Ladies and gentlemen, welcome to the Aareal Bank Q1 2025 Investor and Analyst Conference call. I am Hiley, the call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jürgen Junginger. Please go ahead. Good morning, everybody. I'm pleased to welcome you to today's conference call. Today's agenda covers our results for the first quarter of 2025, together with the outlook for the full year. I'm joined by our CEO, Dr. Christian Ricken, and our CFO, Andy Halford. They will take you through our presentation, which will be followed by a question-and-answer session. Now, I'm pleased to hand over to Christian. Christian, the floor is yours. Yeah, many thanks, Jürgen. Good morning to everyone, and thank you for attending today's call. I'm very pleased to present our results for the first quarter of 2025 and to confirm our outlook for the full year. We've made a good start to 2025 with adjusted operating profit, 15% up on the first quarter of 2024. Net interest income continues to be strong, and loan impairment charges are significantly lower. In the Structured Property Financing segment, we recorded new business of EUR 2.3 billion, substantially ahead of the same period last year, and ended the quarter with a commercial real estate loan portfolio of EUR 32.8 billion. This is slightly down on the end of 2024, but mainly as a result of changes in foreign exchange rates. We reduced non-performing loans by 5% to EUR 1.3 billion in the first quarter of 2025. I should note here that the market remains challenging, and we are continuing to monitor non-performing loans very closely. Our capital, funding, and liquidity position are all strong. Our capital CET1 ratio on a Basel IV fully phased basis stands at 15.3%, or 20.6% on a Basel IV phased-in basis. We have comfortable liquidity, and 75%, three quarters of 2025's planned funding is already in place. Overall, we are well prepared to manage the volatile markets that we now find ourselves in, and that may be with us for some time. I will now hand over to Andy, who will provide further detail on 2025's first quarter figures. Andy, over to you. Thank you, Christian. Let's turn to slide five. Aareal Bank is off to a good start in 2025, and as Christian has just noted, overall adjusted operating profit of EUR 107 million for the first quarter is up by 15% over the same period last year. Whilst net interest income is down by 7% to EUR 249 million, this is as expected. I'll say a bit more on net interest income when we turn to the next slide. Loan impairment charges are down by 36% to EUR 55 million. This is a significant decrease when compared with 2024's first quarter and reflects the work we have already done and continue to do in carefully managing the loan portfolio. Admin expenses, excluding non-recurring items, are up by 7% to EUR 88 million. This increase arose from prioritizing specific change projects in the quarter. The effective tax rate for the quarter was 27%. You'll see that although our adjusted operating profit is up by 15%, adjusted return on equity is stable at 8.2%. There are two reasons for this. Firstly, AT1 costs are up by EUR 5 million compared to the first quarter of 2024. This is explained by the timing of our new AT1, which overlapped with the existing AT1 bond, which it was replacing. Secondly, we took the opportunity to further strengthen our equity position, and I'll say more on this later. Now, let's take a look at the key profit and loss account elements on slide six. Net interest income, as I said, was down 7% to EUR 249 million, but compared to past years, this is still a strong quarterly number. The decrease is mainly driven by two things: the low interest rate environment and by the effects of proactively strengthening our tier two and senior non-preferred funding positions over the last 12 months. Turning to admin expenses, excluding EUR 7 million of one-off charges, our admin expenses were slightly up. However, expenses are in line with our budgets and continue to be tightly controlled. As mentioned a moment ago, the increase is primarily due to prioritizing specific change projects in the quarter. Our cost income ratio for the first quarter was 35%. Now, let's turn to risk provisioning on slide seven and look in a little more detail. Including fair value P&L items, the overall loan impairment charge amounts to EUR 55 million and mainly, again, relates to U.S. office. It includes an addition of EUR 9 million to our management overlay. In aggregate, the management overlay now stands at EUR 94 million, which compares with EUR 85 million at the end of 2024. I'd now like to hand back to Christian, who will talk about business developments in more detail. Thank you, Andy. Let's move on to page nine. Following a strong pickup in new business in the fourth quarter of last year, we achieved EUR 2.3 billion of new business in the first quarter of 2025. We continue to target new business of EUR 9 billion-EUR 10 billion for the full year and have made a very good start towards this total. However, I would like to emphasize that we will continue to be selective and maintain very strict conservative risk standards. The average loan-to-value ratio for the first quarter of 2025's newly acquired business was 56%, which provides a comfortable risk buffer. Margins were also good, averaging 281 basis points. These figures show that we are actively identifying attractive market opportunities. We are currently taking a more cautious approach to new office financings, and in the first quarter of 2025, we increased our activity in the hotel sector. One example was the refinancing of a EUR 567 million portfolio of seven hotels in four different European countries in March. Therefore, looking at the geographical distribution of the quarter's new business, almost 80% was in Europe, just 16% in North America, and 5% in the Asia-Pacific region. As regards property types, the Hotel segment, as you know, is a traditional strength