Overseas expansion drives higher lending at MünchenerHyp

The bank strengthened its position by growing its presence, particularly outside Germany.

German mortgage bank Münchener Hypothekenbank wrote €1.4 billion of new commercial property lending in the nine months to the end of September, up by 55 percent year-on-year.

The bank strengthened its position by growing its presence, particularly outside Germany, said Louis Hagen, chairman of MünchenerHyp’s board of management.

“Thanks to our unbroken favourable new business results we are once again able to strengthen our earnings power as planned”

– Louis Hagen

MünchenerHyp’s local market accounted for €1 billion of the bank’s new CRE lending, with the remaining allocated to the UK, France, Spain and the Netherlands.

MünchenerHyp posted total new business results, including residential, of almost €3.9 billion, up by 14 percent from September 2016. It also improved its new business for private residential property financing by 13.6 percent to €2.5 billion, year-on-year.

The banks’ portfolio of mortgage loans went up by €1.2 billion to €29.1 billion. In contrast, the bank further reduced its capital markets portfolio in line with its strategic policy.

“Thanks to our unbroken favourable new business results we are once again able to strengthen our earnings power as planned,” Hagen said.

In the first nine months of the year, the bank’s interest income rose by 13 percent year-on-year to €190.3 million.

The bank said provisions for lending risks remain at a low level, as results from normal business operations rose by €10.8 million to €56.3 million.

Total assets rose during the first nine months by €500 million to €39 billion.

In August, MünchenerHyp issued a €750 million benchmark Mortgage Pfandbrief, with a term of nine years and two months and a coupon of 0.625 percent. It was placed at a price 13 basis points below the mid-swap rate.

“The great interest shown by investors demonstrated that there is still a high level of liquidity in the covered bond market,” Hagen said.

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