Ladies and gentlemen, welcome to the Aareal Bank AG six-month 2026 investor and analyst conference call. I'm Sergen, the conference call operator. I would like to remind you that all participants will be on 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, Head of Debt Investor Relations. 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 six months of 2026, together with the outlook for the year. I'm joined by our CEO, Dr. Christian Ricken, and our CFO, Andy Halford. They will take you through our presentations, which will be followed by a question and answer session. I'm pleased to hand over to Christian. Thank you, Jürgen, and good morning to everyone, and thank you for attending today's call. Let me start by turning to slide three. We, Aareal Bank, are well on track at the half-year stage. The adjusted operating profit for the first six months of 2026 amounted to EUR 208 million. Net interest income increased, driven by both loan and deposit growth. In the Banking & Digital Solutions business segment, housing industry deposits continued to increase with a monthly average over EUR 15 billion for the first time ever in June of this year. The Structured Property Financing business segment also performed well. New business was strong and in line with our portfolio targets. Our funding, liquidity, and capital positions remain solid, providing us with financial resilience. Let me take a moment to reiterate our positioning in the context of the ongoing unsettled macroeconomic situation. Aareal has not been directly affected. We have no loan exposure to the Middle East, and our U.S. business has not experienced any direct impact from the U.S.-Iran war. However, there are clear implications for the energy market, for inflation, and for growth. These secondary effects cause uncertainty for businesses generally and increase the risk of weakening economies, particularly if the Middle East conflict is prolonged. We are continuing to monitor the wider effects on global markets very carefully. Turning now to slide four, which shows some of our main KPIs. All of those KPIs are in line with our outlook and are on track to meet our 2027 targets. In addition to the satisfactory operating profit achieved in the first half of this year, I would like to highlight the following points. Both the loan portfolio and deposit balances are at targeted levels. The fully phased CET1 ratio stands at 15.6%. The adjusted return on equity was an annualized 8.3%. The cost income ratio slightly improved compared to the first half of 2025 to 31%. Turning to slide five. One of the highlights of Aareal's second quarter was a successful issue of our first green covered bond. It is a further step in diversifying our funding mix. It also enabled us to broaden our investor base. Sustainability continues to be deeply embedded in our core business as a property's environmental performance is an important input to overall value. We support the green transformation of commercial properties. The launch of a green Pfandbriefe is further evidence of our sustainability credentials. The bond was very well received. The issue amounted to EUR 625 million. It was around three times oversubscribed, with 57% of the orders coming from green investors. The bond's attractiveness was enhanced by meeting the standards of German mortgage Pfandbriefe, which provides stronger protection than most other covered bond regimes. This appeal was also supported by the transparency provided by Aareal's annual green bond allocation and impact report. Let us turn to slide six, which focuses on BDS and shows the development of deposits since 2023. Housing industry deposits are constantly trending up and reached an average of EUR 14.7 billion in the first half of 2026. As I mentioned a few minutes ago, the monthly average reached a significant milestone exceeding EUR 15 billion for the first time in June. Additionally, the quality of our housing deposits is continuously improving. We have extended the duration of our retail deposits. Together, average housing industry and retail deposits totaled EUR 16.5 billion. BDS is the growing earnings and stability anchor for our group. Its strong deposit franchise reinforces the group's funding position with the quality continuing to improve. BDS is also expanding internationally as part of our Aareal Ambition strategy. Turning to slide seven and to our real estate financing portfolio. After significant growth in the portfolio over the last two years, the total remained as planned, steady at around EUR 34 billion at the end of the first half of 2026. During the first half, we continued our cautious approach to new business. We focused on our areas of real strength. For example, we completed cross-border and portfolio financings. We focused most attention on Europe and on hospitality-related loans. Overall, the quality of our portfolio is evident from its low LTV of 56% and the strong yield on debt of 9.9%. Also, as planned, we further reduced the U.S. portfolio. Compared with the end of 2023, it is down by 24%. It now represents 18% of the total portfolio, compared with 25% at the end of 2023. The U.S. office portfolio was down 40% over the same period. In the