Deutsche Pfandbriefbank (PBB) Q4 2024 earnings summary

Executive summary

• Pre-tax profit rose over 15% year-over-year to €104 mn, driven by lower risk costs and disciplined cost management, with operating income at €544 mn at the upper end of guidance.

• Operating expenses fell by nearly 4% year-over-year, with a cost-income ratio (CIR) of 49%, below the ~50% guidance.

• Selective new business with strong margins contributed to profitability, despite a challenging market.

• Portfolio reached the strategic target of €29 bn, aligning with long-term goals and active management.

• Dividend proposal of €0.15 per share and intended €15 mn share buyback, subject to ECB approval.

Financial highlights

• Operating income declined to €544 mn from €603 mn in 2023, reflecting the absence of prior year’s non-recurring gains.

• Net interest income for 2024 was €465 mn, down from €482 mn in 2023.

• Administrative expenses fell to €245 mn from €249 mn, despite investments in digitalization and diversification.

• CIR improved to 49% in 2024 from 50% in 2023.

• EPS for 2024 was €0.48, down from €0.51 in 2023.

Outlook and guidance

• 2025 guidance: new business volume €6.5–7.5 bn, operating income €500–540 mn, CIR ~50%, and portfolio stable at €29 bn.

• Pre-tax profit expected to increase significantly, with ROTE before taxes of 3.5–4.5%.

• CET1 ratio (Basel IV F-IRBA) targeted above 15.5%.

• Risk costs projected to decline further.

• Dividend proposal for 2024 is €0.15 per share, with a €15 mn share buyback planned.