Mbh Mortgage Bank Co. Plc. · BET:TAKAREKJZB
Mbh Mortgage Bank — Takarék Mortgage Bank — Debt Investor Presentation (March 2021)
49 slides from Mbh Mortgage Bank's debt investor presentation, Mar 31, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION Takarék Mortgage Bank Co. Plc. March 31, 2021
Slide 2: Content
CONTENT 1. THE GROUP– SLIDE 4. 2. COMPANY OVERVIEW, OWNERSHIP & ORGANIZATION STRUCTURE, STRATEGY – SLIDE 9. 3. COVER POOL CHARACTERISTICS AND RISK PROFILE – SLIDE 18. 4. INVESTOR PROTECTION WITHIN THE INTEGRATION – SLIDE 25. 5. FUNDING & LIQUIDITY – SLIDE 28. 6. FINANCIAL INFORMATION – SLIDE 34. 7.
Slide 3: Abbreviations
ABBREVIATIONS TMB: Takarék Mortgage Bank Co. Plc OBA: National Deposit Insurance MTB: MTB Magyar Takarékszövetkezeti Bank Ltd. Jht.: Act on Mortgage Bank and Mortgage Bonds Takarekbank: Universal commercial bank of Takarek HCSO: Hungarian Central Statistical Office Group GDMA: Government Debt Manage
Slide 4: 1. The Group
1. THE GROUP SS TAKAREKJELZALOGBANK
Slide 5: Takarék Group's evolution
Takarék Group’s evolution Integration, mergers By 2017 the number of Cooperative Credit Institutions Pre-integration (CCIs) (from 2020: "integrated credit institutions") are No. of Saving Cooperatives: 122 significantly decreased through the mergers of 52 Low capitalization level in the CCIs.
Slide 6: Hungarian Bankholding Group
Hungary's 2nd largest banking group has been established by the share transfer of the key owners of MTB, MKB Bank and Budapest Bank to Hungarian Bankholding HUNGARIAN BANKHOLDING GROUP Starting a strategic cooperation Size of the new banking Group (20201) 1 A strategic cooperation was formed betwe
Slide 7: Roles and responsibilities within the Hungarian Bankholding Group in 2021
In 2021 Bankholding will develop the detailed merger roadmap and business strategy for the banking group, while the banks will operate separately and running the daily business Roles and responsibilities within the Hungarian Bankholding Group (HBG) in 2021 BANKHOLDING BANKS (MKB, BB, TAKARÉK) CBICI
Slide 8: Standalone management structure of Takarék Group
Standalone management structure of Takarék Group Central Body of Central body, Integrated Credit primarily regulatory Institutions (CBICI) and supervisory roles Business governance and Takarék United Cooperative in a new form, Cooperative ownership functions MTB ownership functions (formerly called
Slide 9: 2. Company Overview, Ownership & Organization Structure, Strategy
2. COMPANY OVERVIEW, OWNERSHIP & ORGANIZATION STRUCTURE, STRATEGY 9
Slide 10: Dominant debt security issuer in Hungary
Dominant debt security issuer in Hungary Pioneer of the domestic mortgage bond market • The first Hungarian mortgage bond • Best Structured Borrower – 2004, Euromoney was issued by Takarék Mortgage Bank (or TMB, former FHB in 1998) • Best Companies in Central & Eastern Europe – 2005, Euromoney • Ban
Slide 11: 22-year activity on local and international capital markets
22-year activity on local and international capital markets • More than HUF 1900bn total issue of covered and unsecured bonds since 2002, nominal amount of issues reaches HUF 60-130bn on annual basis, 16-20 transactions per year • Strong know-how basis: fundamentals of • mortgage covered bonds, • un
Slide 12: History of Takarék Mortgage Bank – Road to the Integration
History of Takarék Mortgage Bank (TMB) – Road to the Integration Year / Milestones /Strategic cooperations 1997/ FHB Mortgage Bank was established, as a state- FHB) Commercial Bank Ltd. become member s of (IOCCI) on owned specialized financial institution September 23, 2015 2006/ FHB Commercial Bank
Slide 13: Market position - dominant player on the local mortgage refinancing market
Market position - dominant player on the local mortgage refinancing market Market share of local mortgage banks based on 18%-20% market share in issued mortgage bond volume (2021 Q1) outstanding covered bonds in K&H MB TMB the local market 8,8% 19,6% UC MB 12,7% Outstanding mortgage bond volume Erst
Slide 14: TMB's Ownership structure
TMB’s Ownership structure – Share of MTB Zrt. is close to 90% Takarék Mortgage Bank Co. Plc. ownership stucture Composition of the board of directors (21.04.2021) Takarék Other (including József Vida: Chairman (Chairman and CEO of MTB since Zártkörű foreing and Befektetési Alap domestic 30 November
Slide 15: Organizational structure since 2017
Organizational structure since 2017 – Takarék Mortgage Bank (‚Refinancing mortgage bank’) General Supervisory Board Assembly Board of Directors Internal Audit CEO Deputy CEO Assett-liability and Human Treasury Mid- Compliance and Cover pool Legal dep. resources Capital markets Liquidity Office Bank
Slide 16: Business strategy and new services
