EN: Geschäftsbericht 2021
2021
The Management Board of DZ HYP
From left to right: Jörg Hermes, Dr Georg Reutter (Chief Executive Officer), Sabine Barthauer
2021 will be etched in all our memories as yet another year dominated by the COVID-19 pandemic. Following the lockdown that lasted well into the spring, we were hoping for a gradual normalisation as positive news began to prevail again. Economic activity picked up and vaccination rates accelerated at an increasing pace. The fourth wave of the pandemic that started in autumn, the new Omicron variant at the end of the year, ever increasing infection rates and the population’s diminishing willingness to be vaccinated made the light at the end of the tunnel seem somewhat dimmer again. At the same time, we experienced a year characterised by high momentum on the German real estate markets, with transaction volumes exceeding the €100 billion mark for the first time. Persistently low interest rates and negative bond yields on the capital markets also had a favourable effect.
Despite the challenging environment, DZ HYP performed well during the 2021 financial year, maintaining its position as one of the leading real estate banks in Germany. DZ HYP’s new business increased once again year-on-year. We are particularly pleased with an increase in volume of around one-third in our private home loan business, which is mainly brokered via the German cooperative banks. We also achieved pleasing results with our partner banks in the Corporate Clients segment. Our joint lending business increased by around 15 per cent compared to 2021, demonstrating our ability to maintain and build on the trusting partnership we have with our partners and clients, even in challenging times.
The COVID-19 pandemic affected the mood on the German real estate markets in the year under review. However, financing conditions for real estate also remained favourable in this second pandemic year thanks to persistently low interest rates. It is remarkable how robust and crisis-resistant the market proved to be. This is due to high transaction volumes for both commercial real estate investments and the private housing market. Purchase prices and rents for residential properties in Germany continue to rise.
Our role as a successful real estate bank in Germany enabled us to take advantage of the high momentum on the transaction market in the year under review. Our market position was further strengthened by a 12 per cent increase in new business volume to €12 billion (including business with public-sector clients). Strong demand for residential real property is also reflected in our new business figures. At €2.7 billion, business with retail customers clearly exceeded the previous year’s level. In the Corporate Clients segment, we achieved a volume of around €3.9 billion in joint lending business with German cooperative banks, compared to the previous year’s figure of €3.3 billion. The collaboration we enjoy with cooperative banks, which is founded on partnership and trust, enables us to maintain a broad presence in the market.
Despite the COVID-19 pandemic, DZ HYP consistently pursued its business and risk strategy during the reporting year. A viable business model, an accelerated build-up of general risk provisions and an absence of any obvious risks to date provided the basis for a sound financial position and performance.
2021 marked DZ HYP’s 100th anniversary. The former Deutsche Genossenschafts-Hypothekenbank was founded in Berlin on 11 May 1921. DZ HYP has repeatedly demonstrated its resilience to crisis during its 100 year history, which clearly illustrates the importance of our integration within the German Cooperative Financial Network. Today, DZ HYP is a leading market player and Germany’s largest Pfandbrief bank. This is due not least to the commitment of our employees.
The music enthusiasts among them put their commitment into practice through a very special project: with the help of professional artists, they recorded the anniversary song “Together for the next 100 years”. Following lengthy preparations, a grand ceremony was held in the Recital Hall of the Elbphilharmonie Concert Hall with leading speakers representing financial, political and business circles. Unfortunately, COVID-19 restrictions meant that we were only able to livestream this event. This autumn, we would like to take the opportunity to finally catch up with our employees at our grand anniversary celebration in Berlin, the city where we were founded. We very much hope that we will all be able to gather in person and enjoy the celebratory mood of this special occasion together.
