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Lending business of the Pfandbrief banks |
Commercial Property Finance
In the property markets, the effects of the economic and financial crisis were clearly reflected in dramatic declines in transaction volumes. This, in turn, had consequences for lendings in this market segment. Compared with 2008, loan commitments fell by € 31.3 billion or 45.5%. In particular, large-volume loans and syndicated loans were extended on a substantially smaller scale than they had been prior to the financial market crisis. Even greater importance was attached to servicing existing customers and, therefore, to the prolongation of loans in 2009 than in the years before. This explains why, although new lendings were clearly down, there was a further slight rise in total loans.
This decline is particularly true of cross-border lendings. Faced with the difficult economic situation in a number of major foreign property markets, the member banks adopted an especially risk-aware stance and exercised restraint in their new lending activity. To be specific, new commitments by the vdp member banks totaled € 19.2 billion (-31%) in domestic and € 18.3 billion (-55%) in cross-border commercial property finance.
The individual segments of the commercial property finance market experienced declines on a similar scale, although the structure of loan commitments by property category largely remained stable. Office premises constituted the most important market segment, taking a share of 52.5% of all commercial property loans by Pfandbrief Banks. Retail buildings represented the second-largest group in 2009, accounting for € 10.8 billion or 28.7% of all commitments.
