pbb Capital Markets Day
On 10 October 2024, pbb’s management presented its strategy 2027 on a Capital Markets Day.
With that, pbb is diversifying its business model and income base to make the bank even more future-proof and profitable. Commercial real estate finance remains the backbone of pbb. The relatively high weighting of the asset class office is to be gradually reduced in the coming years, and the focus on more profitable and faster-growing segments is to be intensified.
In addition, the bank plans to consistently expand its asset management and to develop an extended service business for institutional CRE investors. The plan is for around 10% of income to be generated from commissions by end of 2027. The funds for the necessary investments shall be created by consistently implementing existing and additional measures to increase efficiency in the core business. Overall, the return on tangible equity (RoTE) as the future key performance indicator, is expected to increase significantly to around 8% by the end of 2027.
The 2027 strategy has three core pillars:
- Strengthening the core business of commercial real estate financing by diversifying into promising asset classes and focusing on higher-growth business (henceforth the RE Finance Solutions division),
- Developing a significant commission business (henceforth the RE Investment Solutions division), and
- Increasing efficiency and adapting the current operational platform, including through the further use of technology and artificial intelligence.
Shareholders are to participate in this development through dividends and, in the future, share buybacks (the latter subject to prior ECB approval). Up to and including the financial year 2027, the bank intends to distribute at least 50% of its profit after tax (IFRS, group) and AT1 coupon to shareholders. Despite this capital distribution and the planned acquisitions in asset management, the core capital ratio (CET 1 ratio) is expected to remain above 15.5% during this period.