Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q1 2015 Earnings Presentation
56 slides from Deutsche Pfandbriefbank's earnings presentation, May 19, 2015
Slide 1: Results Q1 2015 (IFRS, pbb Group, unaudited)
Results Q1 2015 (IFRS, pbb Group, unaudited) Continued positive operating development with strong PBT of EUR 51 mn in Q1 (+34% y-o-y) Results Call Munich/Unterschleissheim, 19th May 2015 Andreas Arndt, Co-CEO/CFO Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe for or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial condit
Slide 3: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 3
Slide 4: Highlights Q1 2015: Ongoing benefits from stringent execution of strategy
Highlights Q1 2015 Ongoing benefits from stringent execution of strategy Strong pre-tax profit of EUR 51 mn (Q1/14: EUR 38 mn) − Continued positive earnings trend from lending business with net interest income up +27% y-o-y; loan-loss provisions in core business remaining on low level (EUR 4 mn rele
Slide 5: Highlights Q1 2015: Continued positive operating development
Highlights Q1 2015 Continued positive operating development Business volume development Income statement development New business Net interest income and similar General administrative expenses Q1 Q1 EUR millions (IFRS) Q1 EUR billions (Commitments, incl. extensions >1 yr) EUR millions (IFRS) 10.2 4
Slide 6: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 6
Slide 7: Income statement: Net interest income continuously strengthened
Income statement Net interest income continuously strengthened Income from lending business EUR millions Q1/14 Q1/15 Key drivers Q1/15: Net interest and similar 89 113 NII driven by portfolio growth at increased portfolio income margin as well as benefiting from one-off gain from thereof: prepayment
Slide 8: Income statement: Loan-loss provisions benefit from releases
Income statement Loan-loss provisions in core lending business benefit from releases Loan-loss provisions: Income statement EUR millions Q1/14 Q1/15 Key drivers Q1/15: Loan-loss provisions 3 3 Net releases of loan-loss provisions in core lending thereof: HETA - -6 business more than compensate for E
Slide 9: Heta Asset Resolution AG (HETA)
Heta Asset Resolution AG (HETA) Total valuation adjustments of EUR 197.5 mn – pbb’s HETA exposure (nominal EUR 395 mn) now valued at ~50% HETA adjustment P&L impact (EUR mn) pre Q4 2014 Q4 2014 Q1 2015 Net income from (1.5) (109) (73) financial investments Total value Loan loss provisions (8) (6) ad
Slide 10: Income/expenses from financial instruments
Income statement Income/expenses from financial instruments primarily driven by derivative valuation and one-off effects Income/expenses from financial instruments EUR millions Q1/14 Q1/15 Key drivers Q1/15: Net trading income -9 5 NTI benefited from positive derivative valuation effects, thereof: H
Slide 11: Operating cost base further reduced due to strict cost containment
Income statement Operating cost base further reduced due to strict cost containment Income/expenses from further business activities EUR millions Q1/14 Q1/15 Key drivers Q1/15: Net other operating 13 -11 Since 2015, no more income from IT services for income/expenses DEPFA thereof: IT services DEPFA
Slide 12: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 12
Slide 13: New business: Strong new business of EUR 2.8 bn in Q1/15
New business Strong new business of EUR 2.8 bn in Q1/15 marks new Q1 record level Total new business PIF EUR billions (Commitments, incl. extensions >1 yr) REF +75% 3.2 0.3 2.8 2.7 2.7 2.7 0.2 2.1 0.3 0.3 0.3 1.6 1.8 0.4 1.6 <0.1 0.5 0.3 2.9 2.4 2.4 2.4 2.7 1.6 1.8 1.3 1.3 Q1/13 Q2/13 Q3/13 Q4/13 Q1
Slide 14: New business: Strategic portfolios continuously growing
