Deutsche Postbank to accelerate new UK lending with €500m target for 2011

Deutsche Postbank hopes to increase its new lending in the UK this year to €500m. Last year the German retail bank lent €300m here.

Bruce Matthews, co-manager of the 40-strong London branch, said: “Last year a lot of investments went to cash buyers and a lot of what we were shown in the debt market was too secondary or tertiary.”

Matthews said six deals had already been through the London credit committee, with one, a £14m retail investment loan, just closed. “It is good secondary property with management angles,” he said.

“This year has started better than last year. We have already had a third of the volume we saw in the whole of last year.”

The other deals that have been through the UK credit committee involve three office investments, a hotel and an industrial asset.

The bank, which doesn’t use  pfandbrief bonds to back its UK deals, has a track record for lending on development and its developer clients include Heron and Minerva.

But the German bank avoided development last year and did not join the club that funded Heron’s City residential tower. Matthews said the bank would consider small-scale develop-ment financing this year for projects that were low risk.

Postbank was acquired in December by Germany’s biggest investment bank, Deutsche Bank, in an agreed €25-per-share bid, but DB will retain Postbank as a separate legal entity and brand.

The retail bank, which has retail deposits of €56bn and a €74bn mortgage book, made a profit in the first nine months of last year after posting losses in 2009. The bank intends to raise its first-tier capital reserves ratio from 8% to 9.5% by 2012.

Deutsche Postbank placed its most recent Jumbo pfandbrief, with a volume of €1bn, on 8 February.

The 10-year issue, which was 2.5 times oversubscribed, was priced at a nominal 3.62% interest rate and the yield at the re-offer price is 3.73%, 22 basis points above the mid-swap price.

 

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