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Wiesbaden (dpa) - The tightened corona lockdowns in many countries hit Aareal Bank harder than expected.

Instead of an operating profit, the management board now expects a negative operating result in the double-digit million range for the past year, as the real estate financier surprisingly announced on Sunday evening in Wiesbaden.

The money house named an increased risk provision for possible loan defaults as the cause.

The news was badly received on the financial market.

For the Aareal Bank share listed in the MDax, shortly after the start of trading on Monday, it fell by around four percent to 19.17 euros.

Aareal Bank is heavily involved in the financing of commercial real estate such as hotels, offices and shopping centers.

Because shops in many countries were closed for months because of the pandemic and tourism has collapsed, many borrowers from the industries are under great pressure.

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Only in mid-November did the Aareal management cut their targets for 2020, but still promised an operating profit in the mid double-digit million range.

Now the board is moving away from it.

"We are ticking the pandemic year 2020 with a comprehensive precautionary measure for Covid-19-related risks," said CFO Marc Hess.

A “clearly positive operating result” is expected for the new year.

The bank plans to present the entire preliminary business figures for the past year on February 24th.

Despite the annual loss, the shareholders are to receive a dividend of 1.50 euros per share for 2020.

However, this is subject to the proviso that the supervisory authorities allow this.

Aareal shareholders went away empty-handed for 2019 after supervisory authorities called for a dividend freeze.

Meanwhile, CFO Hess is fueling the hope that the institute will again make significant profits in the coming years.

The bank wants to generate a group operating profit in the order of 300 million euros in 2023.

Possible takeovers are not yet included.

As a prerequisite, however, the Executive Board states that the corona pandemic must be completely overcome by then.

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