Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Debt Investor Presentation (November 2021)
30 slides from Deutsche Pfandbriefbank's debt investor presentation, Nov 12, 2021
Slide 1: Debt Investor Update – Strong PBT in 9M/21
Strong PBT of € 186 mn in 9M/21 – full-year result 2021 expected at upper end or slightly above guidance of € 180-220 mn Debt Investor Update
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: Business Model & Strategy
Business Model & Strategy pbb is a leading commercial real estate lender with a complementary public investment finance business USPs Key figures (IFRS, 30/09/2021) Specialised on-balance sheet lender with extensive placement capabilities Strong franchise with long-standing client relationships
Slide 4: 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 43% 42% Q2 CIR 39% Q1 Q1 Q1 9.3 464 482 202 204 2.1 7.4 126 375 59 119 61 151 5.7 2.6 3.0 113 126
Slide 5: New business
New business Solid REF new business volume of € 5.7 bn with stable avg. gross interest margin of ~170 bp and avg. LTV of 55% REF New business REF new business € bn (commitments, incl. extensions >1 yr) 9M/20 FY20 9M/21 27.1 27.0 27.0 Financing Total volume (€ bn) 4.3 7.3 5.7 volume thereof: 9.0 Exte
Slide 6: Portfolio
Portfolio Business approach reflected in stable risk parameters and low average LTV of 52%, which provides solid risk buffer – NPLs remain on low level REF Portfolio: Avg. weighted LTVs Non-performing loans % (commitments)1 € mn (EaD, Basel III) Workout2 Restructuring3 64% 0.9% 1.0% 0.9% NPL 0.8% ra
Slide 7: Funding
Funding Solid funding activities focused on non-Euro Pfandbriefe and “Green” Senior Preferred – funding optimised with TLTRO III New long-term funding1 € bn Funding Q3/9M 2021 9M/20: € 3.4 bn4 9M/21: € 3.4 bn4 Solid Pfandbrief funding with focus on foreign currencies USD 750 mn Pfandbrief Spread
Slide 8: The Covered Bond Report Award for Excellence
Funding The Covered Bond Report Award for Excellence – In recognition of pbb´s international issuances Order Order Order ~ 2bn GBP ~1.3bn USD ~1.2bn EUR Inaugural £500mn $750mn Inaugural €500mn SONIA-linked 3-year 0.500% 5-year GREEN Senior Hypothekenfandbrief Hypothekenpfandbrief Preferred Bond Sep
Slide 9: Ambition level for Own Funds and Eligible Liabilities of 8% TLOF
Funding Ambition level for Own Funds and Eligible Liabilities of 8 % TLOF significantly exceeded (in € bn as of 30/09/2021)1) Composition of MREL2 Liabilities Rundown (30/09/2021) (30/09/2021) Substantial buffer for Senior Preferred (SP) investors due to high volume of ~ 15.6 capital instruments a
Slide 10: Investment opportunities
Funding Investment opportunities Pfandbrief Investments Mortgage Pfandbrief and Public Sector Pfandbrief One of the largest Pfandbrief issuers with 21 benchmarks denominated in EUR, GBP, USD and SEK Benchmarks issued with maturities up to 2035 Very low weighted average LTV of 32.09% in the M
Slide 11: Capitalisation remains strong
Capital Capitalisation remains strong Basel III: RWA RWA development Q3/9M 2021 € bn (IFRS) RWA up q-o-q due to various effects mainly as a result from increase in REF portfolio 18.3 18.0 18.1 17.7 partly compensated by maturity effects and technical adjustments no material RWA effect from i
Slide 12: Future structural challenges – Green as differentiating factor
Sustainability Future structural challenges – “Green” as positive differentiating factor Current crisis (COVID-19) different from last crisis (GFC) – no cyclical downturn of CRE market prices and subsequent upwards adjustment; pandemic accelerates structural changes in real estate markets and thei
Slide 13: pbb Green Loan Framework
Sustainability pbb Green Loan Framework aligned with current regulatory and market developments – specific metrics defined for each criteria pbb Scoring Model EU Taxonomy MAX SCORE: 100 Points III. Additional I. Energy Efficiency II. Building Certification Sustainability Factors • Energy demand/- •
Slide 14: Summary & Outlook
Summary & Outlook pbb well on track – full-year result 2021 expected at upper end or slightly above guidance of € 180-220 mn Digitalisation initiatives on track with current focus on client interfaces and processes Comprehensive ESG program in place: Sound governance structure with Board respons
Slide 15: Contact details
Contact details Funding / Debt Investor Relations Götz Michl +49 (0)6196 9990 2931 Goetz.Michl@pfandbriefbank.com Silvio Bardeschi + 49 (0)6196 9990 2934 Silvio.Bardeschi@pfandbriefbank.com Funding Desk Funding@pfandbriefbank.com Webpage: www.pfandbriefbank.com/investors/debt-investors.html
Slide 16: Appendix
Appendix DEUTSCHE PFANDBRIEFBANK
Slide 17: Markets