for Aareal Bank and accounted for half of new business in the quarter. Sustainability has been and continues to be an integral part of lending decisions. In the first quarter of 2025, we again supported the green transformation of commercial properties with EUR 0.7 billion of green loans included in our new business numbers. Let's now turn to the next slide, which shows the current portfolio. The portfolio totaled EUR 33 billion at the end of March, which was down by EUR 500 million compared to the end of 2024. The reduction was caused mainly by foreign exchange rate movements. As you can see from the two pie charts at the bottom of the slide, we are still broadly diversified by property types and regions, with a clear focus on properties in the major metropolitan areas. We intend to continue to be broadly diversified across Europe, North America, and the Asia-Pacific region in the future. Driven by new business and an increase in properties now meeting the criteria in our green finance framework, green loans reached EUR 8.3 billion at the end of the first quarter. The next slide, 11, tracks two key performance indicators for our performing portfolio: loan-to-value and yield on debt. Our conservative approach is reflected in these indicators, which remain at healthy levels. The average loan-to-value ratio for our overall performing portfolio stands at a very respectable 57% and repeats the ratio at the end of 2024. At 64%, the loan-to-value ratios for the office asset class are also still solid. I would also like to highlight the development on yield on debt, i.e., the ratio of a property's net income to the amount of the loan. This is a key indicator for gauging a property's profitability relative to the financing structure. Yield on debt for our entire performing portfolio is now at 9.7%, up from 9.6% at the end of 2024, and our highest level for years. Hotels, shopping centers, and logistics properties have particularly good yield on debt ratios. While the ratio for offices is currently a little lower, we are confident that offices in top locations with good transport connections and high-quality standards will remain attractive investments. Let's now turn to non-performing loans on page 12. Through active portfolio management, we significantly reduced non-performing loans in 2024 and have continued to improve the total in the first quarter of this year. Non-performing loans stood at EUR 1.3 billion at the end of March, down from EUR 1.4 billion at the end of last year and from EUR 1.6 billion at the end of 2023. The coverage ratio in the first quarter of this year was 28%. I would like to highlight that we will continue very active management of non-performing loans. However, the markets continue to be challenging, and there may be more volatility in the aggregate non-performing loan position during the year. Our NPE ratio continued to improve on the EBA's definition. The ratio stood at 2.6% compared to 2.8% at the end of 2024. Let's now turn to our Banking and Digital Solutions segment on page 13, where business with clients from the housing and energy industries has been very encouraging. First, financial software, our joint venture with Aareon, is also successfully attracting new clients. Net interest income is rate-sensitive and consequently reduced by 10% but remains strong in historic standards. At EUR 13.4 billion, the volume of deposits from housing industry clients remains at a high level, and as planned, is between EUR 13 billion and EUR 14 billion as set out in our outlook. Since the end of the quarter, during the month of April, the volume is even back at 2024 levels. Rental deposits and maintenance reserves have increased yet again, confirming two particularly granular and sticky components of our deposit structure. They come from around 4,000 clients managing more than 9 million housing units. Now, let me hand over to Andy for an update on our funding, liquidity, and capital positions. Thank you, Christian. Slide 15 shows our broadly diversified funding mix, solid liquidity ratios, and capital markets activity. Deposits now total around EUR 17 billion, representing around 43% of our total funding volume. The largest part comes from the housing industry, and an additional EUR 3.1 billion is from retail deposits via platforms like Raisin. Our deposits are, in general, very sticky. Furthermore, 99% of the retail deposits have an original maturity of two years or more. We were particularly active in the capital markets during the first quarter of 2025, being cautious in the volatile environment. As already mentioned, we increased our AT1 capital by replacing our EUR 300 million AT1 with increased AT1 funding of $425 million and completed a EUR 100 million tier two issue. Including retained earnings of around EUR 0.3 billion, we increased our capital by EUR 0.5 billion. In addition, we placed bonds and funds equivalent to EUR 0.8 billion in total. This included both euro and Swedish krona issues. This was Aareal's first Swedish currency issue since 2006. With a further fund brief of EUR 750 million in April, Aareal has already achieved 75% of the 2025 full-year funding plan. The remaining balance of this year's plan is expected to be met by further fund briefs and potentially senior non-preferred issues. Next, our treasury portfolio on slide 16. The treasury portfolio stood at EUR 8.3 billion at the end of March, up from EUR 8.2 billion at the end of 2024. In terms of asset classes, the portfolio comprises public sector borrowers, covered bonds, and a very small portion of bank bonds. It, therefore, has a strong liquidity profile. High credit quality requirements are reflected in the rating breakdown. 