DePfa: 4Q23 Results Mean AT1 Coupon To Be Paid In April

DePfa (PBB GY) 4Q23 results out and the headline is that the AT1 coupon in April will be paid as the company retained a profit (on a tax-write back). Details on the conf call could be vital to spread moves today but, on the face, these results aren’t the disaster that recent spread moves could have presaged.

• Key credit metrics: loan losses rose to 111bp of loans (from 87bp in 3Q23 and 6bp in 4Q23) driven by “US office loans” and non-performers rose to 3.97% (from 3.50% at Sep-23). Mgmt does try to paint a picture of NPL formation slowing in 4Q23, too. CET was 15.7% (from 15.2% at Sep-23), still around 6pp above regulatory minimum.
• Liquidity: mgmt appear to have had success raising retail deposits (EUR6.9bn at Feb-24, near its FY target allegedly) such that no “senior unsecured benchmark” issues are needed this year. This could still mean sub-benchmark issues are needed.
• Revenues were 10% better than consensus with flat net interest income and the beat driven by a “realisation”. Credit losses were around a quarter higher than 3Q23 which meant pre-tax was roughly breakeven and a tax write-back allowed a net profit to be retained.

Conf call is 0930 (London time) at: https://cdn.acs-solution.de/s/5356d4d3-bc90-4c5f-9b42-ca784ddde0ce/