Annual Report
2022
2
MANAGEMENT
REPORT
7 ECONOMIC REPORT
7 General economic conditions
7 Economic development
7 Financial markets
8 Property markets and property financing markets
11 Business development
11 New mortgage business
12 Capital markets business
13 Refinancing
14 Financial performance, financial position
and net assets
14 Development of earnings
15 Balance sheet structure
16 Planned acquisition of Warburg Hypothekenbank
16 Ratings, sustainability and general legal conditions
16 Ratings
16 Sustainability
17 Separate non-financial report
17 General regulatory conditions
18 Registered office, executive bodies, committees
and employees
18 Registered office
18 Executive bodies and committees
18 Employees
18 Corporate governance statement pursuant to
Section 289f HGB
19 RISK, OUTLOOK AND
OPPORTUNITIES REPORT
19 Risk report
19 Counterparty risk
22 Market price risks
24 Liquidity risk
25 Investment risk
25 Operational risks
25 Migration risks
25 Risk-bearing capacity
26 Use of financial instruments for
hedging purposes
26 Accounting-related internal control and risk
management processes
26 Corporate planning
26 Outlook – opportunities and risks
26 Economic development and financial markets
27 Property markets and property financing markets
28 Development of business at
Münchener Hypothekenbank
29 Disclaimer regarding forward-looking statements
6
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
General economic conditions
ECONOMIC DEVELOPMENT
Russia’s war of aggression against Ukraine had a significant
impact on the development of the world economy in 2022,
causing it to weaken considerably. According to the IMF
estimate of January 2023, global gross domestic product rose
by 3.4 percent in the year under review, nearly half the rate
of economic growth in 2021. The slowdown was primarily
attributable to energy and commodity prices, which rose
sharply as a result of the war in Ukraine, as well as high infla-
tion, material shortages, supply bottlenecks and, particularly
in China, the effects of the COVID-19 pandemic.
According to the World Bank, economic growth in the euro-
zone fell by two percentage points year-on-year to 3.3 per-
cent. The European economy thus proved to be more robust
than many experts had assumed, despite the adverse effects
of the war in Ukraine and the high dependence on energy
supplied from Russia. Growth was spurred in particular by
capital investment and private consumption. Inflation spiked
as a consequence of the war. In its autumn forecast for 2022,
the European Commission anticipated an inflation rate of
8.5 percent. The labour market was in good shape. The num-
ber of people in employment rose further and the unemploy-
ment rate fell to 6.2 percent, in line with the European Com-
mission’s autumn forecast.
The German economy also performed better than predicted.
According to initial calculations by the Federal Statistical
Office, gross domestic product grew by 1.9 percent, following
2.6 percent the year before. The main driver of growth was
private consumption, which benefited from the ending of the
COVID-19 protection measures. Capital investments also made
a positive contribution to growth. By contrast, construction
activity declined, with construction investment falling by
1.6 percent. This was due to the shortage of building materials
and skilled workers, but also to a greater number of order
cancellations in light of rising prices and interest rates.
Inflation hit a record high of 7.9 percent owing to enormous
price increases for energy and food following the outbreak of
the war in Ukraine. Relief measures by the German govern-
ment were able to weaken inflation somewhat towards the
end of the year, although it remained at a high level.
The labour market continued to trend positively in spite of
the difficult overall conditions. The number of people in
employment rose to 45.6 million, while the number unem-
ployed fell by around 200,000 to 2.4 million, representing a
drop in the unemployment rate of 0.4 percentage points to
5.3 percent.
FINANCIAL MARKETS
The war in Ukraine, high inflation rates, rising interest rates
and growing fears of a recession unsettled the capital and
financial markets considerably in 2022. This resulted in some-
times drastic price jumps, as well as high volatility.
Central banks responded to rising inflation rates with several
significant interest rate hikes. The U.S. Federal Reserve (Fed),
for instance, raised interest rates seven times during the year
by a total of 4.25 percent to a current range of 4.25 percent
to 4.50 percent. The European Central Bank (ECB) ended its
zero interest-rate policy, which had been in effect for a num-
ber of years, and increased the main refinancing rate in four
increments to 2.50 percent.
In order to reduce excess liquidity in the monetary system,
the ECB eased the interest rate terms for long-term tender
operations and facilitated additional repayment dates for
banks. In addition, the reinvestment of maturing securities
under the asset purchase programme (APP) is expected to be
lowered to EUR 15 billion per month, starting in the first
quarter of 2023. This change in monetary policy made it signifi-
cantly more expensive for companies and banks to refinance.
The ending of the low interest-rate policy also caused yields
on the bond markets to rise sharply. Yields on ten-year
German government bonds, for example, climbed over the
course of the year: from minus 0.18 percent at the beginning
of 2022 to 2.57 percent at the end of the year.
On the foreign exchange market, the US dollar made signifi-
cant gains against the euro over the course of the year,
strengthening from EUR/USD 1.14 at the start of the year to a
peak of EUR/USD 0.95. This development was mainly due to
the considerably faster and larger interest rate jumps by the
Fed, the outbreak of the war in Ukraine, and Europe’s heavy
reliance on energy from Russia. With expectations growing
that the ECB would raise interest rates, the euro recovered in
the fourth quarter to close the year at EUR/USD 1.07.
ECONOMIC REPORT
7
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
The trend of the Swiss franc over the course of the year was
similar to that of the US dollar against the euro. After closing
2021 at the rate of EUR/CHF 1.04, it improved to EUR/
CHF 0.94 by the end of September before weakening some-
what to EUR/CHF 0.99 at the end of 2022. The British pound
dropped slightly from EUR/GBP 0.84 at the end of 2021 to
EUR/GBP 0.89 at the end of 2022. This was due to the con-
tinuing impact of Brexit and the government crises in the UK.
The covered bond market saw an extraordinarily high number
of issues over the entire year. At the start of the year, many
issuers exploited the low interest rates and spreads for bench-
mark issues. Rising interest rates over the rest of the year and
greater uncertainty about inflation and interest rate hikes
caused issue spreads to rise, particularly for long maturities.
In addition, changing risk considerations by investors resulted
in shorter maturities being issued in greater numbers. Issuing
activities also benefited from the TLTRO III tender subsequently
becoming more expensive for banks. Overall, benchmark
covered bonds totalling around EUR 200 billion were issued
in 2022, twice the volume in the previous year. The countries
with the highest issuance were again France and Germany.
PROPERTY MARKETS AND PROPERTY
FINANCING MARKETS
Residential property, Germany
The German residential property market cooled considerably
in 2022. This was caused by the sharp rise in financing costs,
which made owner-occupiers as well as private and institutional
investors noticeably more cautious. The institutional invest-
ment market, for instance, saw residential property sales
totalling just under EUR 13 billion, representing a drop of
more than 70 percent compared with the record result of the
previous year, which was marked by the takeover of Deutsche
Wohnen by Vonovia. In 2022 the market was dominated by
domestic investors and by fund and property companies and
asset managers, which accounted for a share of about
70 percent of the transaction volume.
In the case of owner-occupied housing, the much higher
interest rates and tighter lending policies of banks meant
that it became prohibitively expensive for lower-income or
“marginal" households to buy their own homes.
Yields on ten-year German government bonds
IN %
Source: Bloomberg
January February March April May June July August September October November December
2.0
1.5
1.0
0.5
0.0
– 0.5
2.5
3.0
8
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
The mood in the construction sector also darkened consider-
ably. With manufacturing and material costs continuing to
rise sharply – in November 2022 alone they increased by
nearly 17 percent compared with the same month the previ-
ous year – and less favourable financing terms, numerous
housing projects had to be recosted. This led to a noticeable
increase in project cancellations over the course of the year.
According to the ifo Institute, about 17 percent of construc-
tion companies were affected by cancellations in November.
Reluctance to build is also reflected in the number of build-
ing permits granted. From January to November 2022, the
construction of owner-occupied housing fell by 16 percent
compared with the same previous-year period. By contrast,
the number of permits for the construction of condominiums
rose slightly by 1 percent. Overall, the number of building
permits dropped by nearly 6 percent, which indicates that
the German government will for now likely fall far short of
its goal of 400,000 new homes per year.
The lack of new construction in previous years has resulted in
a significant housing shortage, currently estimated at around
700,000 homes. The situation on the housing market last
year was exacerbated by record net immigration. According
to estimates, the population grew by around 1.1 million peo-
ple, which predominantly impacted a rental housing market
that was already very constricted in many places. This caused
rents under new leases to rise by an average of 4.8 percent in
the first three quarters of 2022 compared with the previous-
year period. However, purchase prices for owner-occupied
housing (+8.3 percent) and for multi-family houses
(+4.1 percent) also continued to rise year on year, although
the momentum slowed noticeably in the third quarter.
Atthesame time, yields on multi-family houses rose in the
thirdquarter of 2022 for the first time since 2011.
In terms of financing, falling demand over the course of the
year for residential properties and for new construction, as
well as for upgrades, led to a decline in residential property
financing in the third quarter of 2022. Overall, the total
volume of loan commitments in the first three quarters
amounted to EUR 218 billion, nearly 2 percent lower than in
the previous-year period.
Trend in prices for owner-occupied housing
INDEX VALUES: 2010 = 100
Owner-occupied housing, total Source: vdp Research property price index,
Owner-occupied homes Q3 2022, based on analysis of the vdp transaction database,
Condominiums as at November 2022
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
90
100
110
120
130
140
150
160
170
180
190
200
210
9
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
Residential property, international
Tighter financing terms and rising construction costs, as well
as shortages of materials and workers, had an adverse effect
on the housing market in nearly every European country. The
impact was felt on both the supply and the demand side.
Eurostat house price index showed that price rises across
Europe began to slow in the second quarter of 2022, and in
some countries, such as Denmark, Sweden and Italy, prices
even fell slightly in the third quarter of 2022 compared with
the previous quarter.
The Swiss housing market is characterised by the limited
supply of both owner-occupied and rental housing. This can
be seen in the vacancy rate, which fell further to 1.3 percent
in mid-2022 due to lower new construction and higher
immigration. Despite higher financing costs, prices for owner-
occupied homes and condominiums consequently increased
by 5.6 percent and 7.6 percent respectively within the space
of a year, once again a higher rise than the long-term aver-
age. Rents, on the other hand, went up only slightly.
The Austrian housing market is one of those that experienced
significant price increases. House prices here rose by 12.8 per-
cent on average over the first three quarters. On the demand
side, higher financing costs in the first half of 2022 caused
buyers to become increasingly cautious about buying. In
addition, minimum lending requirements concerning equity
and the debt service-to-income ratio were introduced on
1July2022, which made it more difficult for many house-
holds to purchase residential property. This development puts
added pressure on rents, which rose by nearly 5 percent in
the first nine months.
Commercial property, Germany
The commercial property market had a good start in the first
quarter but then steadily lost momentum. Here too, rising
interest rates and economic uncertainties made investors
increasingly cautious. As a result, transaction volumes fell by
11 percent to EUR 54 billion.
The decline in the case of office properties was somewhat
steeper, with the volume of transactions coming in at nearly
EUR 22 billion, but their share of total sales rose to about a
third. Thus, after two years, office properties in 2022 were
once again the investment class that generated the highest
sales in Germany. This development indicates that the user
market is robust, with high revenue from leasing and rising
rents. According to JLL's analyses, the focus was on
high-quality spaces that meet current ESG criteria. Prices for
office properties rose by 1.4 percent through to the end of
September 2022, although they softened noticeably in the
third quarter. This was due to yield expectations, which
began rising again for the first time since 2010.
The mood in the retail sector was markedly gloomier, with a
series of crises – the pandemic, war in Ukraine, inflation and
energy costs – dampening consumers’ willingness to spend.
This caused a drop in retail sales and numerous commercial
insolvencies. Sales per square metre also declined slightly and
are now about one third lower than the pre-COVID level.
Investors continue to take a dim view of retail properties, and
this is again reflected in falling purchase prices and rising
yields. In total, retail property sales amounted to around
EUR 9 billion.
Commercial property, international
Internationally, commercial property markets also tended to
perform less strongly than in the previous year for the rea-
sons outlined in the preceding section. However, the invest-
ment market was still robust enough in the first half of the
year for the transaction volume in Europe to rise by 18 per-
cent to EUR 229 billion by the end of September 2022,
despite a weak third quarter. Investors were primarily focused
on Core and Core Plus properties, which caused the share of
office properties to climb sharply again in most countries,
with yields again slightly higher in nearly all countries and
segments from mid-2022 onwards.
After struggling with the consequences of Brexit for several
years, the UK investment market began to recover in 2021. By
mid-2022, however, deteriorating overall economic condi-
tions and rising interest rates had brought the recovery to a
halt. Despite a strong first six months, the transaction vol-
ume fell by 13 percent to GBP 54 billion. The weakness of the
pound against other currencies, particularly the US dollar,
favoured the purchase of property by foreign investors, so
Trend in commercial property
transaction volumes in Germany
IN € BILLION
Residential (only portfolio) Source: EY Research,
Commercial as at January 2023
12.8
54.2
17.6
18.8
20.3
60.5
70.7
58.6
52.9
60.9
2018
2019
2020
2021
2022
10
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
that only about 40 percent of the transaction volume was
attributable to domestic investors. With interest rates on the
rise, yields in all asset classes increased again slightly from
the middle of the year.
The investment market in France stagnated. Properties worth
around EUR 26 billion were turned over, which corresponds
to a slight decline of 1 percent compared to the previous
year. Transactions again predominantly involved office prop-
erties, which accounted for a 50 percent share. Compared
with previous years, however, their dominance waned in the
face of a sharp increase in retail and logistics properties.
Yields in all three asset classes rose in 2022, but so too did
prime rents.
In the Netherlands, a slight decline in economic growth in
the third quarter of 2022 caused the commercial property
market to lose momentum. After starting the year strongly,
demand for office space fell sharply. By contrast, office rents
in prime locations rose further, with a shortage of supply.
Demand for space also declined in the retail sector. Prime
rents had fallen significantly through 2021, but the rent level
stabilised in 2022.
Thanks to lively interest from foreign investor groups and a
number of major deals, the Spanish investment market
recorded a rise in transaction volumes in 2022, with more
than half being invested in retail and residential properties.
The drop in rents for retail properties that set in with the
outbreak of the COVID-19 pandemic came to a halt for the
moment, while yields rose again slightly for the first time.
This trend could also be observed with office properties. The
user market proved to be robust, with heightened demand
for space in Madrid and Barcelona.
In the third quarter of 2022, rising interest rates halted the
recovery on the US investment market, as the volume of
transactions came in more than 20 percent below the previ-
ous year’s figure. In addition, investor confidence was rattled
by geopolitical tensions, high inflation and weak economic
outlooks. Economic uncertainties in particular had an effect
on demand for office space, which was depressed by the
negative performance of the technology sector and the con-
tinuing trend toward smaller but higher-quality space. Sales
of office space thus dropped overall. This led to falling rents,
rising vacancy rates and caution among investors.
Business development
NEW MORTGAGE BUSINESS
The change in property markets and property financing
markets brought about by rising interest rates, higher construc-
tion costs and economic uncertainties had an increasing
impact over the course of the year on our new business in
residential and commercial property financing. In the first
half of the year, we were able to expand new business once
again as a result of anticipatory effects. In the second half,
however, falling demand and lower transaction activity signifi-
cantly depressed the volumes committed.
Overall, we granted a total of EUR 5.4 billion in private and
commercial property financing, representing a drop of 21 per-
cent year-on-year. Nevertheless, this is a satisfactory result
given that increasingly difficult general conditions prevented
us from achieving the moderate growth in our two core busi-
ness areas we had budgeted for.
New private residential property financing business
amounted to EUR 3.3 billion, a commitment volume that was
25 percent lower year-on-year.
Of this total, EUR 2.4 billion (minus 21 percent) was attribut-
able to business with partner banks in the Cooperative Financial
Network. The majority of this was generated in the first half
of the year, when demand for follow-on financing was high
due to rising interest rates. This effect disappeared in the
second half since interest rates had by then come to a stand-
still. In this regard, hedging against rising interest rates was
an important motive for borrowing. Overall, demand for long
fixed-interest rate periods also increased further.
New mortgage business 2018 to 2022
IN € MILLION
Private residential property financing
Commercial property financing
3,257 2,101
3,142
3,717
4,338
2,461
4,019
2,477
2,690
2,147
2018
2019
2020
2022
2021
11
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
The placement of private property financing generated via
independent financial service providers in Germany fell by
18percent year-on-year to EUR 670 million. New business
from our partnership with PostFinance in Switzerland
amounted to EUR 133 million (minus 68 percent), while in
Austria it came to EUR 26 million (minus 46 percent).
In commercial property financing, too, the sharp rises in
interest rates put a dampener on transaction activity from the
second half of the year. This caused our new business to fall
by 15 percent to EUR 2.1 billion. Of this total, the commitment
volume in domestic business came in at EUR 1.6 billion, just
under the last year’s result of EUR 1.7 billion. Foreign business
fell from EUR 0.7 billion to EUR 0.5 billion. The two most
important foreign markets were the US (syndicated business
only) and the Netherlands.
In terms of earnings the trend has stabilised, which enabled
the lower new business volume to be offset in part by the
improved margin result. This applies to domestic and foreign
business equally. The average loan sizes grew further in the
year under review.
From a risk perspective, we maintained our conservative
financing approach with a focus on conventional financing
at completion, giving due consideration to adequate, sus-
tainable minimum cash flows and locations. Positive aspects
for us are the high level of equity that owners have in their
properties – although it decreased slightly year-on-year, it
still stood at 41 percent on average – and the average loan-
to-value ratios, which declined slightly.
CAPITAL MARKETS BUSINESS
In line with the business strategy, the Bank continues to
conduct its capital markets business with restraint. New
purchases serve primarily to meet regulatory requirements.
Liquid securities are needed to manage liquidity and the
cover pools, and also as collateral in ECB repo transactions
or tender operations.
Highly liquid sovereign and bank securities continued to trade
at very expensive spread levels and, for regulatory reasons,
resulted in high total asset costs. The budgeted target volume
of liquid securities has now been reached, so there are no
plans for a further portfolio reduction.
Mortgage rates of Münchener Hypothekenbank, 10-year fixed rate
IN %
1990 1992 201620142012201020082006200420022000199819961994 2018 2020
2023
2022
0
2
1
3
4
5
6
7
8
9
10
0
2
1
3
4
5
6
7
8
9
10
Long-term average 4.75
8,64
■
■
4,33
12
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
New business volume stood at EUR 514 million in 2022.
Through sales of EUR 323 million and maturities of
EUR 688 million, the total portfolio dropped slightly to
EUR 3.4 billion (previous year: EUR 3.6 billion).
