Deutsche Pfandbriefbank (PBB) Q3 2025 earnings summary

Executive summary

• Strategy 2027 execution is underway, focusing on profitability, diversification, and resilience, with new business ROTE at 9% for 9M/25 and Q3/25 at 7%.

• New business in commercial real estate financing grew over 60% year-over-year to €4 billion, but portfolio reduction continues due to de-risking and US exit.

• The acquisition of Deutsche Investment Group is expected to close in Q1 2026, supporting diversification and commission income growth, with all regulatory approvals received.

• The exit from the US market is progressing, with significant risk reduction, one-off charges, and capital redeployment.

• Profit before tax fell to €-235 million for 9M/25, mainly due to higher risk provisioning and the US exit.

Financial highlights

• Nine-month pre-tax result: €-235 million; adjusted for US exit one-off, €79 million; Q3/25 PBT at €14 million.

• Net interest income for 9M/25 was €310–314 million, down from €347–359 million year-over-year, due to lower portfolio volume and higher funding costs.

• Net income from risk provisioning worsened to €-356 million, mainly due to US exposures and one-off charges.

• Operating expenses reduced by 3% year-over-year to €189 million in 9M/25, with strict cost discipline.

• Cost-income ratio increased to about 60%.

Outlook and guidance

• Full-year 2025 new business volume expected at €5.5–6 billion; real estate finance portfolio at €27.5–28 billion.

• At best, pre-tax result for 2025 expected at €-210 million; annual loss not expected to exceed €-265 million; adjusted pre-tax earnings forecasted between €50–105 million.

• Positive Q4 contribution expected, but a loss cannot be ruled out depending on de-risking progress.

• Management highlights significant uncertainties due to geopolitical crises, market conditions, and borrower defaults.