Yahoo Finance

• Pre-Tax Profit: 28 million, 6 million below Q1 2024.

• Operating Income: Declined compared to Q1 2024 but stable compared to Q4 2024.

• Interest Income: Slightly increased despite a smaller real estate finance portfolio.

• Risk Provisioning: Declined by 13%.

• New Business Volume: 1.1 billion in Q1 2025, up from 0.7 billion in Q1 2024.

• Average Gross Interest Margin: Increased to around 250 basis points.

• Return on Tangible Equity: Approximately 9% for new business.

• General Administrative Expenses: Decreased from 66 million to 59 million quarter over quarter.

• Cost-Income Ratio: Improved to 54%, targeting 50% for 2025.

• Pre-Provision Profit: 54 million, up 7 million quarter over quarter.

• Risk Costs: Down by 45% year over year and 13% quarter over quarter to 26 million.

• NPL Volume: Marginally down by 16 million to 1.887 billion.

• Retail Deposits: Slightly down to 7.3 billion.

• CT1 Ratio: 15.5%, up from 14.4% at the end of the previous year.

• Dividend Proposal: 0.15 per share for 2024.

• Warning! GuruFocus has detected 3 Warning Signs with WBO:PBB.

Release Date: May 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Deutsche Pfandbriefbank AG (WBO:PBB) reported a solid pre-tax profit of 28 million for Q1 2025, despite high market volatility.

• Interest income increased slightly, reflecting the strategic focus on profitability in the core business of real estate finance.

• The company successfully reduced risk provisioning by 13%, indicating effective risk management.

• The European property market shows signs of stabilization, with growing transaction volumes and falling yields in premium segments.

• Deutsche Pfandbriefbank AG is making progress in its Strategy 2027, focusing on diversifying its business model and increasing profitability.

Negative Points

• Operating income declined compared to Q1 2024 due to lower realization results and a smaller real estate finance portfolio.

• The economic environment in the United States is deteriorating rapidly, creating significant uncertainty and impacting the company's core markets.

• The US property market faces high vacancy rates, particularly in the office segment, contributing to market volatility.

• The company has not been able to provide new commitments in the US due to high volatility and uncertainty.

• The timing of the planned share buyback program is under review due to the significant change in the macroeconomic environment in the US.

Q & A Highlights

Q: Do you expect the same margin decline as in 2024 over the next quarters, and can you elaborate on the new business in other regions? A: We have exceeded our expectations with a 250 basis points cross-interest margin. We expect a gradual movement towards 240 basis points, similar to last year's trend. Our new business is focused on Germany and European markets, with notable transactions in Spain, Italy, and Austria.