REFINANCING
The market environment for our issues was marked by substan-
tial changes and strong momentum on the primary market
for covered bonds. Despite the changing overall conditions,
we consistently enjoyed access to funding on good terms
during the year under review.
The focus of our large-volume funding transactions was
again on the issuance of Pfandbriefe and uncovered bonds
in EUR and CHF.
In terms of Pfandbrief issues, four Mortgage Pfandbriefe in
benchmark and jumbo format are worth emphasising.
■
In January 2022, we issued a Mortgage Pfandbrief with a
volume of EUR 750 million and a term of seven years at a
spread of 3 basis points below the mid-swap rate and a
coupon of 0.125 percent. The issue met with brisk demand
among investors seeking to invest in medium-term
maturities.
■
At the beginning of April 2022, we issued a Green Jumbo
Mortgage Pfandbrief for EUR 1 billion, which proved
highly successful. It is based on Münchener Hypotheken-
bank’s Green Bond Framework, which fulfils the ICMA
Green Bond Principles and meets the vdp’s minimum
standards for green Pfandbriefe. The bond has a term of
seven years and ten months and a coupon of 1.25 per-
cent. The issue was placed at a price of 2 basis points above
the mid-swap rate. Demand for the Jumbo Pfandbrief was
so high that the order book was closed after about two
hours at a volume of more than EUR 2.7 billion. Around a
third of the issue volume was subscribed by investors
specialising in green and sustainable investments.
■
We opened the second half of 2022 by issuing another
Jumbo Mortgage Pfandbrief. The issue volume amounted
to EUR 1 billion and the term was ten years. The Pfand-
brief has a coupon of 1.875 percent. Investor demand was
so high that the order book was more than twice over-
subscribed after about two hours. This enabled the spread
to be reduced in the course of the transaction to 5 basis
points above the mid-swap rate.
■
In November 2022, we issued a further benchmark Mort-
gage Pfandbrief for EUR 700 million. The term is just under
five years and the coupon is 3.0 percent. The issue was
placed at a price of 1 basis point above the mid-swap rate.
As regards issues in foreign currencies, the focus was on
Swiss francs. All told, we issued bonds with a volume of
around CHF 675 million. This volume was primarily issued on
the capital market in the first half of the year via syndicated
bonds. This issuance activity covered various terms and prod-
uct categories (Pfandbrief, senior non-preferred and Addi-
tional Tier 1). The senior non-preferred bond was issued in
green format.
The total issue volume in 2022 was around EUR 6.5 billion.
This comprised EUR 5.3 billion in Mortgage Pfandbriefe and
around EUR 1.2 billion in uncovered bonds. Once again, no
Public Pfandbriefe were issued, in keeping with the Bank’s
business strategy.
In May 2022, we also issued a further Additional Tier 1 bond
in the amount of CHF 75 million. That enabled us to further
strengthen our equity basis and to optimise our equity struc-
ture with respect to banking supervisory requirements for
additional core capital. The entire issue volume was placed in
Switzerland.
13
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
4 Notes 5 Further information
2 Management report
ECONOMIC REPORT
Financial performance, financial
position and net assets
DEVELOPMENT OF EARNINGS
Net interest income
1
increased by EUR 29.2 million, or
7.2 percent, to EUR 431.8 million, which was attributable to
mortgage portfolio growth in line with our forecast. The
one-off effect in net interest income that resulted from a
premium of EUR 21.8 million for the third targeted longer-
term refinancing operation (TLTRO III) with the ECB was
more than offset by a decline in income from early repay-
ment penalties due to the rise in interest rates.
Commission paid totalled EUR 122.3 million, which was
down by EUR 19.9 million, or 14 percent, compared with
the previous year. Commission received amounted to
EUR 12.6 million, resulting in net commission income
2
of
minus EUR 109.7 million, compared with minus
EUR 130.2 million the previous year.
This resulted in net interest and commission income
3
of
EUR 322.1 million, which corresponds to an increase of
EUR49.6 million, or 18.2 percent, compared with the
previous year.
General administrative expenses rose by EUR 15.9 million to
EUR 142.6 million. This included an increase in personnel
costs of EUR 2.6 million, or 4.2 percent.
Other administrative expenses rose by EUR 13.3 million, or
20.8 percent. The expense for the bank levy alone increased
by EUR 4.0 million. Expenses in connection with the planned
takeover of Warburg Hypothekenbank also contributed to
this rise.
Depreciation, amortisation and write-downs of intangible
and tangible assets fell by EUR 1.7 million year-on-year to
EUR 4.5 million.
Total administrative expenses
4
came to EUR 147.1 million
compared with EUR 132.9 million the previous year. The
cost-income ratio
5
was 45.7 percent, as against 48.8 percent
a year earlier.
The net result of other operating expenses and income
amounted to minus EUR 2.7 million.
The operating result before loan loss provisions
6
increased by
26.4 percent year-on-year to EUR 172.3 million.
The item “Depreciation, amortisation and value adjustments
on accounts receivable and certain securities as well as
allocations to loan loss provisions” amounted to minus
EUR 45.5 million. The changed market environment made it
necessary to set up additions to impairment allowance,
including the provision for irrevocable loan commitments in
the amount of EUR 28 million. These two positions thus total
EUR 49 million. The net result of changes in loan loss provisions
(including direct write-downs) came to minus EUR 17.6 mil-
lion (previous year: minus EUR 5.9 million).
The item “Income from reversals of write-downs on partici-
pating interests, shares in affiliated companies and securities
treated as fixed assets” amounted to EUR 5.5 million.
Income from ordinary business activities totalled
EUR 132.3 million. After tax expenses of EUR 64.2 million,
net income came to EUR 68.1 million, a year-on-year
increase of 15.3 percent. The increase is thus above our
forecast, in particular due to the higher net interest and
commission income.
The return on equity (RoE) before tax amounted to 7.7 per-
cent.
7
After tax, the Bank achieved an RoE of 4.0 percent.
8
7
RoE before tax is calculated as the ratio of income statement item 14 “Results from ordinary
business activities” to balance sheet liability item 9 “Fund for general banking risks” (previous
year) plus liability item 10aa “Members’ capital contributions” (current year) plus item 10b
“Revenue reserves” (previous year) plus income statement item 18 “Retained earnings brought
forward from previous year”.
8
RoE after tax is calculated as the ratio of income statement item 16 “Allocation to fund for
general banking risks” plus item 17 “Net income” to balance sheet liability item 9 “Fund for
general banking risks (previous year)” plus liability item 10aa “Members’ capital contributions”
(current year) plus item 10b “Revenue reserves” (previous year) plus income statement item 18
“Retained earnings brought forward from previous year”.
1
Net interest income is calculated by adding item 1 “Interest income” plus item 3 “Current
income” plus item 4 “Income from profit-pooling, profit transfer or partial profit transfer
agreements” minus item 2 “Interest expenses” as shown in the income statement.
2
Net commission income is calculated by netting item 5 “Commission received” and item 6
“Commission paid” as shown in the income statement.
3
Net interest and commission income is the sum of net interest income and net commission
income.
4
Total administrative expenses are the sum total of item 8 “General administrative expenses”
and item 9 “Depreciation, amortisation and write-downs of intangible and tangible assets” as
shown in the income statement.
5
Ratio of total administrative expenses to net interest and net commission income.
6
Net result of items 1 to 10 in the income statement.
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ECONOMIC REPORT
BALANCE SHEET STRUCTURE
Total assets stood at EUR 52.4 billion at the end of the finan-
cial year 2022 compared with EUR 52.5 billion at 31 Decem-
ber 2021.
During the course of the year, the mortgage loan portfolio
grew by EUR 2.7 billion to EUR 44.3 billion. Private residential
property financing in Germany was once again the fastest
growing segment, increasing by EUR 1.3 billion.
The private residential property financing portfolio is struc-
tured as follows: domestic – EUR 24.8 billion (previous year:
EUR 23.5 billion); foreign – EUR 5.4 billion (previous year:
EUR 5.2 billion). In addition to the financing business in Swit-
zerland, this portfolio also includes financing in Austria. The
commercial property financing portfolio totals EUR 14.1 billion
(previous year: EUR 13.0 billion). Of this amount, EUR 4.1 billion
(previous year EUR 3.7 billion) is attributable to financing
outside Germany. The most important international market is
the USA at 27 percent (previous year: 22 percent), followed
by the Netherlands at 24 percent (previous year: 23 percent),
Spain at 17 percent (previous year: 18 percent) and the UK at
12 percent (previous year: 15 percent).
In line with our business and risk strategy, the portfolio of
public-sector and bank loans and securities decreased from
EUR 3.6 billion to EUR 3.4 billion, EUR 2.2 billion of which
was made up of securities and bonds.
At the end of 2022, the net balance of hidden charges and
hidden reserves in the securities portfolio amounted to
EUR 2 million (previous year: EUR 33 million).
Following a detailed examination of all bonds, we have come to
the conclusion that there are no permanent impairments. We
have accounted for bonds on a held-to-maturity basis. There
was no necessity for write-downs to a lower fair value.
The portfolio of long-term funding instruments increased by
EUR 1.5 billion to EUR 43.5 billion. Mortgage Pfandbriefe
accounted for EUR 31.7 billion of this amount, Public Pfand-
briefe EUR 1.3 billion and uncovered bonds EUR 10.5 billion.
The total volume of funding instruments – including money
market funds and customer deposits – amounted to
EUR 49.6 billion as at 31 December 2022.
The item "Other liabilities to customers" can be broken down
as follows:
OTHER LIABILITIES TO CUSTOMERS
IN € 000
Remaining term
< one year
Remaining term
> one year Total
Other liabilities to customers as at 31 December 2022 2,294,693 2,682,294 4,976,987
Registered bonds 27,809 1,514,995 1,542,804
of which institutional investors 16,884 1,346,200 1,363,084
Promissory note loans on the liabilities side 738,458 822,157 1,560,615
of which institutional investors 160,810 480,657 641,467
Other 1,528,426 345,142 1,873,568
of which institutional investors 878,908 182,109 1,061,017
Portfolio development 2018 to 2022
IN € MILLION
Residential housing, domestic Commercial property, domestic
Residential housing, Commercial property foreign
Switzerland and Austria
31,956
35,498
38,411
41,662
44,342
2018
2019
2020
2021
2022
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ECONOMIC REPORT
Members’ capital contributions grew by EUR 28.8 million to
EUR 1,272.0 million. Together with the issue of the Addi-
tional Tier 1 bonds in the amount of CHF 200 million in 2019
and 2022, regulatory own funds totalled EUR 1,950.0 million
(previous year: EUR 1,790.1 million).
Common Equity Tier 1 capital rose from EUR 1,626 million
in the previous year to EUR 1,690 million as at 31 Decem-
ber 2022. At the end of 2022, the Common Equity Tier 1 cap-
ital ratio was 19.0 percent (previous year: 20.4 percent), the
Tier 1 capital ratio 21.2 percent (previous year: 21.9 percent)
and the total capital ratio 21.9 percent (previous year:
22.5 percent). The leverage ratio at 31 December 2022 was
3.7 percent (previous year: 3.6 percent).
PLANNED ACQUISITION OF WARBURG
HYPOTHEKENBANK
In early November 2022, Münchener Hypothekenbank signed
a contract to acquire all shares in M.M.Warburg & CO
Hypothekenbank AG (Warburg Hypothekenbank). The current
owners are M.M.Warburg & CO (AG & Co.) Kommanditge-
sellschaft auf Aktien and Landeskrankenhilfe V.V.a.G.
The planned closing on the purchase of the shares is still
subject to required official approvals. This includes, in par-
ticular, the regulatory holder control procedure, which had
not yet been completed when this report was drafted.
Once the acquisition is concluded, the plan is to integrate
Warburg Hypothekenbank by way of a merger before the end
of 2023.
Ratings, sustainability and general
legal conditions
RATINGS
In August 2022, Moody’s confirmed all ratings for Münchener
Hypothekenbank and also maintained its "stable" rating
outlook.
Moody’s remains positive about the fact that Münchener
Hypothekenbank has a strong reputation on the capital market
as an issuer of Pfandbriefe, noting that it has a correspond-
ingly high level of funding capacity, and also acknowledges
the firm ties and corresponding support the Bank enjoys
within the Cooperative Financial Network.
RATING
Mortgage Pfandbriefe Aaa
Junior Senior Unsecured A2
Senior Unsecured Aa3
Short-term liabilities Prime-1
Long-term deposits Aa3
The long-term unsecured liabilities are rated by the other two
major rating agencies, Standard & Poor’s (A+) and Fitch (AA-),
on the basis of the combined rating of the Cooperative
Financial Network.
SUSTAINABILITY
The regulatory requirements for sustainability in corporate
governance by the EU, the ECB, the European Banking
Authority (EBA) and the Federal Financial Supervisory
Authority (BaFin) remained high in the year under review.
These requirements stem in particular from the EU taxonomy,
the ECB’s “Guide on climate-related and environmental risks”,
disclosure pursuant to CRR II and the EBA’s “Guidelines on
loan origination and monitoring”. They relate primarily to
Münchener Hypothekenbank’s core business, risk manage-
ment and reporting.
As part of the ESG regulatory project set up by the Board of
Management 2021 for the purposes of implementing these
requirements, numerous work packages were advanced to a
significant extent in the period under review. These include,
in particular, the creation of the necessary processes, struc-
tures and corresponding data architecture with the aim of
developing effective and efficient sustainability management
on this basis.
In 2022, Münchener Hypothekenbank also enacted its sustain-
ability strategy, which establishes clear objectives and KPIs for
the Bank that address regulatory requirements and respond
to the increased interest in sustainability in the market.
The Bank’s ESG Committee also began its work as part of the
ESG framework we created last year. Meeting every three
months, this interdisciplinary body advises the ESG Board,
consisting of the entire Board of Management, on sustaina-
bility issues, collaborates on the further development of the
sustainability strategy and prepares decision proposals.
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ECONOMIC REPORT
Our sustainability activities remain focused on our core busi-
ness – private and commercial property financing. In private
residential property financing business, our loans with a
social and environmental focus (MünchenerHyp Green Loan
and MünchenerHyp Family Loan) that were made to banks in
the Cooperative Financial Network accounted for more than
18 percent of new business in this segment. We publish an
annual impact report on the specific environmental added
value of sustainable loans for private and commercial property.
As regards sustainable securities, in 2022 we issued ESG and
green Pfandbriefe, uncovered senior preferred and senior
non-preferred bonds and commercial papers. Approximately
EUR 1.2 billion was successfully placed in this segment.
In its sustainability rating, ISS ESG awarded Münchener
Hypothekenbank a rating of C+ for sustainability manage-
ment. This again places us among the top performers in the
Financials / Mortgage & Public Sector rating peer group. As a
result, ISS ESG has granted us “Prime Status” once again.
Each year, the agency Sustainalytics awards a risk score
between 0 and 40 points. The lower the risk score, the
stronger the sustainability management. Münchener
Hypothekenbank’s risk score in 2022 was 16.3, which corre-
sponds to a low risk. This puts the bank in 10th place in the
Thrifts and Mortgages peer group.
9
The development of the sustainability ratings in 2022 and
the two previous years at a glance:
THE DEVELOPMENT OF THE SUSTAINABILITY RATINGS SINCE 2020
2020 2021 2022
ISS ESG
C+
(Prime Status)
C+
(Prime Status)
C+
(Prime Status)
Sustainalytics Risk score 17.4 (low risk) Risk score 18.5 (low risk) Risk score 16.3 (low risk)
SEPARATE NON-FINANCIAL REPORT
Münchener Hypothekenbank has been reporting on the
non-financial aspects and the material economic, environ-
mental and social impacts of its business activities since 2012.
It does so in harmony with the Global Reporting Initiative
Standards. We comply with the requirements set out in the
German CSR Directive Implementation Act (CSR-Richtlinie-
Umsetzungsgesetz – CSR-RUG) by publishing a separate
non-financial report. The non-financial report is published on
the Bank’s website at the same time as the annual report.
GENERAL REGULATORY CONDITIONS
Capital
For the most part, Münchener Hypothekenbank calculates its
capital requirements using the internal ratings-based
approach (IRBA).
Liquidity
The liquidity coverage ratio (LCR) was maintained throughout
the year, with values above 500 percent on average. The
minimum was above 200 percent. The net stable funding
ratio (NSFR) was always above 107 percent, and on average
above 111 percent.
Single Supervisory Mechanism for EU banks
The “finalisation” of Basel III also includes the gradual intro-
duction of an output floor of 72.5 percent to limit the effects
of internal approaches compared with standard approaches.
This means that in particular banks with low risk weightings
for their receivables, such as Münchener Hypothekenbank,
will be adversely affected by the changes. The introduction of
this floor will also impact Münchener Hypothekenbank’s capital
ratios. Overall, we take a critical view of the new regulation,
because it will make loans more expensive. The Bank is moni-
toring developments and, given the currently high Common
Equity Tier 1 capital ratio, believes that this regulatory
change will be manageable.
9
Copyright ©2022 Sustainalytics. All rights reserved. This section contains information developed
by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of
Sustainalytics and / or its third-party suppliers (Third Party Data) and are provided for informa-
tional purposes only. They do not constitute an endorsement of any product or project, nor an
investment advice and are not warranted to be complete, timely, accurate or suitable for a
particular purpose. Their use is subject to conditions available at
https://www.sustainalytics.com/legal-disclaimers.
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ECONOMIC REPORT
The Bank’s Compliance unit follows discussions on the publi-
cation of new national and international regulations very
closely and forwards any new regulations to the responsible
departments within the Bank, where they are implemented in
various measures and projects. The abundance of additional
regulatory requirements imposed by supervisory authorities
causes significant costs and poses a considerable challenge
for our Bank’s human and financial resources.
As every year, the ECB conducted the Supervisory Review and
Evaluation Process (SREP), comprising a very detailed evalua-
tion of the business model, internal governance and capital and
liquidity adequacy. Any additional capital and liquidity require-
ments are derived from that process. The additional capital
adequacy requirement (P2R) imposed within the framework
of the SREP amounts to 1.75 percent of total capital; no
additional requirements were set for liquidity.
Recovery and resolution plan
The recovery plan was updated and the information required
for the resolution plan was sent to the resolution authority.
There were no significant changes from the previous year.
Registered office, executive bodies,
committees and employees
REGISTERED OFFICE
Münchener Hypothekenbank eG has its registered office in
Munich. The Bank also has a branch in Berlin and 10 offices
across Germany.
EXECUTIVE BODIES AND COMMITTEES
Dr Louis Hagen stepped down from the Board of Manage-
ment of Münchener Hypothekenbank with effect from the
end of 2022. He had been a member of the Bank’s Board of
Management since 2009 and had been its spokesman since
2010 and Chairman since 2016.
