Deutsche Pfandbriefbank (PBB) Q4 2024 earnings summary

Executive summary

• Profit before tax rose to €104m, up 15% year-over-year, despite a challenging real estate market and lower new business volume.

• Net income was €90m, slightly below last year, with earnings per share at €0.48.

• Strategic focus on diversifying business, reducing office exposure, and expanding green and commission-based products.

• Strategy 2027 aims for higher profitability, targeting a ROTE of ~8% by 2027 and >30% green assets in the portfolio.

• Supervisory Board confirmed robust governance, risk management, and successful IT modernization.

Financial highlights

• Operating income was €544m, down from €603m year-over-year, mainly due to lower net interest income and fewer one-off effects.

• Net interest income declined to €465m (from €482m), impacted by higher refinancing costs and a smaller non-core portfolio.

• Cost-income ratio increased to 48.9% (2023: 45.8%), reflecting lower income and stable costs.

• Risk provisioning improved, with net charges of €170m (2023: €212m), aided by reversals and improved market outlook.

• CET1 ratio at 14.4% (2023: 15.7%), own funds ratio at 17.2%, leverage ratio at 7.5%.

• Total assets decreased to €44.2bn (2023: €50.9bn), mainly due to portfolio sales and maturities.

Outlook and guidance

• 2025 profit before tax expected to be significantly above 2024 (€104m), with new business volume guidance of €6.5–7.5bn.

• Cost-income ratio forecasted at 47–53%, ROTE before tax at 3.5–4.5%, and CET1 ratio to remain above regulatory minimums.

• Strategy 2027 targets ROTE of ~8%, cost-income ratio below 45%, and >30% green assets by 2026.