Changes under way in refinancing market: pbb

Change is under way in Europe's refinancing arena as the nervousness in the market is being priced in, Berhard Scholz, a member of the board at Deutsche Pfandbriefbank, told PropertyEU at Expo Real.

Nevertheless, despite ongoing troubles in the eurozone, the lender has not changed its risk policy or strategy, although Scholz conceded that they now 'look more closely at geographical markets and how they evolve'.

And while the lender's risk policy and strategy remains broadly unchanged, it is now eyeing markets outside the eurozone, notably the UK. 'Our focus is more on the UK at the moment because we feel that the competitive situation has improved. We are interested in core and value-add assets there,' Scholz said.

In the first half of 2011, Deutsche Pfandbriefbank originated EUR 4.1 bn in new real estate and public sector business, of which around EUR 3 bn was real estate loans. The majority of this took the form of new loans rather than extensions, Scholz said. 'At the moment, refinancing does not account for the majority of our business, largely because we transferred a lot of loans to FMS Wertmanagement. However, that could change in the future.' The lender is also 'on track' to meet its target of EUR 8 bn in new business this year, Scholz added.

The ongoing sovereign debt crisis is not the only issue giving bankers sleepless nights. For Scholz, one of his main concerns is how banks can revert to having long-term views with regard to financing. ‘Time horizons have been really reduced. It’s like ‘drive by sight’, a bit foggy,’ he said.