Business strategy and new services Business strategy New strategic services • Simplified business model: mortgage refinancing and mortgage bond issuance only • Expansion of mortgage refinancing: Providing high quality services for partner banks outside Takarék Group and intra-group as well to increa
Slide 17: Green and ESG targets
Green and ESG targets MNB Green Programm TMB has been focusing on sustainability issues since 2019 and participates e actively in Hungarian and international programmes Green BSE covered • Participates in green dialogues initiated by the Magyar Nemzeti Bank about the bond proposal for ESG establishm
Slide 18: 3. Cover Pool Characteristics and Risk Profile
3. COVER POOL CHARACTERISTICS AND RISK PROFILE 18
Slide 19: Cover pool composition and coverage
Cover pool composition and coverage 400 000 000 000 400 000 000 000 MNB cb purchase MNB cb purchase MNB cb purchase MNB cb purchase program I. starts program I. ends program II. starts program II. ends 350 000 000 000 350 000 000 000 300 000 000 000 300 000 000 000 250 000 000 000 250 000 000 000 20
Slide 20: Cover pool characteristics I. (Q1 2021)
Cover pool characteristics I. (Q1 2021) Asset types of cover pool Interest rate distribution of cover pool FX distribution of cover pools 1,4% 1% 9% 10% 2021Q1 30% 2021Q1 31% 1% 2021Q1 2020Q4 69% 89% 70% 98,6% 90% Floating rate Fixed rate HUF Other Residential loans Commercial loans Substitute aseet
Slide 21: Cover pool characteristics II. (Q1 2021)
Cover pool characteristics II. (Q1 2021) Current LTV distribution of loans Remaining maturity structure of cover 240 pool loans HUF bn 120 HUF bn 200 100 160 80 120 60 80 40 40 20 0 0 0-70 % 70-100 % 100- % -5 years 5-10 years 10-15 years 15-20 years 20 years- Regional distribution of cover pool loa
Slide 22: Cover bond portfolio characteristics and rating, Q1 2021
Cover bond portfolio characteristics and rating, Q1 2021 Interest rate distribution of Maturity profile, as of 31 st of March, 2021 covered bonds (HUFm) 9% 81 871 71 200 67 034 91% 39 610 Fixed rate Floating rate 20 906 19 320 FX distribution of outstanding 6 650 3 000 500 covered bonds 7 979 0 0 0
Slide 23: Risk mitigating factors of TMB's covered bonds I.
Risk mitigating factors of TMB’s covered bonds I. Instrument and market specific factors Regulatory environment Issuer specific factors Price quotation Hungarian Mortgage Bank Act Integration membership – guarantee community Act on Bank Recovery and Resolution Overcollateralization and 6M liquidity
Slide 24: Risk mitigating factors of TMB's covered bonds II.
Risk mitigating factors of TMB’s covered bonds II. Regulatory environment Cover assets - Act no. XXX of 1997 on mortgage banks and mortgage bonds (Jht.) see: Appendix I. - LTV - Loans secured by a residential real estate can be taken in cover up to 70% of - Specialized credit institution principal t
Slide 25: 4. Investor Protection within the Integration
4. INVESTOR PROTECTION WITHIN THE INTEGRATION 25
Slide 26: Investor protection within the Integration I.
Investor protection within the Integration I. System of joint and several liability Szhitv. or Integration Law (CXXXV. of 2013): The members of the In case of the termination of the membership, the joint and several liability Integration Organization: the integrated credit institutions, the busi
Slide 27: Investor protection within the Integration II.
Investor protection within the Integration II. Amendment of the Szhitv (Act CXXXV. Of 2013.) or Integration Law Effects of the amendment of the Szhitv. or Integration Law The most important governing members of the Integration • The Parliament adopted the Act LXXX of 2020 (03.07.2020) on the amendme
Slide 28: 5. Funding & Liquidity
5. FUNDING & LIQUIDITY 28 SS TAKAREKJELZALOGBANK
Slide 29: Asset composition and funding structure (TMB standalone, IFRS)
Asset composition and funding structure (TMB standalone, IFRS) Interest earning assets Funding structure 0,3% 1,2% 8,0% 2020 YE 2020 YE 5,2% 17,4% 1,4% 39,3% 2019 YE 2019 YE 64,2% 13,2% 60,4% 43,5% 98,6% 47,4% Interbank borrowings Own issued covered bonds Interbank loans Own originated Loans Securit
Slide 30: Funding, Issue strategy of TMB
Funding, Issue strategy of TMB Issuance planning Basic strategic principles • Annually renewed Issuance Program and Base Prospectus approved by the • TMB focuses primarily on covered bond issuance MNB, max. HUF 200 billion volume • TMB’s primary task is to meet the refinancing needs, even • Optional
Slide 31: Structure of financial transaction within the Integration
Structure of financial transaction within the Integration Money Interbank depo / • Centralized liquidity management and funding market IRS strategy within the Integration • MTB as the only entity raising MM funding in the Integration from the market MTB • TMB, as a specialized institution provides r
Slide 32: Takarék mortgage covered bond investor base
