Pbb Deutsche Pfandbriefbank boosts property lending ahead of 2015 sell-off

Pbb Deutsche Pfandbriefbank increased its real estate lending business by 43% last year, as management continues the preparations for the government- owned bank’s sale in 2015.

New property lending rose from €4.9bn to €7bn, with €5.3bn of that figure comprising new commitments and €1.7bn extensions of existing loans.

The number of loans made also increased, from 79 to 131, as did the average loan-to-value ratio on new commitments, from 56% to 61%.

Some 53% of the bank’s lending was in Germany, while the UK was the next biggest market, at 17% (€1.17bn). Total new lending, including on public sector infrastructure, rose 46% to €8.2bn.

The bank’s pre-tax profit was €165m, up from €124m in 2012, although it was flattered by one-off profits of €54m. Net interest and commission income rose from €319m to €328m and is estimated to be over €370m this year. But after – tax return on equity was still below the bank’s target, at 4.9%

A sales process has already started for Depfa, pbb Deutsche Pfandbriefbank’s sister bank,  dormant since the financial crisis. Under European Commission rules, pbb must also be sold, by the end of 2015.

Bernhard Scholz, management board member for real estate finance and public investment finance, said: “Last year we finished the last steps in preparation for privatisation of the bank. We have a clean balance sheet, we’re lean and efficient, and we are one of the leading real estate financing banks in Europe.

“We have shown that we can stand on our own, because we are fully funded, as we have been consistently for three years. “We started [after separation from the FMS-WM bad bank] on a match-funded basis and  are still match-funded, which shows we have a sustainable business model.”

Parent HRE Holding recently appointed Andreas Schenk as chief risk officer, a role previously carried out by CEO Manuela Better.

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