The Supervisory Board appointed Dr Holger Horn as Chairman
of the Board of Management with effect from 1 January 2023.
Markus Wirsen joined Münchener Hypothekenbank’s Board
of Management on 1 April 2022.
EMPLOYEES
In 2022, human resources work was again influenced by the
COVID-19 pandemic. However, the established measures
made it possible to largely contain the adverse effects on the
staff and maintain the Bank’s operations without interruption.
As the pandemic subsided, human resources work increas-
ingly returned to implementing the human resources strategy.
Recruitment, for instance remained a key challenge for the
Bank given the tight labour market. For this reason,
Münchener Hypothekenbank’s human resources strategy is
focused on enhancing our employer brand, attracting and
promoting talent, creating attractive overall conditions for all
employees and offering an attractive remuneration, among
other things.
The Bank had 630 employees
10
(previous year: 624) on aver-
age over the year.
CORPORATE GOVERNANCE STATEMENT
PURSUANT TO SECTION 289F HGB
The proportion of women in the Bank as a whole came to
50 percent in the year under review. At Board of Management
level, the proportion stood at 0 percent, while the proportion
at the first management level below the Board was 18 percent,
at the second level 19 percent and at the third level 29 per-
cent. The proportion of women on the Supervisory Board was
17 percent in 2022. Münchener Hypothekenbank has set itself
the goal of increasing the proportion of women in leadership
positions. For the Supervisory Board and the two management
levels below the Board of Management, the Bank is aiming
for a proportion of women of 20 percent, with a target quota
for the Board of Management of 33 percent. In December 2020,
the Supervisory Board’s Nomination Committee addressed
the issue of the proportion of women on the Board of Man-
agement and Supervisory Board and decided to retain the
existing target quotas and to strive to achieve them by 2026
in the context of upcoming succession arrangements.
10
Number of employees in accordance with Section 267 (5) of the German Commercial Code
(Handelsgesetzbuch, HGB); excludes trainees, employees on parental leave, in early retirement
or in partial retirement (non-working phase) and employees on leave of absence.
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ECONOMIC REPORT
RISK, OUTLOOK AND OPPORTUNITIES REPORT
Risk report
The continuous control and monitoring of risks is essential to
the management of business development at Münchener
Hypothekenbank. Risk management is therefore a high prior-
ity in terms of the overall management of the Bank.
The framework governing business activities is laid down in
the business and risk strategy. Münchener Hypothekenbank’s
Board of Management as a whole is responsible for this
strategy, which is reviewed regularly to ensure its objectives
are being met, revised where necessary and discussed with
the Supervisory Board at least once a year.
The Supervisory Board’s Risk Committee is informed of the
Bank’s risk profile at least once a quarter and additionally as
necessary so that it can exercise its supervisory function.
This information is based on, among other things, reports on
ICAAP and ILAAP and on credit risks, operational risk reports
and the risk report prepared in accordance with MaRisk. The
Risk Committee also receives numerous detailed reports from
internal management.
Risk management is based firstly on the analysis and presenta-
tion of existing risks, and secondly on comparing these
riskswith the available risk coverage potential (risk-bearing
capacity). There are also various other relevant analyses that
need to be viewed as a whole to enable adequate management
of the Bank. Extensive control procedures involving internal,
process-dependent monitoring are employed for this purpose.
The Internal Audit department, which is independent of all
processes, has an additional supervisory role in this respect.
When analysing and presenting the existing risks, a distinction
is made between counterparty risks, market price risks, credit
spread risks, liquidity risks, migration risks, investment risks,
model risks, property risks and operational risks. Additional
risks, such as the placement risk, reputational risk, business
risk and ESG etc. risk, are each seen as elements of the above
risks and are taken into account at the appropriate point in
the respective calculations.
Counterparty risk
The counterparty risk (credit risk) is of major importance for
Münchener Hypothekenbank. The counterparty risk is the risk
that a counterparty will fail to meet its payment obligations
towards the Bank by paying late or by defaulting completely
or in part.
The Credit Manual sets forth the credit approval procedures
and process regulations for those units involved in the lend-
ing business and the permissible credit products. The business
and risk strategy also contains more detailed explanations of
the sub-strategies for target customers and target markets, as
well as basic specifications for measuring and managing credit
risks at individual transaction and portfolio level. Individual
limits have been set for all types of lending. Another factor is
regional diversification, which is ensured by country limits.
In mortgage business, we ensure that we grant senior loans
predominantly with moderate loan-to-value ratios; in com-
mercial business, limits also apply with regard to DSCR and
LTV. The current loan-to-value ratios break down as follows:
TOTAL PORTFOLIO OF MORTGAGE AND OTHER LOANS
Loan-to-value ratio
31 December 2022 31 December 2021
€ Relative € Relative
Up to 60% 18,450,179,319.36 39.3% 17,712,207,741.73 39.5%
> 60% and ≤ 70% 6,896,647,556.85 14.7% 6,840,677,939.84 15.3%
> 70% and ≤ 80% 7,898,331,218.38 16.8% 7,817,675,352.88 17.4%
> 80% and ≤ 90% 4,400,454,401.52 9.4% 4,114,483,751.81 9.2%
> 90% and ≤ 100% 4,022,835,568.79 8.6% 3,513,107,035.49 7.8%
Over 100% 5,295,250,958.09 11.3% 4,826,847,133.62 10.8%
Without 2,618,630.23 0.0% 1,656,656.42 0.0%
Total 46,966,317,653.22 100.0% 44,826,655,611.79 100.0%
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RISK, OUTLOOK AND
OPPORTUNITIES REPORT
The regional breakdown within Germany and internationally is summarised below:
TOTAL PORTFOLIO OF MORTGAGE AND OTHER LOANS
Region 31 December 2022 31 December 2021
€ Relative € Relative
Baden-Württemberg 4,010,063,304.61 8.5% 3,756,142,446.13 8.4%
Bavaria 8,822,458,827.26 18.8% 8,474,865,821.42 18.9%
Berlin 2,485,848,753.78 5.3% 2,275,822,809.98 5.1%
Brandenburg 827,421,460.83 1.8% 764,316,946.44 1.7%
Bremen 151,347,035.71 0.3% 146,032,821.18 0.3%
Hamburg 1,227,295,063.51 2.6% 1,216,985,454.59 2.7%
Hesse 3,370,033,196.40 7.2% 3,276,664,075.86 7.3%
Mecklenburg-West Pomerania 587,840,864.78 1.3% 595,844,836.17 1.3%
Lower Saxony 3,356,204,347.00 7.1% 3,196,387,918.79 7.1%
North Rhine-Westphalia 5,743,181,146.40 12.2% 5,609,760,400.35 12.5%
Rhineland-Palatinate 1,839,349,385.35 3.9% 1,813,885,036.53 4.0%
Saarland 423,200,795.08 0.9% 431,112,825.77 1.0%
Saxony 1,215,349,407.71 2.6% 1,113,316,958.79 2.5%
Saxony-Anhalt 813,642,843.04 1.7% 695,276,822.37 1.6%
Schleswig-Holstein 2,049,672,294.47 4.4% 2,052,971,928.16 4.6%
Thuringia 438,961,353.66 0.9% 355,371,130.18 0.8%
Total domestic 37,361,870,079.59 79.6% 35,774,758,232.71 79.8%
Austria 235,491,553.53 0.5% 224,186,194.19 0.5%
Belgium 105,492,104.98 0.2% 105,544,541.73 0.2%
France 455,318,820.72 1.0% 472,425,600.20 1.1%
Luxembourg 152,668,656.25 0.3% 105,094,688.44 0.2%
Netherlands 989,984,062.14 2.1% 868,016,719.22 1.9%
Spain 707,255,450.32 1.5% 659,341,232.09 1.5%
Switzerland 5,339,498,930.27 11.4% 5,224,247,514.15 11.7%
United Kingdom 479,712,176.14 1.0% 541,450,654.06 1.2%
USA 1,139,025,819.28 2.4% 851,590,235.00 1.9%
Total foreign 9,604,447,573.63 20.4% 9,051,897,379.08 20.2%
Total domestic and foreign 46,966,317,653.22 100.0% 44,826,655,611.79 100.0%
20
Münchener Hypothekenbank
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2 Management report
RISK, OUTLOOK AND
OPPORTUNITIES REPORT
Credit risk management starts with the drafting of loan
terms and conditions when the target transaction is selected.
Regularly reviewed risk cost functions are used for this pur-
pose. Depending on the type and risk level of the transaction,
various rating and scoring procedures are used.
In property financing, a broadly diversified portfolio of mainly
residential property finance and credit approval processes
that have been tried and tested for years are reflected in a
portfolio with a low credit risk. Our lending business with
public sector borrowers and banks is focused on central and
regional governments, public local authorities and Western
European banks (covered bonds only). The regional focus is
on Germany and Western Europe, respectively. Highly liquid
sovereign bonds and other highly rated securities will con-
tinue to be needed to a certain extent in order to guarantee
compliance with CRR liquidity requirements.
Mortgage loans are checked for the need to create an indi-
vidual impairment allowance based on their rating, any pay-
ment arrears or other negative factors. Workout Management
carries out more extensive monitoring of individual impair-
ment allowances, especially in non-retail business.
The portfolio distribution broken down by rating category is
as follows:
TOTAL PORTFOLIO OF MORTGAGE AND OTHER LOANS
Rating category 31 December 2022 31 December 2021
€ Relative € Relative
0a to 0b 0.00 0.0% 0.00 0.0%
0c to 0e 10,386,907,954.46 22.1% 10,321,572,171.81 23.0%
1a to 1c 23,302,010,446.37 49.6% 22,541,286,450.37 50.3%
1d to 2a 10,144,438,199.25 21.6% 9,367,647,410.66 20.9%
2b to 2c 1,453,992,753.39 3.1% 1,183,501,713.56 2.6%
2d to 2e 267,095,148.10 0.6% 374,436,327.41 0.8%
3a to 3b 657,308,115.98 1.4% 567,687,876.18 1.3%
3c to 3d 535,178,813.93 1.1% 212,184,459.98 0.5%
3e 32,123,225.73 0.1% 36,082,435.09 0.1%
4a to 4e 186,909,346.16 0.4% 221,905,737.35 0.5%
no rating 353,649.85 0.0% 351,029.38 0.0%
Total 46,966,317,653.22 100.0% 44,826,655,611.79 100.0%
The Bank creates a collective impairment allowance as a pre-
caution to cover latent credit risks. This collective impairment
allowance is calculated on the basis of an expected credit
loss model, with the IFRS 9 methodology being adopted for
levels 1 and 2 and applied to the HGB assessment basis.
As property markets have largely remained very stable despite
the war in Ukraine, individual impairment allowances continue
to be created at a very low level for both the residential
property financing business and the commercial property
financing business.
Business relations with financial institutions are based on
master agreements that allow the netting of receivables
from, and liabilities to, the other institution. Collateral agree-
ments exist with all derivative counterparties. Derivative
transactions, insofar as they are subject to clearing, are set-
tled via a central counterparty (CCP).
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RISK, OUTLOOK AND
OPPORTUNITIES REPORT
Individual and collective impairment allowances changed as
follows in the year under review:
TOTAL LENDING BUSINESS
IN € MILLION
Opening balance Additions Reversals Utilisation
Exchange rate-
related and
other changes Closing balance
Individual impair-
ment allowances 34.6 22.9 –4.3 –0.4 –1.0 51.8
Collective impair-
ment allowances
1
21.0 28.0 0.0 0.0 0.0 49.0
1
Including a provision for irrevocable loan commitments in the amount of EUR 2.0 million.
Market price risks
Market price risks include the risks to the value of positions
due to changes in market parameters, including interest
rates, volatility and exchange rates. They are quantified as a
potential present value loss using a present value model. This
distinguishes between interest rate, option and currency risks.
In the case of the interest rate risk, a distinction is made
between general and specific interest rate risks. The general
interest rate risk is the risk that the market value of invest-
ments or liabilities that depend on general interest rates will
be adversely affected if interest rates change.
The specific interest rate risk, also known as the credit spread
risk, is likewise included under the market price risk. The
credit spread is defined as the difference in yield between a
risk-free and a risky bond. Spread risks take account of the
risk that the spread may change even without any change to
the rating. The reasons for a change to yield spreads may
include:
■
varying opinions among market participants regarding
positions;
■
an actual change in the creditworthiness of the issuer not
already reflected in its rating;
■
macroeconomic aspects that influence creditworthiness
categories.
The risks inherent in options include the volatility risk (vega:
the risk that the value of a derivative instrument will change
due to increasing or decreasing volatility), the time risk
(theta: the risk that the value of a derivative instrument will
change over time), the rho risk (the risk of a change in the
value of the option if the risk-free interest rate changes) and
the gamma risk (the risk of a change in the option delta if
the price of the underlying asset changes; the option delta
describes the change in value of the option due to a change
in the price of the underlying asset). Options in capital market
business are not contracted for the purposes of speculation.
All option positions arise implicitly as a result of borrower’s
option rights (e.g. statutory termination rights under Section
489 of the German Civil Code (Bürgerliches Gesetzbuch – BGB)
or the right to make unscheduled repayments) and are
hedged where necessary. These risks are monitored in the
daily risk report and are limited.
The currency risk is the risk that the market value of invest-
ments or liabilities that depend on exchange rates will be
adversely affected due to changes in exchange rates. Foreign
currency transactions of Münchener Hypothekenbank are
hedged to the maximum possible extent against currency
risks; only the margins included in interest payments are not
hedged.
The share price risk for Münchener Hypothekenbank is low
and results almost exclusively from participations in compa-
nies in the Cooperative Financial Network. In addition, the
Bank has invested in a mixed fund (as a special fund of Union
Investment), in which a mix of shares is also possible. Respon-
sibility for calculating risk ratios is transferred to the invest-
ment fund company; the results are reviewed for plausibility
and then input into the Bank’s systems.
In order to manage market price risks, the present value of all
Münchener Hypothekenbank transactions is determined on a
daily basis. All transactions are valued using the Summit IT
program. The interest rate risk is managed on the basis of the
BPV vector (Base Point Value), which is calculated daily from
the change in present value per maturity band that would
occur if the mid-swap curve changed by one basis point.
Sensitivities to exchange rates and in relation to rotations in
the interest rate curve and changes to the base spread and
volatilities are also determined.
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At Münchener Hypothekenbank, market risks are recorded
and limited using the value at risk (VaR) indicator. The VaR
calculation takes account of both linear and non-linear risks
by means of a historic simulation. The impact of extreme
movements in risk factors is also measured here and for
other types of risks using various stress scenarios.
The daily stress scenarios (others are tested with less fre-
quency) are:
■
Supervisory requirements:
»
The yield curve is shifted up and down in parallel by
200 basis points separately for each currency. The worse
of the two results is taken into account and limited.
»
In addition, six further stress tests (parallel shift
up / down, steepening / flattening, parallel shift
up / down in the short-term segment) are calculated.
The worst result is monitored as an early warning indi-
cator for the limit. The stress tests are prescribed by
EBA Guideline 2018 / 02.
■
Parallel shifting: the current yield curve is shifted up and
down completely by 50 basis points across all currencies
at the same time. The worse of the two results is taken
into account.
■
Sensitivities:
»
Exchange rates: all foreign currencies change by
10 percent.
»
Volatilities: all volatilities increase by 1 percentage point.
»
Steepening / flattening: a moderate steepening / flatten-
ing of the yield curve is simulated, i.e. at the short end
by up to +/–10 basis points, at the long end by up to
+/–20 basis points, with rotation around the 5-year
grid point.
■
Historic simulation:
»
2008 financial market crisis: changes in interest rates
between 12 September 2008 (the last banking day before
the collapse of investment bank Lehman Brothers) and
10 October 2008 are applied to the current level.
»
Brexit: change in interest rates and exchange rates due
to the Brexit referendum on 23 and 24 June 2016.
»
COVID-19 scenario (worst case): worst case from four
scenarios that depict the market data movements
within the days / weeks after the start of the COVID-19
pandemic in Germany (5 March 2020).
In the year under review, the maximum VaR of the entire
portfolio (interest, currencies and volatilities) at a confidence
level of 99 percent with a ten-day holding period was
EUR 46 million. The average figure was approximately
EUR 30 million.
Although Münchener Hypothekenbank is a trading book
institution (for futures only), it has not concluded any trad-
ing transactions since 2012.
In order to manage credit spread risks, the present value
ofasset-side capital market transactions of Münchener
Hypothekenbank is calculated and the credit spread risks are
determined on a daily basis. The credit spread VaR, credit
spread sensitivities and various credit spread stress scenarios
are calculated in the Summit valuation system.
At Münchener Hypothekenbank, credit spread risks are
recorded and limited using the VaR indicator. The VaR is
calculated based on a historic simulation.
The current (daily) credit spread stress scenarios are:
■
Parallel shifting: all credit spreads are shifted up and
down by 100 basis points. The worse of the two results is
taken into account.
■
Historic simulation of the collapse of the investment bank
Lehman Brothers: the scenario assumes an immediate
change in spreads based on the change that was measured
in the period from one banking day before the collapse of
Lehman Brothers to four weeks after this date.
■
Flight to government bonds: this scenario simulates a
highly visible risk aversion seen on the markets in the
past. The spreads of risky security classes widen, while the
spreads of safe sovereign bonds narrow.
■
Euro crisis: this scenario replicates the change in spreads
during the euro crisis between 1 October 2010 and
8November 2011. During that period, the spreads of
poorly rated sovereign bonds in particular increased sharply.
■
COVID-19 crisis: this scenario reflects the change in credit
spreads in the wake of the COVID-19 crisis between
28February and 18 March 2020. Spreads increased signif-
icantly in all asset classes during this period.
The credit spread VaR for the entire portfolio at a 99.9 per-
cent confidence level and with a holding period of one year
stood at a maximum of EUR 210 million in the year under
review, while the average figure was about EUR 178 million.
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Liquidity risk
The liquidity risk includes the following risks:
■
Inability to honour payment obligations on time (liquidity
risk in the narrower sense).
■
Inability to procure sufficient liquidity on the expected
terms when needed (funding risk).
■
Inability to close out, extend or settle transactions with-
out incurring a loss due to insufficient market depth or
market disruptions (market liquidity risk).
Münchener Hypothekenbank distinguishes between short-term
solvency measures and medium-term structural liquidity
planning.
Short-term solvency measures
The purpose of short-term solvency measures is to ensure
that the Bank is able to honour payment obligations in due
form, in time and in full on a daily basis, even during stress
situations (willingness to pay). Current supervisory require-
ments (MaRisk and CRD IV) regarding banks’ liquidity reserves
have been implemented.
Münchener Hypothekenbank classes itself as a capital market-
oriented institution within the meaning of MaRisk and there-
fore also fulfils the requirements of BTR 3.2.