New business Strategic portfolios continuously growing 12/141 03/15 Total portfolio EUR billions (Financing volumes) Strategic Non-strategic portfolios portfolios 51.1 52.5 (run-down) +8% -2% 21.8 23.5 22.7 22.2 +3% 6.6 6.8 REF PIF VP2 Total2 Key drivers Q1/15: PIF As of 01/01/15, Italian PIF portfo
Slide 15: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 15
Slide 16: Real Estate Finance (REF)
Real Estate Finance (REF) Portfolio growing and net interest income with continued positive trend New business (incl. extensions >1 year) 2014 Q1/15 New business: Regions/property types Volume (EUR bn, commitments) 9.0 2.7 Q1/15: EUR 2.7 bn (commitments, incl. extensions >1 year) No. of deals 161 33
Slide 17: Public Investment Finance (PIF)
Public Investment Finance (PIF) Portfolio growing and business turned profitable New business (incl. extensions >1 year) 2014 Q1/15 New business: Regions/counterparty types Volume (EUR bn, commitments) 1.2 0.2 Q1/15: EUR 0.2 billions (commitments) No. of deals 42 7 Average maturity(WAL) (years) ~6.7
Slide 18: Value Portfolio (VP): High quality portfolio with 99% investment grade
Value Portfolio (VP) High quality portfolio with 99% investment grade Portfolio: Product class Income statement (IFRS, EUR mn) Q1/14 Q1/15 31/03/2015: EUR 25.9 bn (EaD, Basel III)1 Operating income 11 -14 thereof: Net interest and similar income 9 28 Loan-loss provisions - -6 General administrative
Slide 19: Value Portfolio: RWA consumption will decrease significantly
Value Portfolio (VP) RWA consumption will decrease significantly in the medium term – freed-up capital will be reallocated into higher-yielding strategic business and initiates portfolio gross margin uplift Value Portfolio: Financing volumes Value Portfolio: RWA EUR billions (contractual maturities)
Slide 20: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 20
Slide 21: Portfolio: Strategic portfolios continuously growing
Portfolio Strategic portfolios continuously growing 12/141 03/15 Total portfolio EUR billions (EaD, Basel III) Strategic Non-strategic Bank steering/ portfolios portfolios ALM 65.2 66.5 (run-down) +5% -1% 24.3 25.6 26.2 25.9 +1% 7.8 7.9 6.9 7.0 REF PIF VP2 C&A2,3 Total2 Key drivers Q1/15: PIF As of
Slide 22: Portfolio: Remaining sound risk profile
Portfolio Remaining sound risk profile Total portfolio: Internal ratings (EL classes) Total problem loans EUR billions (EaD, Basel III)1 EUR millions (EaD, Basel III)3 Coverage 32% 30% 41% 24.3 25.6 7.8 7.9 26.2 25.9 6.9 7.0 65.2 66.5 ratio 0% 0% 1% 1% 0% 0% 4% 3% 10% 7% Share in 1.4% 1.8% 1.4% tota
Slide 23: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 23
Slide 24: Funding: New long-term funding activities reduced
Funding New long-term funding activities reduced on the basis of a comfortable liquidity position – focus on optimisation and re-balancing of cover pools New long-term funding Pfandbriefe Q1/14 EUR billions1 Focus on optimisation and re-balancing of cover pools Q1/15 X.X Avg. maturity (yrs) Cautious
Slide 25: Funding: Quantitative easing continues
Funding Quantitative easing continues Mortgage Pfandbriefe: Spread development Unsecured: Spread development bp vs. mid-swap bp vs. mid-swap 40 140 Spread development affected 120 by increased attention on privatisation 20 100 80 0 60 40 (20) Pfandbrief spreads remain attractive – further spread tig
Slide 26: Funding: Focus on optimisation and re-balancing of cover pools
Funding Focus on optimisation and re-balancing of cover pools – cover pools managed on comfortable OC levels Mortgage Cover Pool: Total cover funds Public Sector Cover Pool: Total cover funds EUR billions (Nominal) EUR billions (Nominal) OC (%) OC (%) OC (absolute) OC (absolute) Pfandbriefe outstand
Slide 27: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 27
Slide 28: Capital: pbb with strong capital ratios under Basel III
