ECB to seek higher real estate loan provisions from some German banks, Bloomberg News reports

Deutsche Pfandbriefbank AG

04/06/2024 15:48

June 4 (Reuters) - The European Central Bank will soon
push certain German banks to set aside higher reserves against
property loan defaults, Bloomberg News reported on Tuesday.
    The top regulator will communicate its demands to banks in
the coming months, the report said, citing people familiar with
the matter, adding that the resulting increase in provisions was
likely to affect this year's profitability.
    ECB is focusing on banks that are heavily invested in
commercial real estate loans, like Deutsche Pfandbriefbank
 PBBG.DE  and some regional lenders jointly known as
Landesbanken, the report said.
    However, it was not clear which banks or lenders would
ultimately face demands for higher provisions, the report said.
The ECB has scrutinized banks from other countries but German
lenders will be among those most affected, it said.
    Banks in Germany have become a particular focus amid the
country's worst real-estate slump in decades, marked by
insolvencies, halted construction, and a freeze in property
deals.

 (Reporting by Surbhi Misra in Bengaluru
Editing by Bernadette Baum)
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