Pfandbrief banks keep lending at high level even in pandemic year 2020

Berlin, March 25, 2021

vdp statistics prove banks are circumspect in their lending

The banks belonging to the Association of German Pfandbrief Banks (vdp) gave real estate loan commitments totalling EUR 162.3 bn in 2020 (-3.6 percent compared with the previous year). Financing for residential properties rose by 8.1 percent to EUR 108.3 bn. Loans for commercial properties fell by 20.8 percent to EUR 54 bn. This decline was driven, on the one hand, by reduced demand for financing on the part of borrowers putting off investments in an environment of pandemic-induced uncertainty and, on the other, by the banks’ circumspect lending practices.

“By keeping their lending at a high level even during the pandemic, the Pfandbrief banks are making their contribution to overcoming the crisis. In so doing, they continue to provide finance in a risk-oriented and sustainable manner,” commented vdp Chief Executive Jens Tolckmitt.

He pointed out, moreover, that commercial property finance rose to a markedly higher volume in the fourth quarter of 2020 than in the previous quarters. By contrast, demand for residential property finance remained consistently high throughout 2020.

As at December 31, 2020, the real estate loan portfolio of the vdp member banks totalled EUR 904.0 bn, representing growth of 4.5 percent year on year. This increase was attributable both to residential (+5.6 percent) and to commercial property finance (+2.0 percent).