pbb posts another set of good results for the third quarter of 2017

  • PBT of €51 million in Q3 2017, and of €154 million in 9m 2017 – higher net interest and commission income, whilst loan loss provisions remain low
  • Pre-tax profit of €195 million to €200 million expected for the full financial year 2017 
  • RWA increase by around €2 billion due to ECB-driven harmonisation of risk models – pbb considers this process concluded to the greatest possible extent 
  • Low interest rates and competitive markets will prevail throughout 2018

Munich, 13 November 2017 – As announced on 2 November 2017, Deutsche Pfandbriefbank AG (pbb) showed continued good performance during the third quarter of 2017 and raised its full-year pre-tax profit guidance. pbb disclosed consol-idated pre-tax profit of €51 million (IFRS, unaudited) for the third quarter, and €154 million for the first nine months of 2017. Therefore, pbb was clearly ahead of the adjusted figures of €27 million and €114 million respectively for the same periods of the previous year (Q3 2016: €159 million, reported; 9m 2016: €246 million, reported); in Q3 2016, €132 million in non-recurring income from the reversal of write-downs related to Heta Asset Resolution AG (Heta) was recognised. On 2 November 2017, pbb once again raised its guidance for the full year 2017, to achieve pre-tax profit of between €195 million and €200 million, given the anticipat-ed stable development in the fourth quarter.

These good results for the first nine months of the year were driven by positive developments in net interest andcommission income (9m 2017: €321 million; 9m 2016: €297 million), and by loan loss provisions remaining low (9m 2017: net addition of €2 million; 9m 2016: net release of €3 million), whilst general and administrative expenses increased slightly, in line with expectations to €155 million (9m 2016: €147 million).

New business rose to €7.4 billion during the first nine months of the financial year, distributed almost evenly amongst the quarters. New business slightly exceeded the volume of the same period of the previous year (9m 2016: €6.7 billion), and was in line with the expectations for the full year 2017 (€10.5 billion - €12.5 billion).

Andreas Arndt, CEO of pbb, said: “The good results for the first nine months of the financial year are all the more remarkable since the market environment continues to be highly competitive, and pbb has maintained its conservative approach to risk. Higher net interest income due to lower funding costs, and low loan loss provisions, were the key drivers of this development. We expect further stable development in the fourth quarter, and have therefore increased our guidance for the full year 2017 to pre-tax profit of between €195 million and €200 million at the beginning of November.”

Along with the third-quarter results, pbb also provided a first outlook for 2018. pbb expects the low interest rate environment and strong competitive pressure to continue in Europe, and commercial real estate markets to remain stable, albeit at elevated pricing levels. Against this background, pbb provides cautious earnings pro-jections for 2018. “We presume that market conditions are set to remain challeng-ing. The positive factors of 2017 cannot be taken as a given for 2018. Therefore, we will again make conservative projections for 2018, particularly in terms of risk costs,” said Mr Arndt.

pbb will provide its guidance for the full year 2018, along with the disclosure of results for the financial year 2017, at the beginning of March 2018, including its divi-dend proposal.

Facts and Figures – Q3 2017/9m 2017 are available in the Download below.

Walter Allwicher, +49 89 2880-28787, walter.allwicher(at)pfandbriefbank.com
Nina Lux, +49 89 2880-11496, nina.lux(at)pfandbriefbank.com