Bloomberg News

Aareal Bank Jumps After Euro Region Leaders Loosen Bailout Rules

July 02, 2012

Aareal Bank AG (ARL), a German commercial property lender, jumped to the highest in seven weeks after European Union leaders agreed to ease repayment rules for Spanish banks and relaxed conditions for possible aid to Italy.

Aareal rose 7 percent to 13.84 euros at the close in Frankfurt, the highest since May 11. It has gained 15 percent since June 28, after euro-area leaders dropped the requirement that governments get preferred-creditor status on crisis loans to Spain’s banks and opened the door to recapitalizing lenders directly with bailout funds once a banking supervisor is set up.

The lender’s shares tumbled 39 percent from their high on Feb. 3 through June 28 because of investor concerns that the sovereign debt crisis would cause losses on Spanish and Italian government bonds.

“The bank has relatively high exposure to Italian and Spanish government debt and the decisions made in Brussels last week are good news for Aareal,” said Philip Haessler, an analyst at Equinet AG. “Despite the large exposure to Italian and Spanish debt the bank has a business model that works.”

To contact the reporter on this story: Jan-Henrik Forster in Frankfurt at Jforster14@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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