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Geschäftsbericht 2015, englisch

47 management report We are planning to achieve new commercial property business vol- ume that will be at least at the previous year’s level. We also antici­ pate a further escalation in the competitive situation. Furthermore, based on the assumption of unchanging low interest rates and a lack of alternative investment opportunities for investors, we fore- see high, or rising, prices for commercial property. This can affect our new business as we also measure the risk-content of a proposed financing by using the mortgage lending value for calculating the loan-to-value ratio. This makes us more risk-conscious than pro- viders that base their calculations on a property’s market value. In order to counter rising competition we have implemented measures to further optimise our processes and capacities so that we will be better able to smoothly handle a larger volume of new business inquiries. In addition, we will increase our abilities to acquire new business outside of Germany. The foreign-oriented activities that we will intensify include working with foreign investors who want to invest in Germany, and our cross-border financing business. We already expanded our syndicated loan business in 2015 and will continue to grow in this area in 2016. The objective of our lending business with the public-sector and banks will remain unchanged and primarily serve to manage liqui­ dity and cover pools. Our liquidity requirements for 2016 are anticipated to be € 6.5 bil- lion, or slightly below the previous year’s figure. We plan – depend- ent on the volume of private placements – to issue three to four benchmark Mortgage Pfandbriefe. Furthermore, we plan to use new products in our money market business to increasingly attract new corporate clients for our uncovered refinancing paper in addition to banks within the Cooperative Financial Network, who remain our core customer group within this segment. In general we anticipate that overall conditions for issuers – and thus for us as well – will be even more challenging than they were in 2015. It seems un- likely that the ECB’s third Covered Bond Purchase Programmme (CBPP3), which has been extended in the interim, will be able to reverse the trend pointing towards higher premiums and a high new issue premium for benchmark issues in an unchanging low yield environment. Due to quality and continuity of our Bank’s issues – which has become very valued by investors – we continue to anticipate that MünchenerHyp’s overall refinancing situation will remain favourable. We will continue to decisively pursue our sustainability strategy. We plan to use ecological and social financing criteria, as well as sustainable product ideas, to anchor the concept of sustainability more intensively within our lending business. We also plan to float a further ESG Pfandbrief as part of our efforts to further expand our sustainability-oriented refinancing activities. In addition, we want to continue our ongoing sustainability dialogue with our stakeholders, and integrate our employees in the sustainability processes of the Bank as best as possible. We are aiming to achieve a moderate increase in net interest income generated from business operations in 2016. The stable develop- ment in our core markets offers us unchanging opportunities to further expand our new business and thus our portfolio of mort- gage loans. This will continue to have an increasingly favourable effect on the Bank’s performance. As a result, we anticipate that our earnings will improve again in 2016. We believe that our administrative expenses will rise slightly in 2016. Nevertheless, we are currently expecting that our cost-in- come ratio will remain unchanged. Based on the currently available information, we expect that pro- visions for lending risks will develop stably. In view of the good market conditions that have been forecast, we are confident, that we will achieve our objectives for the 2016 busi- ness year and that we will be able to further expand our market position. We anticipate that our net income will exceed the pre- vious year’s level.

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