pfandbrief this year. However, it should be noted that, due to the sovereign debt crisis, there is currently a higher risk associated with pla- cing Jumbos. Nonetheless, because of our good reputation as an issuer, we expect comparatively stable spreads for our issues, although it is unlikely that they will remain unaffected by general developments. Demand for uncovered refinancing will be largely met via the Volksbanken Raiffeisenbanken Cooperative Financial Network. We will strive to achieve higher net interest income from our normal business operations in 2012 and beyond from the basis of our growth objectives. The development of property markets in our core markets, in particular, provides opportunities in this area, and favours a further increase in new business per- formance. As the mortgage banking business is a long-term business by definition, the favourable figures for new busi-