One issue that is of intense concern to the real estate industry as a whole, and also to us at DZ HYP, is sustainability. In order to live up to our social responsibility and to demonstrate our ambition, we launched a bank-wide project in September 2020. A significant milestone in the past year was the adaptation of our existing sustainability strategy, which was extended in particular to incorporate DZ HYP’s banking business objectives. As a result, we have put conditions in place allowing us to sharpen our activities in this area and to issue a sustainable refinancing product, a Green Pfandbrief. Our first Green Pfandbrief was subsequently and successfully issued in February 2022 following a period of intensive preparatory work.
Following the merger in 2018, we conducted our first “Pulse Check” workforce satisfaction survey at the end of 2020. The results were published in March 2021, confirming our findings: DZ HYP is a good employer. We were delighted to see so many positive aspects come to light. The survey also highlighted areas for action and its results provide us with a good starting point. At the end of last year, in order to build on this feedback and to gain more in-depth knowledge, DZ HYP launched its own “culture project”. We want to work together with our employees to make our strategic orientation even more tangible, so that DZ HYP can continue to be successful. Our staff are actively involved in the implementation of this project through a variety of initiatives. The results will be published in the spring.
We plan to conduct another banking and customer survey in 2022. This survey will help us to analyse how DZ HYP is currently perceived within the Financial Network and in the market, as a collaborative partner, and in relation to its competitors. It aims to identify areas for action that can be used to optimise customer and partner satisfaction. The issues of sustainability and digitalisation will also be included in the surveys.
The COVID-19 pandemic will remain with us this year. However, the past two years, with all its ups and downs, have shown us that DZ HYP is built on solid foundations – not least thanks to our conservative risk strategy and our membership in the German Cooperative Financial Network. The collaboration we enjoy with cooperative banks, which is founded on partnership and trust, underpins our position as an efficient and reliable financing partner. We look ahead to the future with confidence.
Yours sincerely,
The Management Board
The music enthusiasts among them put their commitment into practice through a very special project: with the help of professional artists, they recorded the anniversary song “Together for the next 100 years”. Following lengthy preparations, a grand ceremony was held in the Recital Hall of the Elbphilharmonie Concert Hall with leading speakers representing financial, political and business circles. Unfortunately, COVID-19 restrictions meant that we were only able to livestream this event. This autumn, we would like to take the opportunity to finally catch up with our employees at our grand anniversary celebration in Berlin, the city where we were founded. We very much hope that we will all be able to gather in person and enjoy the celebratory mood of this special occasion together.
One issue that is of intense concern to the real estate industry as a whole, and also to us at DZ HYP, is sustainability. In order to live up to our social responsibility and to demonstrate our ambition, we launched a bank-wide project in September 2020. A significant milestone in the past year was the adaptation of our existing sustainability strategy, which was extended in particular to incorporate DZ HYP’s banking business objectives. As a result, we have put conditions in place allowing us to sharpen our activities in this area and to issue a sustainable refinancing product, a Green Pfandbrief. Our first Green Pfandbrief was subsequently and successfully issued in February 2022 following a period of intensive preparatory work.
Following the merger in 2018, we conducted our first “Pulse Check” workforce satisfaction survey at the end of 2020. The results were published in March 2021, confirming our findings: DZ HYP is a good employer. We were delighted to see so many positive aspects come to light. The survey also highlighted areas for action and its results provide us with a good starting point. At the end of last year, in order to build on this feedback and to gain more in-depth knowledge, DZ HYP launched its own “culture project”. We want to work together with our employees to make our strategic orientation even more tangible, so that DZ HYP can continue to be successful. Our staff are actively involved in the implementation of this project through a variety of initiatives. The results will be published in the spring.
We plan to conduct another banking and customer survey in 2022. This survey will help us to analyse how DZ HYP is currently perceived within the Financial Network and in the market, as a collaborative partner, and in relation to its competitors. It aims to identify areas for action that can be used to optimise customer and partner satisfaction. The issues of sustainability and digitalisation will also be included in the surveys.