MaRisk distinguishes between five different scenarios, which
have been implemented accordingly:
1) Base case: corresponds to normal management of the
Bank.
2) Bank stress: the reputation of the institution deteriorates,
for example due to large on-balance-sheet losses.
3) Market stress: short-term event affecting one part of the
financial market. Examples of this include the terrorist
attack on 11 September 2001 and the financial mar-
ket / sovereign debt crisis.
4) Combined stress: simultaneous occurrence of bank and
market stress.
5) Combined stress without countermeasures: it is assumed
that it is no longer possible to obtain any liquidity at all.
According to MaRisk, the Bank must meet the liquidity
requirements arising from scenarios 1 to 4 for a minimum of
30 days. Scenario 5 is the worst-case scenario for internal
management purposes.
Depending on the scenario, various modelling assumptions
have been deduced for all important cash flows, such as draw-
downs of liquidity lines, drawdowns of loan commitments
already made or changes to collateral. In addition, all securities
were allocated to various liquidity classes in order to deduce
the volume in each scenario that could be sold or placed in a
securities repurchase agreement, and in what time frame, in
order to generate additional liquidity. In all cases, statutory
restrictions, such as the 180-day rule in the German Pfand-
brief Act (Pfandbriefgesetz – PfandBG), were met at all times.
The result is a day-by-day presentation of available liquidity
over a three-year horizon in three currencies (euros, US dollars
and Swiss francs). Positions in other currencies are negligible.
Limits are set in the stress scenarios across various horizons
as early warning indicators for each scenario.
In addition, the liquidity coverage ratio (LCR) and a forecast
in accordance with CRD IV are calculated across all currencies
at least once a week.
Medium-term structural liquidity planning
The purpose of structural liquidity planning is to safeguard
medium-term liquidity. The legal basis for this is both MaRisk
BTR 3 and CRD IV on the net stable funding ratio (NSFR).
Medium-term liquidity management in accordance with
MaRisk is based on short-term liquidity management in
accordance with MaRisk, i.e. both use the same scenarios and
modelling assumptions. In view of the longer observation
period, however, additional modelling that is not critical to
short-term liquidity management is taken into account,
including new business planning and current expenses such
as salaries and taxes.
Medium-term liquidity planning has the following liquidity
ratios over time as profit or loss components:
■
cumulative overall cash flow requirement;
■
available covered and uncovered funding potential,
including planned new business and extensions in accord-
ance with Moody’s over-collateralisation requirements;
■
other detailed data for planning and management activities.
Liquidity risks are limited via the structural liquidity forecast
and stress scenarios, based on available liquidity within a year.
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In addition, the NSFR is computed monthly across all curren-
cies in accordance with CRD IV. Forecasts are also created for
monitoring purposes.
In order to reduce the funding risk, Münchener Hypotheken-
bank strives to refinance loans with matching maturities
where possible. The Bank continuously checks if its relevant
funding sources (especially those within the Cooperative
Financial Network) are still available. In order to limit the
market liquidity risk in its business with governments and
banks, the Bank predominantly acquires ECB-eligible securi-
ties that can be used as collateral for ECB open market oper-
ations at any time.
In order to diversify its funding sources, the Bank has built up
a modest deposit business. At the end of 2022, the portfolio
volume was EUR 303 million.
Münchener Hypothekenbank does not have any illiquid
bonds such as mortgage-backed securities (MBS) or similar
securities in its portfolio.
Investment risk
This describes the risk of potential losses if the price of invest-
ments falls below their carrying amount. It applies to partici-
pating interests held by Münchener Hypothekenbank for
strategic reasons in companies of the Cooperative Financial
Network and, to a small extent, positions within its special
mixed fund.
Operational risks
Operational risks are the risk of potential losses caused by
human error, process or project management weaknesses,
technical failures or negative external factors. Human error
includes unlawful actions, inappropriate selling practices,
unauthorised actions, transactional errors and information
and communication risks.
We minimise our operational risks by using skilled staff,
transparent processes, automated standard workflows, written
work instructions, comprehensive IT system function tests,
appropriate contingency plans and preventive measures.
Insurable risks are covered by insurance policies to the normal
extent required by banks.
The materiality of all services outsourced by Münchener
Hypothekenbank in connection with banking transactions
and financial services or other standard banking services has
been examined in a risk analysis. All outsourced services are
monitored in accordance with ECB guidelines and included in
the risk management process.
Migration risks
These describe the risk that borrower ratings may be down-
graded, which would reduce the cash reserves of Münchener
Hypothekenbank. The measures and arrangements described
in the section “Counterparty risk” limit migration risks in an
analogous manner.
Risk-bearing capacity
The technical concepts and models used to calculate risk-
bearing capacity, known as ICAAP, are continually updated
in accordance with supervisory requirements. Münchener
Hypothekenbank calculates its risk-bearing capacity in
accordance with the requirements of the ECB in both the
normative and the economic perspective.
Market risks, loan default risks, operational risks, spread risks,
migration risks, funding risks, investment risks, property risks
and model risks, which include other risks not specifically listed,
are considered in the economic perspective. Risks are allo-
cated to risk-coverage potential conservatively, disregarding
any diversification effects between different types of risks.
In the normative perspective, a multi-year planning horizon
is used to verify that the Bank continuously meets all quanti-
tative regulatory and supervisory capital requirements both
as part of basic planning as well as under adverse scenarios.
The Bank maintained its risk-bearing capacity at all times
throughout the year under review.
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Use of financial instruments for hedging purposes
We engage in hedging activities – interest rate and currency
derivatives – in order to further reduce our risks and to
hedge our business activities. We do not use credit derivatives.
Asset swaps are used as micro-hedges in larger individual
transactions. Structured underlying transactions, such as
callable securities, are hedged accordingly with structured
swaps. Exchange rate risks for exposures in foreign currency
are hedged primarily by endeavouring to secure funding in
matching currencies; any remaining transactions are hedged
using (interest rate) cross-currency swaps. At portfolio level,
we prefer to use interest rate swaps and swaptions as hedging
instruments. Bermuda options on interest rate swaps (swap-
tions) are used in addition to linear instruments to hedge
embedded statutory termination rights or interest rate cap
agreements.
Accounting-related internal control and risk
management processes
The accounting-related internal control system is documented
in organisational guidelines, process descriptions, accounting
manuals and operating instructions. It comprises organisational
security measures and ongoing automatic measures and
controls that are integrated into work processes. The main
controls are segregation of functions, the dual control principle,
access restrictions, payment guidelines, the new product and
new structure processes and balance confirmations. Non-pro-
cess-specific audits are conducted primarily by Internal Audit.
The risk management methods described in the risk report
provide ongoing qualitative and quantitative information on
the financial situation of Münchener Hypothekenbank, such
as performance development. Aspects of all types of risks are
included in this assessment.
At Münchener Hypothekenbank, there is close coordination
between the risk control and financial reporting units.
The output from the risk management system is used as a
basis for multi-year planning calculations, year-end projec-
tions and reconciliation procedures for the accounting ratios
calculated in the Bank’s financial reporting process.
Corporate planning
Münchener Hypothekenbank regularly analyses its business
model with an eye on the challenges that the Bank will face
in future, and refines its business and risk strategy on this
basis. In order to achieve its strategic objectives, numerous
measures have been defined across various areas of activity,
some of which have already been implemented and which
we will continue to implement consistently in the years
ahead. The MaRisk-compliant strategic process plays a crucial
role in this. The starting point for the annual strategy cycle is
a strategic review comprising a review of the implementation
and impact of the adopted measures. As part of the annual
planning that follows the strategy process, sales targets and
centralised and decentralised components of administrative
expenses are reconciled with the projected rolling multi-year
income statement. All earnings and cost components and our
risk-bearing capacity are monitored continually or projected
on a rolling basis, so the Bank can react promptly and appro-
priately to fluctuations in earnings or costs.
Planning also includes matters relating to capital adequacy.
Outlook – opportunities and risks
Economic development and financial markets
The global economy is expected to cool further in 2023, with
experts believing that factors which have so far provided
support, such as private consumption and high order back-
logs in industry, will have less of an impact. In particular,
inflation and high financing costs are expected to put a
dampener on investment and consumption.
The predictions are associated with great uncertainty, not
least due to the ongoing war in Ukraine. Nevertheless, the
IMF is forecasting that global growth will come in at 2.9 per-
cent. It bases this assessment on the fact that in many
countries the economy has proved to be more resilient than
expected. By contrast, the World Bank is expecting growth
of just 1.7 percent, since it is concerned about a recession in
many countries. There is agreement that economic growth
will once again weaken considerably in what are known as
advanced economies. The eurozone, for instance, is expected
to stagnate in 2023 or post only slight GDP growth. In addition,
inflation is forecast to remain high or decline only gently.
Weak momentum in the world economy will also have an
impact on the German economy. At the start of 2023, how-
ever, economists were less pessimistic about economic pros-
pects. This is mainly due to the fact that the feared energy
supply crisis has so far failed to materialise, energy prices and
inflation abated somewhat at the end of the year, and the
German government’s aid package attenuated the adverse
effects on private households and companies. In its annual
economic report, the German government therefore raised its
GDP growth forecast to 0.2 percent. It anticipates growth
of1.8 percent for 2024. In terms of construction investment,
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economists expect a decline for 2023 due to a drop in
incoming orders and a rise in cancellations. Inflation will
remain high, but no longer reach the level of 2022. The
labour market is predicted to develop robustly, with rising
wages.
Higher interest rates mean that central banks will continue
to maintain restrictive monetary policies. Benchmark interest
rates are expected to rise further. The Fed will likely adopt
smaller rate hikes of 0.25 percentage points up to a level of
5.0 percent. It enacted its first interest rate increase of
0.25 percentage points on 1 February 2023. One day later,
the ECB raised its main refinancing operations rate by
0.5 percentage points to 3.0 percent. In view of high inflation, a
further interest rate increase to 3.5 percent is expected in the
spring of 2023.
The ECB has announced that the asset purchase programme
(APP) portfolio will be reduced by about EUR 15 billion each
month from the beginning of March. This will be done by not
reinvesting all of the principal payments from maturing
securities. In the second half of the year, the ECB will decide
whether to further curtail the reinvestment of principal pay-
ments from maturing securities and thus to start reducing
the portfolio more rapidly.
On the foreign exchange market, the euro is expected to
trend in a slightly positive direction against the US dollar,
since the Fed has announced that interest rates will be raised
more slowly and the ECB is expected to raise them more
sharply. The British pound may again perform rather more
weakly against the euro given that already modest economic
prospects are being further impacted by the lasting effects of
Brexit. As far as the Swiss franc is concerned, we expect only
slight fluctuations in 2023 and a gentle decline in the
exchange rate against the euro.
Funding spreads for banks are likely to come under pressure
due to the faster repayment of TLTRO tenders and the ECB’s
curtailing of securities purchases and its portfolio reduction.
Over-liquidity on the money market should shrink considerably
in 2023 and could result in somewhat firmer market rates.
The covered bond markets are forecast to see brisk issuing
activity again, particularly because there will be repayments
of TLTRO tenders. Covered bonds, which were previously
funded in part via the ECB’s low-cost tender programme, will
thus increasingly be issued through public deals once more. It
is therefore possible that spreads will widen further. Demand
for covered bonds will also be further boosted by the CBPP 3
purchase programme, although to a lesser extent than in
previous years, as only maturing instruments will be rein-
vested by the ECB. New issues of benchmark covered bonds
denominated in euros are forecast to reach EUR 175 billion
for 2023.
Property markets and property financing markets
In 2023, higher interest rates and weaker economic growth
will once again shape the overall conditions on the property
markets and influence the behaviour of clients and investors.
The resulting uncertainties on the investment markets will be
reflected in pricing processes that remain difficult. Thus, the
transaction volume for both residential and commercial
properties is expected to be lower than in the previous year.
Transaction activity will not pick up until mid-2023 at the earli-
est. This is contingent on buyers as well as sellers being able to
calculate financing costs and margins more reliably again.
With investors focussing even more strongly on energy-
efficient buildings, price trends are expected to differ
depending on the quality of the property. This means that
price declines will mainly affect energy-intensive residential
and commercial properties.
The residential property markets in our target countries of
Germany, Switzerland and Austria continue to be character-
ised by scarcity of supply. This will lead to further substantial
prices rises on the rental housing markets. The situation will
be aggravated by a decline in new construction activity,
along with new regulatory requirements. Stricter minimum
requirements concerning equity and the debt service-to-in-
come ratio in the case of lending in Austria, as well as the
countercyclical capital buffer and the sectoral systemic risk
buffer for residential property financing which have been in
effect in Germany since February 2023, will make it more
difficult for many households to purchase property.
There is disagreement among experts with regard to the fur-
ther trend in purchase prices in the case of owner-occupied
housing and multi-family houses. A clear trend is not
expected to emerge until the second half of 2023 at the ear-
liest, meaning that even demand from institutional investors
is likely to remain modest until then.
In light of economic weaknesses compared to previous years,
assessments of the prospects on the commercial property
markets are somewhat more restrained on the whole. This
will also affect the office property market. Take-up, for
instance, is forecast to be somewhat lower for the first half
of 2023 compared to the previous year. In all the countries
considered here, this assessment excludes prime properties in
very good office locations, where it is assumed that rents will
remain stable or even rise. Away from these locations, high
vacancy rates are expected, which will increase the pressure
on rents. For institutional investors, office properties remain
the most attractive asset class.
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The situation for bricks-and-mortar retailing will again be
challenging in 2023. Firstly, a persistent, real loss of purchas-
ing power among private households will limit the ability to
improve sales. Secondly, higher energy prices will increase
costs. In addition, online retail is continuing to gain market
share because the shopping habits developed during the
pandemic have permanently changed. Accordingly, companies
will rethink their locations and space requirements, which will
likely lead multi-channel companies to scale back considerably
on floor space. Against this backdrop, investors will continue
to be highly selective when it comes to retail properties.
Development of business at
Münchener Hypothekenbank
Our targets for new business in 2023 are conservative since,
as described, the prospects for the property markets and
property financing markets are restrained. In the first quarter
of 2023 particularly, higher interest rates, but also weak con-
struction activity, will continue to act as a brake on demand
for property financing, since private customers and investors
alike will wait for better general conditions. If general condi-
tions stabilise in the further course of the year, we believe
that demand for residential and commercial financing will
gradually pick up. Under these conditions, we may return to
the level of new business volume that we posted in 2022.
Lower demand from customers, coupled with continued
broad supply, will intensify competition in private property
financing. For that reason, we will optimise our products,
sales campaigns and processes further in order to differenti-
ate ourselves even more distinctly from competitors and to
strengthen the partnership with the banks in the Cooperative
Financial Network and with our collaboration partners in
Germany, Switzerland and Austria. In Switzerland, moreover, we
intend to expand the share of our sustainable mortgage loans.
Overall, we expect new business in private property financing
to be below the previous year's level.
We plan in principle to expand commercial property financ-
ing further. Since it is our assessment that the transaction
market will come back to life in the second half of the year
at the earliest, and with it the demand for purchase financ-
ing, our objective is to maintain new business volume at the
2022 level.
In addition, we will continue to assess and monitor economic
risks in a conservative, forward-looking manner. Develop-
ments in the war in Ukraine and the impact on the energy
section are critical factors in this regard. By contrast, the
adverse effects of the COVID-19 pandemic on our business
will continue to abate.
In view of sharply higher interest rates, we believe that a
more stable interest rate level may slowly emerge. Although
alternative asset classes have become more attractive again
in light of higher interest rates, we consider the capital flow
of investors into the property asset class to be stable, mean-
ing that financing opportunities will continue to arise for
Münchener Hypothekenbank.
We expect modest transaction activity for the national and
international syndication market, since the decisions made
by central banks about interest rates have caused investors to
become reluctant to purchase properties, with the result that
fewer transactions are currently taking place. We therefore
anticipate that the volume of Münchener Hypothekenbank’s
participation in financing will be slightly lower compared
with the previous year. Demand for underwriting transactions
in direct business is expected to increase. Here, Münchener
Hypothekenbank provides the overall financing and subse-
quently surrenders portions of the financing to other banks
or institutional investors.
Once the acquisition of Warburg Hypothekenbank is concluded,
we will acquire a low-risk loan portfolio that is a very good
fit for Münchener Hypothekenbank. At the same time, posi-
tive economic effects can be achieved with this transaction.
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For 2023, we are budgeting for a funding requirement of
between EUR 8.0 billion and EUR 9.5 billion, EUR 6.5 billion
to EUR 7.0 billion of which is expected to be raised on the
capital market, the remainder on the money market. We plan
to launch three to four large-scale issues, which is similar to
last year. Given its partnership with PostFinance in Switzer-
land, Münchener Hypothekenbank will continue to have a
funding requirement in Swiss francs.
Three large-volume Pfandbriefe will mature and fall due for
repayment in 2023: a Mortgage Pfandbrief with a volume
ofEUR 0.75 billion in June and two Mortgage Pfandbriefe of
EUR 0.5 billion each in September and December.
We also intend to attract additional deposits from private
customers in 2023.
In 2023, we will continue to work on implementing our sus-
tainability strategy, along with the areas of activity included
in it (sustainable business model, responsible corporate gov-
ernance, risk management, employees, customers and partners,
climate change and CO
2
emissions), as well as various regula-
tory requirements.
We expect net interest income to be slightly above the previ-
ous year's level. Due to the decline in new business, net com-
mission income will decrease slightly. Administrative
expenses will be above those of the previous year.
We expect loan loss provisions to remain at the same level as
2022. This is due to the increased portfolios and, in particular,
the macroeconomic uncertainties described above.
In the current market environment, we are nevertheless con-
fident that we will attain our targets for the financial year
2023, and we anticipate that net income will come in at the
level of the previous year.
Disclaimer regarding forward-looking statements
This annual report contains statements concerning our
expectations and forecasts for the future. These forward-
looking statements, in particular those regarding Münchener
Hypothekenbank’s business development and earnings per-
formance, are based on planning assumptions and estimates
and are subject to risks and uncertainties. Our business is
influenced by a large number of factors, most of which are
beyond our control. These mainly include economic develop-
ments, the state and further development of financial and
capital markets in general and our funding conditions in
particular, as well as unexpected defaults by our borrowers.
Actual results and developments may therefore differ from
the assumptions that have been made today. Such statements
are thus valid only at the time this report was prepared.
