Deutsche Pfandbriefbank AG · XETR:PBB
Deutsche Pfandbriefbank — Investor Presentation (January 2023)
48 slides from Deutsche Pfandbriefbank's investor presentation, January 2023
Slide 1: pbb Deutsche Pfandbriefbank Company Presentation January 2023
pbb Deutsche Pfandbriefbank Company Presentation January 2023 Please think about the environment before printing!
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe for or purchase any securities in any jurisdiction, including any jurisdiction of the United States. Securities may not be offered or sold in the United States absent registration or pursuant to an available exemption from reg
Slide 3: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 3
Slide 4: Business Model & Strategy
Business Model & Strategy New business line Real Estate Investment Management provides for increased growth potential and profitability FUNDING LENDING LENDING USP Strong capital market presence: Pfandbrief-eligible senior loans, Leading specialised CRE bank benchmark issuances and private com
Slide 5: The system works as designed
The system works as designed pbb well positioned to navigate current landscape Challenges Our response Interest rate positioning by design not part of pbb’s Low interest rate sensitivity while business model, setting stabilising floor in times of interest rates are rising declining interest rate
Slide 6: Operating and financial overview
Operating and financial overview New business Q4 Net interest and commission income 1 Q4 General and admin. expenses Q4 € bn (commitments, incl. extensions >1 yr) Q3 € mn (IFRS) Q3 € mn (IFRS) Q3 Q2 Q2 42% 43% Q2 40% Q1 Q1 CIR4 Q1 9.1 482 502 219 204 7.4 127 3.3 6.6 126 362 59 68 157 3.0 2.3 124 126
Slide 7: Shareholder return
Shareholder return Stable returns and conservative risk approach shows good resilience even in global pandemic crisis – attractive shareholder return PBT (in € mn) 301 PBT bandwidth HETA around € 200 mn 242 Stable and profitable PBT 132 204 215 216 +3.7% 195 since IPO despite various one- p.a. till
Slide 8: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 8
Slide 9: CRE Markets
CRE Markets Investment volumes still on solid level despite further decline in Q3/22, with expectations more subdued European and US Investment volume1 (€ bn) Despite further slowing volume growth US CRE investment volumes still 1.000 € with relatively solid performance in Q3/22 but, weak sentimen
Slide 10: New Business
New Business REF new business up by € 0.9 bn y-o-y – deal pipeline supports solid new business with significant positive margin trend for Q4/22 REF New business REF new business € bn (commitments, incl. extensions >1 yr) 9M/21 FY21 9M/22 29.5 Financing 27.0 27.6 Total volume (€ bn) 5.7 9.0 6.6 volum
Slide 11: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 11
Slide 12: Portfolio
Portfolio Business approach reflected in stable risk parameters and continued low average LTV of 51%, providing solid risk buffer REF Portfolio: Avg. weighted LTVs Total portfolio: Internal ratings (EL classes) % (commitments)1 € bn (EaD, Basel III) 06/22 09/22 Non-investment grade2 52% 52% Investme
Slide 13: Risk provisioning
Risk provisioning Risk provisioning down y-o-y – scenarios adequately cover current macroeconomic forecasts, management overlay maintained Net income from risk provisioning Key drivers Q3/9M 2022 € mn Net income from risk provisioning of € -19 mn in Q3/22 Q3/21 Q3/22 9M/21 9M/22 (9M/22: € -38 mn;
Slide 14: NPLs & loss allowances on B/S
NPLs & loss allowances on B/S NPLs remain on low level – solid loss allowances on balance sheet Key drivers Q3/9M 2022 Non-performing loans – regions € mn (EaD, Basel III) Non-performing loans (NPLs) remain on low level No. of 22 22 22 22 23 indiv. Restructuring loans slightly up at € 587 mn (06
Slide 15: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 15
Slide 16: Funding
Funding Strong funding in 9M/22 – focus on Pfandbriefe, asset matching currencies and Green refinancing New long-term funding1 Funding Q3/9M 2022 € bn Strong Pfandbrief funding year-to-date: US$ 750 mn Pfandbrief 9M/21: € 3.4 bn 9M/22: € 4.8 bn € 2.75 bn Pfandbrief Benchmarks (2 x € 750 mn in
Slide 17: Funding: structural shifts in funding costs
