According to Berlin Hyp, the difficult times in the real estate sector will continue for a while longer. "2025 will not yet bring a significant turnaround,“ CEO Sascha Klaus said in an interview with Börsen-Zeitung. However, he points out that the individual asset classes will develop dfferently.

Hesitation on the transaction market was reflected in weak new business at Berlin Hyp in the first half of the year: The volume, including prolongations, was only 2.6 billion euros, compared to 3.5 billion in the previous year. „The market is still very volatile,“ says Klaus, who is counting on the second half of the year, saying that the bank has „seen positive signals in new business recently.“ He therefore expects new business for the year as a whole to be only slightly below the previous year's level of 6.5 billion euros.

According to Klaus, who has now been at the helm of the bank for eight years, there is currently very intense competition in the industry – especially for the lower-risk business. The average margins nevertheless increased in the first half of the year. The Chairman of the Board of Management emphasised in the interview that existing business is more important to Berlin Hyp than new business anyway.

Klaus explains that the savings banks are becoming increasingly important for his institution. Almost a third of new business in the first half of the year was already attributable to business with the savings banks. The strong increase from 90 million euros to 801 million euros in the first six months is somewhat distorting, because the 2023 contracts were mainly concluded in the second half of the year. However, there are now business relationships with 178 savings banks, and thus a market penetration in the savings bank camp of around 50%.

„We definitely want to expand our network business even further,“ emphasises Klaus. The cooperation via the „ImmoDigital“ syndication platform is developing particularly well.

The Berlin-based property finance specialist is now a wholly owned subsidiary of Landesbank Baden-Württemberg (LBBW). „The regulatory docking with LBBW will be finalised by the end of the year,“ Klaus now announces. „We are making very good progress here.“

Due to the generally uncertain situation, the bank further strengthened its provisioning reserves in the first half of the year. However, of the risk provisions, which more than doubled to 113 million euros, only a small double-digit million euro amount went into specific loan loss provisions, Klaus clarifies. „The rest was intended to increase the provision reserves, which will further strengthen us for the future.“

Thanks to a significant 18% increase in net interest and commission income to 268 million euros, and a simultaneous slight decrease in administrative expenses, Berlin Hyp was able to improve its operating result before risk provisioning by 30% to 174 million euros in the first half of the year. Before taxes, a profit of 72.1 (previous year: 59.3) million euros remained on the books. Klaus confirmed the previous forecast for 2024 as a whole, according to which net interest income, net commission income and pre-tax profit, among other things, will be higher than in the previous year.

It is important to Klaus that Berlin Hyp will continue to play a pioneering role in ESG in the future. „Our Green Finance portfolio was stable in 2024,“ he explains. The green building ratio has already reached the 35% mark. And 40% of the bank's capital market funding is already sustainable. „We want to further increase this share,“ says the CEO.

Climate change is already having an impact on business today, and the property sector needs to prepare better for climate change and the associated severe weather events, which can cause damage to buildings. „Preventative measures need to be implemented more strongly and more quickly", says Klaus.