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3 Annual statement
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3
ANNUAL STATEMENT
OF ACCOUNTS
31 BALANCE SHEET
35 INCOME STATEMENT
36 STATEMENT OF DEVELOPMENT
IN EQUITY CAPITAL AND CASH
FLOW STATEMENT
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BALANCE SHEET
BALANCE SHEET
31 December 2022
ASSETS
IN €
31 Dec. 2022
€ 000
31 Dec. 2021
1. Cash reserve
a) Cash on hand 0.00 9
b) Balances with central banks 39,245,223.44 574,567
of which: with Deutsche Bundesbank € 39,245,223.44
39,245,223.44 574,576
2. Claims on banks
a) Mortgage loans 170,670.94 201
b) Public-sector loans 25,109,612.50 100,619
c) Other claims 1,502,674,404.31 1,538,332
of which: payable on demand € 1,204,113,085.25
1,527,954,687.75 1,639,152
3. Claims on customers
a) Mortgage loans 44,187,378,043.31 41,555,682
b) Public-sector loans 1,199,491,726.83 1,351,009
c) Other claims 49,624,912.35 139,173
45,436,494,682.49 43,045,864
4. Bonds and other fixed-income securities
a) Bonds and notes 2,263,362,557.32 2,213,811
aa) Public-sector issuers € 1,632,941,586.94 (1,591,894)
of which: eligible as collateral for Deutsche Bundesbank advance € 1,595,761,958.00
ab) Other issuers € 630,420,970.38 (621,917)
of which: eligible as collateral for Deutsche Bundesbank advance € 488,133,139.15
b) Own bonds and notes 2,560,526,377.77 4,500,102
Nominal value € 2,550,000,000
4,823,888,935.09 6,713,913
Carried forward: 51,827,583,528.77 51,973,505
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Annual Report 2022
1 Foreword 2 Management report 4 Notes 5 Further information
3 Annual statement
of accounts
BALANCE SHEET
ASSETS
IN €
31 Dec. 2022
€ 000
31 Dec. 2021
Brought forward: 51,827,583,528.77 51,973,505
5. Equities and other variable-yield securities 144,423,738.46 147,000
6. Participations and shares in cooperatives
a) Participations 102,723,767.61 102,726
of which: credit institutions € 29,412,172.14
b) Shares in cooperatives 18,500.00 19
of which: in credit cooperatives € 15,500.00
102,742,267.61 102,745
7. Shares in affiliated companies 11,751,601.64 11,752
8. Intangible assets
Concessions acquired for consideration, commercial rights and similar rights and values, as well as licenses to these rights and values 182,873.14 1,361
182,873.14 1,361
9. Tangible assets 65,186,015.17 65,924
10. Other assets 143,817,694.71 139,905
11. Deferred items
a) From issuing and lending business 107,806,380.06 95,482
b) Other 2,039,438.16 556
109,845,818.22 96,038
Total assets 52,405,533,537.72 52,538,230
33
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 2 Management report 4 Notes 5 Further information
3 Annual statement
of accounts
BALANCE SHEET
LIABILITIES, CAPITAL AND RESERVES
IN €
31 Dec. 2022
€ 000
31 Dec. 2021
1. Liabilities to banks
a) Registered Mortgage Pfandbriefe issued 844,256,193.08 700,885
b) Registered Public Pfandbriefe issued 68,883,948.99 84,267
c) Other liabilities 5,550,025,089.16 7,288,049
of which: payable on demand € 1,469,154,748.58
6,463,165,231.23 8,073,201
2. Liabilities to customers
a) Registered Mortgage Pfandbriefe issued 9,440,097,720.29 9,068,509
b) Registered Public Pfandbriefe issued 1,228,771,335.82 1,339,300
c) Other liabilities 4,976,986,199.48 4,458,803
of which:payable on demand € 31,788,064.28
15,645,855,255.59 14,866,612
3. Certificated liabilities
a) Bonds issued 27,686,591,580.39 26,718,553
aa) Mortgage Pfandbriefe € 21,618,274,944.29 (20,706,066)
ab) Public Pfandbriefe € 41,054,124.17 (66,081)
ac) Other bonds and fixed-income securities € 6,027,262,511.93 (5,946,406)
b) Other certificated liabilities 339,177,118.34 657,136
of which: money market paper € 339,177,118.34
28,025,768,698.73 27,375,689
4. Other liabilities 143,520,291.35 165,643
Carried forward 50,278,309,476.90 50,481,145
34
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 2 Management report 4 Notes 5 Further information
3 Annual statement
of accounts
BALANCE SHEET
LIABILITIES, CAPITAL AND RESERVES
IN €
31 Dec. 2022
€ 000
31 Dec. 2021
Brought forward: 50,278,309,476.90 50,481,145
5. Deferred items from issuing and lending business 64,145,174.26 77,456
64,145,174.26 77,456
6. Provisions
a) Provisions for pensions and similar obligations 35,903,134.00 36,182
b) Provisions for taxes 360,000.00 14,450
c) Other provisions 46,272,892.00 51,173
82,536,026.00 101,805
7. Subordinated liabilities 0.00 19,500
8. Instruments of the additional regulatory core capital 203,107,545.45 120,995
9. Fund for general banking risks 55,000,000.00 55,000
10. Capital and reserves
a) Subscribed capital 1,272,002,690.00 1,243,221
aa) Members´ capital contributions € 1,272,002,690.00 (1,243,221)
b) Revenue reserves 412,000,000.00 372,000
ba) Legal reserve € 406,000,000.00 (366,000)
bb) Other revenue reserves € 6,000,000.00 (6,000)
c) Unappropriated profit 38,432,625.11 67,108
1,722,435,315.11 1,682,329
Total liabilities, capital and reserves 52,405,533,537.72 52,538,230
1. Contingent liabilities
Contingent liability on guarantees and indemnities 766.94 1
2. Other commitments
Irrevocable loan commitments 4,334,874,732.10 5,126,314
35
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 2 Management report 4 Notes 5 Further information
3 Annual statement
of accounts
INCOME STATEMENT
INCOME STATEMENT
For the year ended 31 December 2022
INCOME STATEMENT
IN €
1 Jan. to 31 Dec. 2022
€ 000
1 Jan. to 31 Dec. 2021
1. Interest income from 971,326,029.30 940,668
a) Lending and money market operations 906,902,920.56 893,615
of which: negative interest on financial assets 6,370,026.45 5,623
b) Fixed-income securities and government debt register claims 64,423,108.74 47,053
2. Interest expenses 542,977,203.58 541,705
of which: positive interest on financial liabilities 47,599,820.88 49,763
3. Current income from 3,406,316.39 3,570
a) Shares and other non-fixed income securities 0.00 0
b) Participating interests and shares in cooperatives 2,906,316.39 2,470
c) Investments in affiliated companies 500,000.00 1,100
4. Income from profit-pooling, profit transfer or partial profit transfer agreements 0.00 69
5. Commission received 12,627,864.65 12,047
6. Commission paid 122,319,821.47 142,200
7. Other operating income 1,676,287.75 2,860
8. General administrative expenses 142,615,371.05 126,729
a) Personnel expenses 65,674,674.53 63,044
aa) Wages and salaries 55,432,985.05 53,161
ab) Social security contributions and cost of pensions and other benefits 10,241,689.48 9,883
of which: for pensions 2,176,485.26 1,978
b) Other administrative expenses 76,940,696.52 63,685
9. Depreciation, amortisation and write-downs of intangible and tangible assets 4,476,711.11 6,210
10. Other operating expenses 4,381,526.05 6,122
11. Write-downs on and valuation allowances of loans and advances and specific
securities, as well as additions to loan loss provisions 45,467,137.62 27,018
12. Depreciation, amortisation and write-downs of participating interests, shares
in affiliated companies and securities treated as fixed assets 5,476,109.39 3,493
13. Expenses from loss transfer 198.34 0
14. Results from ordinary business activities 132,274,638.26 112,723
15. Taxes on revenue and income 64,188,651.68 53,652
16. Allocation to fund for general banking risks 0.00 0
17. Net income 68,085,986.58 59,071
18. Retained earnings brought forward from previous year 346,638.53 33,037
19. Allocation to revenue reserves 30,000,000.00 25,000
a) Legal reserve 30,000,000.00 25,000
b) Other revenue reserves 0.00 0
20. Unappropriated profit 38,432,625.11 67,108
36
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 2 Management report 4 Notes 5 Further information
3 Annual statement
of accounts
STATEMENT OF DEVELOPMENT IN
EQUITY CAPITAL AND CASH FLOW
STATEMENT
STATEMENT OF DEVELOPMENT IN EQUITY
CAPITAL AND CASH FLOW STATEMENT
STATEMENT OF DEVELOPMENT IN EQUITY CAPITAL FOR 2022
IN € 000
Subscribed capital
Members capital
contributions
Silent
participations
Revenue
reserves
Unappropriated
profit
Total capital
and reserves
Capital and reserves as of 1 Jan. 2021 1,153,051 347,000 46,705 1,546,756
Net change in capital 90,170 90,170
Dividends paid 13,668 13,668
Net income 25,000 34,071 59,071
Capital and reserves as of 31 Dec. 2021 1,243,221 372,000 67,108 1,682,329
Net change in capital 28,782 +10,000 –10,000 28,782
Dividends paid 56,761 56,761
Net income 30,000 38,085 68,085
Capital and reserves as of 31 Dec. 2022 1,272,003 412,000 38,432 1,722,435
37
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 2 Management report 4 Notes 5 Further information
3 Annual statement
of accounts
STATEMENT OF DEVELOPMENT IN
EQUITY CAPITAL AND CASH FLOW
STATEMENT
CASH FLOW STATEMENT
IN € MILLION
31 Dec. 2021
1. Profit for the period 68.1
2. Depreciation, amortisation and write-downs of and valuation allowances on receivables and items of fixed assets / reversals of such write-downs and valuation allowances 59.7
3. Increase / decrease in provisions –19.3
4. Other non-cash expenses / income –0.4
5. Gain / loss on disposal of fixed assets 0.0
6. Other adjustments (net) 0.0
7. Increase / decrease in receivables from credit institutions 82.5
8. Increase / decrease in receivables from customers –2,479.3
9. Increase / decrease in securities (unless classified long-term financial assets) 1,950.0
10. Increase / decrease in other assets relating to operating activities 98.7
11. Increase / decrease in liabilities to credit institutions –1,547.6
12. Increase / decrease in liabilities to customers 777.3
13. Increase / decrease in securitised liabilities 623.3
14. Increase / decrease in other liabilities relating operating activities –433.3
15. Interest expense / interest income –159.2
16. Income tax expense / income –0.1
17. Interest and dividend payments received 647.6
18. Interest paid –56.7
19. Income taxes paid –64.1
20. Cash flows from operating activities (total of lines 1 to 19) –452.9
21. Proceeds from disposal of long-term financial assets 491.8
22. Payments to acquire long-term financial assets –543.7
23. Proceeds from disposal of tangible fixed assets 0.0
24. Payments to acquire tangible fixed assets –2.1
25. Proceeds from disposal of intangible fixed assets 0.0
26. Payments to acquire intangible fixed assets –0.5
27. Cash flows from investing activities (total of lines 21 to 26) –54.5
28. Proceeds from capital contributions 28.8
29. Dividends paid to shareholders –56.8
30. Changes in cash funds relating to other capital (net) 0.0
31. Cash flows from financing activities (total of lines 28 to 30) –28.0
32. Net change in cash funds –535.4
33. Effect on cash funds of exchange rate movements and remeasurements 0.0
34. Cash funds at beginning of period 574.6
35. Cash funds at end of period (total of lines 32 to 34) 39.2
38
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
4
NOTES
40 GENERAL INFORMATION ON
ACCOUNTING POLICIES
42 NOTES TO THE BALANCE SHEET
INCOME STATEMENT
42 Maturity analysis by residual term
43 Claims on | Liabilities
43 Securities
44 Separate funds
44 Trading book
45 Fixed assets
46 Shareholdings
46 Tangible assets
46 Other assets
46 Deferred items
46 Deferred taxes
46 Assets pledged to secure liabilities
47 Other liabilities
47 Subordinated liabilities
47 Additional Tier 1 capital instruments
47 Members capital contributions
48 Details of revenue reserves
48 Foreign currency items
48 Other commitments
48 Interest expenses
48 Commission paid
48 Other operating expenses
48 Write-downs on and value allowances of loans
and advances and specific securities, as well as
additions to loan loss provisions.
48 Taxes on revenue and income
48 Forward trades | Derivatives
50 Cover statement for Pfandbriefe
51 PUBLICATION IN ACCORDANCE
WITH SECTION 28 PFANDBRIEF ACT
51 Pfandbriefe outstanding and their cover
53 Maturity structure of Pfandbriefe outstanding
and their respective cover pools
55 Mortgage loans used as cover for Mortgage
Pfandbriefe according to their amount in
tranches
55 Cover assets used to secure public Pfandbriefe
according to their amount in tranches
56 Volume of claims used to cover Mortgage
Pfandbriefe according to states in which the
real property is located, according to property
type and the total amount of payments in
arrears for at least 90 days as well as the total
amount of these claims inasmuch as the
39
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
4
NOTES
respective amount in arrears is at least 5 per-
cent of the claim
57 Volume of claims used to cover Public Pfand-
briefe
58 Total amount of payments in arrears for at
least 90 days as well as the total amount of
these claims inasmuch as the respective
amount in arrears is at least 5 percent of the
claim
62 Further cover assets – in detail for
Mortgage Pfandbriefe
63 Key figures about outstanding Pfandbriefe and
Cover pool
67 List of International Securities Identification
Numbers of the International Organization for
Standardization (ISIN) by Pfandbrief class
68 Overdue interest
68 Foreclosures and receiverships of mortgages
used as cover
69 OTHER DISCLOSURES
69 Membership movement
69 Personnel statistics
69 Special disclosure requirements
69 Proposed appropriation of distributable income
69 Events after the balance sheet date
69 Company
70 BODIES
70 Supervisory Board
70 Board of Management
70 Mandates
71 AUDITING ASSOCIATION
71 OTHER FINANCIAL OBLIGATIONS
72 CONTINGENT LIABILITY
73 INDEPENDENT AUDITOR’S REPORT
79 AFFIRMATION BY THE
LEGAL REPRESENTATIVES
80 ANNEX TO ANNUAL FINANCIAL
STATEMENTS PURSUANT TO
SECTION 26A PARA. 1 SENTENCE 2
OF THE GERMAN BANKING
ACT (KWG)
81 REPORT OF
THE SUPERVISORY BOARD
40
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
GENERAL INFORMATION
ON ACCOUNTING POLICIES
The Münchener Hypothekenbank eG annual financial state-
ments as of 31 December 2022 were prepared in accordance
with the provisions of the German Commercial Code (HGB),
in conjunction with the accounting regulation for banks and
financial service institutions (RechKredV), and in accordance
with the rules contained in the Cooperatives Act (GenG) and
the Pfandbrief Act (PfandBG).
All claims are stated at nominal amounts in accordance with
Section 340e (2) of the German Commercial Code. The differ-
ence between the amounts disbursed and the nominal
amount is shown under deferred items. All identifiable indi-
vidual credit risks are covered by specific value adjustments
and provisions set up against claims for repayment of princi-
pal and payment of interest. General allowances are calcu-
lated in accordance with IDW RS BFA 7 using an expected
credit loss model, whereby the IFRS 9 methodology is
employed for stage 1 and 2 and applied using the German
Commercial Code’s (HGB) basis for assessment. Taking into
account the probability of default, the loss given default and
the exposure at default, general allowances are created for
latent default risks for all transactions reported under the
balance sheet items loans and advances to credit institutions
and loans and advances to customers, as well as for irrevoca-
ble loan commitments. General allowances for irrevocable
loan commitments are reported in the balance sheet in the
form of a provision. All transactions not subject to a specific
GENERAL INFORMATION ON
ACCOUNTING POLICIES
allowances requirement test are assigned to stage 1 and 2,
whereby the expected 12-month expected loss is calculated
for stage 1 and the lifetime expected loss is calculated for
stage 2. All transactions are generally assigned to stage 1 at
the time they are acquired. The assignment to stage 2 is
made at the balance sheet date if the transaction’s risk of
default has increased significantly compared to the risk of
default when the transaction was originally acquired. The
relevant point-in-time parameters for calculating risk provi-
sions are determined on the basis of macroeconomic fore-
casts, which are updated quarterly by Münchener Hypothek-
enbank’s stress testing committee on the basis of external
macroeconomic data.
In addition, contingency reserves were formed pursuant to
Section 340f of the German Commercial Code.
Securities held in the liquidity portfolio are strictly valued at
the lower of cost or market principle. The present value cor-
responds to the current exchange or market price.
Securities held as fixed assets, which were mainly acquired as
cover for Public Pfandbriefe and for other coverage purposes,
are valued at their cost of purchase. Discounts and premiums
are recognised as interest income or expense over the resid-
ual life of the securities. Securities associated with swap
agreements are valued together with these agreements as a
single item. To the extent that derivatives are used to hedge
risks they are not valued individually. As in the previous year,
securities held as fixed assets in the business year, and which
were not subject to a sustained decrease in value, are valued
in accordance with the modified lower of cost or market
principle. In cases involving securities treated as fixed assets
where a permanent decrease in value is anticipated, the
write-down to the fair value takes place on the balance sheet
date.
Borrowed securities do not appear on the balance sheet.
In accordance with the rules pertaining to the valuation of
fixed assets, participations and holdings in affiliated compa-
nies are valued at their cost of purchase. Depreciation is
taken on those assets where the reduction in value is
expected to be long term.
Intangible assets and tangible assets are valued at cost or
production costs less accumulated depreciation. Scheduled
depreciation is carried out in accordance with the normal
useful life. Due to technical innovation, the normal useful life
for software is based on empirical business reality. Low-value
business assets are treated in accordance with tax regula-
tions. Non-scheduled depreciation is taken in the event of a
permanent loss in value.
41
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
GENERAL INFORMATION
ON ACCOUNTING POLICIES
Existing deferred taxes arising due to temporary differences
between values calculated for trading and tax purposes are
cleared. A backlog of deferred tax assets is not recorded in
the balance sheet.
Liabilities are shown at settlement value. Zero bonds are car-
ried in the accounts at the issuing price plus earned interest
based on the yield at the time of purchase in accordance
with the issuing conditions. The difference between the nom-
inal amount of liabilities and the amount disbursed is shown
under deferred items. Based on the principles of prudent
business practice, provisions have been made for uncertain
liabilities in the amount of the settlement value of these
liabilities. Provisions with a remaining term of more than one
year were discounted using the commensurate average rate
of market interest rates.
Provisions made for pension obligations are calculated based
on the projected unit credit method, a discount rate of
1.78 percent and a 2.5 percent rate of salary growth, as well
as a 2.0 percent rate of pension growth. The calculation is
made on the basis of the “Heubeck guideline tables 2018 G”
prepared by Klaus Heubeck. In accordance with the terms of
Section 253 (2) of the German Commercial Code the average
market rate of interest of the last 10 business years is used
for discount purposes with an assumed remaining term to
maturity of 15 years.
