(Bloomberg) -- German real estate lender Deutsche Pfandbriefbank AG said it plans to cut back on office loans and will also focus more on its European business, as it tries to leave behind a crisis of confidence over its exposure to US commercial real estate.

“The relatively high weighting of the asset class office is to be gradually reduced in the coming years, and the focus on more profitable and faster-growing segments is to be intensified,” PBB said in a statement on Thursday. It will target new business in areas such as data centers, senior living, logistics and hotels. The geographic focus will be more on Europe, while US business will be done more selectively, it said.

PBB intends to distribute at least 50% of its profit after tax and AT1 coupons to shareholders until 2027, it said. Apart from dividends, the lender also plans to conduct share buybacks.

PBB, which has a significant exposure to US and office real estate, earlier this year became one of the most prominent examples of European banks hit hard by fears that troubles in US property markets are spreading to Europe. Chief Executive Officer Kay Wolf, who joined this year from Deutsche Bank AG, has sought to revive the firm by selling loans and diversifying into asset management.

The US accounted for about 12% of PBB’s €29 billion ($31.7 billion) performing real estate loans as of June, and for almost half of the lender’s soured real estate debt. 

PBB was created in 2009 from the functioning parts left behind by the collapse of Hypo Real Estate, a mortgage lender that became Germany’s biggest casualty of the financial crisis. The government sold much of its stake in PBB through a public listing in 2015 and divested completely in 2021. 

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