Against the background of the COVID-19 pandemic, the Management Board of Deutsche Pfandbriefbank AG (pbb) resolved today to withdraw the forecast for the 2020 financial year, as published in the annual report for the 2019 financial year. In particular, the development of risk provisioning and net income from fair value measurement cannot be reliably forecast, due to uncertainty concerning the macroeconomic environment and real estate market developments. pbb will recognise net risk provisions of €-34 million for the first quarter of 2020 (Q1 2019: €-1 million; Q4 2019: €-39 million). Likewise, net income from fair value measurement will be clearly negative, at €-17 million, especially due to widening credit spreads (Q1 2019: €-2 million; Q4 2019: €-5 million). pbb’s pre-tax profit for the first quarter of 2020 will thus decline to €2 million (Q1 2019: €48 million; Q4 2019: €29 million; consolidated figures in accordance with IFRS). Excluding the extraordinary burdens caused by the COVID-19 pandemic, pbb would have generated pre-tax profit of €47 million. The Bank will publish an updated forecast as soon as this can be reliably projected.
Net income from risk provisioning for the first quarter of 2020 includes model-based value adjustments of €-30 million for performing loans (stages 1 and 2; Q1 2019: €-1 million; Q4 2019: €-22 million), plus €4 million for impaired financings – in particular, for an already provisioned loan for a shopping centre in the United Kingdom (stage 3; Q1 2019: €0 million; Q4 2019: €-18 million). At the beginning of the year, pbb had anticipated risk provisions for the 2020 financial year to be in line with the previous year (€49 million).
Following a sharp fall during the first half of the year, pbb anticipates a recovery of the economy during the second half of 2020, with a gradual recovery of market values for most property types over subsequent years and therefore expects stable operating performance with regard to net interest income and general administrative expenses. However, uncertainty surrounding the scope and duration of the pandemic (as well as its macroeconomic and market impact) is very high: as a consequence, the environment may be highly volatile for a longer period of time.
pbb will publish its quarterly announcement for the first quarter 2020 on 13 May 2020.
Media Contact
Walter Allwicher, +49 89 2880-28787, walter.allwicher@pfandbriefbank.com