total U.S. portfolio, we achieved a reduction of EUR 300 million in the first half of this year. It was largely offset by FX movements. We will continue to reduce, but not exit, the U.S. portfolio in line with our Aareal Ambition strategy. I am now turning to slide eight, which provides a quick update on our Aareal Ambition strategy and its strategic targets. Implementation is on track. First, in the structured property financing business segment, our portfolio is well diversified and stands on target at around EUR 34 billion. We have increased our new business allocation to hospitality and to Europe, and in the U.S., we have a new leadership team in place executing our strategy there. Secondly, in the banking and digital solutions business segment, we have achieved further growth in housing deposits, and as I've already mentioned, they exceeded on average EUR 15 billion in June. The quality of the deposit mix continues to improve. We have also built strong momentum in acquiring new clients, expanding our partner ecosystem. This includes the first international expansion of BDS, which is in the Netherlands. Thirdly, our strong capital position and liquidity is supporting our financial resilience. We also have a continued focus on NPLs and on the targeted reduction to below 3% or below EUR 1 billion. As I've just described, we successfully issued our first green covered bond. Our transformation program to deliver efficiency gains and cost savings is underway. Modernization of our IT architecture and transition to the cloud is on track. In addition, increased use of AI and automation is already enhancing operational efficiency. I will hand over to Andy, who will take you through 2026 first half results in more detail. Andy, over to you. Thank you, Christian. Turning to slide 10, Aareal has made a good start to 2026, and as Christian has highlighted, we achieved an adjusted operating profit of EUR 208 million in the first half of the year. Net interest income was strong at EUR 474 million, with the benefits of loan and deposit growth offsetting the effects of lower interest rates and the non-recurrence of the interest on last year's Aareon proceeds. A large part of the swing in net commission income is attributable to SRT costs. Loan impairment charges totaled EUR 127 million for the first half, which is in line with expectations. The strict cost disciplines and efficiency measures that we've put in place led to a reduction of 4% in adjusted admin expenses, which amounted to EUR 155 million. The cost-income ratio for the first half was therefore 31%. Other components contributed EUR 23 million, and mainly related to market valuation changes and loan repayment effects. EUR 20 million of the prior year other components income related to the exit from a former legacy NPL. The effective tax rate is around normal levels at 27%. AT1 costs have normalized in 2026. In 2025, they reflected an overlap in the new and previous AT1s. Taken together, the adjusted post-tax return on equity was 8.3%. Our fully paid CET1 ratio was 15.6% at the end of June, slightly up on the level at the end of last year. Going to slide 11, let's look further at net interest income. As I've just said, net interest income was strong. The top chart on this slide steps through the main drivers of this result. The contribution from gross loan margin was driven by the higher loan portfolio and added EUR 8 million, whilst BDS's deposit business contributed an additional EUR 11 million. The main negative impact was lower interest rates, which reduced net interest income by EUR 9 million. As I've just mentioned, last year's first half included interest on the proceeds from the sale of Aareon of EUR 8 million. Turning to admin expenses, as planned, Admin expenses have been tightly controlled and are down by 4% to EUR 155 million. As Christian mentioned, the cost-income ratio for the first half was 31%. Turning now to funding liquidity and capital, and first to capital on slide 12. We are managing our capital conservatively by running the bank on a fully phased-in ratios. Our CET1 ratio on this basis was slightly up at 15.6%. The Tier 1 ratio stood at 17.7% and total capital ratio at 21.1%. Our leverage ratio stood at 7% at the end of June, well above regulatory requirements. Slide 13 shows our funding and liquidity positions. The top chart on the slide shows our broadly diversified funding mix. Deposits represent around 45% of our total funding volume. The largest part comes from the housing industry, with an additional EUR 2.8 billion from retail deposits. Overall, we have a very balanced maturity profile across all funding instruments. We also have solid liquidity ratios. The NSFR stood at 115% at the end of June, and the average LCR was 201% for the second quarter. We were also active in the capital markets during the first half of the year. In addition to the green Pfandbriefe, which Christian has already highlighted, we issued two benchmark mortgage Pfandbriefe, one for EUR 750 million and the other for GBP 250 million sterling. We also completed smaller private placements of mortgage Pfandbriefe totaling a little under EUR 100 million. Overall, total funding at the half year is