The number of active German mortgage Pfandbrief issuers has increased from 38 to 68 since September 2008, although many of the new issuers are small, with the number of institutions with less than Eu1bn outstanding having doubled since then, according to HSBC Trinkaus analysts.

The analysis is based on figures reported by German Pfandbrief issuers in accordance with Section 28 of the country’s Pfandbrief legislation. The HSBC Trinkaus analysts said that the volume of outstanding mortgage Pfandbriefe has shrunk for the eighth quarter in a row and is at its lowest since June 2008.

They contrasted this trend in outstandings with the development in the number of active Hypothekenpfandbrief (mortgage Pfandbrief, or Hypfe) issuers, which has increased from 38 to 68 since September 2008. That this has not corresponded with an increase in volumes is explained by the majority of newcomers during this time having been small, mainly savings banks, according to the analysts.

While as at the end of September 2008 eight savings banks had mortgage Pfandbriefe in circulation, to date there are 33, from across Germany.

There have also been more high profile entries into the market since 2008, most notably from bigger banks such as Commerzbank and Deutsche Bank, with ING-DiBa also a newcomer.

According to the HSBC Trinkaus analysts, in September 2008 there were only 16 issuers with less than Eu1bn of outstanding mortgage Pfandbriefe and seven with less than Eu100m, compared with 39 and 12, respectively, as at the end of the second half of 2014.

The average volume of outstanding mortgage Pfandbriefe per issuer has fallen from Eu7.4bn to Eu2.9bn since the introduction of the Pfandbrief Act in 2005, said the analysts, while the outstanding volumes of larger issuers have also shrunk.

They noted that UniCredit Bank AG in September 2005 had Eu49.8bn of Hypothekenpfandbriefe outstanding and a market share of 23.3%, making it the biggest issuer at that time, while today’s largest, Hypothekenbank Frankfurt, as at 30 June had only Eu19bn outstanding and a market share of 9.6%.

“Both developments are evidence that the market for Hypothekenpfandbriefe is becoming increasingly granular,” said the HSBC Trinkaus analysts.