Pbb Deutsche Pfandbriefbank, the biggest unit of Germany’s Hypo Real Estate Holding AG, said third-quarter profit rose 27 percent as a property sale helped offset costs related to the valuation of derivatives.
Pretax profit advanced to 62 million euros ($83 million) from 49 million euros in the year-earlier period, the Munich-based company said in a statement today. The lender gained 92 million euros from the sale of a property.
Hypo Real Estate, led by Chief Executive Officer Manuela Better, last month raised its 2013 profit target by 50 percent to 150 million euros. The company is selling its Dublin-based Depfa Bank Plc unit, which is closed to new business, to meet European Union conditions for Hypo Real Estate’s government bailout. By the end of 2015, Better also needs to find a buyer for pbb Deutsche Pfandbriefbank, which combines most of the continued business of Hypo Real Estate.
The company booked charges of 55 million euros in the quarter related to changes to how it values derivatives. New business rose 50 percent to 2.1 billion euros.
“We also anticipate strong new business in the fourth quarter,” Better said. “We now focus exclusively on our core business as a specialist lender for real estate finance and public investment finance.”
Hypo Real Estate received EU approval in 2011 for a bailout, with Germany injecting 10 billion euros and state and financial institutions providing credit lines and debt guarantees of as much as 142 billion euros to save the lender.