Deutsche Pfandbrief's profit falls 34% in 2012

German lender pbb Deutsche Pfandbriefbank saw its pre-tax profit decline by 34% to €124 mln in 2012, versus €188 mln a year before.

According to preliminary and unaudited figures published on Thursday, the bank said the result 'is well within its guidance' and takes into account several factors which have either positively affected results for 2011 or burdened performance during 2012.

Following a slow start of the year, the business accelerated in the second half, with pbb Deutsche Pfandbriefbank originating a total of €5.6 bn of new business including extensions for more than one year.

'pbb Deutsche Pfandbriefbank can look back on a successful year in 2012,' CEO Manuela Better said. 'We generated very high funding volumes, and proved our origination strength especially during the second half of the year.' The company originated €2.7 bn of loans in the fourth quarter alone.

At €4.9 bn, commercial real estate finance accounted for the lion's share of new business, with the remaining €700 nmln going to public investment finance.

Aggregate new long-term funding volume amounted to €6.5 bn, of which €4.2 bn were Pfandbrief issues and another €2.3 bn were promissory notes and bearer bonds. To broaden its funding base, the bank has just launched a retail deposit-taking business through its pbbdirekt.com online platform.

Looking ahead, pbb envisages a marked increase in new business volumes for 2013 and a pre-tax profit over €100 mln.

The lender said effects from the valuation of financial instruments were hard to predict, with the entire financial services sector changing its approach to the valuation of derivatives during 2013.

'Depending on market developments, the potential impact of this change may have a significant impact on the results of pbb Deutsche Pfandbriefbank, with any offsetting effects only occurring during subsequent years,' it added.