Source: Anna Nekrashevich via Pexels
German real estate lender Deutsche Pfandbriefbank AG reported a net profit for 2023 less than half the company’s net profit in the prior year amid losses in its US property book.
The lender, which specializes in commercial real estate, reported on March 7 a net profit of €91 million for 2023, less than half the €187 million Deutsche Pfandbrifbank (PBB) posted a year ago.
PBB in 2023 slightly lowered the value of its performing US portfolio to €4.5 billion from €4.7 billion while nonperforming assets in the US more than doubled to €607 million from €301 million in the previous year.
Total nonperforming loans in PBB’s German property portfolio nearly quadrupled to €404 million from €114 million, according to the bank’s filings.
PBB rose risk provisions to €212 million in 2023 from €44 million in 2022 due to real estate finance worries. The company also scrapped its dividend for last year due to the “current challenging situation on the commercial real estate markets,” PBB said in its annual report.
The company said in Feb. 8 that it has a sufficiently large liquidity buffer to operate without new unsecured funding for the next six months despite concerns over PBB’s exposure to US commercial real estate.
PBB expects its 2024 results “to be significantly higher than in 2023,” the bank said in a statement released on the same day as its annual report.