German mortgage bank Münchener Hypothekenbank (MünchenerHyp) wrote €901.5 million of new commercial property lending in the year to 30 September 2016, down from around €1.3 billion in the same period in 2015.
The bank said that it had written lower levels of new business as it “remained true to its proven financing principles” in a market environment where lenders were willing to accept greater risks and lower margins.
MünchenerHyp posted total new business results of €3.4 billion to 30 September 2016, down from €3.7 billion last year across all real estate lending activity. Residential property financings this year to the end of September were around €2.5 billion, roughly in line with 2015.
The bank’s recorded net interest income of €168.5 million at the end of September was up 4.2 percent from €161.7 million at the same point last year.
“We are on track to improve our earnings and see ourselves well positioned to face the growing challenges posed by the market and competition“, said Louis Hagen, CEO of MünchenerHyp.
The bank’s total assets increased over the course of the year by around €1 billion to €39.1 billion as it expanded its mortgage loans portfolio by €1.5 billion to €27.2 billion. The bank reduced its capital markets portfolio in line with its strategy.
MünchenerHyp’s tier 1 capital ratio as at 30 September 2016 was 19 percent and its common equity tier 1 capital ratio was also 19 percent, while its total capital ratio stood at 20.7 percent.