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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FINANCIALS
PBB and Aareal pair move – both of these German real estate lenders have been in focus amongst global banks for their exposures not only to Germany, but the US, too. We note the spread on the pair trade is 2.5 standard deviations from the mean of the last twelve months.
- PBB has 16% of its real estate finance (REF) book in the US, Aareal is 29%. Conversely, Aareal is only 7% Germany, against PBB’s 43%. Either way, both are heavily exposed to some very tough real estate sectors.
- PBB’s non-performers are 3% of the total book (4.6% in REF), Aareal’s figure is 3.4% so operationally, the credit metrics aren’t that far apart
- CET1 ratios: PBB is 15.7%, Aareal’s is 19.4%. Liquidity measures (LCR and NSFR) are both comfortable and not far apart.
- However, we note the vast disparity between the credit performances, especially recently (see graphic, referring to comparable 2026 bonds). Aareal is now owned by Advent, Centerbridge and CPP Investments but this was announced in Jun-23 and saw the spread move meaningfully from then to September. The move has reasserted itself in the last two months and now stands more than 2õ away from the mean.
- PBB 1Q24 results are due 14-May with Aareal results a day later.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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