The COVID-19 pandemic will remain with us this year. However, the past two years, with all its ups and downs, have shown us that DZ HYP is built on solid foundations – not least thanks to our conservative risk strategy and our membership in the German Cooperative Financial Network. The collaboration we enjoy with cooperative banks, which is founded on partnership and trust, underpins our position as an efficient and reliable financing partner. We look ahead to the future with confidence.
Yours sincerely,
The Management Board
Looking back, we have experienced a year with significant highlights. Most significant was the Bank's 100th anniversary. We celebrated the occasion by holding a live-streamed ceremony in the Recital Hall of the Elbphilharmonie Concert Hall.
2021 represented yet another challenging financial year as a result of the ongoing pandemic. Despite this, we proved throughout this period that it was possible to successfully maintain cohesion and interaction with our clients and our partners, the cooperative banks, as well as with our staff via digital formats. More than that: it worked very well. We have achieved a lot together and have been actively involved in the Bank’s further development. The following chapters provide an overview of the broad range of topics DZ HYP was involved in during the past year, starting with the activities surrounding our anniversary, continuing with the development of our employer branding campaign, the intense preparations for the issue of our Green Pfandbrief and the award for "Best Euro Issuer", concluding with our successful sales activities in real estate finance.
Again, we were successful across a number of areas during the second consecutive year of the COVID-19 pandemic – something we are very proud of, and which demonstrates the strength of DZ HYP's close partnership with the Cooperative Financial Network.
One motto – a whole load of activities: in 2021, DZ HYP celebrated its 100th anniversary with the motto "Together for the next 100 years".
An anniversary advertisement appeared in all the national business and trade media relevant to the Bank, as well as in cooperative publications, to coincide with the centenary on 11 May 2021.
Many of our business partners and employees joined the ceremony at the Recital Hall of the Elbphilharmonie via livestream. Welcoming speeches by Dr Peter Tschentscher, First Mayor of the Free and Hanseatic City of Hamburg, and Uwe Fröhlich, Chairman of the Supervisory Board of DZ HYP, preceded the ceremonial address by Olaf Scholz, Chancellor of the Federal Republic of Germany.
Two financial historians explored the history of DZ HYP from its foundation right through to the present day, with their findings forming the basis for a book on the Bank's development. It is well worth reading, and also provides an interesting insight into Germany’s financial history.
With the help of professional musicians, an anniversary song was created in the workforce with great commitment. Around 80 employees were involved in the lyrics, music, singing and choreography.
DZ HYP employees received a surprise parcel at their homes shortly before the anniversary, which included an Anniversary cake and specially designed stamps.
The Bank’s centenary was honoured editorially in numerous articles and publications, including a special issue of the "Immobilien & Finanzierung" trade journal and in DZ HYP's own IMMO KOMPAKT customer magazine.
DZ HYP celebrated its 100th anniversary on 11 May 2021, with the motto "Together for the next 100 years". The Bank ran an image advertisement in national business and trade media to publicise the centenary. The image also transported a little anniversary glamour into the Bank's everyday work, in the form of a screen saver.
A ceremony was held behind closed doors at the Recital Hall of the Elbphilharmonie Concert Hall, simultaneously livestreamed to guests and employees alike due to COVID-19 restrictions, which featured appearances and contributions from several prominent speakers together with numerous messages of congratulation. Dr Georg Reutter, Chairman of the Management Board of DZ HYP, presented an anniversary book compiled by two renowned financial historians to mark the centenary, covering the Bank's historical development from its foundation right through to the present day. We got to hear DZ HYP's anniversary song for the first time at this occasion, with many of the Bank's employees having been involved in putting it together.
The Bank's originally planned anniversary celebrations have been rescheduled for 2022 and will take place in the Bank's founding city, Berlin.
What is it that makes DZ HYP so special? What holds us together? As part of our branding workshop, we explored these and other questions, looking at them from a creative perspective. The key conclusion was that we see ourselves as a high-performance team, always looking for better ways of doing things, while supporting each other in the process. That is what gives our work its purpose.
