Germany's PBB warns of slow recovery in property as profit stagnates (updated)

Deutsche Pfandbriefbank AG

27/02/2025 06:36

Adds details on risk provisions in paragraph 4, and background in paragraphs 2, 6-7

By Tom Sims and Alexander Hübner

FRANKFURT, Feb 27 (Reuters) - Deutsche Pfandbriefbank PBBG.DE (PBB), one of Germany's top property financiers, posted a slight drop in annual net profit and warned that a recovery in real estate markets was slow.

The grim outlook follows a wave of bad news last year for the bank, which dates back to the 1860s and was bailed out by the government in the 2009 financial crisis, as it navigates what it has called "the greatest real estate crisis" since then.

The bank's net profit was at 90 million euros ($94.19 million) for 2024, down from 91 million euros a year earlier.

Risk provisions, driven by bad loans for U.S. offices and German property developments, fell to 170 million euros in 2024 from 212 million euros a year earlier amid a "persistently difficult market".

"The recovery on the property markets is only making slow progress," CEO Kay Wolf said.

PBB in recent years bet heavily on the U.S. market by offering commercial real estate loans, which across the industry have succumbed to pressure from high office vacancies and falling property prices following interest rate hikes and a trend towards home-working since the pandemic.

In a revamp last year, PBB said it would reduce its exposure to the U.S. property market and focus less on offices, as it tries to restore profitability.

($1 = 0.9557 euros)

 (Reporting by Tom Sims and Alexander Huebner, Editing by Friederike Heine and Rashmi Aich)

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