Per the terms of Section 256a of the German Commercial
Code, monetary assets and liabilities denominated in foreign
currencies are calculated using the European Central Bank’s
exchange rate valid on the balance sheet date. Results realised
from the conversion of particularly covered foreign currency
positions are recognized in the income statement under
other operating expenses. Results realised from the conver-
sion of specific value adjustments denominated in foreign
currencies are shown under the item “Income from reversals
of write-downs to claims and certain securities as well as
reversals of provisions for possible loan losses”. Costs and
income are valued at the individual daily exchange rate.
Negative interest on financial assets or financial liabilities has
been deducted from the related interest income items or
interest expense items shown on the income statement.
42
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
NOTES TO THE BALANCE SHEET
INCOME STATEMENT
Maturity analysis by residual term
ASSETS
IN € 000
31 Dec. 2022 31 Dec. 2021
Claims on banks 1,527,955 1,639,153
– Three months 1,502,788 1,538,396
– Three months – one year 11 16
– One year – five years 59 55
– Five years 25,098 100,686
Claims on customers 45,436,495 43,045,864
– Three months 1,117,737 758,232
– Three months – one year 2,124,318 1,936,432
– One year – five years 14,096,011 12,446,834
– Five years 28,098,429 27,904,366
Bonds and other fixed-income securities ≤ one year 63,668 242,615
LIABILITIES, CAPITAL AND RESERVES
IN € 000
31 Dec. 2022 31 Dec. 2021
Liabilities to banks 6,463,165 8,073,201
– Three months 1,753,708 1,441,538
– Three months – one year 1,708,662 320,505
– One year – five years 1,509,849 4,908,741
– Five years 1,490,946 1,402,417
Liabilities to customers 15,645,855 14,866,612
– Three months 1,135,897 917,821
– Three months – one year 1,457,049 1,329,639
– One year – five years 1,328,896 1,263,893
– Five years 11,724,013 11,355,259
Certificated liabilities 28,025,769 27,375,689
Bonds issued
– Three months 273,723 523,286
– Three months – one year 2,382,303 1,938,249
– One year – five years 11,671,628 11,265,756
– Five years 13,358,938 12,991,262
Other certificated liabilities
– Three months 69,802 331,905
– Three months – one year 269,375 325,231
43
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
Claims on | Liabilities
CLAIMS ON AND LIABILITIES TO AFFILIATED COMPANIES AND COMPANIES IN WHICH PARTICIPATING INTERESTS ARE HELD
IN € 000
Affiliated companies
31 Dec. 22
Companies in which
participating interests are held
31 Dec. 22
Affiliated companies
31 Dec. 21
Companies in which
participating interests are held
31 Dec. 21
certificated non-certificated certificated non-certificated certificated non-certificated certificated non-certificated
Claims on banks 0 0 0 236,011 0 0 0 669,230
Claims on customers 0 0 0 0 0 0 0 0
Bonds and other fixed-income securities 0 0 92,076 0 0 0 92,076 0
Liabilities to banks 0 0 0 1,683,790 0 0 0 554,447
Liabilities to customers 0 2,027 0 0 0 3,492 0 0
Certificated liabilities 0 0 0 0 0 0 0 0
Subordinated liabilities 0 0 0 0 0 0 0 0
Securities
SECURITIES MARKETABLE ON THE STOCK EXCHANGE
IN € 000
31 Dec. 22 31. Dec. 21
Asset category Listed Unlisted Listed Unlisted
Bonds and other fixed-income securities 2,075,057 169,163 1,985,441 209,463
Shares and other non-fixed-income securities 0 0 0 0
Participations 0 0 0 0
44
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
Separate funds
SHARES IN SEPARATE FUNDS
IN € 000
Description of the fund Investment goal
Valuation pursuant to Section 168 and
278 Capital Investment Code (KAGB), or
Section 36 Investment Act (old version)
or comparable foreign regulations Difference to book value Distribution paid out for financial year
UIN-Fonds No. 903
Long-term return and diversification bene-
fits compared to a direct investment in
shares, taking the structure of the Bank’s
portfolio into consideration 144,424 0 0
SUBORDINATED ASSETS
IN € 000
31 Dec. 22 31 Dec. 21
Bonds and other fixed-income securities 92,076 92,076
Trading book
As of 31 December 2022, the portfolio contained no financial
instruments used in the trading book. During the year under
review no changes were made to the Bank’s internal criteria
for including financial instruments in the trading portfolio.
45
Münchener Hypothekenbank
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of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
Fixed assets
DEVELOPMENT OF FIXED ASSETS
IN € 000
Net book value on
Acquisition
and produc-
tion costs Changes total + / –
1
31 Dec. 2022 31 Dec. 2021
Bonds and other
fixed-income securities 2,213,811 +49,552 2,263,363 2,213,811
Shares and other non
fixed-income securities 0 0 0 0
Participations and shares
in cooperatives 102,745 –3 102,742 102,745
Shares in affiliated
companies 11,751 11,751 11,751
Changes in legal depreciation
taken related to Net book value on
Acquisition
and produc-
tion costs at
start of busi-
ness year
Additions
during
business
year
Disposals
during
business
year
Transfers
during
business
year
Acquisition
and pro-
duction
costs at
end of
business
year
Accumu-
lated
deprecia-
tion at
start of
business
year
Deprecia-
tion during
business
year
Additions
during
business
year Additions Disposals Transfers
Accumu-
lated
deprecia-
tion at end
of business
year 31 Dec. 2022 31 Dec. 2021
Intangible assets 41,149 515 22,341 19,323 39,788 1,693 22,341 19,140 183 1,361
a) Internally generated
commercial property
rights and similar
rights and assets 5,241 5,241 5,241 5,241 0 0
b) Concessions acquired
for consideration,
commercial rights and
similar rights and
values, as well as
licenses to these rights
and values 35,908 515 17,100 19,323 34,547 1,693 17,100 19,140 183 1,361
Tangible assets 100,816 2,064 1,039 101,841 34,892 2,783 1,021 36,655 65,186 65,924
1
The Bank has exercised the option, available under Section 34 (3) of the accounting regulation for banks and financial services institutions, to combine certain items.
46
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
No information was available on the other participations on
the balance sheet date that the present value of the Bank’s
participations and capital holdings at cooperatives, holdings
in affiliated companies, as well as the value of shares and
other non-fixed-income securities was less than their book
values.
The item “Bonds and other fixed-income securities” includes
securities with a book value of € 605,189 thousand (previous
year: € 808,327 thousand) exceeding the present value of
€ 574,978 thousand (previous year: € 799,074 thousand). To
the extent that these securities are associated with a swap
transaction, they are valued together with the transaction as
a single item.
Securities held as fixed assets, which are separately identified
in the portfolio management system and are not expected
tobe subject to a permanent impairment in value, are valued
in accordance with the moderated lower of cost or market
principle. In light of our intention to hold these securities
until they mature, we generally assume that market price-
related decreases in value will not become effective and that
these securities will be repaid in full at their nominal value
at maturity. Of the securities that are valued in accordance
with the moderated lower of cost or market principle
€ 2,244,220 thousand (previous year: € 2,194,904 thousand)
are marketable securities.
Shareholdings
SHAREHOLDINGS
IN € 000
Percentage
of capital
held Equity Profit / loss
M-Wert GmbH, Munich
1
100.00 953 680
Immobilienservice GmbH
der Münchener
Hypothekenbank eG,
Munich (profit transfer
agreement)
2
100.00 509 0
Nußbaumstraße GmbH &
Co. KG, Munich
2
100.00 11,438 362
M-4tec GmbH, Munich
1
100.00 624 –611
1
Annual financial statements 2021.
2
Annual financial statements 2022.
Tangible assets
The portion of the total value attributable to the land and
buildings used by the Bank is € 53,026 thousand (previous
year: € 53,983 thousand), and of plant and office equipment
€ 3,324 thousand (previous year: € 2,914 thousand).
Other assets
The item “Other assets” includes deferred items of
€ 50,498 thousand related to the derivative business, and
€ 65,529 thousand in commissions for mortgage loans
thatwill be paid after the balance sheet date. Furthermore
this item also includes € 22,634 thousand in cash collateral
pledged within the framework of the banking levy.
Deferred items
DEFERRED ITEMS FROM THE ISSUING
AND LOAN BUSINESS
IN € 000
31 Dec. 2022 31 Dec. 2021
Assets side 11.
Discount from liabilities 87,811 71,983
Premium from claims 2,907 3,827
Other deferred charges 19,128 20,228
Liabilities side 5.
Premium from liabilities 46,337 58,079
Discount from claims 1,388 1,274
Other deferred income 16,420 18,104
The remaining deferred items include compensatory payments
by the Bank to derivative counterparties due to a change in the
collateralisation agreements or agreements arising from the
transition from EONIA to €STR. These compensatory payments
are shown on a proportionate basis in the income statement.
Deferred taxes
Deferred tax liabilities mainly result from the low valuation
of bank buildings taken for tax purposes.
Deferred tax assets arise from provisions made for pensions,
and the different methods used to value premiums from
swap options that were exercised. The remaining backlog of
deferred tax assets arising after clearing is not recorded in
the balance sheet.
Assets pledged to secure liabilities
Within the framework of open market deals with the European
Central Bank, securities valued at € 2,292,000 thousand (pre-
vious year: € 4,292,000 thousand) were pledged as collateral
47
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
to secure the same amount of liabilities. The book value of
the pledged assets (genuine repurchase agreements) was
€ 0 (previous year: € 0). Within the framework of security
arrangements for derivative transactions, cash collateral of
€ 858,320 thousand (previous year: € 1,286,540 thousand)
was provided. Securities valued at € 19,970 thousand (previ-
ous year: € 14,734 thousand) were pledged to secure pension
obligations and requirements of the partial retirement model
for older employees. Securities valued at € 20,000 thousand
(previous year: € 20,000 thousand) were pledged to secure
financial aid obligations within the framework of a Contractual
Trust Arrangement (CTA). Claims in respect of loans valued at
€ 632,437 thousand (previous year: € 548,451 thousand) were
assigned to secure loans obtained from credit institutions.
Pursuant to Section 12 (5) of the Restructuring Fund Act
(Restrukturierungsfondsgesetz – RStruktFG) € 22,634 thou-
sand in cash collateral has been pledged.
Other liabilities
The item “Other liabilities” consists of € 113,712 thousand for
deferred items and adjustment items for valuation of foreign
currency items, and € 21,137 thousand related to derivative
transactions, as well as interest deferrals for an Additional Tier
1 (AT1) bond of € 4,846 thousand.
Subordinated liabilities
Subordinated liabilities incurred interest expenses of
€ 738 thousand (previous year: € 1,508 thousand). There
were no subordinated liabilities in the portfolio as of
December 31, 2022.
Additional Tier 1 capital instruments
Additional Tier 1 (AT1) capital with a total nominal value of
CHF 200million, or a book value of € 203 million valued at
the exchange rate on the balance sheet date, is reported
under the item Additional Tier 1 (AT1) instruments. Interest
expenses amounted to € 6,457 thousand on the balance
sheet date, of which € 4,846 thousand was attributable to
accrued interest.
As of 31 December 2022, there were two bonds in the portfolio.
Nominal amount Currency Interest rate Date issued
First interest
rate adjustment
(every 5 years
thereafter)
Margin on
interest rate
adjustment
125,000,000.00 CHF 3.125 12.12.2019 02.06.2025 3.656
75,000,000.00 CHF 5.750 02.06.2022 02.12.2027 4.945
Both bonds were issued in denominations of CHF 50,000 and
are perpetual bonds. Each of them is callable by Münchener
Hypothekenbank for the first time after 5.5 years. The interest
rate will be adjusted to the current 5-year CHF mid-swap
rate on the interest rate adjustment date. as well as an addi-
tional margin.
Payment of interest will not take place if the issuer has insuf-
ficient distributable items available for distribution, if the
issuer is ordered to do so by a competent regulatory authority,
or due to non-compliance with equity capital and capital
buffer requirements.
Interest payments are not cumulative.
The bond will be written down in the event MünchenerHyp’s
Common Equity Tier 1 capital ratio (CET1 ratio) falls below a
minimum level of 7 percent. A write-up of the bond is at the
full discretion of the issuer and requires sufficient net income
for the year and may not contravene any statutory or official
prohibition on distribution.
Pursuant to the terms of commercial law, this is a liability
and not equity.
Members capital contributions
Members capital contributions disclosed under capital and
reserves item 10aa) consisted of:
MEMBERS CAPITAL CONTRIBUTIONS
IN €
31 Dec. 2022 31 Dec. 2021
Capital contributions 1,272,002,690.00 1,243,221,000.00
a) of remaining
members 1,264,006,170.00 1,231,501,180.00
b) of former
members 7,293,020.00 10,128,160.00
c) in respect of
shares under
notice 703,500.00 1,591,660.00
Outstanding obligatory
payments in respect of
shares 0.00 0.00
48
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
Details of revenue reserves
DEVELOPMENT OF REVENUE RESERVES
IN € 000
Legal reserve
Other revenue
reserves
1 Jan. 2022 366,000 6,000
Transfer from 2021
retained earnings 10,000 0
Transfer from 2022 net
income 30,000 0
31 Dec. 2022 406,000 6,000
The increase in the assessment period used for defining the
average discount rate from 7 to 10 years resulted in a positive
contribution to income of € 1,520 thousand, which is barred
from being distributed and is included under the item “Other
revenue reserves”.
Foreign currency items
FOREIGN CURRENCY ITEMS
IN € 000
31 Dec. 2022 31 Dec. 2021
Assets side 6,976,033 6,603,665
Liabilities side 5,987,279 5,723,114
Contingent liabilities
and other obligations 170,961 364,131
Other commitments
The irrevocable loan commitments contained in this item
consist almost solely of mortgage loan commitments made
to customers. It is anticipated that the irrevocable loan
commitments will be drawn down. Against the background
of the ongoing monitoring of loans, the probable need to
create provisions for risks related to contingent obligations
and other obligations is viewed as minor.
Interest expenses
This item includes the premium for targeted longer-term refi-
nancing operations (TLTRO II program and TLTRO III program)
shown as a negative interest expense of € 33,303 thousand
(previous year: € 39,058 thousand). The amount attributable
to the previous year 2021 is EUR 11,398 thousand (previous
year: EUR 9,019 thousand).
Commission paid
This item includes expenses from provisions for current agent
commissions in the amount of € 5,750 thousand (previous
year: €0.00 thousand). The portion attributable to previous
years amounts to € 3,780 thousand (previous year: € 0.00
thousand).
Other operating expenses
This item contains expenses arising from adding interest
effects of € 1,122 thousand (previous year: € 3,127 thou-
sand) for established provisions.
Write-downs on and value allowances of loans and
advances and specific securities, as well as additions
to loan loss provisions.
The item “Depreciation, amortisation and value adjustments
on accounts receivables and certain securities as well as
allocations to provisions for possible loan losses” amounted
to minus EUR 45,467 thousand (previous year: minus
EUR 27,018 thousand). The net result of changes in loan loss
provisions (including direct depreciation) amounted to minus
EUR 17,610 thousand (previous year: minus EUR 5,894 thou-
sand). The calculation of general loan loss provisions for
the lending business in accordance with IDW RS BFA 7
resulted inan addition of EUR 28,000 thousand (previous
year: EUR 8,050 thousand), of which EUR 1,000 thousand
(previous year: EUR 1,000 thousand) was in the form of a
provision for latent default risks for commitments.
Taxes on revenue and income
This item includes expenses of € 6,674 thousand relating to
other periods (previous year: € 408 thousand).
Forward trades | Derivatives
The following derivative transactions were made to hedge
swings in interest rates or hedge against exchange rate risks.
These figures do not include derivatives embedded in under-
lying basic transactions stated on the balance sheet.
49
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
NOMINAL AMOUNTS
IN € MILLION
Residual term
≤ one year
Residual term
> one year ≤
five years
Residual term
> five years Total
Fair value at
balance sheet
date
1
neg. (–)
Interest-rate-related transaction
Interest rate swaps 10,159 25,814 58,652 94,625 518
Interest rate options
– Calls 8 288 610 906 19
– Puts 10 229 50 289 –27
Other interest rate contracts 101 50 2,188 2,339 189
Currency-related transactions
Cross-currency swaps 1,311 2,758 250 4,319 –158
Currency swaps 456 0 0 456 9
1
Valuation methods:
Interest rate swaps are valued using the present value method based on the current interest rate curve at the balance sheet date. In doing so the cash flows are discounted using market interest rates
appropriate for the related risks and remaining terms to maturity. Interest that has been accrued but not yet paid is not taken into consideration. This approach is known as “clean price” valuation.
The value of options is calculated using option price models and generally accepted basic assumptions. In general, the particular value of an option is calculated using the price of the underlying
value, its volatility, the agreed strike price, a risk-free interest rate and the remaining term to the expiration date of the option.
The derivative financial instruments noted involve premiums
stemming from option trades in the amount of € 38.6 million
(previous year: € 38.7 million) which are carried under the
balance sheet item “Other assets”.
Interest attributable to derivative deals is carried under the
balance sheet items “Claims on banks” with € 255.2 million
(previous year: € 284.0 million) and “Liabilities to banks”
with € 224.4 million (previous year: € 288.8 million) or “Claims
on customers”, which amounted to € 7.7 million (previous
year: € 10.3 million) while “Liabilities to customers” were
€ 12.3 million (previous year: € 15.2 million). The accrual of
compensatory payments made is entered under “Other
assets” with €11.9 million (previous year: € 10.6 million); the
accrual of compensatory payments received is entered under
“Other liabilities” with € 21.1 million (previous year:
€ 29.9 million).
Compensatory items in the amount of € 113.7 million (previ-
ous year: € 112.9 million) related to the valuation of foreign
currency swaps are carried under the balance sheet item
“Other liabilities”.
The counterparties of derivative contracts are banks and
providers of financial services, located in OECD countries.
Hedging arrangements were made to reduce credit risks
associated with these contracts. Within the framework of
these arrangements collateral was provided for the net
claims / liabilities arising after the positions were netted.
In the context of the Bank’s hedging positions, € 2,075 mil-
lion (previous year: € 986 million) in balance sheet hedging
positions were designated in accounting to hedge interest
rate risks associated with securities carried on the balance
sheet under “Bonds and other fixed-income securities”. It
may be assumed that the effectiveness of the hedging posi-
tions will remain unchanged over the entire term of the
transaction as the conditions of the securities correspond to
those of the hedging derivatives (critical term match method).
Offsetting changes in value are not shown in the balance
sheet; uncovered risks are treated in accordance with stand-
ard valuation principles. The total amount of offsetting value
changes for all valuation units amounted to € 204 million.
