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Berlin Hyp increases lending through international expansion

The German bank wrote €2.2bn in new loans across Poland, Benelux, France and Czech Republic last year.

German mortgage bank Berlin Hyp wrote €6.7 billion of new lending in 2017, a 24 percent increase on the same period a year earlier.

The growth, which excludes extensions to existing loans, was driven by new business in foreign markets, which totalled €2.2 billion last year, compared with €1.2 billion in 2016.

The bank’s financing of foreign properties accounted for 33 percent, up from 22.6 percent in 2016, with 12 percent secured by property in Poland and 11 percent in Benelux. France and Czech Republic accounted for 6 percent and 4 percent, respectively.

During 2017, new lending was 67 percent weighted towards properties in Germany, compared with 77.4 percent in 2017. By volume, new lending in Germany totalled €4.4 billion last year, up from €4.2 billion in 2016.

By borrower type, new lending to developers increased to 21 percent, from 7 percent in 2016. Lending to housing associations decreased from 15 percent to 3 percent last year and investors accounted for 76 percent of new lending, slightly down from 78 percent in 2016.

Berlin Hyp’s business was focused on offices, accounting for 44 percent of new lending. Retail, on the other hand, had the largest increase to 25 percent, up from 16.6 percent in 2016.

Last year, the bank also saw lending extensions increase to €1.4 billion, from €600 million in 2016.

“We stuck by our conservative risk policy and have still managed to achieve great success on the market,” said Sascha Klaus, chair of the bank’s board of management. “The rise in extensions shows that our customers are keen to stay with a bank with which they have a positive and reliable partnership.”

The bank’s 2017 profit before tax and transfers stood at €117 million, 60.3 percent up from the previous year, despite “intense competition in commercial real estate financing, the continuing low-interest environment and additional regulatory requirement”, it said.