German property bank PBB unlikely to meet 2027 targets, it says (updated)

Deutsche Pfandbriefbank AG

13/02/2026 11:54

Shares drop 10.8% after profit warning and pretax loss

S&P had cut PBB outlook to negative, citing profitability risks

Bank has been exiting US market

Updates with shares, context in paragraphs 6-7, details on pretax profit in 8, S&P outlook in 9-10

By Tom Sims

FRANKFURT, Feb 13 (Reuters) - Property financing company Deutsche Pfandbriefbank PBBG.DE (PBB) is unlikely to meet its key financial targets for 2027, it warned on Friday, citing the drag on momentum from a subdued commercial property market this year.

PBB has been hit particularly hard by property market downturns in Germany and the U.S.

The targets set out in 2024 included operating income of around 600 million euros ($711 million) and a return on tangible equity - a key profitability measure - of 8%.

Without stronger tailwinds from the market, the bank is "unlikely to achieve its key strategic financial targets ... before 2028," it said.

Shares in the bank fell sharply after the announcement and were down 10.8% in early afternoon trade.

After its previous owner was bailed out by the government during the financial crisis more than a decade ago, PBB went public in an initial public offering in 2015. It then went on a lending spree in the U.S., which has been suffering from high office vacancies and falling property prices.

In May, PBB said that it would not take on new U.S. business, calling the market too volatile under President Donald Trump. In June, it opted for a complete exit and retracted its financial guidance for the year.

Friday's profit warning came as the bank posted a preliminary pretax loss of 250 million euros for 2025, compared with a profit of 104 million euros for 2024.

Ratings agency S&P in November cut its outlook on PBB to negative from stable.

"The negative outlook reflects the risk of further reducing profitability and transition risk to a more sustainable business model," S&P said at the time.

($1 = 0.8435 euros)

 (Reporting by Tom Sims. Editing by Ludwig Burger and Mark Potter)

 ((Tom.Sims@thomsonreuters.com; +49 30 220 133 645;))