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German bank PBB’s profit drops by 120 million euros due to value adjustment

German bank PBB’s profit drops by 120 million euros due to value adjustment

BERLIN: German mortgage lender Deutsche Pfandbriefbank (PBB) said that preliminary pre-tax profit plunged by 120 million euros ($130.12 million) last year to 54 million euros because of a value adjustment.

PBB’s 2014 preliminary pre-tax profit would be 174 million euros if the effects of a March 1 move by Austria’s financial watchdog to impose a debt moratorium on “bad bank” Heta Asset Resolution were excluded, the bank said.

Austria’s financial market authority (FMA) took control of Heta and halted payments on more than 11 billion euros worth of debt after the state refused to plug a capital hole of up to 7.6 billion euros revealed in an external audit.

PBB, which is gearing up for a stock market listing after completing a restructuring, said it has adjusted the value of a nominal 395 million euros of claims against Heta.