German mortgage financing institution Deutsche Pfandbriefbank exits US operations - projected withdrawal of funds by 18th June 2025, 08:30, according to dpa-AFX. Current comment: nil.
German Pfandbriefbank Bids Adieu to U.S. Operations
German Pfandbriefbank (PBB) has tugged its heartstrings as it bids adieu to its U.S. market, announcing plans to wind down, securitize, or sell its U.S. loan portfolio valued at approximately €4.1 billion [1][3]. Seems like it's time to pack up and bid farewell!
The U.S. portfolio, heavily concentrated on the East Coast, boasts performing loans worth around €3.2 billion. These real estate jewels include office properties, with smaller slices in residential and logistics sectors, with non-performing loans amounting to around €0.8 billion, spread across the East Coast, Chicago, and even the West Coast [1].
This farewell tour comes with a price tag. The bank might fork out some extra coins, potentially facing a financial loss in 2025. As a result, they're ditching their financial guidance for the year and plan to cash in on a revised outlook later [2][3].
Though the bank didn't explicitly blame President Trump for this breakup, the growing economic uncertainty, including rising interest rate risks and market volatility, could've played a significant role [5]. It's like a wild rollercoaster ride with unexpected twists and turns that no bank wants to be on.
Despite this tsunami of challenges in the U.S. market, PBB is clinging onto its commitment to maintain a Common Equity Tier 1 (CET1) capital ratio of at least 14% and its medium-term targets for 2027 [2][3]. This decision shows that despite bidding farewell to the U.S., the bank is determined to focus on its European core markets and minimize risks in its borrowing portfolios.
In essence, PBB's U.S. market exit symbolizes a strategic retreat from the unpredictable economic climate. By selling, securitizing, or running off its loans, the bank will face unavoidable expenses and temporary financial setbacks to strengthen its European roots [1][3][5]. It's like a heart-aching goodbye, but it's all for the better!
The German Pfandbriefbank (PBB) is selling or securitizing its U.S. loan portfolio, totaling approximately €4.1 billion, which is primarily concentrated on the East Coast, in a bid to strengthen its European roots, thus aligning this decision with its capital management strategy. Consequently, the bank may encounter financial losses in 2025, necessitating a revision of its financial outlook.
