S&P trims Deutsche Pfandbriefbank

S&P said it lowered its long-term issuer credit ratings on Deutsche Pfandbriefbank (PBB) to BBB from BBB+ and all its debt ratings by a notch, including the senior subordinated rating to BB+ from BBB- and subordinated ratings to BB from BB+.

“We have revised down our base-case earnings projections for German midsize commercial real estate (CRE) lender Deutsche Pfandbriefbank (PBB) after it announced materially higher–albeit manageable–risk costs in the third quarter of 2023. PBB's high risk-adjusted capitalization and pre-provision earnings are key mitigants to heightened risks and uncertainty in CRE market,” the agency said in a press release.

The downgrade reflects higher loan loss provisions and non-performing loans in CRE markets, S&P said.

The outlook is negative.

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