Deutsche Pfandbriefbank AG (pbb), a leading European specialist bank for commercial real estate finance, will concentrate on diversifying its business model in the years to come, thus establishing a broader foundation for future revenue growth and increased profitability. The Bank aims to increase return on equity before taxes to more than 10 percent by year-end 2026 and is systematically refining the strategy presented in March 2022, which focuses on organic growth in the core business, a significant expansion of capital-light commission-based business, and diversification of the funding base. Green finance and digitalisation remain core elements of the strategic thrust across all growth areas. The Bank intends to maintain its conservative risk profile and adhere to its traditionally strict cost discipline.
pbb generated a pre-tax result of €213 million (audited consolidated figures in accordance with IFRS, Supervisory Board approval pending) in the 2022 financial year, reaching the upper end of the forecast range. Return on equity before taxes amounted to 6.3 percent (5.5 percent after taxes). In light of the solid results, the Management Board and Supervisory Board will propose a dividend of 95 cents per no-par value share entitled to dividends to the Annual General Meeting, equalling a consistently high distribution ratio of around 75 percent (based on consolidated net income attributable to shareholders in accordance with IFRS after taxes and the AT1 coupon). At a share price of € 9.42 (XETRA closing price on 8 March 2023) the dividend yield amounts to approximately 10 percent.
“pbb has proven once again that its business model is strong and robust, standing tall even in a highly challenging year for the world economy. We are aiming once again to pay our shareholders a highly attractive dividend. Supported by our solid operating performance and comfortable capitalisation, we will be able to reinforce investments into strategic development during 2023, whilst maintaining our conservative risk profile and strict cost discipline, continuing to prudently manage the risk/reward ratio, and remaining a reliable dividend stock for long-term investors,” said CEO Andreas Arndt.
2022 financial year
- Financing volume increases by 6.2 percent to €29.3 billion (previous year: €27.6 billion)
- New business volume stable at €9 billion
- Net interest income of €489 million on the previous year’s level (2021: €494 million)
- Risk provisioning almost halved to €44 million (2021: €81 million)
- Pre-tax result of €213 million in the upper half of the forecast range
- A dividend proposal of 95 cents per share corresponds to a yield of approximately 10 percnt
Strategic outlook until 2026
- 2023 earmarked as a year of investment and strict cost discipline
- Return on equity (RoE) before taxes of at least 10 percent expected for 2026
- Priority on green transformation and digitalisation
- Organic growth and margin improvement planned in core business
- Aiming to diversify revenues with the new Real Estate Investment Management division and “pbb Debt” product
- Capital-light commission-based business to account for up to 10 percent of revenues by year-end 2026
- Optimisation of funding base via deposits and green bonds targeted