By Tom Sims
FRANKFURT (Reuters) -Short sellers have taken bets against more than 8% of shares in Deutsche Pfandbriefbank (PBB), filings showed on Friday, as the German lender comes under increasing pressure on concerns over its exposure to U.S.
commercial property and as it navigates a real estate crisis at home.
PBB is one of Germany’s biggest financers of property, and a nearly 38% fall in the bank’s shares since the start of the year underscores investor worries about its exposure to the United States, which makes up 15% of its portfolio, amid growing concerns about defaults.
The bank’s domestic market of Germany is also in its worst real estate slump in decades – characterized by insolvencies, halted construction and a freeze in property deals.
Commercial property prices fell 10% in 2023, in a sharp acceleration of their decline this decade.
PBB’s shares plunged more than 11% on Thursday, and the price of its debt tumbled to a record low, after S&P cut the bank’s credit rating on worries about its property lending and gave it a negative outlook.
PBB’s shares were down more than 2% early on Friday, and the price of its 300 million euro ($322.86 million) AT1 bond fell further.
Figures in Germany’s official Federal Gazette on Friday showed short sellers, whose bets speculate on a fall in a company’s share price, held positions against 8.08% of the bank’s shares, up from 7.57% earlier in the week.
The figure may underreport the positions because only bets of 0.5% and above are required to be publicly disclosed.
PBB declined to comment on the short sellers. The bank last week sought to reassure investors that it had enough funds to cope with a property slump that has cast a shadow over numerous lenders.
Banks in Europe have about 1.4 trillion euros in loans to the commercial property industry, with banks in Germany, France and the Netherlands the most exposed to the sector.
($1 = 0.9292 euros)
(Reporting by Tom SimsEditing by Miranda Murray, Gerry Doyle and Susan Fenton)
