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ePaper created 2013-04-15, 17:20:51 | version 1.25.7
Management report – münchener Hypothekenbank eg l annual Report 201248 Corporate planning and outlook Corporate planning MünchenerHyp is continuing a growth strategy that is focused on residential and commercial property financing. Thereby we assume that the overall conditions for refinancing and property financ- ing will remain largely unchanged. The overarching strategic goal will remain the sustainable improvement of our earning power. Adequate equity-capital resources are of particular importance in this respect. Despite the easing effect on our equity capital requirements stemming from the approval as an IRBA bank last year, future increases in equity requirements are already casting a shadow. MünchenerHyp is correspondingly striving to achieve constant capital ratios, even as the volume of its assets rise, by reinforcing its equity capital. In this context, MünchenerHyp plans to take measures to increase its paid up capital. The annual adjustment of our business and risk strategy provides the formal planning framework for this. Our integrated process plays a key role in the planning and management of our oper- ations. This process synchronises our sales goals, supervision of the decentral and central components of our administrative expenses – including our project portfolio – with the profit and loss forecast as it develops over the course of the year. All of the income and expense items, as well as our ability to bear risk, are continually monitored respectively planned on a continuous basis, enabling the Bank to respond appropriately and in a timely manner to fluctuations in earnings or costs. Outlook – opportunities and risks Economic development and financial markets As of the beginning of 2013 the economic outlook is marked by uncertainty. In particular, it is difficult to estimate the further course of the sovereign debt crisis in the eurozone and the effects of the conflicts surrounding the budget and national debt in the United States. This uncertainty is also reflected in the eco- nomic forecasts of the International Monetary Fund (IMF) and the World Bank, which are markedly different. The IMF, for instance, expects the global economy to improve slightly and grow by 3.5 percent, while the World Bank lowered its prediction to 2.4 percent. The global economy is expected to improve nota- bly in 2014. Another recession year is expected for the eurozone as a whole, although the economy could gradually stabilise over the course of the year as long as the sovereign debt crisis does not inten- sify again. Economic development will once again vary widely in the individual member states. It is expected that it will take until 2014 before the situation in the eurozone can sta- bilise sufficiently and lead to slight economic growth of about 1 percent. “The economic outlook for 2013 is restrained. It is expected to improve again next year.” According to the German government’s annual economic report, the German economy’s pace of growth will slow in 2013 and is expected to fall below 0.5 percent. However, Germany’s econ- omy is also expected to pick up steam over the course of the year and lead to a 1.5 percent increase in gross domestic prod- uct in 2014. The Federal Government believes that domestic demand will be the main growth driver in 2013. Residential construction will account for most of the expected increases in construction investments. An increase in new construction activity and sales is forecast here. In contrast to the year under review, commer- cial construction and public-sector construction projects are also expected to record slight growth. The economic slowdown will also be noticeable in the job mar- ket in 2013. Due to the strong German economy, current fore- casts only expect employment growth to slow, and the number of unemployed to remain fairly stable. The inflation rate is expected to be close to the previous year’s level and fluctuate around 2 percent. Against the backdrop of these subdued economic prospects, central banks are not expected to make any major changes to their interest rate policies.