German property lender Aareal sees rise in non-performing loans

Aareal Bank AG

08/08/2024 08:01

FRANKFURT, Aug 8 (Reuters) - The property lender Aareal
recorded a 26% increase in loans that were likely to go unpaid
during the second quarter, the company reported on Thursday, the
latest sign of the ongoing severity of a commercial real-estate
slump rattling investors on both sides of the Atlantic. 
    The disclosure by Aareal, which is based in Germany but
operates globally, came as part of its quarterly earnings
report, which nevertheless showed a rise in net profit.
    Aareal and other banks have been navigating a global crunch
in commercial real estate. Aareal has a quarter of its business
in the United States, which has been especially rocked by the
downturn.
    "US office markets still very challenging," the bank wrote
in a presentation for analysts.
    So-called non-performing loans rose to 1.415 billion euros
in the three months ended in June, up from 1.123 billion euros
at the end of March.
    The increase follows a reduction of non-performing loans
during the first quarter. 
    

 (Reporting by Tom Sims, Editing by Rachel More)
 ((Tom.Sims@thomsonreuters.com; +49 30 220 133 645;))