Structure of a Pfandbrief bank

The Pfandbrief Bank grants property finance, ship loans, aircraft loans and public-sector loans. These assets are reported in the credit institution’s balance sheet.

Not all the loans a Pfandbrief Bank extends are eligible as cover for Pfandbriefe. The Pfandbrief Act expressly stipulates which loans and other claims may serve as cover assets. In this context a distinction is, as a rule, made between the individual Pfandbrief types.

The cover pool monitor enters loans or parts of loans that are eligible as cover under the Pfandbrief Act into the respective cover register – together with the collateral for them – which the cover pool monitor watches over. A separate register is maintained for each loan type. In their entirety, the cover assets entered in one cover register are referred to as the cover pool. Pfandbriefe are issued on the basis of the cover pools. The Pfandbrief Bank undertakes to pay the Pfandbrief bearers the promised interest and, at maturity, to repay the principal amount of the Pfandbrief.