Deutsche Pfandbriefbank (PBB) investor relations material

Executive summary

• Strategic transformation advanced with new segment reporting: Real Estate Finance Solutions (REFS), Real Estate Investment Solutions (REIS), and Corporate Center, including full integration of Deutsche Investment from January 2026.

• Profit before tax was EUR 6 million in Q1 2026, in line with guidance but down from EUR 28 million year-over-year, reflecting SRT costs, de-risking, and lower net interest income.

• REIS segment contributed EUR 11 million in operating income, driven by Deutsche Investment consolidation.

• Liquidity and capital ratios remained robust, with CET1 at 13.4%, despite regulatory changes and volatile macroeconomic conditions.

• Operating expenses remained stable quarter-on-quarter, with cost discipline offsetting integration costs.

Financial highlights

• Operating income declined to EUR 77 million from EUR 106 million in Q4/25 and EUR 99 million year-over-year, mainly due to lower net interest income and negative fair value adjustments.

• Net interest income for Q1/26 was EUR 84 million, down from EUR 99 million in Q4/25 and EUR 107 million year-over-year.

• Fee income increased by EUR 10 million quarter-on-quarter, driven by Deutsche Investment integration.

• Cost-income ratio rose to 88.3% in Q1/26, up from 54.2% year-over-year, due to lower operating income and SRT/fair value charges.

• Risk provisioning improved to EUR -2 million, reflecting successful de-risking.

Outlook and guidance

• Confident in achieving full-year targets despite market volatility and geopolitical uncertainty, with operating income for 2026 expected at EUR 375–425 million and pre-tax profit guidance of EUR 30–40 million.

• Strategic RoTE target of 8% confirmed but postponed to 2028, with operating income projected to reach EUR 600 million by then.

• Risk provisioning expected to normalize at 25–30 bp by end of 2026, and 15–25 bp long-term.

• Management highlights risks from geopolitical crises, financial market conditions, and borrower defaults, which could cause actual results to deviate from forecasts.

• Strong start into Q2 2026 and robust transaction pipeline support positive outlook.