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Research Tree provides access to ongoing research coverage, media content and regulatory news on DEUTSCHE PFANDBRIEFBANK AG. We currently have 4 research reports from 1 professional analysts.
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DEUTSCHE PFANDBRIEFBANK AG
DEUTSCHE PFANDBRIEFBANK AG
Expert procedure for “Estate UK-3” could lead to a big loss
14 Dec 16
Hypo Real Estate Bank International AG, which was merged into Deutsche Pfandbriefbank AG (“pbb”), issued Credit Linked Notes (“CLNs”) in February 2007, within the scope of the Estate UK-3 (“UK-3”) synthetic securitisation transaction. The CLNs were issued in order to hedge a portfolio of loans in the UK. The portfolio comprised 13 loans, financing 110 commercial property assets. The CLNs have an aggregate volume of £113.68m, structured in six classes with sequential loss allocation. The biggest individual loan in the portfolio (amounting to c.£176m) subsequently defaulted, and the underlying collateral was realised in January 2016. The proceeds from the realisation were substantially lower than the original collateral value, leading to a loss of c.£113m (around €135m). At the end of November 2016, pbb notified auditors Deloitte (the Trustee of the UK-3 transaction) that it intends to allocate the losses to the CLNs. Deloitte yesterday notified pbb that in its view doubts exist as to whether the loss allocation intended by pbb is justified, and that Deloitte will appoint an expert, in accordance with the terms of the UK-3 transaction, who will decide on whether the loss allocation is in fact justified.
Heta gain pushes Q3 results, special dividend but tax warning for Q4
14 Nov 16
Net profit attributable to shares increased by 128% to €121m for Q3 16 compared to Q3 15. Net interest income was up by 2% to €97m for Q3 16 compared to Q3 15. Loan loss provisions were €3m in Q3 16. Commission income was €2m in Q3 16. Net income from financial investments increased to €123m for Q3 16 compared to €5m for Q3 15 as Q3 16 benefited from net income of €117m from previously-impaired receivables from Heta Asset Resolution AG (Heta). Administrative expenses rose by 2% to €53m in the same period. Pre-tax profit tripled to €159m for Q3 16 compared to Q3 15. The tax ratio was 24% for Q3 16 compared to 0% for Q3 15. The Basel 3 fully phased-in core Tier 1 ratio was 19.1% at end September 2016 versus 18.2% at year-end 2015. pbb raised its pre-tax profit guidance to between €280m and €290m for FY2016 due to the extraordinary Heta gain. Management said it is considering a special dividend after the Heta gain for FY2016. However, it is now also anticipating a higher tax burden for the full year 2016 than in the first three quarters, due to the valuation losses on deferred tax assets from losses carried forward, as well as additional tax payments due following a tax audit. This should translate into a notional group tax rate of around 35%. For 2017, pbb aims for a pre-tax profit between €150m and €170m.
Unremarkable Q2 figures
12 Aug 16
Net profit attributable to shares decreased by 35% to €32m for Q2 16 compared to Q2 15. Net interest income was down by 20% to €93m for Q2 16 compared to Q2 15. Loan loss provisions were zero in Q2 16. Commission income was €1m in Q2 16. Administrative expenses decreased by 2% to €49m in the same period. Pre-tax profit declined by 31% to €42m for Q2 16 compared to Q2 15. The tax ratio rose from 20% for Q2 15 to 24% for Q2 16. The Basel 3 fully phased-in core Tier 1 ratio was 18.4% at end June 2016 versus 18.2% at year-end 2015. pbb confirmed its pre-tax profit guidance, expecting a slight decline for FY2016 compared to FY2015.
02 Jun 16
We have initiated coverage of the German Deutsche Pfandbriefbank AG (pbb) with a price target of €10.05 per share and a REDUCE recommendation. pbb is a mortgage bank with a business focus on commercial real estate and public investment finance. Positive items are: • The property market in Germany is booming. The vdp property price index in Germany has increased every year since 2010 for both residential properties and commercial properties. The index increased by 5.0% for FY2015. • pbb seems to have no problem in fulfilling the future Basel 3 fully-loaded CET1 targets. The Basel 3 fully-loaded CET1 ratio was 18.1% at the end of March 2016. pbb is targeting a higher single-digit RoE and Basel 3 fully-loaded CET1 of above 12.5% mid-term. pbb has obviously some excess capital. However, management does not intend currently to give it back to the shareholders. The payout-ratio target remains at 40% to 50%. Much lower than the new 70% to 80% payout-ratio target of German peer Aareal Bank (see corporate governance item below). The concerns are: • The real estate finance business is cyclical. The predecessor of pbb, HRE, had to be rescued and nationalised by the German state in 2009 during the financial market crisis. The better business part of bankrupt HRE was bundled into pbb by the German state. pbb had to be listed via an IPO on the German stock exchange in July 2015 (EU condition). • The earnings development of pbb has been quite volatile since 2011 due to different one-off effects. pbb benefited from a tax credit in FY2015 and could benefit from a pre-tax gain of €132m in FY2016 due to the write-back of Heta’s debt securities. pbb has benefited from low or no loan loss provisions due to considerable reversals in the last few years. This is likely to change mid-term. • pbb is targeting a higher single-digit RoE mid-term. This target is well below the targets which universal banks promise. But it is much better than what Deutsche Bank or Commerzbank has delivered over the last few years. • pbb has a non-strategic portfolio: the Value Portfolio (VB, volume €18.7bn at the end of 2015). VP contains the old style public finance (HRE) business which should deliver a pre-tax loss of around €10m to €15m p.a. to group profit over next few years. • The IPO of pbb is a paradigm change regarding corporate governance in our view as the targets of a public bank and a commercial bank are quite different. The transformation should be closed with the sale of the remaining 20% stake owned by the German state.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
Making Mobiles Better
17 Jan 17
Mobile phones are increasingly the key connection for the modern world. This means that the performance of mobile phones, and their networks, is going to become more critical for all the apps and businesses that rely on them. New technologies such as VR, AR, and AV will need better, more reliable connections to really move into the mainstream. In this thematic piece we attempt to identify some of the most important issues facing mobile phone networks and their users, and start to identify solutions and enablers that will solve these problems and create value by doing so.
11 Jan 17
Joules Group (JOU): Strong festive trading (BUY) | Shoe Zone (SHOE): Tough FY16 could be just the beginning (HOLD) | H&T (HAT): Alternative lender emerging (BUY) | Omega Diagnostics* (ODX): ISO accreditation received for Pune, India (CORP) | Redcentric* (RCN): Interims – restoring forecasts (CORP)
Small Cap Breakfast
17 Jan 17
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.