DePfa: All About Credit Quality And Near-Term Liquidity

DePfa Bank (PBB GY) results due 7-Mar which will focus on credit quality and near-term liquidity, we feel.

• One of the lenders at the heart of fears around CRE, especially that in the US, the total focus of these results will be asset quality and the near-term refi events. The 4Q23 pbbIX (German property index) was back down in “crisis” territory (released 22-Feb) so few mitigants in the domestic market.
• Pre-released: mgmt released the Dec-23 liquidity figure of 212% and CET1 of “more than 14%” (released early-Feb) alongside the statement that it can operate for six months without new capital markets funding. These figures were 218% and 15.2% at Sep-23.
• Recent moves: the equity is down a third YTD (and has more than halved over the last year). The senior unsecured EUR cash curve has blown out meaningfully this year with spreads c.300-500bp wider (best priced fixed bond beyond ’24 is streaming at 93.39) with it being hit each time another event such as those surrounding NYC Bancorp hits the tapes.

Results are due pre-market with a 1030 (London time) conf call at: https://www.pfandbriefbank.com/en/investors/equity-investors/presentations.html