Capital The regulatory capital ratios stated are calculated on an unaudited pro-forma basis. According to the ‘Waiver Rule’ regulated in Article 7 CRR, Deutsche Pfandbriefbank AG, being a subsidiary of Hypo Real pbb with strong capital ratios under Basel III Estate Holding AG, is currently exempt fr
Slide 29: Agenda
Agenda 1 Highlights Q1 2015 2 Financials 3 New business 4 Business units 5 Portfolio 6 Funding 7 Capitalisation 8 Key take-aways Appendix Contact details Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 29
Slide 30: Key take-aways
Key take-aways Ongoing benefits from execution of strategy – operating performance indicators of core lending ✓ business show a continued positive trend Successful new business activities reflect the bank’s standing as one of the leading players in the ✓ commercial real estate finance market ✓ Susta
Slide 31: Appendix
Appendix Results Q1 2015 (IFRS, pbb Group, unaudited), 19th May 2015 31
Slide 32: Key figures
Key figures Income statement (EUR millions, 2014 2012 2013 2014 Q1/14 Q1/15 IFRS) (adjusted)1 Operating income 467 482 326 438 89 93 thereof: Net interest and similar income 296 319 421 421 89 113 Loan-loss provisions 4 -8 -21 -13 5 4 General and administrative expenses -341 -312 -251 -251 -62 -48 P
Slide 33: Income statement
Income statement EUR millions, IFRS 2012 2013 Q1/14 Q2/14 Q3/14 Q4/14 2014 2014 Q1/15 Q1/15 (adjusted)1 (adjusted)1 Operating income 467 482 89 114 112 11 326 438 93 169 Net interest and similar income 296 319 89 106 108 118 421 421 113 113 Net fee and commission income 23 9 0 0 0 1 1 1 7 7 Net trad
Slide 34: Portfolio: Total portfolio
Portfolio Total portfolio Regions 31/12/2014 / Total: EUR 65.2 bn EUR billions (EaD, Basel III)1 31/03/2015 / Total: EUR 66.5 bn 27.3 28.2 7.2 7.2 6.1 6.0 5.2 5.2 4.9 5.0 3.9 3.9 3.3 3.4 2.0 2.1 1.9 2.1 1.4 1.4 0.9 0.9 0.4 0.4 0.4 0.4 0.2 0.3 <0.1 <0.1 <0.1 <0.1 Germany2 Austria France Spain UK CEE
Slide 35: Portfolio: Problem loans
Portfolio Problem loans Total problem loans No. of individual cases Regions EUR millions (EaD, Basel III)1 EUR million (EaD, Basel III)1 VP (thereof: HETA) REF 60 56 1,143 928 Japan 100% 12% 16% Italy 12% Benelux -19% 21% 19% CEE 1,143 Spain 2 928 26% 314 27% Nordics 240 3 Germany 827 685 29% 37% HE
Slide 36: Portfolio: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Portfolio: Regions Portfolio: Property types 31/03/2015: EUR 25.6 bn (EaD, Basel III) 31/03/2015: EUR 25.6 bn (EaD, Basel III) Austria <1% Switzerland 1% Japan <1% Benelux 1% Portugal <1% Spain 2% Italy <1% Other 7% Hotel/Leisure 3% Nordics Mixed use 7% Retail/Sho
Slide 37: Real Estate Finance (REF): Regions
Portfolio Real Estate Finance (REF) Regions 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 25.6 bn 12.5 12.8 4.8 4.2 2.7 2.6 2.3 2.3 1.5 1.8 0.4 0.5 0.3 0.3 0.2 0.3 0.2 0.2 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Germany UK France CEE Nordics Spain Switzer- Benelux Austr
Slide 38: Real Estate Finance (REF): Property types
Portfolio Real Estate Finance (REF) Property types 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 25.6 bn 7.2 7.3 7.3 6.7 4.7 5.0 2.3 2.3 1.6 1.7 1.2 1.2 0.7 0.8 Office Retail/ Residential Warehouse/ Mixed use Hotel/ Other Shopping Logistics Leisure 31/12/2014
Slide 39: Real Estate Finance (REF): Loan types
Portfolio Real Estate Finance (REF) Loan types 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 25.6 bn 23.0 21.6 2.0 1.9 0.5 0.6 0.1 0.1 Investment loans Development loans Customer derivatives Other 31/12/2014 31/03/2015 Customer derivatives 2% Other <1% Custome
Slide 40: Real Estate Finance (REF): Internal ratings
Portfolio Real Estate Finance (REF) Internal ratings (EL classes) 31/12/2014 / Total: EUR 24.3 bn EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 25.6 bn Investment grade Non-investment grade 6.4 5.7 4.3 3.4 3.6 3.7 3.0 2.8 2.9 1.7 1.9 1.2 1.5 1.2 1.3 0.8 0.8 0.7 0.5 0.4 0.2 0.1 0.0 0.1 0.0 0.
