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Aareal Bank - AGM 22 May 2019

General: Aareal Bank is a leading international property specialist. It provides smart financings, software products, and digital solutions for the property sector and related industries, and is present across three continents: Europe, North America and Asia. The Group is organised in two business segments: Structured Property Financing and Consulting/Services. In the Structured Property Financing segment, Aareal Bank facilitates property investment projects for its domestic and international clients. In its Consulting/Services segment, Aareal Bank offers its European clients from the property and energy sectors a unique combination of specialised banking services as well as innovative digital products and services.

As of 31 December 2018, Deka Bank, BlackRock, Dimensional Fund and VBL each held between 5% and 10%, Allianz Global Investors, JPMorgan Chase Bank, iShares Trust, the State of Norway as well as DFA International Small Cap Value each held between 3% and 5% of the Company's shares.

Item 2: Management and Supervisory Board are proposing a dividend of EUR 2.10 per share which is covered by earnings but is not covered by free cash flow. ECGS believes that dividends should be covered by consolidated earnings and/or free cash flow and supported by a strong balance sheet in terms of solvency and leverage. Due to the fact that the dividend is not covered by free cash flow for a third consecutive year, we consider a dividend payment inappropriate at this time and therefore recommend to oppose the dividend proposal.

Item 5: PwC, Frankfurt am Main, is proposed as auditor for the current financial year. We have no concerns over the ratio of non-audit/audit fees. However, we note that PwC has audited the Company since the financial year 1976 which significantly exceeds our maximum acceptable term of office. We therefore recommend opposing the re-election of PwC as auditor.

Aareal Bank AG

Aareal Bank is an international property specialist, providing financing, advice and other services to the housing industry and the commercial property sector. Co.'s segments include: Structured Property Financing, which finances commercial property, in particular, office buildings, hotels, shopping centers as well as logistics properties and residential property in Germany, Europe, North America and Asia; and Consulting/Services, which provides specialized banking services to housing and commercial property management sector customers in its core market of Germany. Through its subsidiary, Aareon AG, Co. provides IT consulting, software and IT services in several European countries.


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