Germany's Pfandbriefbank withdraws guidance as it winds down US business

By Paolo Laudani

(Reuters) -Deutsche Pfandbriefbank, one of Germany's top property financiers, said on Wednesday it was withdrawing its full-year guidance amid extraordinary expenses from discontinuing its business in the United States.

In the longer term, "the freed-up capital shall be used to accelerate the bank's transformation," the lender said in a statement.

PBB said in May that it would not take on new business in the United States as it considered the country too volatile under President Donald Trump.

Analysts at AlphaValue said this announcement was not a complete surprise. "Our forecasts are under review with a downgrading tendency at least for 2025," they added in an email to Reuters.

Shares were down 12% at 0820 GMT and on track for their biggest fall since March 2020.

U.S. AND WOES

Wednesday's decision marks a major strategic shift for PBB.

The U.S. is its second biggest market, making up 14% of its loan portfolio.

The bank in recent years has bet heavily on the U.S. market by offering commercial real estate loans, which across the industry have succumbed to pressure from high office vacancies and falling property prices following interest rate hikes and a trend towards home-working since the pandemic.

In February, PBB forecast new business volume of between 6.5 billion and 7.5 billion euros for the 2025 financial year and said it expected its Common Equity Tier 1 (CET1) ratio to exceed 15.5%. A CET1 ratio is a metric that measures a bank's liquidity to its risk exposure.

In a separate statement on Wednesday, PBB said it was in advanced negotiations to acquire a majority stake in a real estate investment manager that it did not name, with the euro price expected to be in the "mid-double-digit millions".

(Reporting by Paolo Laudani in Gdansk, Editing by Friederike Heine and David Evans)