Interest-based finance instruments carried in the banking
book are valued without losses within the framework of an
overall valuation, whereby the interest rate driven present
values are compared to the book values and then deducted
from the positive surplus of the risk and portfolio manage-
ment expenses. In the event of a negative result a provision
for contingent risks has to be made.
A related provision did not have to be made based on the
results of the calculation made on 31 December 2022.
As on the date of record the portfolio contained no derivatives
used in the trading book.
50
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
NOTES TO THE BALANCE
SHEET INCOME STATEMENT
Cover statement for Pfandbriefe
A. MORTGAGE PFANDBRIEFE
IN € 000
31 Dec. 2022 31 Dec. 2021
Ordinary cover assets 33,795,563 31,558,599
1. Claims on banks (mortgage loans) 168 195
2. Claims on customers (mortgage loans) 33,742,931 31,505,940
3. Tangible assets (charges on land owned by the Bank) 52,464 52,464
Substitute cover assets 581,414 615,414
1. Cash reserves 1,000 0
2. Other claims on banks 0 0
3. Bonds and other fixed-income securities 580,414 615,414
Total cover 34,376,977 32,174,013
Total Mortgage Pfandbriefe requiring cover 31,693,890 30,297,713
Surplus cover 2,683,087 1,876,300
B. PUBLIC PFANDBRIEFE
IN € 000
31 Dec. 2022 31 Dec. 2021
Ordinary cover assets 1,406,984 1,480,866
1. Claims on banks (public-sector loans) 25,000 25,000
2. on customers (public-sector loans) 1,171,984 1,320,866
3. Bonds and other fixed-income securities 210,000 135,000
Substitute cover assets 50,000 0
1. Other claims on banks 0 0
2. Bonds and other fixed-income securities 50,000 0
Total cover 1,456,984 1,480,866
Total public-sector Pfandbriefe requiring cover 1,308,390 1,456,322
Surplus cover 148,594 24,544
51
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION IN ACCORDANCE
WITH SECTION 28 PFANDBRIEF ACT
PUBLICATION PURSUANT TO SECTION 28 (1) SENTENCE 1, 3 PFANDBRIEF ACT
Pfandbriefe outstanding and their cover
Q4 2022
PFANDBRIEFE OUTSTANDING AND THEIR COVER
IN € MILLION
nominal value net present value risk-adjusted net present value
1
Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021
Outstanding total Mortgage Pfandbriefe 31,693.9 30,297.7 28,407.9 32,742.1 21,197.3 30,715.0
of which derivatives – – – – – –
Cover pool 34,377.0 32,174.0 32,304.3 36,715.1 24,490.0 34,255.1
of which derivatives – – – – – –
Over-collateralisation (OC) 2,683.1 1,876.3 3,896.4 3,972.9 3,292.7 3,540.1
OC in % of Pfandbriefe outstanding 8.5 6.2 13.7 12.1 15.5 11.5
Statutory OC
2, 3
1,148.8 – 1,162.0 –
Contractual OC
2, 4
– – – –
Voluntary OC
2, 5
1,534.3 – 2,734.3 –
“Over-collateralization in consideration of
vdp credit quality differentiation model” 2,683.1 1,876.3 3,896.4 3,972.9
OC in % of Pfandbriefe outstanding 8.5 6.2 13.7 12.1
1
The dynamic approach was used for calculating the risk-adjusted net present value according to Section 5 (1) No. 2 of the Net Present Value Regulation (PfandBarwertV).
2
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
3
According to nominal value: sum of the nominal statutory over-collateralisation pursuant to Section 4 (2) PfandBG and the nominal value of the net present value statutory over-collateralisation pursuant to Section 4 (1) PfandBG
4
Contractual over-collateralisation
5
Residual, depending on the statutory and contractual over-collateralisation; net present value includes the net present value of the nominal statutory over-collateralisation pursuant to Section 4 (2) PfandBG
Note: The release of the over-collateralisation with a view to the vdp-credit quality differentiation model is voluntary.
52
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
OUTSTANDING TOTAL PUBLIC PFANDBRIEFE
IN € MILLION
nominal value net present value risk-adjusted net present value
1
Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021
Outstanding total Mortgage Pfandbriefe 1,308.4 1,456.3 1,401.9 1,910.9 993.8 1,783.2
of which derivatives – – – – – –
Cover pool 1,457.0 1,480.9 1,552.6 2,109.0 1,041.4 1,882.2
of which derivatives – – 12.0 36.4 –15.8 27.7
Over-collateralization (OC) 148.6 24.5 150.7 198.1 47.7 99.0
OC in % of Pfandbriefe outstanding 11.4 1.7 10.7 10.4 4.8 5.6
Statutory OC
2, 3
51.1 – 55.9 –
Contractual OC
2, 4
– – – –
Voluntary OC
2, 5
97.5 – 94.8 –
Over-collateralization in consideration of
vdp credit quality differentiation model 148.6 24.5 150.7 198.1
OC in % of Pfandbriefe outstanding 11.4 1.7 10.7 10.4
1
The dynamic approach was used for calculating the risk-adjusted net present value according to Section 5 (1) No. 2 of the Net Present Value Regulation (PfandBarwertV).
2
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
3
According to nominal value: sum of the nominal statutory over-collateralization pursuant to Section 4 (2) PfandBG and the nominal value of the net present value statutory over-collateralization pursuant to Section 4 (1) PfandBG
4
Contractual over-collateralization
5
Residual, depending on the statutory and contractual over-collateralization; net present value includes the net present value of the nominal statutory over-collateralization pursuant to Section 4 (2) PfandBG
Note: The release of the over-collateralization with a view to the vdp-credit quality differentiation model is voluntary.
53
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (1) SENTENCE 2, NOS. 4, 5 PFANDBRIEF ACT
Maturity structure of Pfandbriefe outstanding and their respective cover pools
Q4 2022
MORTGAGE PFANDBRIEFE
IN € MILLION
Q4 2022 Q4 2021
Q4 2022 Mat-Ex
(12 months)
1
Q4 2021 Mat-Ex
(12 months)
2
Maturity:
Pfandbriefe
outstanding Cover pool
Pfandbriefe
outstanding Cover pool
Pfandbriefe
outstanding
Pfandbriefe
outstanding
<= 0.5 years 1,280.9 1,414.7 1,251.8 989.8 – –
> 0.5 years and <= 1 year 1,613.0 1,603.7 691.7 1,324.1 – –
> 1 year and <= 1.5 years 731.9 1,399.8 1,174.2 1,336.7 1,280.9 –
> 1.5 years and <= 2 years 885.6 1,192.9 1,170.4 1,308.9 1,613.0 –
> 2 years and <= 3 years 1,186.6 3,229.2 1,435.0 3,024.5 1,617.4 –
> 3 years and <= 4 years 2,723.1 2,800.0 1,362.5 2,761.4 1,186.6 –
> 4 years and <= 5 years 3,197.7 2,916.4 3,345.0 2,604.3 2,723.1 –
> 5 years and <= 10 years 9,446.0 10,078.2 7,477.7 9,273.5 10,954.7 –
> 10 years 10,629.2 9,741.9 12,389.3 9,550.7 12,318.2 –
PUBLIC PFANDBRIEFE
IN € MILLION
Q4 2022 Q4 2021
Q4 2022 Mat-Ex
(12 months)
1
Q4 2021 Mat-Ex
(12 months)
2
Maturity:
Pfandbriefe
outstanding Cover pool
Pfandbriefe
outstanding Cover pool
Pfandbriefe
outstanding
Pfandbriefe
outstanding
<= 0.5 years 36.7 24.9 21.3 20.4 – –
> 0.5 years and <= 1 year 48.0 24.9 12.0 28.2 – –
> 1 year and <= 1.5 years 53.9 26.4 35.5 12.4 36.7 –
> 1.5 years and <= 2 years 46.8 28.0 55.4 8.6 48.0 –
> 2 years and <= 3 years 77.9 128.6 102.1 9.9 100.6 –
> 3 years and <= 4 years 129.6 134.6 86.7 6.8 77.9 –
> 4 years and <= 5 years 5.4 12.4 116.4 219.7 129.6 –
> 5 years and <= 10 years 402.4 210.6 332.9 159.4 324.1 –
> 10 years 507.9 866.5 694.0 1,015.6 591.5 –
1
Effects of an extension of maturity on the maturity structure of the Pfandbriefe / extension scenario: twelve months. This is an extremely unlikely scenario, which could only come into play after the appointment of a cover pool administrator.
2
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
54
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
INFORMATIONS ON THE MATURITY EXTENSION OF THE PFANDBRIEFE
Q4 2022 Q4 2021
1
Prerequisites for the extension of
maturity of the Pfandbriefe
The extension of the maturity is necessary in order to avoid the imminent insolvency of
the Pfandbrief bank with limited business activity, the Pfandbrief bank with limited
business activity is not overindebted and there is reason to believe that the Pfandbrief
bank with limited business activity will be able to meet its liabilities then due after the
expiry of the maximum possible extension date, taking into account further possibilities
for extension. See also, Section 30a (2b) Pfandbrief Act.
Powers of the cover pool administrator
in the event of the extension of
maturity of the Pfandbriefe
The cover pool administrator may extend the maturity dates of the principle payments,
if the relevant requirements pursuant to Section 30 (2b) Pfandbrief Act are met. The
administrator shall determine the period of the extension of the maturity, which may
not exceed a period of twelve months, in accordance with necessity.
The cover pool administrator may extend the maturity dates of the principal and inter-
est payments falling due within one month after the appointment of the cover pool
administrator to the end of that monthly period. If the cover pool administrator
decides in favour of such a extension of the maturity, the existence of the prerequisites
pursuant to Section 30 (2b) Pfandbrief Act shall be irrefutably presumed. Such an
extension shall be taken into account within the maximum extension period of twelve
months.
The cover pool administrator may only exercise his authority uniformly for all Pfand-
briefe of an issue. In this connection, the maturities may be extended in full or on a pro
rata basis. The cover pool administrator must extend the maturity for a Pfandbrief issue
in such a way that the original order of servicing of the Pfandbriefe which could be over-
taken by the postponement is not changed (prohibition of overtaking). This may result
in the maturities of later maturing issues also having to be extended in order to comply
with the prohibition on overtaking. See also, Section 30 (2a and 2b) Pfandbrief Act.
1
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
55
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (2) NO. 1 A PFANDBRIEF ACT,
SECTION 28 (3) NO. 1 NO. 1 PFANDBRIEF ACT AND SECTION 28 (4) NO. 1A PFANDBRIEF ACT
Mortgage loans used as cover for Mortgage Pfandbriefe
according to their amount in tranches
Q4 2022
COVER ASSETS
IN € MILLION
Q4 2022 Q4 2021
Up to EUR 300,000 19,684.7 18,947.6
Between EUR 300,000 and EUR 1 million 4,962.8 4,033.2
Between EUR 1 million and EUR 10 million 2,286.7 2,347.5
Over EUR 10 million 6,861.3 6,230.3
Total 33,795.6 31,558.6
Cover assets used to secure public Pfandbriefe
according to their amount in tranches
Q4 2022
COVER ASSETS
IN € MILLION
Q4 2022 Q4 2021
Up to EUR 10 million 51.9 90.6
Between EUR 10 million and EUR 100 million 430.0 370.2
Over EUR 100 million 975.1 1,020.1
Total 1,457.0 1,480.9
56
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (2) NO. 1 B, C AND NO. 2 PFANDBRIEF ACT
Volume of claims used to cover Mortgage Pfandbriefe according to states in which the real property is located, accord-
ing to property type and the total amount of payments in arrears for at least 90 days as well as the total amount of
these claims inasmuch as the respective amount in arrears is at least 5 percent of the claim
Q4 2022
MORTGAGE BONDS COVER
IN € MILLION
ACCORDING TO GROUP OF
BORROWERS AND REGIONS
IN € MILLION
Cover assets
Total amount of
payments in arrears
for at least 90 days
Total amount of
these claims inas-
much as the respec-
tive amount in
arrears is at least
5% of the claimTotal
thereof
Residential Commercial
Total
thereof
Total
thereof
State Q4
Apart-
ments
Single-and
two-family
houses
Multiple-
family
houses
Buildings
under
construc-
tion
Build-
ing
land
Office
buildings
Retail
buildings
Industrial
buildings
Other
commer-
cially used
buildings
Buildings
under con-
struction
Build-
ing
land
Total –
all states year 2022 33,795.6 27,774.0 5,136.1 17,406.1 5,222.4 8.1 1.3 6,021.6 3,874.9 1,860.5 6.9 279.3 – – 11.6 12.9
year 2021 31,558.6 25,969.9 4,599.8 16,326.0 5,034.0 9.6 0.6 5,588.7 3,544.1 1,701.5 8.0 335.1 – – 9.9 11.1
Germany year 2022 26,682.6 22,840.3 3,524.8 14,718.8 4,587.3 8.1 1.3 3,842.2 2,513.5 1,089.6 6.9 232.2 – – 11.6 12.9
year 2021 25,044.0 21,569.1 3,140.9 13,786.3 4,631.7 9.6 0.6 3,474.9 2,249.6 981.1 8.0 236.2 – – 9.9 11.1
Belgium year 2022 71.6 – – – – – – 71.6 71.6 – – – – –
year 2021 29.6 – – – – – – 29.6 29.6 – – – – –
France year 2022 259.2 – – – – – – 259.2 201.2 58.0 – – – –
year 2021 254.2 – – – – – – 254.2 193.0 61.2 – – – –
Great Britain year 2022 281.9 – – – – – – 281.9 231.2 27.6 – 23.0 – –
year 2021 332.9 – – – – – – 332.9 291.8 16.8 – 24.3 – –
Luxembourg year 2022 90.9 – – – – – – 90.9 90.9 – – – – –
year 2021 90.9 – – – – – – 90.9 90.9 – – – – –
Netherlands year 2022 716.6 299.6 – – 299.6 – – 417.0 175.2 241.8 – – – –
year 2021 631.9 284.8 – – 284.8 – – 347.0 142.0 200.9 – 4.1 – –
Austria year 2022 173.7 45.4 14.2 30.9 0.3 – – 128.3 36.2 92.1 – – – – – –
year 2021 157.4 17.7 5.8 11.7 0.1 – – 139.6 36.2 103.4 – – – – – –
Spain year 2022 469.0 8.5 – – 8.5 – – 460.5 132.0 328.5 – – – –
year 2021 443.6 8.5 – – 8.5 – – 435.1 118.4 316.6 – – – –
Switzerland year 2022 4,253.5 4,253.5 1,597.1 2,656.5 – – – – – – – – – –
year 2021 3,980.9 3,980.9 1,453.0 2,527.9 – – – – – – – – – –
USA year 2022 796.5 326.6 – – 326.6 – – 469.9 423.0 22.8
– 24.0 – –
year 2021 593.2 108.8 – – 108.8 – – 484.4 392.5 21.5 – 70.4 – –
57
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (3) NO. 2 PFANDBRIEF ACT
Volume of claims used to cover Public Pfandbriefe
Q4 2022
VOLUME OF CLAIMS USED TO COVER PUBLIC PFANDBRIEFE
IN € MILLION
State Q4
Cover assets
Total thereof owed by thereof granted by
total includes
claims granted
for promoting
exports State
Regional
authorities
Local
authorities Other debtors State
Regional
authorities
Local
authorities Other debtors
Total – all states year 2022 1,457.0 – 120.0 1,200.1 51.9 85.0 – – – –
year 2021 1,480.9 – 120.0 1,185.1 94.2 75.0 – – 6.6 –
Germany year 2022 1,302.0 – – 1,165.1 51.9 85.0 – – – –
year 2021 1,325.9 – – 1,150.1 94.2 75.0 – – 6.6 –
Austria year 2022 155.0 – 120.0 35.0 – – – – – –
year 2021 155.0 – 120.0 35.0 – – – – – –
58
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (3) NO. 3 PFANDBRIEF ACT
Total amount of payments in arrears for at least 90 days as well as the total
amount of these claims inasmuch as the respective amount in arrears is at
least 5 percent of the claim
Q4 2022
AMOUNT OF CLAIMS IN ARREARS ON PUBLIC-SECTOR PFANDBRIEFE
IN € MILLION
State Q4
Amount of claims in arrears for at least 90 days
Total amount of these claims inasmuch as the respectiveamount
in arrears is at least 5% of the claim
Total
thereof
Total
thereof
State
Regional
authorities
Local
authorities Other debtors State
Regional
authorities
Local
authorities Other debtors
Total –
all states year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Germany year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Belgium year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Bulgaria year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Denmark year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Estonia year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Finland year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
France year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Greece year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
59
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
AMOUNT OF CLAIMS IN ARREARS ON PUBLIC-SECTOR PFANDBRIEFE
IN € MILLION
State Q4
Amount of claims in arrears for at least 90 days
Total amount of these claims inasmuch as the respectiveamount
in arrears is at least 5% of the claim
Total
thereof
Total
thereof
State
Regional
authorities
Local
authorities Other debtors State
Regional
authorities
Local
authorities Other debtors
Great Britain year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Ireland year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Italy year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Croatia year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Latvia year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Lithuania year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Luxembourg year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Malta year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Netherlands year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Austria year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Poland year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Portugal year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Romania year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Sweden year 2022 – – – – – – – – – –
60
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
AMOUNT OF CLAIMS IN ARREARS ON PUBLIC-SECTOR PFANDBRIEFE
IN € MILLION
State Q4
Amount of claims in arrears for at least 90 days
Total amount of these claims inasmuch as the respectiveamount
in arrears is at least 5% of the claim
Total
thereof
Total
thereof
State
Regional
authorities
Local
authorities Other debtors State
Regional
authorities
Local
authorities Other debtors
year 2021 – – – – – – – – – –
Slovakia year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Slovenia year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Spain year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Czech Republic year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Hungary year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Cyprus year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Iceland year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Liechtenstein year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Norway year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Switzerland year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Japan year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Canada year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
USA year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
61
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
