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Research Tree provides access to ongoing research coverage, media content and regulatory news on DEUTSCHE PFANDBRIEFBANK AG. We currently have 5 research reports from 1 professional analysts.
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DEUTSCHE PFANDBRIEFBANK AG
DEUTSCHE PFANDBRIEFBANK AG
2016 figures in line, €1.05 DPS due to special dividend from the Heta gain
08 Mar 17
Preliminary pre-tax profit increased by 54% to €301m for 2016 compared to 2015 mainly due to a one-off gain of €123m related to Heta in 2016. Net interest income was down by 5% to €404m for 2016 compared to 2015. Loan loss provisions were €1m in 2016. Commission income declined by 43% to €8m in 2016. Net income from financial investments increased to €125m for 2016 compared a loss of €32m for 2015 as Q3 16 benefited from net income of €123m from previously-impaired receivables from Heta Asset Resolution AG (Heta). Administrative expenses declined by 4% to €198m for 2016 compared to 2015. The tax ratio was 35% for 2016 and led to tax expenses of €104m for 2016 compared to tax income of €35m for 2015. Net profit attributable to shares decreased therefore by 14% to €197m for 2016 compared to 2015. The Basel 3 fully phased-in core Tier 1 ratio was 19.0% at the end of 2016 versus 18.2% at year-end 2015. The dividend proposal per share increased from €0.43 for FY2015 to €1.05 for FY2016 including a special dividend from the Heta gain. Pbb confirmed its pre-tax profit guidance range of between €150m and €170m for FY2017.
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.
Another positive verdict
20 Mar 17
Burford’s results for 2016 produced another outstanding set of figures. Revenue grew by 60% to $163.4m with strong growth in the litigation finance business and an additional boost from a secondary sale in the Petersen case. On an underlying basis net income grew to $114m, a 75% increase despite the investment in growing capacity which increased costs. A combination of ongoing investment and gains and increases on valuation saw the fair value of the litigation assets increase 67% to $559m, underpinned by a growth in invested capital to $394m. With the results statement there was an announcement of a further sale of 9% of the Petersen case at a valuation of 20 times the cost of investment.
N+1 Singer - Morning Song 22-03-2017
22 Mar 17
Carador Income Fund (CIFU LN) Premium rating restored, high levels of refinancing activity | Cello Group (CLL LN) Outlook getting brighter – watch Pulsar | Eckoh (ECK LN) Largest ever US secure payments win | eg solutions (EGS LN) Full year results in line | Futura Medical (FUM LN) Licensing deal for CSD500 in Portugal | Verona Pharma (VRP LN) Global agreement with QuintilesIMS to support development of RPL554 | Xaar (XAR LN) 2016 results slightly ahead, reduced visibility in 2017
Small Cap Breakfast
21 Mar 17
First Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march. Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.
Small Cap Breakfast
23 Mar 17
K3 Capital Group—Schedule 1 from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Admission date and fundraise details TBC. Integumen— Schedule 1 from the personal health company developing and commercialising technology and products for the human integumentary system. Raising £2.16m at 5p. Expected market cap £8.16m. Admission expected 5 April. Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march.