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Aareal Bank Q4 Profit Rises; Proposes Dividend Increase - Quick Facts

Real estate lender Aareal Bank Group (AAALF.PK) on Wednesday reported that its fourth-quarter consolidated net income allocated to ordinary shareholders amounted to 44 million euros, up from 33 million euros in the year-ago period.

However, consolidated operating profit for the fourth quarter fell to 66 million euros from 85 million euros last year.

Net interest income stood at 148 million euros, down from 169 million euros a year ago. Allowance for credit losses amounted to 29 million euros from last year's 33 million euros, and was in line with expectations.

Net commission income of 61 million euros was higher than the prior year's 56 million euros.

Further, the company said its Board proposes a marked increase in the dividend, from 2.00 euros to 2.50 euros per share, reflecting a strong financial year 2017.

Looking ahead, Aareal Bank Group anticipates the challenging business environment to prevail during the current financial year - with continued low interest rates in Europe, and strong competitive and margin pressure on key target markets.

For fiscal 2018, Aareal Bank expects consolidated operating profit in a range between 260 million euros and 300 million euros. This is in line with the previous year's figure, adjusted for the positive non-recurring effect related to Corealcredit.

The company anticipates consolidated net interest income for the full year 2018 between 570 million euros and 610 million euros, including the net result from the de-recognition of financial assets and liabilities not measured at fair value through profit or loss, which will be reported separately.

Allowance for credit losses for the year is expected in a range between 50 million euros and 80 million euros.

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