German Banks’ CRE Lending: U.S. Office Loans Driving Increasing NPLs

The commentary focuses on German Banks‘ exposure to Commercial Real Estate (CRE) lending and the impact of U.S. office loans on their asset quality.

-- German banks have significant exposure to CRE, including exposure to U.S. office properties.
-- Higher rates combined with lower demand for office space have led to a significant increase in NPLs and provisioning needs.
-- For most banks increases in credit costs are more than offset by higher revenues.

“Remote work habits have led to a significant reduction in demand for office space, which is most visible in the U.S., where vacancy rates have spiked and property valuations have plummeted,” said Sonja Förster, Vice President from the Morningstar DBRS European Financial Institutions team. “Therefore we are taking a closer look at German banks with significant CRE exposure, in particular in the U.S.”

Join us at 3:30 p.m. CEST/9:30 a.m. EDT, April 18, for a webinar discussion on this topic.

Join here - https://www.brighttalk.com/webcast/15677/609896?utmsource=HN&utmmedium=DBRS&utmcampaign=609896&utmid=701Ql00000BlDTLIA3