well ahead of plan. We will continue to focus on mortgage Pfandbriefe in the second half, with activity depending on the market environment. I'm also pleased to report that Fitch upgraded our issuer default derivative counterparty, senior preferred, and deposit ratings to A minus. Let us now turn to our two business segments, as shown on slide 15. We introduced this slide in March to illustrate the importance of both of our business segments to the group. We expect both business segments to continue to make strong contributions. Just as a note, let me remind you that this year we have updated intragroup transfer pricing to reflect the development of our funding structure. As a result, you will see changes to the 2025 segmental split of results in the slides that follow. Around EUR 10 million adjusted operating profit in the first half of last year moved from Banking & Digital Solutions to Structured Property Financing. Turning to slide 16, let's look further at the BDS business segment. Overall adjusted operating profit for the first half of 2026 is up by 15% to EUR 71 million. This is driven by a 10% increase in net interest income and by improved operating leverage. Housing industry deposits continue to grow and reached an average of EUR 14.8 billion in the second quarter. The segment's strong deposit franchise reinforces the group's funding position and as Christian said, further growth opportunities have now been added by expanding beyond the German core market. In the top half on slide 17, we take a closer look at categories within the housing industry deposits and look over a longer period. Our strong deposit franchise continues to reduce our dependence on capital markets. Total housing industry deposits continue to grow, with June's average of over EUR 15 billion being notable. There is interest from new and existing customers with growth in sight and term deposits driven by our successful sales activities. Maintenance reserves and especially rental deposits are particularly sticky and have constantly increased and reached 41% of all housing industry deposits in the first half of 2026, compared to 35% back in 2022. The second chart on the slide shows retail deposits. These deposits provide an additional important funding source. We have been focusing on the weighted average lifetime. Maturity now averages around four and a half years, compared with an average of less than two years back in 2022. We plan to continue with a total of EUR 2 billion-EUR 3 billion of retail deposits. Let's turn to the Structured Property Financing portfolio on slide 18. Overall, adjusted SPF profit for the first half was down 15% at EUR 137 million, which was in line with expectations. The real estate financing portfolio is on target. It's around EUR 34 billion, and we are reducing the U.S. portfolio in line with our Aareal Ambition strategy. Green loans total EUR 12.2 billion at the end of the first half, compared to EUR 11.3 billion at the end of last year. These loans include the financing of refurbishments as we continue to support commercial properties' green transition. We continue to apply strict risk management, proactively controlling risk and managing NPLs. Over 50% of our financing volume is portfolio deals and the associated cross-collateralization significantly reduces single asset risks. We're now on slide 19. We have good margins and low LTVs on new business. We have continued to be particularly selective in our approach by quality over quantity. In the U.S., new business came only from renewals. New business totaled EUR 4.7 billion in the first half of 2026, matching the level achieved in the first half of 2025. Gross margins of 242 basis points were above plan and ahead of the average for 2025 as a whole. For the rest of this year, we expect margins to be slightly below 2025 levels. The LTV for newly acquired business stood at 55%. We again supported the green transformation of commercial properties with EUR 1.9 billion of green loans included in our new business numbers. To slide 20 and to non-performing loans. We are continuing our very active management for non-performing loans. The balance stood at EUR 1.17 billion at the end of June. We reduced non-performing loans on U.S. office properties by $78 million in the first half, and the current balance is now around half of its level at the end of 2023. The Stage 2 coverage ratio stood at 3%, with the Stage 3 ratio at 30% at the end of June. The non-performing loan ratio was little changed at 3.3%. Loan impairment charges amounted to EUR 127 million in the first half of 2026 and continued to show a downward annualized trend. The charges relate mainly to U.S. office properties with risk costs for the rest of the portfolio below long-term averages. Real estate markets, particularly for distressed assets, remain challenging, but Aareal is well on track in identifying and executing solutions. Now I'll hand back to Christian, who will cover our outlook for 2026. Thank you, Andy. I am turning now to the outlook on slide 22. Looking ahead, the 2026 outlook reflects our near-term targets, and we are continuing to manage towards meeting these. Our first half performance, capital and liquidity