Funding Structural shifts in funding costs – contrary to Senior Preferred, retail deposits cheapened significantly while Pfandbrief spreads have remained largely stable Senior Preferred pbb direkt Pfandbrief Spread Development pbb vs peers Spread Development vs Mid-Swap Spread Development pbb vs pee
Slide 18: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 18
Slide 19: Capital
Capital Capitalisation remains strong Basel III: RWA RWA development Q3/9M 2022 € bn (IFRS) RWA up mainly due to increase in REF portfolio and FX effects 17.3 only partly compensated by maturity, interest rate movements; 16.8 16.7 16.5 reclassification and syndication effects no material RWA
Slide 20: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 20
Slide 21: ESG Governance
ESG Governance ESG Program provides for holistic approach with clear responsibilities assigned – significant progress positively acknowledged by ECB Holistic approach in pbb’s bank management Management and Supervisory Board ESG Committee Setting the ESG strategy as well as objectives and measures
Slide 22: Sustainable Finance
Sustainable Finance pbb as sustainable finance bank and transformation partner – ~30% green REF portfolio share targeted by 2024/2025 Sustainble Finance Green Loans (with explicit loan documentation) € bn Systematic collection of sustainability criteria of financed properties integral part of pbb’
Slide 23: Sustainable Finance: Green Bond and Green Loan frameworks
Sustainable Finance pbb’s Green Bond and Green Loan and Frameworks aligned with current regulation and market standards pbb Scoring Model EU Taxonomy MAX SCORE: 100 Points III. Additional I. Energy Efficiency II. Building Certification Sustainability Factors • Energy demand/- • “Green” building cert
Slide 24: CO2 Footprint
CO2 Footprint Further expansion of pbb’s reporting scope in progress – systematic collection of sustainability criteria of financed properties Emissions (in t CO2) Scope General description Specific subject CO2 compensation 2020 2021 The emissions from owned or Scope 1 operated assets (e.g., emissio
Slide 25: ESG Ratings
ESG Ratings Progress also positively acknowledged by ESG rating agencies with above sector average ratings – upgrade from MSCI from A to AA pbb rating/score ISS ESG MSCI Moody‘s ESG Solutions ESG Ratings A+ AAA (8.571-10.0) Progress also positively acknowledged by ESG rating agencies 80-100 with a
Slide 26: Agenda
Agenda 1. pbb at a glance 2. Market environment & New business 3. Asset quality & Risk provisioning 4. Funding 5. Capitalisation 6. ESG 7. Summary & Outlook Appendix Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 26
Slide 27: Summary & Outlook (based on 9M/22 results)
Summary & Outlook (based on 9M/22 results) System works as designed Solid PBT despite current geopolitical and economic developments Strong growth in REF portfolio, compensating decline in floor income and from TLTRO in the mid-term Best use of funding base – Pfandbrief remains stable source while e
Slide 28: Appendix
Appendix pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 28
Slide 29: Appendix
Appendix 1. Financials 2. Portfolio 3. ECB stress test 2021 4. Funding 5. Ratings Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 29
Slide 30: Financials
Financials Solid operating performance despite difficult market environment Income statement € mn Q3/21 Q3/22 9M/21 9M/22 Key drivers Q3/9M 2022 Operating Income 142 128 429 400 NII slightly down y-o-y – mainly affected by lower floor income, loss in TLTRO premium and slightly higher Net interest
Slide 31: Key figures pbb Group
Key figures pbb Group Income statement (€ mn) 2019 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Q2/22 Q3/22 9M/22 8 Net interest income 458 476 123 123 123 125 494 122 120 116 358 Net fee and commission income 6 6 2 3 1 2 8 2 1 1 4 Net income from fair value measurement -7 -8 2 - 1 7 10 9 5 7 21 Net inco
Slide 32: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (€ mn) 20193 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Q2/22 Q3/22 9M/22 Net interest income 388 3964 104 104 103 106 417 104 103 101 308 Net fee and commission income 7 6 2 3 1 2 8 2 1 2 5 Net income from fair value measurement -8 -6 1 - 1 4 6 6
Slide 33: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (€ mn) 20193 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Q2/22 Q3/22 9M/22 Net interest income 37 38 9 9 10 9 37 8 8 8 24 Net fee and commission income - - - - - - - - - - - Net income from fair value measurement -2 -1 - - - 1 1 1 - 1 2 Net in