The Bank's current employer branding campaign has just the right motto for this: “We can only do this together”. We use authentic images of everyday life at DZ HYP, showing you the Bank’s ‘real faces’. The casting and shooting process proved to be a very special experience for our colleagues.
We offer exciting jobs and opportunities to new talent and specialists in their field – to advance beyond the traditional fields of banking – in IT or data management, for example. DZ HYP offers its employees modern workplaces, a friendly atmosphere and lots of great colleagues. Please click on the following link for podcasts, videos and further information.
Creative bankers in the branding workshop
In the summer of 2021, DZ HYP's branding workshop took on a creative approach to exploring the true purpose and meaning of our work. What is it that motivates us? What is it that we all value most? We interviewed four of the 25 participants and found out what it was that made the workshop so enjoyable for them.
How did you come to participate in the branding workshop?
Annika Meyer: I really wanted to be involved in creating something – and to do something outside of my everyday work. So, when I saw the advert on the intranet, I registered my interest with the HR department.
How did you all manage to work together?
Ilja Ben Ahmed: We were divided up into different groups and used a collaboration tool so that we could work together in teams online. It was really clever: we were able to exchange ideas in separate rooms, almost like in real life. You could share texts and pictures and alert each other to important details.
What was the purpose you were looking at in the branding workshop?
André Jahn: Basically, it is about why we do the work that we do. What are our values and how do we create purpose in the workplace? The answers to these questions have become increasingly important to employer branding and are meant to point to the future instead of just describing the current state of affairs. We hope that our Purpose Statement encourages people to make a conscious decision in favour of DZ HYP.
Is this purpose also important internally?
Ria Sonntag: Yes – it motivates us, the staff, too, and it was nice to hear what the other participants thought and felt about it. We all felt a great sense of connection with each other throughout the workshop.
Ilja Ben Ahmed: The human interaction we have here at DZ HYP is very special, something I didn't experience at previous employers. The way we interact is characterised by helping each other, achieving goals together and celebrating our successes together.
Can you tell us what creativity looks like for a cooperative banker?
Annika Meyer: The first thing I noticed was that a lot of them were not only good at drawing pictures, but also at interpreting them – regardless of what field they worked in. And it quickly became apparent that the cooperative values are very present and firmly anchored in all of them.
Ria Sonntag: We also came up with some great ideas for a slogan. Some chose key words, while others came up with whole sentences. There were some quite strong statements that reflect a lot about what we do here at the Bank.
André Jahn: Our colleagues really contributed a lot. From this point of view, the branding workshop process itself was a great success. The rest is down to the creativity of our agency, which you can see in DZ HYP’s new campaign.
In 2021, we significantly stepped up our social media activities: we are now even more active on business networks such as XING and LinkedIn and on Twitter, true to our motto: "We are wherever we can reach people."
The latest information from the Bank is published on a platform-specific basis and only where it will be of interest to users: For example, you can find our job advertisements on LinkedIn and XING, whilst press releases and our DZ HYP ImmoBlog articles are on Twitter. This way, we contain the flood of information while simultaneously achieving high visibility. Having an online presence is particularly important in strengthening DZ HYP's employer brand. To achieve this, we rely on the power of authentic messages – from employees who are themselves on the web and speak on behalf of the Bank.
Colleagues are also the main contributors to our podcast series "DZ HYP HÖRBAR”, which is available on the Spotify streaming platform. In it, they talk about their areas of responsibility and their personal careers at the Bank.
We also revamped our corporate website in 2021. The website has been redesigned and given a visual overhaul, making it even more user-friendly. See for yourself!
In September 2021, DZ HYP was awarded "Best Euro Issuer" at the European Covered Bond Congress, the largest capital markets event for covered bond issuers and investors. The award reflects bank's excellent reputation in the Pfandbrief market.
