Deutsche Pfandbriefbank (PBB) investor relations material

Executive summary

• Achieved a pre-tax profit of €16 million in H1 2026, a significant turnaround from a €249 million loss in H1 2025, supported by improved risk provisioning and strategic transformation.

• CET1 ratio increased to 14.6%, reflecting regulatory adjustments and active portfolio management.

• Continued strategic transformation with a focus on diversification, profitability, and US portfolio reduction, with NPLs down over 40% since the start of the year.

• First-time consolidation of Deutsche Investment Group contributed to higher fee income and increased general and administrative expenses.

• Net income for H1 2026 was €15 million, compared to a €242 million loss in H1 2025.

Financial highlights

• Operating income in Q2 2026 rose to €90 million from €77 million in Q1, while H1 2026 operating income was €167 million, down from €206 million in H1 2025.

• Net interest income declined to €165 million in H1 2026, mainly due to US market exit costs and a lower investment portfolio.

• Net fee and commission income rose to €12 million in Q2, with €9 million from DI's asset and investment management.

• General administrative expenses increased to €126 million in H1 2026, up from €115 million in H1 2025, mainly due to DI acquisition.

• Cost-income ratio increased to 82% in H1 2026, reflecting lower operating income and integration costs.

Outlook and guidance

• Confident in meeting full-year 2026 expectations despite ongoing geopolitical and macroeconomic uncertainty.

• Pre-tax profit guidance for 2026 is €30–40 million, with CIR expected at 70–75%.

• Strategic RoTE target of 8% confirmed but postponed to 2028, with operating income projected to reach ~€600 million by then.

• Risk provisioning expected to normalize at 25–30 bp by end of 2026 and 15–25 bp long-term.

• Economic and geopolitical uncertainties, especially related to the Middle East, continue to pose risks to growth and inflation.