European specialist bank for commercial real estate finance, Deutsche Pfandbriefbank AG (pbb), is accelerating the implementation of its Strategy 2027 and thus its transition to a more diversified and profitable bank. The bank will withdraw from the US and focus fully on European markets in future. At the same time, pbb is pushing ahead with the diversification of its income streams: it is in advanced negotiations to acquire a majority stake in a German investment manager with assets under management in the low single-digit billion euro range.
pbb has completed the announced strategic review of its US business. The bank is discontinuing its US business completely. It intends to wind down, securitise or sell its portfolio, which has a volume of around €4.1 billion with a weighted average remaining legal maturity of approximately 2.5 years, in a value-preserving manner. The bank is thus accelerating its transformation under Strategy 2027, which focuses on diversifying and improving the profitability of its business activities with a focus on its European home market. The resources freed up by the withdrawal from the US can thus be concentrated even more strongly on markets and business activities that promise profitable growth in a stable market environment.
In this context, extraordinary expenses are expected that could lead to an annual loss in 2025. As a precautionary measure, pbb is therefore withdrawing its guidance for the current financial year and will publish a new guidance for 2025 in due course. The bank confirms that a common equity tier 1 ratio of at least 14 percent should be maintained at all times.
In addition, pbb is sticking to its medium-term targets for 2027. With the planned acquisition in investment management, the bank intends to strengthen its ‘pbb invest’ division and diversify its revenue streams. This would enable pbb to achieve a large part of its volume and earnings targets for 2027 in this area. The purchase price would be in the mid double-digit million euro range. The transaction would be subject to the usual closing conditions and, in particular, the approval of the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and merger authorities.
