Deutsche Bank (DB) to Offload $1B US Commercial Property Loans

Group 1: Deutsche Bank's Strategy - Deutsche Bank plans to offload nearly $1 billion of its U.S. commercial property loans to reduce its commercial and real estate loan exposure due to rising interest rates impacting profits in its real estate portfolio [1] - As of June 30, 2024, Deutsche Bank's loan portfolio included $16 billion in U.S. commercial real estate loans, with $7 billion specifically tied to office properties [1] Group 2: Financial Performance and Provisions - The bank has experienced elevated provisions for commercial property over the past few years, with a compound annual growth rate (CAGR) of 23.4% in provisions for credit losses over the last five years [2] - In the first half of 2024, provisions for the investment bank segment were significantly higher compared to the previous year, particularly due to the commercial real estate sector [2] Group 3: Market Trends and Comparisons - The commercial property market is facing challenges due to rising borrowing costs and increased vacancies in U.S. offices, which are among the lowest performing assets [2] - Other banks, such as Canadian Imperial Bank of Commerce and WaFd, Inc., are also reducing their exposure to commercial real estate loans, indicating a broader trend in the industry [3] - Over the past six months, Deutsche Bank's shares have increased by 11.9% on the NYSE, outperforming the industry's growth of 10.3% [3]