Deutsche Pfandbriefbank withdraws from the USA – shares crash!

Deutsche Pfandbriefbank withdraws from the USA – shares crash!

Deutsche Pfandbriefbank (pbb) has taken a significant step by announcing its complete withdrawal from the US market. The Board of Directors and Supervisory Board have decided to divest from their US operations, which is proving to be a challenging decision. Loud finanztrends.de The reduction of the loan portfolio in the USA involves a volume of around 4.1 billion euros, which will be sold, securitized or allowed to expire. The bank's management is already warning of possible annual losses for 2025, which will result in the previous annual forecast being completely withdrawn.

Analyst Jochen Schmitt from private bank Metzler expresses concerns about future earnings pressure. He sees significant financial challenges facing pbb due to the loss of interest income from the US portfolio. At the same time, the problems are becoming more concrete: loans for office properties, particularly on the West Coast and in Chicago, have proven to be problematic. CEO Kay Wolf had already questioned the general conditions for US business in May due to the economic policy under President Donald Trump.

Impact on stock performance

The news of the withdrawal from US business led to a drastic decline in pbb shares. On the day of the announcement, the share temporarily fell by over twelve percent, making it the bottom performer in the SDAX. This illustrates how sensitively the markets react to such strategic decisions. Although pbb has withdrawn its entire annual forecast, it has announced that it will publish a new forecast at a later date.

Although the bank is confronted with challenges abroad, it is also planning to expand in the domestic market. Part of this strategy involves negotiating the purchase of a majority stake in a German real estate investment manager. This investment manager managed assets in the low single-digit billion range at the end of 2024, and the purchase price is expected to be in the mid double-digit million euro range, possibly supplemented by performance-related bonuses.

Strategic realignment

The aim of this transaction is to strengthen the “pbb invest” division and to diversify the bank’s income streams. CEO Wolf is aiming to transform Deutsche Pfandbriefbank from being a pure lender to a broader real estate service provider. The capital generated by the withdrawal from the US is expected to accelerate banking transformation. However, it is emphasized that the common equity core capital ratio should remain at least 14 percent in order to ensure a solid financial basis.