Deutsche Pfandbriefbank's (PBB) shares continued their decline on Friday, dropping more than 3%, and its bonds remained under pressure amid concerns over its exposure to the U.S. commercial real estate market.

The decline comes a day after the bank sought to reassure investors that it has enough funds to cope with a slump that has cast a shadow on numerous banks that have lent to the sector.

Higher interest rates, refinancing difficulties and lower office occupancy have hit the U.S. commercial real estate sector in recent months, raising concerns about defaults. A renewed selloff in some U.S. regional banking shares this week has reignited fears about which lenders are most exposed.

The shares were down 3.4% mid-morning in Frankfurt, making for a 27% decline so far this year.

The bank's bonds have also come under pressure.

 

 

PBB, listed on the small-cap SDAX index, is heavily focused on the real estate industry, and on Thursday, in a second unscheduled announcement in two days, said its liquidity was twice the amount required by regulators.

On Wednesday, the bank reported an increase in risk provisions in the fourth quarter and described the environment as "the greatest real estate crisis since the financial crisis".