100% of the portfolio has an investment-grade rating, with 88% having a rating of double A or higher. Asset swap purchases ensure that there is low interest rate risk exposure. The portfolio is almost exclusively in euros and has a well-balanced maturity profile with an average duration of around 5.5 years. Turning to capital on slide 17, our ratios continue to be strong. Our CET1 ratio was up at the end of March and stood at 20.6% on a Basel IV phasing basis and at 15.3% on a Basel IV fully phased basis. The total capital ratio rose to 28.5%. The increase in our capital ratios came from the decrease in risk-weighted assets caused by foreign exchange rate movements. In addition, the Tier one ratio and total capital ratio reflect the additional capital raised, as I have just referred to. Our capital ratios are significantly above SREP requirements, and our leverage ratio was 7.3% at the end of March, which is also well above regulatory requirements. Now, I'll hand back to Christian for the outlook and closing remarks. Thank you, Andy. Now, let us turn to the 2025 outlook on page 19. Our Q1 results are fully in line with expectations, and therefore, we are confirming the 2025 outlook. We certainly recognize that recently heightened uncertainties generating increased market volatility may have implications, but it will be some time before they become apparent. Let me summarize our outlook. In the Structured Property Financing segment, we aim to expand our credit portfolio to between EUR 34 billion and EUR 35 billion, excluding foreign exchange movements. We are targeting between EUR 9 billion and EUR 10 billion of new business. In the Banking and Digital Solutions segment, we expect deposits from the housing industry to continue to be between EUR 13 billion and EUR 14 billion. All in all, we are targeting operating profit of between EUR 375 million-EUR 425 million for 2025, excluding expected one-off charges of between EUR 20 million-EUR 25 million. We expect to achieve a post-tax return on equity of between 7%-8%, again excluding the one-off charges. I would like to thank you all very much for your attention. Andy and I are now very happy to answer all of your questions. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Sharada Bhattal from Citibank. Please go ahead. Hi, can you hear me all right? Yes, we can. Can I just get some color on the moving parts in the NPL just on the quarter? Like new additions versus redemptions, and then just some more detail on the U.S. outlook. I know you're saying it will probably take a while to see through into kind of asset quality or the maxability that we've seen this quarter, but just a little bit maybe more detail there in terms of U.S. NPLs. Also on the cost outlook, these various sort of one-off efficiency charges, when do you expect them to kind of be borne out in the year and ultimately kind of end? Just one final question on profitability and your expectation on new business margin and yield on debt going forward. Thank you. Right. Okay. Sorry, there's quite a number of questions within that. The NPLs overall were down by EUR 0.1 billion. By memory, we had a couple of hundred redemptions, 100 more coming in, or something of that sort of order was the profile of that. On the expenses, as I said earlier, the overall expenses are a little higher in the first quarter, not by a lot, but because we've deliberately prioritized some of the change programs and hence have incurred a bit more of the expense earlier on. Overall, the expense outlook for the full year remains unchanged. That is more about phasing. Sorry, remind me which other bits of your question I did not answer. On the NPLs on the U.S., kind of the outlook there, what you're seeing just within this quarter as a reaction to kind of the macro volatility, and then on profitability expectations for new business margin and yield on debt? Yeah. I think we have not seen a lot of impact in recent weeks of volatility in the U.S. market. Obviously, our business is fairly episodic, so there are big expenditures that are made over periods of time. Obviously, investors being thoughtful about what they're doing, and I think everybody in part just sort of waiting to see when the clouds lift sort of quite what happens. We have still got a good stream of inquiries coming through. We are still involved in looking at a number of things, some of which predate the recent volatility, some of which have come up since. Certainly, in terms of NPLs, I would not say the events of the last three or four weeks have particularly disturbed the NPL trend. That is just too recent. It is something which we watch, something which we keep an eye on. At the moment, our sort of sense is that overall, this will settle to a new pattern. As we said, during the first quarter, we have swung more of our new business to Europe, and hence there is slightly less in the U.S. during that period. We have focused more on hotels and have therefore swung a little bit less to offices. It is something we are monitoring on a regular basis, and as best we can, we will manage the portfolio as a collective so that we have got a spread of risk across different asset classes, across different geographies. Overall, we are pretty comfortable with where we are at at the moment. As Christian said, non-performing loan profiles obviously do fluctuate over time. There may be some fluctuation in coming quarters, but generally speaking, we think things are behaving reasonably predictably. Obviously, as with most people, we're keeping a close eye on things and will see how things progress over the coming weeks and months. We now have a question from the line of Corinne Cunningham. Please go ahead. Good morning, everyone. A couple of questions from me, please. First one, just following up on NPLs. You say most of the new provision is for U.S. office. Is that new U.S. office NPLs or topping up existing? If it's topping up for existing, is that simply because real estate values are falling away? Is it increased duration? Maybe a bit of color on that. The second one is on your funding. The EBA recently published something on dollar net stable funding ratios, and Germany didn't look particularly