US Office Crisis Drives Eightfold Provisions Surge at Aareal
- Firm presents plan to reduce US office non-performing loans
- It expects US office markets to remain challenging this year
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The amount of money put aside by Aareal Bank AG for souring loans jumped in the fourth quarter as the German lender braced for worsening real estate markets.
Loan loss provisions in the final quarter of last year amounted to €179 million ($194 million), a roughly eightfold increase on the previous year’s period, Aareal said in a statement on Thursday. That was largely due to US office property financings, it said.