pbb's profit before taxes rises to €216 million


Munich, 4 March 2020 – pbb Deutsche Pfandbriefbank once again performed strongly in the financial year 2019, despite what continued to be a very challenging environment. Profit before taxes of €216 million was slightly higher than the previous year’s figure (2018: €215 million; consolidated, in accordance with IFRS) and significantly above the initial guidance (€170 million - €190 million). Net interest and commission income rose to €464 million (2018: €456 million), and operating income also increased significantly to €505 million (2018: €471 million). Higher prepayment fees of just under €40 million had a positive effect here. Increased risk provisioning of €49 million (2018: €14 million) reflects pbb’s perspective of a growing likelihood of an overall economic and sector-specific downturn. The Bank invested more for the future, in terms of digital initiatives and the expansion of its US business, and im-plemented regulatory-driven projects. As a result, general and administrative expenses rose slightly to €202 million (2018: €193 million). These figures include savings realised by pbb through the centralisation transfer of tasks, and by streamlining its Public Investment Finance business.

Shareholders shall continue to participate in pbb's success: Of the net income attributable to ordinary shareholders of €162 million (2018: €167 million – in each case after deducting coupon payments for additional tier 1 (AT1) capital) pbb intends to distribute 50% as a regular dividend and 25% as a supplementary dividend in line with its current dividend policy. The Bank therefore intends to propose a dividend of €0.90 per share entitled to dividend payments to the Annual General Meeting. 

pbb aims to maintain its dividend policy for the financial years 2020-2022. pbb will make future distributions conditional upon economic viability, a more cautious assessment of overall macroeconomic development in general and real estate markets in particular, as well as upon possible regulatory requirements and demands. pbb continues to aim at a long term stable payout ratio which it will review on a regular basis in the light of these particular risks.

New business in Commercial Real Estate Finance was in line with expectations, with a volume of €9.0 billion, only slightly down on the previous year (2018: €9.5 billion; in each case including extensions of more than one year). Its selective approach in this respect allowed pbb to maintain a stable gross new business margin of around 155 basis points compared with the previous year. 

CEO Andreas Arndt commented: "Our solid pre-tax result for 2019 means that we have been able to build on last year's strong performance. Higher risk provisioning and calibrating our RWAs in line with be expected Basel IV levels will make us more resilient to market conditions. At the same time we increased our investments in digitalisation and strengthened our market presence. Our shareholders will also once again benefit from this, thanks to a proposed dividend of €0.90 per share.”