Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Geschäftsbericht 2015, englisch - Letter from the Board of Management

münchener Hypothekenbank eg | annual report 2015 6 Letter from the Board of Management The 2015 banking year was marked by two far-reaching develop- ments: a significant increase in regulatory requirements and a dis- tinctly low interest rate environment. Both developments can be traced back to the outbreak of the crisis in the financial markets in 2008. Since then policymakers and regulators have acted to contain the immediate dangers of the crisis by placing increas- ingly strict rules on banks and cutting interest rates to historic lows. These policies have succeeded. In the meantime, the risks and dangers associated with these policies are becoming increas- ingly visible, although there are no signs at this time that regula- tory zeal is lessening or that low interest rates could begin to rise. In view of this, it is more important than ever to have a business model that can also defy these burdens. Meeting regulatory challenges Münchener Hypothekenbank faces especially challenges posed by new regulatory requirements, which often do not consider our low- risk business model. This frequently leads to disproportionately high costs and burdens, such as those shouldered by the Bank in 2014 when the European Central Bank (ECB) took over the direct supervision of MünchenerHyp. However, up until the present we have been able to master these challenges quite well. We have built a constructive dialogue with the new supervisory authorities. We have met the requirements placed on the Bank in full and on time. One example of this was the minimum required common equity Tier 1 capital ratio, which was set at 9.25 percent for MünchenerHyp. We achieved a ratio of 17.3 percent thereby notably exceeding the requirement. New business goals surpassed The second major challenge facing banks – the low interest rate environment – is actually rather beneficial for our core area of business: financing property purchases. This is because the more interest rates decline the more demand will increase for property as an investment, and thus the greater the attraction will be for long-term fixed rates of interest. MünchenerHyp is ideally posi- tioned for this market thanks to its range of products. We benefit from good conditions for our long-term refinancing needs, and therefore our financing activities do not have to include risks re- lated to changing interest rates. The favourable overall conditions contributed towards the renewed and notable expansion of our new business results in 2015. We clearly exceeded our objectives as we once again achieved record results as our new property financing business rose by over 9 per- cent to € 4.9 billion. Our brokerage business with banks within the Cooperative Financial Network – the Volksbanken, Raiffeisenbanken, Sparda-Banken and PSD-Banken – played a major role in our success. These results con- tinued the favourable development noted in previous years as the volume of brokered loans has risen by over 120 percent since 2010. For us this is also a pleasing confirmation of the good level of part- ner-like collaboration within the Cooperative Financial Network. In a network that is decentrally organised along specialised com- panies, the key element is the smooth interaction between local banks and the network’s partners. We are – and this is not only visible in the developments noted over the last five years – a sta- ble and a capable partner of the cooperative banks for long-term property financing. Our nationwide presence and the excellent refinancing conditions we enjoy as a Pfandbrief bank strengthen our partners’ product competence. Our cooperation with the Swiss PostFinance is also developing very favourably. PostFinance’s good presence in the market, our attrac- tive financial solutions and proven processes have led to a notable increase in the volume of brokered new mortgage loans. Due to challenging market conditions we have acted cautiously in our dealings with independent providers of financial services and have consciously accepted an accordingly lower volume of brokered business. We also recorded strong gains in our commercial property financ- ing business, which we were able to substantially expand. We could post success in a market environment marked by intensive price competition and where some participants are showing a greater willingness to take on more risk. Thus, it is even more satisfying for us to note that our business grew at an acceptable level of risk. Earnings power further strengthened Our successfully realised growth strategy is the cornerstone of our market success. Its focus is on ensuring that the Bank is able to Dear shareholders and business associates, Letter from the Board of Management

Pages Overview