70 years in the service of the Pfandbrief

Berlin, 27 March 2023

The Association of German Pfandbrief Banks (vdp) is celebrating its 70th anniversary. On March 25, 1953, the present-day vdp was founded as the Association of Private Mortgage Banks.

“However, we as an association don’t feel 70 years old, but 70 years young. We feel the way the German Pfandbrief – which has been around for much longer, namely more than 250 years – presents itself on a daily basis: agile, modern and always up-to-date, yet aware of its tradition,” Jens Tolckmitt, the vdp’s Chief Executive, pointed out.

In 1953 the association’s office and member banks pledged to work together to achieve the greatest possible security and quality for the Pfandbrief, and marketed it jointly to investors worldwide. The association's membership initially consisted of only specialized institutions, but the introduction of the Pfandbrief Act in 2005 led to a fundamental change. All credit institutions were permitted in principle to engage in Pfandbrief business provided they obtained the necessary additional licence and subjected themselves to supervision by the Federal Financial Supervisory Authority (BaFin). At that time the association, which changed its name to vdp in 2005, lobbied vigorously for the stringent rules of the Mortgage Bank Act to be incorporated into the new Pfandbrief Act. The Pfandbrief’s success has proven the vdp right. Credit institutions from all pillars of the German banking industry today use the Pfandbrief as a strategic refinancing instrument. Their joint product, the Pfandbrief, enjoys the highest regard worldwide and is the quality leader within the covered bond family. Its stability and usability at any time and in every crisis since 2008 have played a big part in this success story.

The success of the Pfandbrief is also reflected within the vdp itself, which today has 50 member banks. Together, they account for around 96% of Pfandbriefe outstanding.

The present-day vdp employs around 30 staff members in Berlin and Brussels and operates four subsidiaries to support the member banks in all the Pfandbrief-related aspects of their business.

“We wish to thank our member banks and friends of the Pfandbrief for their support and look forward, with them, to the coming decades in the service of the Pfandbrief,” Tolckmitt remarked.