Pfandbrief bank: profit sharing despite market challenges!

Pfandbrief bank: profit sharing despite market challenges!

Deutsche Pfandbriefbank, once a solid dividend stock on the German stock market, has unpleasant news for its investors on June 8, 2025: The general meeting canceled a dividend payment. Loud FAZ The dividend for the 2023 financial year was not paid after it had already been reduced from 1.18 euros to 95 cents in 2022. However, the current distribution for the 2024 financial year was approved at 0.15 euros per share, which corresponds to a return of 2.7 percent.

The stock is trading ex-dividend today. Although the price has a slight discount, it is still positive, which indicates a certain level of market stability. This positive note comes despite the past turbulence that has weighed on the Pfandbrief bank, particularly in the USA. Two years ago, difficulties in the American office real estate market caused a rising number of provisions for bad loans, which climbed to 212 million euros in 2023 - a significant increase compared to 44 million euros the previous year.

Restructuring and market development

The Pfandbrief bank is currently undergoing restructuring. CEO Kay Wolf has announced that provisions for bad loans will remain high going forward, although with a moderate development in Europe compared to the US, where a decline in commercial property prices is expected. The risks resulting from US business and project financing in Europe are still present. Against this background, the board has also emphasized the need for depreciation in the commercial real estate portfolio. Nevertheless, the Pfandbrief bank expects the real estate market to ease slightly in 2024.

Another sign of uncertainty is that the Pfandbrief bank has been targeted by short sellers who are betting on a fall in the share price. Nevertheless, Wolf emphasizes the company's solid capital and liquidity position, which is positive for future development opportunities.

Future outlook and investment strategy

Given this situation, the new business volume for 2024 is estimated at around 6 to 7 billion euros, slightly reduced compared to the 7.2 billion euros in 2023. The total amount of financing is expected to decrease slightly to 30 to 31 billion euros. However, the majority of investors are optimistic about an increase in investment activity this year, with the first closing of a real estate financing fund for institutional investors, which is seen as a positive signal.

The turnaround at the Pfandbrief bank is underway, but there is still no noticeable positive momentum in the commercial real estate market. With a stop at EUR 4.50, the share remains a holding position.

The shareholder points out that the years without dividends in the bank's financing history since the IPO in 2016 represent one of the worst, apart from the notorious difficulties during the pandemic in 2020. However, experts hope that the coming years could allow a higher dividend again through operational improvements.