Deutsche Pfandbriefbank AG · XETR:PBB
Deutsche Pfandbriefbank — FY2023 Earnings Presentation
17 slides from Deutsche Pfandbriefbank's earnings presentation, Mar 7, 2024
Slide 1: Results Q4/FY 2023 – Press Call
Results Q4/FY 2023 – Press Call 7 March 2024
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: Key Messages: pbb is an expert in managing the cycle
KEY MESSAGES pbb is an expert in managing the cycle pbb remains profitable and well capitalised Pre-provision profit of € ~300 mn provides for solid risk absorption capacity CET 1 ratio is more than 600 bp (€ 1 bn) above the regulatory requirement In light of the challenging market environment, 2023
Slide 4: Highlights 2023: Strong KPI despite challenging markets
HIGHLIGHTS 2023 Strong KPI despite challenging markets Pre-provision profit of € ~300 mn Profit before taxes Net interest income Strong net interest income despite loss of TLTRO and floor income € 90 mn € 482 mn (2022: € 213 mn) (2022: € 489 mn) pbb’s financial strength is built to manage the
Slide 5: Operating & Financial Overview: Growing portfolio, rising margins
OPERATING & FINANCIAL OVERVIEW Growing portfolio, rising margins REF new business Q4 REF portfolio € bn (commitments, incl. extensions > 1 yr.) 9M € bn (financing volume) +1.8 ~170 bp ~205 bp 31.1 New business volume 29.3 REF portfolio growth 9.0 adjusted to challenging Improved portfolio 2.4
Slide 6: Operating Expenses: pbb invests into process and cost efficiencies
OPERATING EXPENSES pbb invests into process and cost efficiencies Operating expenses Personnel expenses € mn (IFRS) Investments of € 35 mn in strategic agenda in 2023 Non-personnel expenses Write-downs IT transformation (€ 5 mn) to achieve cost savings Insourcing of IT infrastructure and IT pers
Slide 7: Risk Costs: Risk provisioning mainly driven by US
RISK COSTS Risk provisioning mainly driven by US Net income from risk provisioning Stage 1&21 Balance sheet – loss allowances Stage 1 € mn (IFRS) Stage 3 € mn Stage 2 Other2 Stage 3 189 bp 161 bp REF 135 bp 589 12 coverage 494 41 -16 -5 -9 1 -2 1 400 59 134 -21 -95 -100 50 114 -211 139 -83 -108 414
Slide 8: REF Portfolio: Portfolio quality remains solid
REF PORTFOLIO Portfolio quality remains solid REF Portfolio Performing € bn (EaD, Basel III) Non-performing Portfolio quality remains solid – focus on prime properties in core locations 33.0 31.0 1.5 0.8 Collateral values of entire portfolio reviewed in 2023 – low average loan-to-value (LTV) of
Slide 9: NPL Portfolio: Pro-active non-performing loan management
NPL PORTFOLIO Pro-active non-performing loan management NPL Portfolio € mn (EaD, Basel III) -41 1,535 +387 -146 +36 -174 1,335 3 loans +638 5 loans 5 loans 835 14 loans 12/22 Additions FX/EaD Recovered/ 09/23 Additions FX/EaD Recovered/ 12/23 Sale/ Sale/ Repayment Repayment Active management of NP
Slide 10: Focus: US – Performing
FOCUS: US – PERFORMING Entire portfolio revalued in 2023 Performing Portfolio € bn (EaD, Basel III) USA largest liquid and transparent CRE market – low market share of pbb allows for selective business. pbb focuses only on 7 4.7 4.5 gateway-cities (CBDs) and predominantly on East Coast office Fu
Slide 11: Focus: US – Non-Performing
FOCUS: US – NON-PERFORMING Pro-active workout and restructuring limited NPL increase to € ~300 mn US NPL Portfolio € mn (EaD, Basel III) Active management of NPL portfolio with 3 US loans (€ 201 mn) successfully restructured/worked out in 2023 2 loans (€ 172 mn) recovered to performing and 1 loa
Slide 12: Focus: Development Portfolio
FOCUS: DEVELOPMENT PORTFOLIO Strict underwriting standards Portfolio Performing Phase Portfolio significantly reduced since 2019 (12/19: € 4.7 bn, € bn (EaD, Basel III) Non-performing 31/12/2023 (commitments, Basel III) 12/23: € 3.2 bn) – turnover of € 6.3 bn due to repayment (~70%) 3.5 or transfe
Slide 13: Funding and Liquidity: Strong liquidity position
FUNDING AND LIQUIDITY Strong liquidity position – 2024 largely covered Capital market funding needs for 2024 largely covered Liquidity Net Stable Pre-funding across toolbox and moderate new business result in lower 2024 funding needs Coverage Ratio Funding Ratio No Senior Unsecured benchmark in
Slide 14: Retail Deposits: Retail deposits continue to grow
RETAIL DEPOSITS Retail deposits continue to grow Retail Deposits – development & maturity profile1 Granular, long-term and deposit insured € bn Granular: € 63,000 average deposit (pbb direkt) WAL WAL Long-term: 88% with 3.8 yrs weighted average life 3.1 yrs 3.8 yrs (WAL) Deposit insured2: ne
Slide 15: Economic Outlook: Base case: modest economic growth outlook
ECONOMIC OUTLOOK Base case: modest economic growth outlook GDP growth picks up moderately in Europe % In 2024 and 2025, pbb expects GDP growth in Continental 3 2.5 Europe, while the UK is expected to grow again by ~0.5% this 2 1.8 year, and ~1.3% in 2025. US GDP is expected to expand 1.4 1.2 1.5 1
Slide 16: Guidance 2024
GUIDANCE 2024 Solid operating income strength – PBT expected significantly above 2023 level New business (incl. extensions > 1 year) € 6-7 bn REF Portfolio Financing volume € 30-31 bn Operating Income € 525-550 mn thereof: NII + NCI € 475-500 mn P&L Loan Loss Provisions (LLP) << 2023 Cost Income Rat
Slide 17: Contact Details
CONTACT DETAILS Grit Beecken Sebastian Zehrer Head of Communications, Marketing and Investor Relations Head of Communications +49 (0)89 2880 28787 +49 (0)89 2880 11841 grit.beecken@pfandbriefbank.com sebastian.zehrer@pfandbriefbank.com Nina Lux Spokesperson +49 (0)89 2880 11496 Website nina.lux@pfan
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