Quitting the US - Pbb Expecting a Loss
Bank departs American market - Anticipated financial setback - Leaving the American Market: Anticipated Financial Loss for Pfandbriefbank
Hey there! Let's talk about Pbb, the German real estate finance specialist. After battling difficulties for years, they've decided to pull out of the US. And get this, they might just face a loss this year due to this move. Shares of Pbb at the Frankfurt Stock Exchange dropped more than 6.5% to 5.04 euros by the afternoon.
The US portfolio, valuing around 4.1 billion euros, has a remaining term of roughly 2.5 years. The board and supervisory board have decided to sell, securitize, or allow this portfolio to run off. While Pbb has revised its earnings forecast for the current year, their medium-term targets up to 2027 remain unchanged.
The US business has given Pbb trouble even before Donald Trump's second presidency. Throw in the pandemic and the shift to remote work leading to a significant decline in office rents, and you've got a perfect storm of difficulties. Back in 2023, Pbb shareholders began to worry, and the bank temporarily gained a reputation as a restructuring case.
New Direction
Though US loans make up only a small portion of Pbb's business, they represent an outsized share of provisions for potentially defaulted loans. At first, CEO Kay Wolf only intended to reduce the US business. But the bank's management seems to have decided that a full withdrawal would be less painful.
Looking for New Business Opportunities in Europe
Just after the initial announcement, Pbb shared that it's in advanced negotiations to acquire an asset manager for a mid-double-digit million amount. The target manages a low single-digit billion amount for its clients. Given the challenges in the commercial real estate business, Pbb has been searching for more attractive business opportunities. In 2024, the bank, with its approximately 800 employees, pulled in around 90 million euros in net profit.
- Germany
- Europe
- Deutsche Pfandbriefbank AG
- Garching
- Real Estate Bank
- Frankfurt Stock Exchange
- Deutsche Pfandbriefbank AG, based in Garching, Germany, is looking for new business opportunities in Europe, following their decision to withdraw from the US market.
- In light of the challenges faced in the commercial real-estate business, the bank has initiated advanced negotiations to acquire an asset manager, potentially strengthening their position in Europe.
- With a focus on expanding their vocational training programs, the bank aims to invest in the development of its European workforce, ensuring a strong foundation for future business growth.
