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

(Reuters) - The European Central Bank will soon push certain German banks to set aside higher reserves against property loan defaults, Bloomberg News reported 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 and some regional lenders jointly known as Landesbanken, the report said.

However, it was not clear which banks or lenders would ultimately face demands for higher provisions, the report said. The ECB has scrutinized banks from other countries but German lenders will be among those most affected, it said.

Banks in Germany have become a particular focus amid the country's worst real-estate slump in decades, marked by insolvencies, halted construction, and a freeze in property deals.

(Reporting by Surbhi Misra in Bengaluru; Editing by Bernadette Baum)