Markets Overall positive trend is further emerging, investment volumes recover and are almost on pre-Covid-19 level again European and US Investment volume1 (€ bn) European and US CRE investment volumes showing further 600 € signs of recovery also in Q3/21 Quarterly US figures were 29% above the
Slide 18: Markets Sub-segments
Markets Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning type Shopping centres: increased pressure, Short Term: supply chain Selective approach with foresighted fashion dominated shopping centres challenges could increase pressure reduction of retail po
Slide 19: Markets Sub-segments
Markets Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning type Slight rise in vacancies Financial difficulties of tenants / Focus on good locations No strategic disinvestments, but in long insolvencies expected to increase Conservative risk positioni
Slide 20: Risk provisioning stays on moderate level
Financials Risk provisioning stays on moderate level – solid buffer to cope with potential further impacts from COVID-19 pandemic Net income from risk provisioning Key drivers Q3/9M 2021 € mn Net income from risk provisioning of € -50 mn (9M/20: Q3/20 Q3/21 9M/20 9M/21 € -84 mn) – previous year st
Slide 21: Key figures pbb Group
Key figures pbb Group Income statement (€ mn) 2018 2019 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 Q3/21 9M/21 Net interest income 9 9 9 9 450 458 111 116 125 124 476 123 123 123 369 Net fee and commission income 6 6 2 1 1 2 6 2 3 1 6 Net income from fair value measurement -9 -7 -17 1 4 4 -8 2 0 1 3 N
Slide 22: Total portfolio
Portfolio Total portfolio € bn (EaD, Basel III) Regions 31/12/2020 / Total: € 58.0 bn 30/09/2021 / Total: € 57.3 bn Hungary <1% Hungary <1% Other Europe 5% Czech Republic 1% Other Europe 5% Czech Republic 1% Other Rest of World 2% Finland 1% Other Rest of World 2% Finland 1% Sweden 2% 5% Sweden 2% 5
Slide 23: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) € bn (EaD, Basel III) Regions Property types 31/12/2020: € 29.3 bn 30/09/2021: € 29.1 bn 31/12/2020: € 29.3 bn 30/09/2021: € 29.1 bn Mixed use 2% Mixed use 2% Other 2% Czech Republic 1% Other Europe Czech Republic 1% Other Europe Other 2% Hotel 5% Hotel 4% Austria
Slide 24: REF Portfolio Shift in composition
REF Portfolio Shift in composition 31/12/2013 / Total: € 22.2 bn1 31/12/20152 / Total: € 25.8 bn1 31/12/2020 / Total: € 29.3 bn1 Regions Other 6% Other 5% Czech Republic 1% Other Europe Nordics Nordics Austria 2% 6% 7% Sweden 3% 1% 10% France CEE 8% 9% Poland 4% 1% CEE 9% Germany 47% Germany USA 10%
Slide 25: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) € bn (EaD, Basel III) Regions Borrower classification1 31/12/2020: € 6.5 bn 30/09/2021: € 6.0 bn 31/12/2020: € 6.5 bn 30/09/2021: € 6.0 bn Infrastructure Corporation 2% Infrastructure Finance 1% Other Europe 3% Finland 1% Other Europe 3% Corporation 2% Finan
Slide 26: Value Portfolio (VP)
Portfolio Value Portfolio (VP) € bn (EaD, Basel III) Regions Borrower classification1 31/12/2020: € 15.2 bn 30/09/2021: € 14.0 bn 31/12/2020: € 15.2 bn 30/09/2021: € 14.0 bn Financial Financial Other Rest Other Rest Institution Supranational 4% Institution Supranational 4% Other Other Poland 1% of W
Slide 27: ISCR and the effect of the Mortgage Lending Value
Pfandbrief refinancing ISCR and the effect of the Mortgage Lending Value – very simplified example! Interest Service Cover Ratio Loan - to - Value Ratio Loan Valuation Refinancing MV € 100 mn Borrower’s Difference Equity e.g. 35% € 45 mn € 4.0 mn rent p.a. at 4% property yield results in a market va
Slide 28: Mortgage Cover Pool
Cover Pools Mortgage Cover Pool Cover funds by region € bn (nominal) 30/06/2021 Total: € 16.9 bn1 Mortgage cover pool (nominal) 30/06/2021 30/09/2021 7.7 30/09/2021 Total: € 17.4 bn1 Pfandbriefe outstanding € 16.3 bn € 16.3 bn 7.4 Cover funds € 18.4 bn € 19.7 bn Over-collateralisation (Nominal/NPV)
Slide 29: Public Sector Cover Pool
Cover Pools Public Sector Cover Pool Cover funds by region € bn (nominal) 30/06/2021 / Total: € 11.8 bn Public Sector cover pool (nominal) 30/06/2021 30/09/2021 3.9 3.9 Pfandbriefe outstanding € 10.6 bn € 10.5 bn 30/06/2021 / Total: € 11.7 bn 3.2 3.1 Cover funds € 11.8 bn € 11.7 bn 2.8 2.8 Over-coll
Slide 30: Mandated Ratings
Mandated Ratings Bank ratings S&P Long-term BBB+ Outlook/Trend Negative Short-term A-2 Stand-alone rating1 bbb- Long Term Debt Ratings “Preferred” senior unsecured Debt2 BBB+ “Non-preferred” senior unsecured Debt3 BB+ Subordinated Debt BB Pfandbrief ratings Moody’s Public Sector Pfandbrief Aa1 Mortg
Deutsche Pfandbriefbank — Debt Investor Presentation (November 2021) on 6ix