Falling CRE-share in the Austrian cover pools

Erste Bank Research Team Erste Bank

Mortgage issues continue to grow

In 1Q 2024, the total volume of cover pools of Austrian issuers amounted to EUR 163.5bn, of which EUR 26.1bn was attributable to public sector cover assets and EUR 137.4bn to mortgage cover pools. The increase of EUR 3.3bn or 2.0% compared to 3Q 23 was below the average of recent periods. The share of the mortgage segment was 84.0% in 1Q 24 (3Q 23: 83.9%).

The volume of outstanding covered bonds amounted to EUR 115.0bn in 1Q 24 and was divided between EUR 98.9bn in mortgage covered bonds and EUR 16.1bn in public sector covered bonds. At 2.1%, the overall growth of the outstanding covered bond volume was in line with that of the cover assets. The growth in total volume was attributable solely to the mortgage segment, while the public sector segment continued to decline.

Declining trend in commercial real estate

The mortgage cover assets of domestic issuers were divided into EUR 95.1bn from private housing and EUR 42.0bn from commercial housing in 1Q 24. While an increase of 4.6% was observed in private housing compared to 3Q 23, the share of commercial real estate (CRE) fell by 3.0%. This led to a percentage decline in the CRE share of the total value of cover pools from 32.2% to 30.6%. The largest decline compared to 3Q 23 was recorded by UniCredit Bank Austria with EUR 735mn (-18%) and Erste Bank Group with EUR 545mn (-4%) in their respective cover pools. RLB NOE-Wien increased its CRE share by 9% with an increase of EUR 368mn.

Share of commercial real estate fell to 30.6%

Mortgage cover pool, in bn EUR

Source: Issuer, Erste Group Research

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Erste Bank Research Team

Erste Bank

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