Slide 41: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) Portfolio: Regions Portfolio: Borrower classification1 31/03/2015: EUR 7.9 bn (EaD, Basel III) 31/03/2015: EUR 7.9 bn (EaD, Basel III) Nordics 3% Supra <1% Corporation UK <1% Sovereign Austria 4% Supra Benelux 4% Public Sector Enterprise <1% 7% Sovereign (re
Slide 42: Public Investment Finance (PIF): Regions
Portfolio Public Investment Finance (PIF) Regions 31/12/2014 / Total: EUR 7.8 bn1 EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 7.9 bn 2.5 2.6 2.2 2.3 2.1 2.0 0.3 0.3 0.3 0.3 0.2 0.2 <0.1 0.1 <0.1 0.1 Germany France Spain Benelux Austria Nordics Supra UK 31/12/20141 31/03/2015 Nordics 3% Sup
Slide 43: Public Investment Finance (PIF): Borrower classification
Portfolio Public Investment Finance (PIF) Borrower classification1 31/12/2014 / Total: EUR 7.8 bn2 EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 7.9 bn 3.4 3.5 1.2 1.3 1.1 1.1 1.1 1.1 0.5 0.5 0.3 0.4 0.1 0.1 Sovereign Sovereign (related) Regional Government Regional Public Sector Supra Corpo
Slide 44: Public Investment Finance (PIF): Internal ratings
Portfolio Public Investment Finance (PIF) Internal ratings (EL classes) 31/12/2014 / Total: EUR 7.8 bn1 EUR billions (EaD, Basel III) 31/03/2015 / Total: EUR 7.9 bn Investment grade Non-investment grade 4.5 4.3 1.6 1.4 1.0 1.0 0.4 0.4 0.3 0.3 <0.1 <0.1 0.2 0.3 <0.1 <0.1 <0.1 0.0 0.0 0.0 0.0 0.0 0.0
Slide 45: Value Portfolio (VP)
Portfolio Value Portfolio (VP) Portfolio: Regions Portfolio: Borrower classification2 31/03/2015: EUR 25.9 bn (EaD, Basel III)1 31/03/2015: EUR 25.9 bn (EaD, Basel III)1 Benelux <1% Japan 1% Switzerland <1% Corporation <1% France 3% Nordics <1% Structured Finance <1% Supra Supra 4% Financial Institu
Slide 46: Value Portfolio (VP): Regions
Portfolio Value Portfolio (VP) Regions 31/12/2014 / Total: EUR 26.2 bn2 EUR billions (EaD, Basel III)1 31/03/2015 / Total: EUR 25.9 bn 8.8 8.4 6.7 6.8 3.3 3.3 1.9 1.9 1.5 1.5 1.4 1.4 1.1 1.2 0.9 0.9 0.3 0.4 0.2 0.1 0.1 0.1 <0.1 <0.1 Germany Austria Italy Spain CEE Portugal Supra France Japan Benelux
Slide 47: Value Portfolio (VP): Borrower classification
Portfolio Value Portfolio (VP) Borrower classification1 31/12/2014 / Total: EUR 26.2 bn3 EUR billions (EaD, Basel III)2 31/03/2015 / Total: EUR 25.9 bn 9.8 9.9 7.4 7.0 3.5 3.4 1.7 2.0 1.7 1.4 1.1 1.2 1.0 1.0 <0.1 <0.1 <0.1 <0.1 Sovereign Sovereign Regional Regional Public Sector Supra Financial Corp
Slide 48: Value Portfolio (VP): Internal ratings
Portfolio Value Portfolio (VP) Internal ratings (EL classes) 31/12/2014 / Total: EUR 26.2 bn2 EUR billions (EaD, Basel III)1 31/03/2015 / Total: EUR 25.9 bn Investment grade Non-investment grade 17.6 17.3 3.1 3.3 1.6 1.4 1.1 1.0 <0.1 1.0 1.0 0.7 0.7 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.
