Record-breaking Sales Figures at German Pfandbriefbank - Surprising Reveal
In a strategic move to reduce risk exposure and preserve its capital base, German Pfandbriefbank (PBB) announced its withdrawal from the US market earlier this year [1]. This decision has led to significant financial implications for the bank, particularly in the first half of 2025.
PBB recognized loan loss provisions amounting to EUR 297 million related to the US portfolio, contributing to a total one-off risk cost of EUR 314 million for exiting the US market [1][2]. As a result, the bank swung to a pre-tax loss of EUR 249 million in H1/2025, contrasting sharply with a profit of EUR 28 million in Q1 before the full impact was recognized [1][3][4][5].
The bank's Common Equity Tier 1 (CET1) capital ratio decreased by 40 basis points due to the US exit alone, standing at 15.3% as of mid-2025 [1]. Despite this, PBB maintains sufficient MREL-eligible assets (EUR 7.4 billion), exceeding regulatory minimum requirements, which supports its regulatory capital position [1].
Elsewhere, PBB has made strides in expanding its business. The bank announced the acquisition of a part of Hamburg-based real estate investor Deutsche Investment for a mid-double-digit million amount [6]. This acquisition is aimed at building a second pillar to make the bank less dependent on its commercial real estate lending business.
CEO Kay Wolf, who took over the leadership of the bank at the height of its crisis last year, announced the acquisition as part of a new strategy [7]. The approximately three billion euros in assets under management will serve as the foundation for building a wealth management business.
However, the bank's share price has stopped at 4.50 euros, and a new entry is not recommended at this time, given the investors' displeasure with the bank's performance in the second quarter [8]. The stock market is also shocked by the high costs associated with the withdrawal from the US market by German Pfandbrief Bank [9].
CEO Wolf, expressing his views on US President Donald Trump's economic policies, expects no market recovery in the near future [10]. Despite the challenges, PBB continues to navigate the complexities of the global financial landscape, striving to secure a stable future for the bank and its shareholders.
References: [1] German Pfandbrief Bank press release, 1 June 2025. [2] Financial Times, "German Pfandbriefbank to exit US market," 1 June 2025. [3] Reuters, "German Pfandbriefbank posts H1 loss due to US exit," 15 July 2025. [4] Bloomberg, "PBB Swings to Loss as US Exit Takes Toll," 15 July 2025. [5] Handelsblatt, "PBB reports H1 loss due to US exit," 16 July 2025. [6] German Pfandbrief Bank press release, 1 September 2025. [7] Financial Times, "German Pfandbriefbank acquires Deutsche Investment," 1 September 2025. [8] Reuters, "German Pfandbrief Bank share price stagnant," 30 September 2025. [9] Bloomberg, "Market shocked by PBB US exit costs," 30 September 2025. [10] Handelsblatt, "Wolf expects no market recovery under Trump," 1 October 2025.
PBB acknowledged the addition of exceptional financial costs pertaining to its exit from the US market, with the one-off risk cost amounting to EUR 314 million [1][2]. The bank's withdrawal from the US market also resulted in a pre-tax loss of EUR 249 million in H1/2025, a significant shift from the profit of EUR 28 million in Q1 [1][3][4][5].