AMOUNT OF CLAIMS IN ARREARS ON PUBLIC-SECTOR PFANDBRIEFE
IN € MILLION
State Q4
Amount of claims in arrears for at least 90 days
Total amount of these claims inasmuch as the respectiveamount
in arrears is at least 5% of the claim
Total
thereof
Total
thereof
State
Regional
authorities
Local
authorities Other debtors State
Regional
authorities
Local
authorities Other debtors
Other
OECD states year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
EU institutions year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
Other states /
institutions year 2022 – – – – – – – – – –
year 2021 – – – – – – – – – –
62
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (1) SENTENCE 1 NOS. 8, 9, 10
Further cover assets – in detail for Mortgage Pfandbriefe
Q4 2022
FURTHER COVER ASSETS – IN DETAIL FOR MORTGAGE PFANDBRIEFE
IN € MILLION
State Q4
Further cover assets for Mortgage Pfandbriefe according to
Section 19 (1) No. 2 a) and b), Section 19 (1) No. 3 a) to c), Section 19 (1) No. 4
1
Total
thereof
Claims according to
Section 19 (1) No. 4
claims according to Section 19 (1)
No. 2 a) and b)
claims according to Section 19 (1)
No. 3 a) to c)
Overall
thereof
Overall
thereof
Covered bonds accord-
ing Article 129 Regula-
tion (EU) No 575 / 2013
Covered bonds accord-
ing Article 129 Regula-
tion (EU) No 575 / 2013
Total – all states year 2022 581.4 – – 1.0 – 580.4
year 2021 – – – – – –
Germany year 2022 571.0 – – 1.0 – 570.0
year 2021 – – – – – –
Austria year 2022 10.4 – – – – 10.4
year 2021 – – – – – –
1
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
63
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (1) SENTENCE 1 NOS. 6, 7, 11, 12, 13, 14, 15
PFANDBRIEF ACT AND SECTION 28 (2) SENTENCE 1 NOS. 3, 4 PFANDBRIEF ACT
Key figures about outstanding Pfandbriefe and cover pool
Q4 2022
MORTGAGE PFANDBRIEFE
Q4 2022 Q4 2021
Outstanding Pfandbriefe (€ mn.) 31,693.9 30,297.7
thereof percentage share of fixed-rate Pfandbriefe Section 28 (1) 13 % 91.0 84.0
Cover pool (€ mn.) 34,377.0 32,174.0
thereof total amount of the claims according to Section 12 (1) which exceed the limits laid down
in section 13 para. 1 s. 2, 2nd half sentence section 28 para. 1 no. 11 (€ mn.) – –
thereof total amount of the assets according to section 19 para. 1 which exceed the limits laid down
in Section 19 (1) sentence 6 Section 28 (1) No. 11 (€ mn.) – –
Claims which exceed the limits laid down in Section 19 (1) No. 2
1
Section 28 (1) No. 12 (€ mn.) – –
Claims which exceed the limits laid down in Section 19 (1) No. 3
1
Section 28 (1) No. 12 (€ mn.) – –
Claims which exceed the limits laid down in Section 19 (1) No. 4
1
Section 28 (1) No. 12 (€ mn.) – –
thereof percentage share of fixed-rate cover assets Section 28 (1) No. 13 % 96.0 96.0
Net present value pursuant to Section 6 of the Pfandbrief Net Present Value Regulation
for each foreign currency in € million Section 28 (1) No. 14 (net total)
CAD – –
CHF 795.2 910.3
CZK – –
DKK – –
GBP – 120.4 –70.7
HKD – –
JPY – –
NOK – –
SEK – –
USD 450.3 101.0
AUD – –
64
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
MORTGAGE PFANDBRIEFE
Q4 2022 Q4 2021
Volume-weighted average of the maturity that has passed since the loan was granted (seasoning) Section 28 (2) No. 4 Years 5.0 5.0
Average loan-to-value ratio, weighted using the mortgage lending value Section 28 (2) No. 3 % 52.0 52.0
Average loan-to-value ratio, weighted using the market value % – –
Key figures on liquidity according to Section 28 (1) No. 6 Pfandbrief Act
1
Largest negative amount within the next 180 days within the meaning of Section 4 (1a) sentence 3 Pfandrief Act for Pfandbriefe (€ mn.) 82.2 –
Day on which the largest negative sum results Day (1–180) 166 –
Total amount of cover assets meeting the requirements of Section 4 (1a) sentence 3 Pfandbrief Act (€ mn.) 620.7 –
Key figures according to Section 28 (1) sentence 7 Pfandbrief Act
Share of derivative transactions included in the cover pools according to Section 19 (1) No. 1 (credit quality step 3) % – –
Share of derivative transactions included in the cover pools according to Section 19 (1) No. 2c (credit quality step 2) % – –
Share of derivative transactions included in the cover pools according to Section 19 (1) No. 3d (credit quality step 1) % – –
Share of derivative transactions in liabilities to be covered according to Section 19 (1) No. 1 (credit quality step 3) % – –
Share of derivative transactions in liabilities to be covered according to Section 19 (1) No. 2c (credit quality step 2) % – –
Share of derivative transactions in liabilities to be covered according to Section 19 (1) No. 3d (credit quality step 1) % – –
Key figures according to Section 28 (1) No. 15 Pfandbrief Act
Share of cover assets in the cover pool for which or for whose debtor a default pursuant to Article 178 (1) of Regulation (EU) no. 575 / 2013 is
deemed to have occurred. % 0.3 –
1
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
65
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (1) SENTENCE 1 NOS. 6, 7, 11, 12, 13, 14, 15
PFANDBRIEF ACT AND SECTION 28 (2) SENTENCE 1 NOS. 3, 4 PFANDBRIEF ACT
Key figures about outstanding Pfandbriefe and cover pool
Q4 2022
PUBLIC PFANDBRIEFE
Q4 2022 Q4 2021
Outstanding Pfandbriefe (€ mn.) 1,308.4 1,456.3
thereof percentage share of fixed-rate Pfandbriefe Section 20 (1) No. 13 % 92.0 91.0
Cover pool (€ mn.) 1,457.0 1,480.9
thereof total amount of the claims according to Section 20 (1 and 2) which exceed the limits laid down in Section 20 (3)
Section 28 (1) No. 11 (€ mn.) – –
Claims which exceed the limits laid down in Section 20 (2) No. 2
1
Section 20 (1) No. 12 (€ mn.) – –
Claims which exceed the limits laid down in Section 20 (2) No. 3
1
Section 20 (2) No. 12 –
thereof percentage share of fixed-rate cover assets Section 28 (1) No. 13 % 91.0 95.0
Net present value pursuant to Section 6 of the Pfandbrief Net Present Value Regulation for each foreign currency in € million
Section 28 (1) No. 14 (net total)
CAD – –
CHF – –
CZK – –
DKK – –
GBP – –
HKD – –
JPY – –
NOK – –
SEK – –
USD – –
AUD – –
66
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLIC PFANDBRIEFE
Q4 2022 Q4 2021
Key figures on liquidity according to Section 28 (1) No. 6 Pfandbrief Act
1
Largest negative amount within the next 180 days within the meaning of Section 4 (1a) sentence 3 Pfandrief Act for Pfandbriefe (€ mn.) 19.3 –
Day on which the largest negative sum results Day (1–180) 111 –
Total amount of cover assets meeting the requirements of Section 4 (1a) sentence 3 Pfandbrief Act (€ mn.) 225.9 –
Key figures according to Section 28 (1) No. 7 Pfandbrief Act
Share of derivative transactions included in the cover pools according to Section 20 (2) No. 1 (credit quality step 3) % – –
Share of derivative transactions included in the cover pools according to Section 20 (2) No. 2 (credit quality step 2) % 0.8 –
Share of derivative transactions included in the cover pools according to Section 20 (2) No. 3c (credit quality step 1) % – –
Share of derivative transactions in liabilities to be covered according to Section 20 (2) No. 1 (credit quality step 3) % – –
Share of derivative transactions in liabilities to be covered according to Section 20 (2) No. 2 (credit quality step 2) % – –
Share of derivative transactions in liabilities to be covered according to Section 20 (2) No. 3c (credit quality step 1) % – –
Key figures according to Section 28 (1) No. 15 Pfandbrief Act
Share of cover assets in the cover pool for which or for whose debtor a default pursuant to Article 178 (1) of Regulation (EU) no. 575 / 2013 is
deemed to have occurred. % – –
1
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
67
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLICATION ACCORDING TO SECTION 28 (1) SENTENCE 1 NO. 2 PFANDBRIEF ACT
List of International Securities Identification Numbers of the International
Organization for Standardization (ISIN) by Pfandbrief class
Q4 2022
MORTGAGE PFANDBRIEFE
Q4 2022 Q4 2021
1
ISIN
CH0386949314, CH0417086086, CH0438965532, CH0457206842,
CH0460872341, CH0463112059, CH0471297991, CH0481013768,
CH1100259808, CH1122290237, CH1131931375, CH1137407453,
CH1139995810, CH1175016091, CH1195555409, DE000MHB10J3,
DE000MHB12J9, DE000MHB13J7, DE000MHB14J5, DE000MHB17J8,
DE000MHB18J6, DE000MHB1954, DE000MHB19J4, DE000MHB20J2,
DE000MHB2135, DE000MHB2192, DE000MHB21J0, DE000MHB2234,
DE000MHB2242, DE000MHB2283, DE000MHB22J8, DE000MHB2317,
DE000MHB2374, DE000MHB2432, DE000MHB2440, DE000MHB2457,
DE000MHB24J4, DE000MHB25J1, DE000MHB2648, DE000MHB2697,
DE000MHB26J9, DE000MHB2705, DE000MHB2721, DE000MHB2739,
DE000MHB2754, DE000MHB27J7, DE000MHB2812, DE000MHB2820,
DE000MHB2838, DE000MHB2853, DE000MHB2861, DE000MHB2895,
DE000MHB28J5, DE000MHB2945, DE000MHB2960, DE000MHB2978,
DE000MHB2994, DE000MHB29J3, DE000MHB30J1, DE000MHB31J9,
DE000MHB32J7, DE000MHB4024, DE000MHB4057, DE000MHB4107,
DE000MHB4149, DE000MHB4156, DE000MHB4172, DE000MHB4206,
DE000MHB4214, DE000MHB4248, DE000MHB4263, DE000MHB4289,
DE000MHB4297, DE000MHB4305, DE000MHB4354, DE000MHB4370,
DE000MHB4388, DE000MHB4396, DE000MHB4404, DE000MHB4412,
DE000MHB4420, DE000MHB4438, DE000MHB4446, DE000MHB4479,
DE000MHB4487, DE000MHB4495, DE000MHB4529, DE000MHB4552,
DE000MHB4560, DE000MHB4586, DE000MHB4602, DE000MHB4610,
DE000MHB4636, DE000MHB4644, DE000MHB4651, DE000MHB4669,
DE000MHB4677, DE000MHB4685, DE000MHB4693, DE000MHB4701,
DE000MHB4719, DE000MHB4727, DE000MHB4735, DE000MHB4743,
DE000MHB4750, DE000MHB61H0, DE000MHB9171 -
1
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
68
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
PUBLICATION IN
ACCORDANCE WITH
SECTION 28
PFANDBRIEF ACT
PUBLIC PFANDBRIEFE
Q4 2022 Q4 2021
1
ISIN DE000MHB3349 –
1
In accordance with Section 55 of the Pfandbrief Act (Pfandbriefgesetz), the previous year’s data will not be published until Q3 2023.
Overdue interest
COVERING MORTGAGES WITH OVERDUE INTEREST
IN € 000
Total Thereof residential Thereof commercial
2022 2021 2022 2021 2022 2021
Overdue interest 293 237 292 231 1 5
Foreclosures and receiverships of mortgages used as cover
FORECLOSURES AND RECEIVERSHIPS
Total Thereof residential Thereof commercial
Pending on balance sheet date 2022 2021 2022 2021 2022 2021
– Foreclosure proceedings 64 53 62 50 2 3
– Receivership proceedings 12 17 10 16 2 1
11
1
17
1
10
1
16
1
1
1
1
1
Foreclosures completed during business
year 14 21 14 21 0 0
1
Thereof included in pending Foreclosure proceedings.
During the year under review no property had to be taken over to salvage our claims.
69
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
OTHER DISCLOSURES
OTHER DISCLOSURES
Membership movement
MEMBERSHIP DATA
Number of members
Beginning of 2022 63,213
Additions in 2022 621
Reductions in 2022 3,487
End of 2022 60,347
€
Increase in remaining members capital
contributions 31,573,500.00
Amount of each share 70.00
Members liability 0.00
Personnel statistics
In the reporting year, the average number of employees was:
Male Female Total
Full-time employees 291 177 468
Part-time employees 34 128 162
Total number of employees 325 305 630
These figures do not include:
Apprenticed trainees 5 9 14
Employees participating
in parental leave, early
retirement, partial retire-
ment (non-working
phase), or employees
suspended with pay 12 31 43
Special disclosure requirements
Pursuant to Section 8 CRR (Articles 435 to 455), Münchener
Hypothekenbank publishes information it is required to dis-
close in a separate disclosure report in the Federal Gazette
(Bundesanzeiger), as well as on the Bank’s homepage.
Pursuant to Section 26a (1) (4) of the German Banking Act
(KWG), the quotient of net income and total assets is equal
to 0.1299 percent.
Proposed appropriation of
distributable income
Net income for the year comes to EUR 68,085,986.58. These
annual financial statements show an advance allocation of
EUR 30,000,000.
A dividend distribution of 3.00 percent will be proposed at
the Delegates Meeting. The remaining unappropriated profit
for the year – including profit carried forward from the pre-
vious year – amounting to € 38,432,625.11 should therefore
be allocated as follows:
3.00% dividend EUR 38,160,500.00
Carried forward to new year EUR 272,125.11
Events after the balance sheet date
In early November 2022, Münchener Hypothekenbank signed
a contract to acquire all shares in M.M.Warburg & CO
Hypothekenbank AG (Warburg Hypothekenbank). The current
owners are M.M.Warburg & CO (AG & Co.) Kommandit-
gesellschaft auf Aktien and Landeskrankenhilfe V.V.a.G. The
planned closing on the purchase of the shares is still subject
to required official approvals. This includes, in particular,
the regulatory holder control procedure, which had not yet
been completed when this report was drafted. Once the
acquisition is concluded, the plan is to integrate Warburg
Hypothekenbank by way of a merger before the end of 2023.
Company
Münchener Hypothekenbank eG
Karl-Scharnagl-Ring 10 | 80539 München
Register of cooperatives of the District Court of Munich
Gen.-Reg 396
70
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
BODIES
BODIES
Supervisory Board
Dr. Hermann Starnecker
Spokesman of the Board of Management
VR Bank Augsburg-Ostallgäu eG
Chairman of the Supervisory Board
Gregor Scheller
Chairman of the Board of Management
VR Bank Bamberg-Forchheim eG (until 31.01.2022)
President and Chairman of the Board of
Genossenschaftsverband Bayern e.V. (as of 01.02.2022)
Deputy Chairman of the Supervisory Board
HRH Anna Duchess in Bavaria
Entrepreneur
Thomas Höbel
Spokesman of the Board of Management
Volksbank Raiffeisenbank Dachau eG
Josef Hodrus
Spokesman of the Board of Management
Volksbank Allgäu-Oberschwaben eG
Jürgen Hölscher
Member of the Board of Management
Emsländische Volksbank eG
Rainer Jenniches
Chairman of the Board of Management
VR-Bank Bonn Rhein-Sieg eG
Reimund Käsbauer
Employee representative
Michael Schäffler
Employee representative
Claudia Schirsch
Employee representative
Kai Schubert
Member of the Board of Management
Raiffeisenbank Südstormarn Mölln eG
Frank Wolf-Kunz
Employee representative
Board of Management
Dr. Louis Hagen
Chairman of the Board of Management (until 31.12.2022)
Dr. Holger Horn
Deputy Chairman of the Board of Management
(until 31.12.2022)
Chairman of the Board of Management (as of 01.01.2023)
Ulrich Scheer
Member of the Board of Management
Markus Wirsen
Member of the Board of Management (as of 01.04.2022)
Mandates
Dr. Louis Hagen
KfW
Member of the Board of Supervisory Directors
(until 31.12.2022)
LBBW Asset Management
Member of the Supervisory Board
(as of 03.06.2022)
Dr. Holger Horn
FMS Wertmanagement AöR (until 31.01.2023)
Member of the Board of Supervisory Directors
As of the balance sheet date loans to members of the Super-
visory Board amounted to € 546 thousand (previous year:
€ 647 thousand). As in the previous year, the lending portfolio
did not include any loans made to members of the Board of
Management. Pension provisions of € 19,782 thousand (previ-
ous year: € 20,117 thousand) were made for former members
of the Board of Management and their surviving dependants.
Total remuneration received by the members of the Board of
Management during the year under review amounted to
€ 2,907 thousand (previous year: € 2,021 thousand), for mem-
bers of the Supervisory Board € 476 thousand (previous year:
€ 503 thousand). Total compensation received by the mem-
bers of the Advisory Committee amounted to € 46 thousand
(previous year: € 35 thousand). Total compensation received
by former members of the Board of Management and their
surviving dependants amounted to € 1,515 thousand (previ-
ous year: € 1,505 thousand).
71
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
AUDITING ASSOCIATION
OTHER FINANCIAL
OBLIGATIONS
DGRV – Deutscher Genossenschafts- und Raiffeisenverband e. V.,
Berlin, Linkstraße 12
The total fee charged by the auditor was € 647 thousand
(previous year € 648 thousand) excluding value-added tax. The
individual charges are as follows:
TOTAL AUDITOR FEE
IN € 000
31 Dec. 2022 31 Dec. 2021
For audit services
1
616 620
Other assurance services 31 28
Tax advisory services 0 0
Other services 0 0
1
of which reversal of provisions from 2021 of EUR 73 thousand
AUDITING ASSOCIATION
OTHER FINANCIAL OBLIGATIONS
Pursuant to Section 12 (5) of the Restructuring Fund Act
(Restrukturierungsfondsgesetz – RStruktFG) irrevocable pay-
ment obligations of € 22,634 thousand were recorded at the
balance sheet date.
72
Münchener Hypothekenbank
Annual Report 2022
1 Foreword 3 Annual statement
of accounts
2 Management report 5 Further information
4 Notes
CONTINGENT LIABILITY
CONTINGENT LIABILITY
Our Bank is a member of the protection scheme of the
National Association of German Cooperative Banks
(Sicherungs einrichtung des Bundesverbandes der Deutschen
Volksbanken und Raiffeisenbanken e.V.). Per the statutes
ofthe protection scheme we have issued a guarantee to the
National Association of German Cooperative Banks. As a
result, we have a contingent liability of € 28,442 thousand. In
addition, pursuant to Article 7 of the Accession and Declara-
tion of Commitment to the bank-related protection scheme
of the BVR Institutssicherung GmbH (BVR-ISG), a premium
guarantee is in force. This pertains to special contributions
and special payments in the event of insufficient financial
resources in order to pay for losses of depositors of one of
the CRR credit institutions belonging to the protection
scheme in the event of a compensation case, as well as to
meet refunding obligations pursuant to cover measures.
Munich, 7 February 2023
Münchener Hypothekenbank eG
The Board of Management
Dr. Holger Horn Ulrich Scheer Markus Wirsen
CEO CFO CRO