Deutsche Pfandbriefbank Shares Plunge to Record Low After US Setback

Deutsche Pfandbriefbank shares hit record low after €410M US write-downs force strategic retreat, delaying profit targets and projecting a 2025 net loss.

Shares of Deutsche Pfandbriefbank plummeted to an unprecedented low of €3.00 on Friday. The sharp decline followed the bank's announcement of a costly strategic withdrawal from the US market, resulting in substantial write-downs and a projected net loss for 2025.

A Costly American Venture Unravels

The bank's foray into the United States, initiated in 2017, has culminated in a significant financial setback. Deutsche Pfandbriefbank disclosed write-downs totaling €410 million on its American loan and project finance portfolio. This stark reversal comes after the institution reported a pre-tax profit of €104 million the previous year. The bank now anticipates a pre-tax loss of €250 million.

Operational earnings contracted sharply, falling from €544 million to €422 million. Concurrently, the bank's total loan portfolio shrank by €1.7 billion to €27.3 billion. This substantial reduction highlights the intense pressure facing European real estate financiers, who are contending with volatile interest rates and shifting market dynamics.

Strategic Recalibration and Revised Targets

The financial repercussions of the US misstep have forced a revision of the bank's medium-term objectives. CEO Kay Wolf announced a delay in achieving the targeted 8% return on equity, pushing the goalpost to 2028—a two-year postponement. Management sought to provide some reassurance, noting the bank's liquidity position remains robust at approximately €5 billion.

Looking ahead to 2026, Wolf projected a period of stabilization. The bank forecasts new business volume to increase to between €7.5 billion and €8.5 billion, up from €6.3 billion. A modest pre-tax profit in the range of €30 million to €40 million is anticipated for that year. Furthermore, the bank expects its total loan portfolio to stabilize, settling between €27 billion and €28 billion.