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Aareal Bank affirms FY'16 guidance as Q1 profit rises YOY

Aareal BankAG posted first-quarter consolidated net income attributable toshareholders of €55 million, up 38% from €40 million a year ago.

Earnings per ordinary share for the period amounted to 85cents per share, compared to 60 cents a year earlier.

The bank said that despite existing market uncertainty andchallenges, it remains "generally confident for the 2016 financialyear," and it affirmed its full-year guidance, as in February.

Aareal Bank noted that it anticipates full-year net interestincome of between €700 million and €740 million, with the allowance for creditlosses ranging between €80 million and €120 million. The bank added that it"sees good opportunities" to reach operating profit of between €300million and €330 million.

First-quarter net interest income was €180 million, up from€178 million a year ago. The allowance for credit losses amounted to €2million, compared to €18 million in the first quarter of 2015. Net commissionincome increased on a yearly basis to €46 million from €41 million, mainlythanks to higher sales revenue at IT subsidiary Aareon.

First-quarter operating profit amounted to €87 million,compared to €67 million a year earlier.

Annualized ROE after taxes stood at 8.3%, compared to 6.6%in the first quarter of 2015.

As of March 31, the lender's fully phased common equity Tier1 ratio stood at 13.2%, compared to 13.1% as of Dec. 31, 2015.