Deutsche Pfandbriefbank AG (pbb), a specialist European bank for commercial real estate finance, generated a pre-tax profit of EUR 16 million in the first half of the 2026 financial year. This amount is based on IFRS standards, compiled at group level, and has been subject to a review. Of this, EUR 10 million was attributable to the second quarter of the year, while the first quarter contributed EUR 6 million.
This represents a significant improvement compared to the first half of 2025, when a result of EUR -249 million was recorded due to a strategic withdrawal from the USA and associated special provisions for risk. Risk provisions normalised to EUR -13 million in the first half of 2026, following EUR -323 million in the prior-year period. Kay Wolf, CEO of pbb, commented that a solid half-year result was achieved despite a persistently volatile market environment. He further emphasised that the bank's transformation was well on track and new business was growing significantly and profitably.
Operating income decreased to EUR 167 million in the first half of 2026 (H1 2025: EUR 206 million). This is primarily due to lower net interest income of EUR 165 million (H1 2025: EUR 211 million). The reasons for this decline were, in particular, the reduced Real Estate Finance portfolio volume and costs associated with the ring-fencing of the performing part of the US portfolio through a “Significant Risk Transfer” agreed in December 2025. Mr Wolf highlighted positively the progress in diversifying income, visible in the significantly increased income in the Real Estate Investment Solutions segment.
New Business Development and Portfolio Stabilisation
In the Real Estate Finance Solutions (REFS) segment, new business saw a significant increase in the first half of 2026. It grew by 18 percent compared to the previous year to EUR 3.1 billion, with EUR 1.8 billion attributable to the second quarter (H1 2025: EUR 2.6 billion). The share of new commitments increased to 67 percent during this period (H1 2025: 23 percent). The Return on Tangible Equity (RoTE) for European new business was 7 percent, which is within pbb's target corridor.
- —Hotel properties
- —Senior Living
- —Student Housing
- —Data Centres
These strategically important property types already accounted for 23 percent of the bank's new business in the second quarter (H1 2026: 14 percent). The existing volume of the REF portfolio stabilised at EUR 26.8 billion at mid-year (Q1 2026: EUR 26.8 billion; H1 2025: EUR 28.2 billion), even considering the faster-than-planned reduction of the US portfolio. REFS contributed EUR 14 million to the pre-tax result in the second quarter of 2026, an increase of EUR 3 million compared to the previous quarter.
Results in Real Estate Investment Solutions and Outlook
In Real Estate Investment Solutions (REIS), operating income rose sharply to EUR 14 million in the second quarter (Q1 2026: EUR 11 million), mainly due to planned income from transaction activities. Assets under Management increased to EUR 3.1 billion (Q1 2026: EUR 3.0 billion). Overall, REIS achieved a pre-tax profit of EUR 2 million in the second quarter of 2026 (Q1 2026: EUR 0 million).
Risk provisions amounted to EUR -13 million in the first half of 2026, with no additional risk costs incurred in the USA. Administrative expenses increased to EUR 126 million in the first half of 2026 (H1 2025: EUR 115 million), driven by increased strategic investments in REIS with simultaneously declining expenses in REFS. The adjusted Cost-Income Ratio (CIR) stood at 77 percent, with pbb maintaining its target of achieving a CIR between 70 and 75 percent for the 2026 financial year. The Common Equity Tier 1 (CET1) ratio rose to 14.6 percent at the end of the first half of 2026 (Q1 2026: 13.4 percent), primarily due to positive effects from regulatory adjustments in the F-IRBA standard. Liquidity remains solid with a Liquidity Coverage Ratio of 402 percent (H1 2025: 330 percent).
For the full year 2026, the bank continues to plan for a new business volume between EUR 7.5 billion and EUR 8.5 billion (2025: EUR 6.3 billion). Despite the ongoing reduction of US business, pbb aims for a REFS financing volume of at least EUR 27 billion by year-end. The bank adheres to its overall forecast for the 2026 financial year, despite continued high market volatility.
