German property lender Pbb Deutsche Pfandbriefbank expects new lending to increase further this year but not as strongly as in 2013 when it surged 46% to reach €8.2 bn, management board member Bernhard Scholz said during a presentation at the MIPIM trade fair.
German property lender Pbb Deutsche Pfandbriefbank expects new lending to increase further this year but not as strongly as in 2013 when it surged 46% to reach €8.2 bn, management board member Bernhard Scholz said during a presentation at the MIPIM trade fair.
France in particular is expected to play a larger role this year, after representing as little as 9% of lending volumes in 2013.
'France is still one of the major markets despite economic prospects not being rosy and we believe its fair share of lending should increase to around 15% this year,' Scholz noted. Spain is also increasingly of interest, he added. 'We did not carry out any business in Spain for a while but at the moment we are carefully evaluating some opportunities in the market. The country has very attractive loan-to-value ratios and values have reached the bottom,' he commented.
The specialist bank for real estate finance and public investment finance increased pre-tax profit by one-third to €165 mln in 2013 from €124 mln in 2012. The bank has forecast a pre-tax profit in excess of €140 mln for 2014, which will largely be driven by higher margins in the current environment. ‘The substitution of old legacy loans with new business with a higher net margin, is the main reason for the increase in profitability,’ said Scholz.
The average loan-to-value ratio for new commitments increased slightly to 61% in 2013 from 56% in 2012, largely as a result of increasing competition in the market.
Pbb Deutsche Pfandbriefbank, part of the Hypo Real Estate group which was rescued and nationalised during the financial crisis, is set to be privatised in 2015 although it is not yet clear whether the privatisation will occur through a stock exchange offering or a trade sale. In any case, the disposal will be a transparent and open process in line with EU regulations, Scholz added.
'We have done all the preparatory steps; in organisational and business model terms we are now in the shape we want to be in. The privatisation should take place in 2015 so we are right on schedule. The markets at the moment are quite attractive, much better than a few years ago. I also believe that we have one key advantage compared to past sales; we are fully funded and this makes a huge difference between us and some other players which went on sale in the past.'
The bank currently has a balance sheet of €69 bn, of which about €33 bn in public sector finance and €22.5 bn in real estate.