(Bloomberg) -- Europe’s lenders remained in the focus of investors Thursday as analysts assessed the risk of contagion from the troubles in commercial real estate markets.

Deutsche Bank AG has limited room to absorb potential losses for the asset class without triggering concerns about its ability to raise investor payouts, analysts at KBW wrote in a note. Deutsche Pfandbriefbank AG, the specialized lender at the center of contagion worries, continued its decline as analysts at Barclays Plc argued PBB had set aside relatively small provisions.

Other banks pushed back against concerns, including French lenders Societe Generale SA and Credit Agricole SA as well as Italy’s Intesa Sanpaolo SpA.

“Our exposure is very limited,” Intesa Chief Executive Officer Carlo Messina said in an interview on Bloomberg TV. “In this sector we do not expect negative surprises in 2024.”

Investors and executives have been on edge after smaller banks from New York to Tokyo were hit by rising defaults in commercial real estate, an asset class that’s been been in sharp decline as last year’s spike in interest rates compounded challenges from the shift to work-from-home. The concerns spread to Europe this week when PBB’s bonds slumped because of its exposure to the troubled US market.

While many analysts argue that larger lenders aren’t at risk because they’re more diversified, Barclays said in its note Thursday that Banco Santander SA and Deutsche Bank had “notable” portfolios of US commercial real estate loans. Shares of Santander have lost about 5% this week and Deutsche Bank is down more than 8%.

Germany’s largest bank has “high relative and absolute exposures” to commercial real estate, yet it has set aside the lowest amount among peers for debt that’s in the early stages of default, KBW analysts led by Thomas Hallett said in a note. That means it has limited room to absorb potential losses before investor payouts could be affected, according to analysts at KBW.

Deutsche Bank declined to comment. A spokesperson for Santander didn’t immediately have a comment. Santander’s US unit said during the presentation of third-quarter results that commercial real estate portfolio consists mostly of multifamily lending.

Deutsche Bank last week said it doubled the amount of money set aside for US commercial real estate loans in the fourth quarter from the previous three months, to 123 million euros. At the same time, it said it expects credit provisions this year to remain in line with where they were last year. US commercial real estate loans, at €17 billion, amount to about 3.5% of the total loan book.

“US commercial real estate is not a big issue among European banks generally speaking, especially the biggest ones,” said Luis Buceta, chief investment officer at Creand Wealth Management. “It may cause some problems to specific lenders.”

PBB, which had issued a profit warning in November, said on Wednesday that it put aside more money for souring loans, with provisions for last year hitting as much as €215 million ($232 million). The lender said it still expects to post a pretax profit for last year, despite what it called the “greatest real estate crisis since the financial crisis.”

Shares of the lender fell 2.4% at 2:52 p.m. in Munich, bringing losses this week to 17%.

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