position, and progress in both business segments are all in line with these targets. However, this outlook reflects our assessment as of today and remains subject to market risk and strategic developments over the course of the year. This does not change our outlook today and as no further strategic measures are planned at present. It does, however, underline our disciplined approach. We continue to expect adjusted operating profit to approach EUR 400 million. This would correspond to an adjusted post-tax return on equity approaching 8%. In banking and digital solutions, we continue to target average annual deposits of around EUR 17.5 billion. In the structured property financing, we continue to target a loan portfolio of around EUR 34 billion and a reduction of non-performing loans to below EUR 1 billion by the end of the year. Moving to slide 23. We are also leaving our 2027 targets unchanged. These are an adjusted post-tax return on equity of around 13%, a CET1 fully phased ratio of at least 13.5%, cost-income ratio of around 30%, and an NPL ratio of under 3%. Now moving to our closing slide, I would like to round up with a few key takeaways. At the half-year stage, Aareal is well on track. Both business segments are performing strongly. We have a balanced and therefore very resilient business model. Our Aareal Ambition strategy is proceeding on schedule, and we aim to maintain momentum and achieve our full-year targets. Now Andy and I will be pleased to take your questions. Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. Anyone who wishes to ask a question may press star one on the telephone. You'll 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 two. Questioners on the phone are requested to stay on loudspeaker mode while asking a question. Anyone with a question, may queue up now. We have the first question coming from Sharada Patel from Citi. Please go ahead. Hi. I have three questions. The first is on the, just focusing on the new business margins. They're quite significantly lower quarter-on-quarter. I just wanted to know why and why your outlook is for them to kind of trend lower than full year 2025. The second question is on the U.S. exposures. The slide points to kind of plan further reductions in this. What will that look like and what's kind of the outlook for the U.S. market? The last question is, it just feels like your messaging on the 2026 guidance is a bit more cautious this quarter than it was kind of earlier in the year. You talk about potential market risks later in the year, kind of throwing this off track. What would those be? Thank you. I would take the second and the third question. Andy, would you like to start with the- Yeah. I mean, the new business margins will move around quarter-by-quarter. We're not running the business like purely on margins. We are very, very focused upon return on equity The RWAs, et cetera, come into the equation. We've got a very sort of cutoff point for what business we will take and what business we will not take. I think we have ended up with some slightly less RWA-intensive lending recently, hence, sometimes margin may be slightly lower, risk-weighted assets slightly lower. Overall returns can be higher, therefore, we are completely comfortable with taking on business like that. I would look at it as a collective rather than just sort of pick off the one line on its own. Okay. On the U.S., yeah, we will continue to reduce the portfolio. It could be significantly below $6 billion by the end of the year. In parallel, we are starting to execute our new strategy. As you know, we have hired a new CEO for our U.S. business, Caroline Mahl. She formerly worked at Wells Fargo, and prior to that, she was working in the hospitality and hotel sector. The strategy has, let's say, three major building blocks. Number one is that we much more leverage our USP, which is financing high-end luxury hotels, five-star hotels, something which we successfully do across the globe. We will also now emphasize this business much more in the U.S. Secondly, leveraging the fact that not only Aareal Bank itself, but also many of our customers are doing business globally. European clients doing business in the U.S. as well, and then, let's say, leveraging this fact much more than in the past. Thirdly, becoming a partner participant in major prime transactions of major U.S. banks. Someone once told me that we are a non-threat to those banks because we are a mid-sized German bank. We are not competing with them in other areas, so therefore, they like to have us participating in major financing transactions. These will be the three building blocks of our U.S. strategy, and on that basis, we will then start to build a kind of new portfolio, as I would call it. The overall outlook for the U.S., I think I would say the slow recovery will continue. Yeah. That's how I would phrase it. With very different developments across property classes and across states or regions in the U.S. Yeah. We are very positive, as I said, about hospitality. We are positive about the Sun Belt states as regions for doing business. California will remain difficult. New York is also difficult, although there are also signs of recovery, and