Slide 34: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (€ mn) 20193 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Q2/22 Q3/22 9M/22 Net interest income 29 38 9 10 9 10 38 9 9 7 25 Net fee and commission income -1 - - - - - - - - -1 -1 Net income from fair value measurement 3 -1 1 - - 2 3 2 1 2 5 Net income fro
Slide 35: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet IFRS, € bn Assets 30/09/22 31/12/21 Liabilities & equity 30/09/22 31/12/21 Financial assets at fair value through P&L 1.0 1.2 Financial liabilities at fair value through P&L 0.8 0.6 thereof th
Slide 36: Appendix
Appendix 1. Financials 2. Portfolio 3. ECB stress test 2021 4. Funding 5. Ratings Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 36
Slide 37: Portfolio
Portfolio Well diversified portfolio with continued focus on European markets, particularly on Germany 30/09/2022 (EaD, Basel III) Real Estate Finance Public Investment Finance Value Portfolio Finland 1% Other Europe 3% Other Other Rest Austria 1% Other Europe Europe 3% of World UK 3% Other Rest of
Slide 38: Markets: Sub segments (09/22) - Retail
Markets Sub segments (09/22) Property Regions Evaluation of current situation Challenges Risk positioning type Shopping centres: increased pressure, Short Term: threads to income Selective approach with foresighted fashion dominated shopping centres stability as well as decreasing reduction of
Slide 39: Markets: Sub segments (09/22) - Office
Markets Sub segments (09/22) Property Regions Evaluation of current situation Challenges Risk positioning type Slight rise in vacancies; but in most markets Financial difficulties of tenants / Focus on good locations still on comparatively low levels. insolvencies expected to increase due to
Slide 40: Appendix
Appendix 1. Financials 2. Portfolio 3. ECB stress test 2021 4. Funding 5. Ratings Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 40
Slide 41: ECB stress test 2021
ECB stress test 2021 Stress test results demonstrate pbb’s resilience to crisis and capital strength Stress test result 2021 Max. CET 1 ratio depletion in adverse scenario (pp.) / Min. CET 1 ratio (%) ECB stress test result 2021 demonstrates pbb‘s resilience to crisis and capital strength In the
Slide 42: Appendix
Appendix 1. Financials 2. Portfolio 3. ECB stress test 2021 4. Funding 5. Ratings Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 42
Slide 43: Public benchmark issuances 2018-10/22
Funding Public benchmark issuances 2018-10/22 Types WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price Senior Unsecured A2GSLC6 16.01.2018 23.02.2022 EUR 500 mn +40 bp 0.625% 99.956% Mortgage Pfandbrief (1st Tap) A2E4ZE 24.01.2018 05.09.2022 EUR 250 mn -18 bp 0.05% 99.579% Mortgag
Slide 44: Pfandbrief funding – effect of the Mortgage Lending Value
Funding Pfandbrief funding – effect of the Mortgage Lending Value (very simplified example) Loan Valuation Refinancing MV € 100 mn Borrower’s Difference Equity e.g. 30 % € 40 mn 60 % LTV max. 60 % OC e.g. 20 % Loan Mortgage Pfandbrief Pfandbrief Lending Value Collateral issued (Coverpool) € 60 mn €
Slide 45: Appendix
Appendix 1. Financials 2. Portfolio 3. ECB stress test 2021 4. Funding 5. Ratings Contact details pbb Deutsche Pfandbriefbank AG, January 2023 (IFRS, pbb Group, unaudited) 45
Slide 46: Mandated Ratings
Mandated Ratings Bank ratings S&P Long-term BBB+ Outlook/Trend Stable Short-term A-2 Stand-alone rating1 bbb Long Term Debt Ratings “Preferred” senior unsecured Debt2 BBB+ “Non-preferred” senior unsecured Debt3 BBB- Subordinated Debt BB+ Pfandbrief ratings Moody’s Public Sector Pfandbrief Aa1 Mortga
Slide 47: Definition of borrower classifications
Definition of borrower classifications Borrower classification Definition Sovereign Direct and indirect obligations of Central Governments, Central Banks and National Debt Agencies Sovereign (related) Indirect obligations of Non Sovereigns with an explicit first call guarantee by a Sovereign Regiona
Slide 48: Contact details
Contact details Grit Beecken Head of Communications +49 (0)89 2880 28787 grit.beecken@pfandbriefbank.com Michael Heuber Head of Investor Relations / Rating Agency Relations +49 (0)89 2880 28778 michael.heuber@pfandbriefbank.com Axel Leupold Investor Relations / Rating Agency Relations +49 (0)89 2880
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