Slide 49: Consolidation & Adjustments (C&A)
Portfolio Consolidation & Adjustments (C&A) Portfolio: Regions Italy <1% Portfolio: Borrower classification3 31/03/2015: EUR 7.0 bn CEE <1% Japan <1% 31/03/2015: EUR 7.0 bn (EaD, Basel III)1 Nordics <1% Rest of World <1% (EaD, Basel III)1 Ireland <1% Benelux 2% ustria <1% Corporation <1% USA Financi
Slide 50: Consolidation & Adjustments (C&A): Regions
Portfolio Consolidation & Adjustments (C&A) Regions 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)1 31/03/2015 / Total: EUR 7.0 bn 4.3 3.5 0.9 0.8 0.8 0.8 0.7 0.4 0.3 0.2 0.3 0.1 0.2 0.2 0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 0.0 <0.1 Germany2 Spain Supra
Slide 51: Consolidation & Adjustments (C&A): Borrower classification
Portfolio Consolidation & Adjustments (C&A) Borrower classification1 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)2 31/03/2015 / Total: EUR 7.0 bn 2.8 1.8 1.7 1.6 1.4 1.1 0.8 0.8 0.8 0.4 0.4 0.2 <0.1 <0.1 Sovereign3 Sovereign (related) Regional Government Public Sector Supra Financial
Slide 52: Consolidation & Adjustments (C&A): Internal ratings
Portfolio Consolidation & Adjustments (C&A) Internal ratings (EL classes) 31/12/2014 / Total: EUR 6.9 bn EUR billions (EaD, Basel III)1 31/03/2015 / Total: EUR 7.0 bn Investment grade Non-investment grade 5.1 4.5 1.7 1.2 0.7 0.6 0.0 0.0 <0.1 <0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0
Slide 53: Funding: Public benchmark issuances since 2013
Funding Public benchmark issuances since 2013 Type WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price Senior Unsecured A1RFBU 17.01.2013 19.07.2016 EUR 500 mn +138bp 2.000% 99.587% Mortgage Pfandbrief A1RFBY 23.01.2013 30.01.2017 EUR 500 mn +8bp 0.875% 99.585% Senior Unsecured (1s
Slide 54: Ratings: Consolidation of rating relationships
Ratings Consolidation of rating relationships S&P DBRS Moody’s Fitch Pfandbrief ratings Public Sector Pfandbrief AA+1,6 Aa1 1,6 Mortgage Pfandbrief AA+ Aa2 Bank ratings Long-term BBB6 A (low) Baa22 A- Outlook/Trend Developing Negative Ratings under review Negative Short-term A-26 R-1 (low)3 P-22 F1
Slide 55: 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 56: Contact details
Contact details Communications Walter Allwicher +49 (0)89 2880 28787 walter.allwicher@pfandbriefbank.com Investor Relations Michael Heuber +49 (0)89 2880 28778 michael.heuber@pfandbriefbank.com Website www.pfandbriefbank.com/investor-relations.html © Deutsche Pfandbriefbank AG Freisinger Strasse 5 8
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