Our new business planning for the 2017 business year foresees interest rates remaining at a low level, although they could, however, rise marginally. In addition we also anticipate high demand for property financing in markets where we are present. As we noted in the previous chapter, we expect general economic conditions to be stable to favourable. Against this background we believe that our total new business performance will expand to some extent compared to the same figure for the year under review.

Our primary focus will remain on financing residential property in Germany via the banks within the Cooperative Financial Network – our key partners in this area of business. These banks have exceptional sales power and close relationships with their customers, two characteristics that have enabled them to steadily expand their market position in recent years. We anticipate that they will also grow faster than the market in the residential property financing sector in 2017. We will assist them by intensifying our sales support, in particular, and by further developing and optimising the brokerage process within the banking systems. These measures are intended to strengthen the perception of our partner banks as competent property financiers, thereby expanding the brokerage business.

We also want to intensify our collaboration with independent providers of financial services as well as with Swiss PostFinance. We plan to achieve a moderate increase in new business in both of these sales channels.

Our plans call for the volume of new commercial property financing business in 2017 to at least achieve the previous year’s level. The prerequisites – unbroken investor interest and overall favourable conditions in our important markets – are in place for us to attain this goal. Furthermore, we intend to participate more heavily in domestic and international commercial property financing deals via the secondary market – and, in particular, again in the USA. Uncertainties are primarily due to the previously described political unknowns, which could make property investors more likely to act cautiously and hesitantly in 2017.

We expect that competition on the financing side of the commercial property business will remain tough in view of the predicted decline in the volume of transactions. As a result, both the pressure on margins and the willingness to accept greater risks will remain unchanged. We also believe that it is more likely that banks will be further burdened by regulatory requirements. These factors indicate that 2017 will again be a challenging year for the commercial property financing business. We will take these general conditions into consideration and take further advantage of the existing latitude we have regarding prices, and concurrently examine the chances of adding new products to our range of offers. We want to strengthen our presence in foreign markets, while in Germany – which will remain the focal point of our financing activities – we will reinforce the support we provide to our foreign investors. Beyond this we will expand the syndication programme within the Cooperative Financial Network. This programme assists and encourages banks within the Cooperative Financial Network to join us in financing commercial property transactions, thereby enabling them, and MünchenerHyp, to participate in additional deals and bigger volumes of financing.

The objective of our lending business with the public-sector and banks will remain unchanged and primarily serve to control liquidity and cover pools.

Our refinancing needs in 2017 are estimated to amount to € 7 billion, and thereby will be above the previous year’s volume. We anticipate that we will float two large volume issues. Beyond these activities our focus will again be on issuing non-euro denominated securities for the purpose of achieving matching currency refinancing for our international business activities, especially our collaboration with Swiss PostFinance.

We plan to accept customer deposits from the Volksbanken and Raiffeisenbanken as part of our efforts to expand our refinancing mix. A corresponding product that meets the interests of the Cooperative Financial Network is currently being developed and should be offered during the remainder of 2017.

We want to further expand our sustainability activities. As part of these efforts we are currently developing a sustainability loan that is focused on social aspects. In addition, we want to integrate sustainability criteria even more strongly into our loan processing.

We are aiming to achieve a moderate increase in net interest income from business operations in 2017. The stable development in our core markets offers us unchanging opportunities to once again expand our new business and thus our portfolio of mortgage 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 2017.

We anticipate that our administrative expenses will increase slightly in 2017. Nevertheless, we currently expect that our cost-income ratio will decline slightly.

Based on the currently available information, we expect that provisions for lending risks will develop stably.

In view of the anticipated favourable market conditions, we are confident that we will achieve our objectives for the 2017 business year and further expand our market position. We expect that our net income will exceed the previous year’s level.