Deutsche Pfandbriefbank (PBB), one of Germany's prominent property financiers, reported a slight decline in annual net profit and cautioned about the sluggish recovery in real estate markets. This somber outlook comes after a challenging year for the bank, established in the 1860s and rescued by the government during the 2009 financial crisis, as it deals with what it deems as "the greatest real estate crisis" since then.
The bank's net profit for 2024 stood at 90 million euros, down from 91 million euros in the previous year.
Driven by bad loans in U.S. offices and German property developments, risk provisions decreased to 170 million euros in 2024 from 212 million euros a year earlier within a "persistently difficult market" environment.
Reflecting on the slow progress, CEO Kay Wolf mentioned, "The recovery in the property markets is only gradually advancing."
In recent years, PBB heavily invested in the U.S. market through commercial real estate loans, which, like others in the industry, faced challenges due to high office vacancies and declining property prices resulting from interest rate hikes and a growing preference for remote work since the pandemic.
In a restructuring initiative in the previous year, PBB outlined plans to lower its exposure to the U.S. property market and shift focus away from offices in a bid to restore profitability.