we are very carefully monitoring the trend of converting office space, where there is an oversupply into residential, where there is still an undersupply. It's a market where you really have to have detailed expertise and knowledge, and Caroline has it. We are very confident that we will then also be successful in the U.S. going forward. On 2026, you said I'm more cautious. Yeah, I am, because of the geopolitical risks. I'm really concerned. I think the markets do not properly reflect the risk of a prolonged conflict or war in the Persian Gulf. We have other conflicts ongoing globally. That could all have an impact on the global economy, on inflation, and finally on policy rates of the major central banks. Therefore, we remain cautious. That's the way how we run the bank. That's also because or why we have this kind of field protection shield with a very high CET1 ratio of 15.6%. We will run this bank in a very cautious and responsible way for the rest of the year, and then let's see. Thank you. The next question comes from Corinne Cunningham from Autonomous. Please go ahead. Good morning, everyone. A couple from me, please. Could you explain a bit more about what's going on in the non-U.S. non-performing loans? They've ticked up in Q1 and in Q2. Secondly, just to follow up on what you were saying about U.S. I think in the opening remarks, you talked about just rising rollovers and not new business. Sounds like that's going to change with the new U.S. CEO. Do you have any kind of expectation or target on what the U.S. could be as a percentage of the total or in absolute amounts? Thank you very much. You'd like to take the first one? Yeah. Shall I take the first one? I think non-performing loans overall are sort of relatively stable, albeit as we look at the profile of various ones that are going to get resolved in the coming weeks and months. We are confident we can get this total down to a billion. The trends underneath that, as you've observed, our U.S. office, which has been our predominant sort of challenge over the last couple of years, is reducing. We have got some U.S. non-office non-performing loans. That is a little bit up on last year. Not spectacularly up, but it is a little bit up. Then the rest of the world outside the U.S., which is incredibly low. By long-term standards, we're measuring the NPLs in point ones and point twos of the overall portfolio. Hence the strategy of focusing more upon Europe at this point in the cycle, reducing the U.S. exposures, as you well know. Certainly, if we can have a good 80% of our business coming from parts of the world where non-performing loans are as low as that, then that should be very good for the financial health of the business over the coming courses and years. Thank you. Yeah. On your second question on the U.S., the size of our U.S. portfolio for the next, let's say one, two years, will be the result of two strategies which we implement in parallel. One strategy is that we continue the cleanup, that we work out the non-performing loans, especially in the U.S. office sector. That is one trend, which is, let's say, ultimately then leading to a reduction in the overall volume. Secondly, we are starting to carefully build a new portfolio. As you have rightly said, there was no, as we call it, new business or newly acquired business in the first half, but only prolongations that might continue in the second half. At latest in 2027, we will write new business, newly acquired business in the U.S. according to the strategy with the three building blocks I was just describing earlier. I continue to believe in the U.S. commercial real estate market. It's the largest homogeneous market with one language, one currency, one legal system, decent margins. The U.S. has good demographics. It's business-minded. It's a very attractive market, yeah, that's why we will stay in the U.S. We have to clean up the current portfolio, then we will carefully build a new one. What that then ultimately means in terms of the percentage of the overall portfolio, we will see. A few years from now, everybody was saying, oh, the U.S. is the hottest market. Everybody has to compete here, and Europe is less attractive. Now, five years later, the opposite narrative is a common narrative, but this may change again, yeah. We will adjust our portfolio targets and our volume targets accordingly. Therefore, I'm not putting out a number now, but the U.S. will remain a key market for us. Thank you. The next question comes from Domenico Maggio from Jefferies. Please go ahead. Hello, good morning. I joined the call later on, apologies if I'm asking something that was already said. You basically reiterated the target of NPL reduction to below EUR 1 billion in 2026. I was wondering how much of the remaining reduction has been already identified, and is there any main driver, I mean, between disposal restructuring on repayment? On the cost of risk, you mentioned there are different strategy with U.S. which you can adopt. Where do you see, though, your sustainable through the cycle cost of risk settling? Maybe just lastly, do you have scope for a further capital optimization within the next 12 to 18 months? You've had the SRT