Aareal Bank has almost halved its new lending to the UK commercial property sector in the first quarter of the year, compared with the year before.
In the three months to the end of March 2016, the bank delivered €900m (£700m) in new business, compared with €1.8bn in Q1 2015.
The German bank, which was one of the UK’s most active lenders during 2013 and 2014, said the reduction in new lending marked a change in policy to pursue the higher margins available in the US.
In addition, Aareal said that deal pipelines carried over from the previous quarter had dried up in 2016 – a very different situation from that of 2015.
It said that in the UK this was “probably also due to uncertainty related to the referendum”.
This left the portfolio of loans at €51.8bn by the end of March 2016, compared with €51.9bn for the same period in 2015.
Profit during the period under review increased, largely due to the greater amount of business from the US. With 54.6% of all new business coming from North America, pretax profit climbed by 22% from €74m to €96m. This was despite a rise in administrative costs from €84m to €96m, caused in part by the purchase of WestImmo last summer.
Operating profit in the bank as a whole, which includes a European-focused services business, was €87m in Q1 2016, up from €67m in the first quarter of 2015.
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