Each year, GlobalCapital, the highly respected capital markets information service, conducts a broad-based survey of investors, banks and issuers to determine who wins the award. The award recognises the fact that DZ HYP issued five Pfandbriefe in 2020, each with high subscription levels and strong payouts. Last year, DZ HYP successfully placed around EUR 4 billion in Pfandbriefe on the market, offering investors a secure investment opportunity in a volatile market environment.
In a video message, Nicole John, Head of Strategic Funding & Investor Relations at DZ HYP, expressed her thanks both for the award and for the trusting partnership DZ HYP has with all of its capital market partners.
The "Liberté 2" office campus near Paris, France: Recognised as a "trophy property"
The well-located 46,000 m2 urban office campus in Charenton-le-Pont features six buildings offering modern office space, training facilities, lecture rooms, restaurants, a fitness centre and a tennis court. On top of that, the unique complex also has an auditorium and more than 1,000 m2 of inner courtyards, terraces and gardens.
Picture: Colliers Global Investors
KREISLER in Frankfurt: Jointly financed with Frankfurter Volksbank and Wiesbadener Volksbank
By 2024, there will be a six to eleven-storey office and commercial building in a central city centre location with a generous roof terrace, greenery and an underground car park with charging facilities for e-cars and e-bikes. The target is "Gold" LEED certification.
Picture: CQ Baseler Straße Verwaltungs GmbH
The “Limmerquartier” in Hanover: contemporary urban living for individuals and families
By 2023, meravis Wohnungsbau- und Immobilien GmbH aims to have built 210 fully accessible apartments and 12 terraced houses to KfW 55 standard, five commercial units and an underground car park with parking for 160 cars and 400 bicycles in the vibrant district of Linden-Limmer – including fibre-optic connection to all residential units.
Picture: macina I meravis
Ingo Krabbe, head of the Housing Sector department at DZ HYP
"Affordable rents for energy-efficient new buildings are very much the way forward when it comes to urban, contemporary living. Sustainable urban developments that offer a good range of infrastructure services are increasingly in demand. The ‘Limmerquartier’ financed by DZ HYP is a good example of how to keep new-build rents in a popular urban district affordable for all generations – over a long period of time."
Christian Voss, Client Relationship Manager, Commercial Real Estate Investors, Institutional & International Clients at DZ HYP
“The energy efficiency of buildings is becoming increasingly important across Europe. In the case of the office complex we financed near Paris, the investor is pursuing a "Manage to ESG" strategy to further strengthen the property's performance in terms of environmental, social and governance aspects."
Maik Neubert, Client Relationship Manager, Commercial Real Estate Investors, Corporates & Cooperative Banks, DZ HYP Real Estate Centre Munich
"In the future, offices will play an even greater role as a place to meet others and as a centre of communication, creating a sense of identity in the workplace. This trend is already evident in the KREISLER office and business premises under construction in Frankfurt, which we are financing jointly with Frankfurter Volksbank and Wiesbadener Volksbank on behalf of the Competo Group and the Quest Group. The new building will incorporate the full range of modern space configurations, from individual offices to open space and activity-based working areas. This open plan approach enables employees to swap their fixed workstation for different workspaces if they wish."
Thanks to a host of new products and services, including improved terms and conditions, DZ HYP has been able to offer the cooperative banks a number of exciting innovations in 2021. The purpose of the Customer Dialogue Centre is to optimise DZ HYP's joint market coverage in the Retail Customers segment. It provides quick answers to questions regarding financing and individual exposures, largely without the need for further consultation.
The new and enhanced structure of terms and conditions enables the cooperative banks to offer more flexible pricing for customers who have standardised financing needs. The VR Baufi product range, developed using a design sprint process, is an ideal fit for this, making it even easier for our partners to offer loans in line with prevailing market conditions at any time. Our daily bulletin features an interest rate monitoring tool that shows the changes in interest rates over the last ten days for the most common maturity bands, as well as an online terms calculator for alternative loan offers. Our VR-BaufiSelect solution, a new product for the cooperative platform business, ensures fair and more finely adjustable pricing.
