Deutsche Pfandbriefbank Seeks to Reassure Investors Amid Doubts and Stock Market Decline

dpa-AFX · February 8, 2024, 2:23 p.m

GARCHING (dpa-AFX) – Deutsche Pfandbriefbank is trying to dispel doubts about its financial situation in view of high provisions for loan defaults. The bank announced on Thursday in Garching near Munich that it had already largely covered its refinancing needs for 2024. Customer deposits have exceeded the seven billion euro mark. According to the information, the institute has also issued several Pfandbrief bonds since the summer. However, the message was initially not convincing on the stock market.

According to the announcement in the early afternoon, the bank’s share price was down 2.7 percent. Since the end of January, the paper has lost around a fifth of its value and is only trading at around half the price it was a year ago.

The bank now referred to the large sums in the accounts of customers who have invested daily and fixed-term deposits with it. Of this, six billion euros were attributable to fixed-term deposits with an average term of more than three years. According to the information, the institute’s liquidity coverage ratio is 212 percent, more than twice as high as required.

The commercial real estate financier drastically increased its risk provisions for bad loans in the fourth quarter. According to information from the previous day, the bank still achieved a pre-tax profit of 90 million euros for the full year 2023. This meant she hit the lower end of her profit forecast, which she had cut significantly in November./stw/tav/jha/

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