Deutsche Pfandbriefbank: Provision-driven earnings beat, guidance reiterated

Research evidence excerpt

Deutsche Pfandbriefbank: Provision-driven earnings beat, guidance reiterated

Deutsche Bank

Research

Rating Company Date

Hold Deutsche 12 May 2026

Results

Europe Pfandbriefbank

Germany

Reuters Bloomberg Exchange Ticker Price at 11 May 2026 (EUR) 3.40

PBBG.DE PBB GR GER PBBG

Price Target (EUR) 3.50

Banks

52-week range (EUR) 5.84 - 2.76

Provision-driven earnings beat,

Valuation & Risks guidance reiterated

Miriam Killian

Weaker operating income offset by lower risk costs Research Analyst

pbb published its 1Q26 results with a pre-tax profit of EUR6m, 30% ahead of +49-69-910-62169

consensus despite weaker-than-expected operating income. The beat was

Benjamin Goy

primarily driven by significantly lower than expected risk provisions, while lower Research Analyst

than anticipated net interest income was impacted by SRT costs and lower portfolio +49-69-910-31946

volumes. Ahead of the results there appeared to be some uncertainty around the

Marlene Eibensteiner

treatment of SRT costs, with pbb ultimately including these within net interest

Research Analyst

income rather than fees. Costs were broadly in line with expectations, while the

+49-69-910-46423

CET1 ratio declined 50bps QoQ to 13.4%, slightly better than previously indicated

by management alongside full year results. pbb reiterated its unchanged 2026 and

2028 guidance. In addition, Deutsche Invest appears to already be fully contributing

in 1Q26, a quarter earlier than we had anticipated.

1Q26 results: net interest income (-), fees (+), costs (+), risk costs (+)

Net interest income was 9% below expectations and down 21% YoY, mainly driven

by SRT-related costs of EUR10m and reduced portfolio volumes that could not be

offset by increased portfolio profitability and lower funding costs. Fee income came