ECB to seek higher real estate loan provisions from some German banks, Bloomberg News reports

June 4 (Reuters) – The European Central Bank will soon push certain German banks to set aside higher reserves against property loan defaults, Bloomberg News reported, opens new tab on Tuesday.

The top regulator will communicate its demands to banks in the coming months, the report said, citing people familiar with the matter, adding that the resulting increase in provisions was likely to affect this year’s profitability.

ECB is focusing on banks that are heavily invested in commercial real estate loans, like Deutsche Pfandbriefbank (PBBG.DE), opens new tab and some regional lenders jointly known as Landesbanken, the report said.