last year, just wondering whether you could do something else there. Thank you. Let me take the first one. I think the NPL portfolio, there's a number of troublesome assets that we are monitoring daily, as you would appreciate, each of those is in a different stage in terms of resolution. Some of those have got now a pretty clear path, we are hopeful that it will just be a question of getting the legals completed to get those sorted. Others are still in discussions with the borrowers, others are at a stage prior to that. With the ones that are advanced, particularly in the first category and ones that are also in the second category are fixed view, is that we should hit that EUR 1 billion or below number in the next six months. Cost of risk through the cycle, I guess, 40, 45 basis points, somewhere around that is probably where we would see this business and the sector having been. As we have said previously, the aim is to be getting our P&L cost down into that range as fast as we possibly can do. We will do it thoughtfully. We are not going to go and rush and take unnecessary hits. On the other hand, we do want as clean a book as we can get. When we get to that level, it will clearly be a lower LIC, loan impairment charge cost in the P&L than we are experiencing today and lower than we have experienced in the last two or three or four years. Hence that will be extremely helpful for the profitability of the business going forward, and it is part of the bridge between our current return on equity and our target 13% return on equity is that very normalization. NPL reduction, consequent LIC reduction, and the higher ROE Capital, I mean, there's different ways to look at it. We've got a pretty healthy capital ratio at the moment, 15.6%. That is slightly higher than our long-term targets at 13.5%. On the other hand, as Christian has said, there are some reasons to be just a little bit cautious about the market environment at the moment. We are more than comfortable to be running with a little bit of a buffer on that front. We will monitor that as we go forwards. Broadly, I think we are in a good place in terms of capital, a good place in terms of liquidity. As we move forwards with the sort of repositioning of the business towards Europe, as we have talked about, I think the prospects for the business look pretty good as we see them at the moment. Well, thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. We have another question from Violeta Baraboi from Societe Generale. Please go ahead. Good morning, gentlemen. A few questions, if I may. I would be interested in hearing a little bit more on conversations you have with the rating agencies, particularly because they put you on positive outlook. I am trying to understand if there are any specific hurdles that you need to reach, that you've been discussing with them for a potential upgrade. You mentioned also on funding that you would be looking to issue fundraise in the second half of the year. Is there any appetite for any other type of wholesale funding unsecured? Maybe strategically, I know that you're reorienting your business in the U.S. and you're focused on that, but what are your thoughts around M&A in your market? Thinking about potential sort of combination with one of your peers. Thank you. Ratings, we've obviously had the upgrade just recently, which is good. We work hard always to try to get our ratings as high as possible, which will not surprise you. Clearly they sometimes take a while to come through. We were very pleased with that happening. I think as the business performance continues to improve and as we get more of a track record, hopefully we will see other ratings improve over a period of time. We just need to really demonstrate the consistency of the profitability in order for that to happen. On the funding side, outside of Pfandbriefe, we're pretty well-funded. There's no need to go and do anything sort of near a term. If there's an opportunity pricing-wise to do it, then fine, we would not hesitate to do it. Overall, we're in a pretty good space. We are quite considerably ahead of where we were anticipating being at the half year when we started the year. We'll monitor it, overall, I think in a good place. Yeah, on the M&A opportunities in the market, I would say that mergers and acquisitions are always coming with a lot of risk and effort, it distracts you from daily business. It would have to be really a great opportunity in order to seriously consider something. Of course, we are managing a bank and we have to be open for situations which might emerge. That relates to exit optionalities, but also to other options. When opportunities arise, we will carefully analyze and then we make respective decisions, but there's nothing concrete on the table as of now. Thank you. There are no more questions at this time. I would now like to turn the conference back over to Jürgen Junginger for any closing remarks. Thank you for joining us today. As always, yeah, our team is happy to take follow-up calls. I wish you from all of us here on this day, thank you for joining us. Thanks. Ladies and gentlemen, the conference is now over and you may now disconnect your lines. Goodbye.