The cooperative banks' funding activities business also received a boost from DZ HYP in 2021. Our Pfandbrief pooling means that the banks have access to highly attractive refinancing terms. This way, we are able to provide them with additional liquidity when needed, and leverage previously untapped potential of real estate loans eligible for inclusion in the cover pool within the Cooperative Financial Network.
Secure funding with long maturities
Interview with Christian Harfmann, Project Manager, Back Office – Treasury & Public Sector Clients
Mr Harfmann, you are the project manager for the current "IMMO Pfandbrief" project. Can you tell us a bit more about it?
The Cooperative Financial Network has been talking about pooling Pfandbriefe for quite some time. The cooperative banks would like to participate in this favourable refinancing option without being issuers themselves. Pfandbriefe offer attractive terms, with a high degree of security in terms of availability and long maturities.
How does the "IMMO Pfandbrief" work?
DZ HYP buys portions of real estate loans secured by land charges from the banks, and uses these purchased loans for inclusion in Pfandbrief cover. This additional cover assets pool enables the Bank to increase its Pfandbrief issuance volume, and to use the liquidity gained for funding purposes. It is important that customer management and credit risk remain with the cooperative banks.
Which loans are best suited for this purpose?
To start with, we used loan portions that we had issued to cooperative banks in the context of loan participations. Because this worked well, in the next expansion stage we opened up Pfandbrief pooling to suitable commercial real estate financings – eligible for inclusion in cover – extended by cooperative banks. Since March 2022, we have also included loans from our retail business.
What are the advantages of Pfandbrief pooling for banks?
Based on our experience to date, the cooperative banks have found the new funding option to be of added value – especially during periods when liquidity is in short supply on the market, making our loan terms comparatively favourable. Pfandbrief pooling gives them the necessary leeway here.
Thank you very much for the interview.
In 2021, we again broadcast numerous specialist events from the DZ HYP Studio. The year kicked off with the Economic, Interest Rate, and Currency Forecast format, in which DZ BANK's Chief Economist, Dr. Michael Holstein, once again provided an outlook on economic developments, moderated by journalist and presenter Anja Kohl. The various editions of DZ HYP ImmoTalks in spring and autumn were also in demand among our customers and Volksbanken and Raiffeisenbanken, with a total audience of more than 1,000. With DZ HYP StudioTalk, we successfully launched another new format. At both series of events, top-class industry representatives discuss current real estate topics with the interactive involvement of participants.
From the middle of the year, face-to-face exchanges were possible again, which we started with the DZ HYP Table Talks on a small scale. The Alster Race, the traditional regatta for our institutional and international clients on Hamburg's Außenalster lake, provided a sporting touch. At the DZ HYP Investor Night at EXPO REAL in October, the main focus was on exchanges among industry representatives. In the fall, we hosted another edition of the Economic, Interest Rate, and Currency Forecast in our studio. There, in November, we also welcomed Dr. Christine Lemaitre, Executive Director of the DGNB, on the occasion of our internal sustainability series.
Supported by professional skippers, the participants sailed a regatta and delivered an exciting head-to-head race. During the breaks and after the awards ceremony, there was plenty of opportunity to network over a barbecue and live music.
Overall, the events in the DZ HYP Studio achieved a high level of participation and positive feedback. In all online broadcasts, viewers also made lively use of the virtual exchange of views with the studio guests.
DZ HYP can look back on a successful participation at EXPO REAL. At the joint stand with Union Investment, our real estate experts held numerous working discussions, made new contacts, and exchanged views on the industry's trend topics.
During EXPO REAL, around 400 guests came to the MINI Pavilion on Lenbachplatz in downtown Munich for the traditional Investor Night and enjoyed networking in a relaxed atmosphere.
Overall, the events in the DZ HYP Studio achieved a high level of participation and positive feedback. In all online broadcasts, viewers also made lively use of the virtual exchange of views with the studio guests.
