German banks brace for further pain as commercial real estate valuations tumble
Hindustan TimesGerman’s top bank watchdog warned that lenders with large exposures to commercial real estate are in store for more pain as valuations for such assets are set to tumble further. German banks have already started to set aside money for losses on commercial real estate loans as real estate companies such as Adler Group SA struggle under a debt load built up when benchmark interest rates were still negative. The industry has Branson said that while the developments in commercial real estate won’t spark a crisis, banks with higher exposures to the sector could face more difficulties. Speaking earlier at the conference, Thomas Gross, the chief executive officer of German lender Landesbank Hessen-Thueringen, said commercial real estate is suffering from writedowns and high refinancing costs.
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