rosy in that analysis. Can you say anything on your dollar net stable funding ratio, please? Thank you. On the NPLs, as ever, it's a bit of a mixture. There's a little bit of top-up. There is some new that's come in there. With the size of portfolio we have got, you would expect in any quarter that we will have some movement. I wouldn't call out any particular trend or any particular pattern. The way we provision, once we know that we have got the problem, we will look at various scenarios, and we'll do a sort of weighted assessment of what provision is appropriate. It's a variety of things, a little bit of new, which you'll get in any quarter, and some is revision to previous estimates. On the NSFR, I mean, we are in a pretty good space, I think, on our funding ratios. Across the piece, we are pretty liquid. Our LCR ratios, NSFR ratios are significantly ahead of the minimum regulatory requirement. Our funding position, particularly with the top-ups we've done both on the tier two, the AT1, the equity, is as strong as it has been for a good period of time. Thank you. No comment specifically on the dollar net stable funding ratio? No, no. It's not untypical. We swap a lot into euros, but the NSFR is in good shape. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Jackie Ineke from Spring Investments. Please go ahead. Hello, good morning. Thanks for the call. Just a couple of questions. First of all, I noticed you've obviously had a number of questions on the NPLs, but in January, you actually gave some really good color in terms of what you're expecting for restructurings. I think you did target less than EUR 1.3 billion for NPLs in the first quarter. Obviously, you're just marginally above that. Can you give us any figures? Because obviously, you must be in the midst of a number of restructurings. Do you have similar figures that you gave in January for the next quarter? If you don't, because I've not really heard many figures so far, is this a decision not to provide that kind of color anymore? That's the first question. The second question, just on domestic finances in Germany, it's clear the ECB has ramped up pillar two requirements and also for your Landesbank competitors, let's say, there. Are you seeing an impact of that? I mean, obviously, the German domestic capital buffer is going down as well. Are you seeing any kind of freeing up a little bit? Is it getting a little bit easier to compete domestically? Thank you. Sure. Christian, do you want to take the? Yeah, I'll start with NPLs and then maybe on that. I mean, on the NPLs, it obviously moves around by quarter, and therefore, trying to forecast accurately quarter by quarter is not always the easiest of things. As I said earlier, we've got in the first quarter about EUR 100 million of new defaults. We've got about EUR 200 million of settled situations from the previous, and hence why we've come down by 1.3 over a period of time. Obviously, we'd like the 1.3 to come down a little bit more, albeit in terms of regulatory ratios. As I said before, we're comfortable on that front. I suspect there could be a bit of volatility on the NPLs, honestly, going forward. It has clearly been a period with some turbulence. If we see a little bit of increase in the second quarter, it would not surprise me hugely. Overall, the long-term trend is on a downward path. We are fine with that. Of course, part of running our business is taking some risks. There will always be some positions that do not quite work out. The key is making sure that we have got much more income coming in than we are taking credit charges. You can see from the results in the first quarter that the fact we had the income slightly off, but nonetheless, a huge improvement on the loan impairment charges. The economics of the business, bit by bit, are clearly improving. As we've said, the sort of target of getting to that 13% ROE over a period of time will be dependent on making sure the loan impairment charges do continue generally on a downward trend year by year, not necessarily by quarter, but overall on a year-by-year basis. Got it. Thank you. Yeah, I take the question on the domestic financing. As you know, we have only 7% of our exposure in Germany. We are not going actively after a single property financing in Germany. We are doing portfolio financings in the hotel space, in the retail, the shopping center space, on the logistics side. Sometimes those portfolio deals also include German properties. That is not the focus of our business, and this will remain so, mainly driven, let's say, by the margin considerations. We have very strict raw rock hurdles. In general, the German business, due to the competitive situation, which is still intense, would not meet those requirements. Okay. So, that's not lessened any in the first quarter? You didn't notice any lessening of that competitive competition? No, not really. In the first quarter, we did not have any newly acquired business in Germany. Thank you. You're welcome. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Christian Ricken for any closing remarks, please. Yeah, thank you very much. I can only reiterate what I said at the very beginning. I think there are two main messages. One is that we had a really good start into 2025. We are extremely pleased about the results, which are confirming that we are on the right track in terms of strategy, in terms of execution on this strategy. That is very encouraging. Nevertheless, we see, of course, the volatility in the markets. We see the continued geopolitical risks. We will be on our toes in order to monitor it, and we'll remain our conservative approach as far as risk is concerned. These are the two messages I would like to make. Thanks for spending your time with us today, and have a good day. Thank you so much. Ladies and gentlemen, the conference is now over. Thank you for choosing CorisCall, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.