Takarék mortgage covered bond investor base (based on data available at the time of issuance), 2021 Q1 Insurance co. Retail 2,56% 0,08% Pension funds 0,58% Banks (w/o MNB) Banks, Magyar Nemzeti Bank (central Investment funds 39,96% bank), investment funds dominate 21,73% the market of Takarék mortga
Slide 33: Covered bond issuance: volumes and spreads vs HGB benchmark
Covered bond issuance: volumes and spreads vs HGB benchmark Public Covered Bond Issuances auctions/subscriptions HUFm bps MNB mortgage bond purchase program I. MNB mortgage bond purchase program II. . 110 28 000 . 120 24 000 100 84 82 77 76 74 70 80 72 70 69 69 67 20 000 61 59 57 60 52 52 51 50 46 4
Slide 34: 6. Financial Information
6. FINANCIAL INFORMATION 34 SS TAKAREKJELZALOGBANK
Slide 35: Financial performance I. - major indicators
Financial performance I. - major indicators (TMB standalone, IFRS) Change : End-2020./End- HUF million H1 2019 End-2019 H1 2020 End-2020 2019 Major indicators Total assets 329 084 342 897 435 129 612 141 78.5% Refinanced loans 190 348 216 983 230 957 287 061 32.3% Own originated loans (gross) 70 129
Slide 36: Financial performance II. - major indicators
Financial performance II. - major indicators (TMB standalone, IFRS) Change : End- millió forintban End-2019 End-2020 2020./End- 2019 Robust growth in Profitability indicators net interest income Net interest income 2 563 3 212 25.3% YoY Net fee and commissions income 155 167 7.7% Operating income ne
Slide 37: Financial performance III. - major indicators
Financial performance III. - major indicators (TMB standalone, IFRS) Balance sheet total (HUF million) Shareholder's equity (HUF million) 612 141 66 684 65 043 65 109 435 129 63 863 333 488 329 084 342 897 62 184 31/12/2018 30/06/2019 31/12/2019 30/06/2020 31/12/2020 31/12/2018 30/06/2019 31/12/2019
Slide 38: Financial performance IV. - major indicators
Financial performance IV. - major indicators (TMB standalone, IFRS) Refinanced mortgage loans Own originated loans (HUF million) (HUF million) 287 061 230 957 217 000 190 182 169 286 77 100 68 103 58 800 54 550 49 446 31/12/2018 30/06/2019 31/12/2019 30/06/2020 31/12/2020 31/12/2018 30/06/2019 31/12
Slide 39: Capital position (consolidated, Takarék Group)
Capital position (consolidated,Takarék Group) HUF million End-2020 End-2019 According to the resolution no. H-EN-I- 36./2017 (on 1 January 2017) the National Bank of Hungary authorized Takarék Group to apply individual exemption and Own funds 276 185 269 529 terminated the obligation for compliance
Slide 40: 7. Appendix
7. APPENDIX SS TAKAREKJELZALOGBANK
Slide 41: Regulatory framework I.
Regulatory framework I. Act no. XXX of 1997 on mortgage banks and mortgage bonds (Jht) I. Mortgage bond owners enjoys a special status versus other a) ordinary and supplementary cover recognized in the creditors in the case of Issuer’s insolvency register of cover at the starting date of liquidatio
Slide 42: Regulatory framework II.
Regulatory framework II. Act no. XXX of 1997 on mortgage banks and mortgage bonds (Jht) II. The cover system Harmonization of EU Covered Bond i) The coverage Directive with domestic mortgage bank act Mortgage banks shall at all times have sufficient cover assets of a value higher than the sum of the
Slide 43: Regulatory framework III.: Resolution Act
Regulatory framework III.: Resolution Act Special status of the covered bonds based on the Resolution Act Hungarian regulation: European regulation: The Act XXXVII of 2014 on the further development of institutional protection for The Part Four (Capital requirement for market risk, large exposures)
Slide 44: MNB's measures to mitigate the negative economic effects of COVID-19
MNB’s measures to mitigate the negative economic effects of COVID-19 – measures affecting the Issuer I. MNB’s mortgage covered bonds purchasing program II. was Moratoria 1: launched from May 18 2020 with the below conditions: • From 19 March until 31 December 2020 Fix rate • Effective for loans th
Slide 45: MNB's measures to mitigate the negative climate change impacts
MNB’s measures to mitigate the negative climate change impacts– measures affecting the Issuer II. Magyar Nemzeti Bank launched its Green Programme in February 2019 MNB’s Green objectives: - Supporting the development of sustainability risk management functions at money and capital markets - Improvin
Slide 46: Mortgage Funding Adequacy Ratio (MFAR)
Mortgage Funding Adequacy Ratio (MFAR) to decrease the maturity mismatch in the mortgage lending market MFAR increases the role of mortgage Calculation and reviews of MFAR effective from April 1, 2017 and 20% banks and 25% effective from October 1 • The regulation aims at increasing 2018 and October
Slide 47: Contacts
CONTACTS Bozzai Rita Senior Advisor / Capital markets E-mail: bozzai.rita@takarek.hu Telefon: +36 20 429 4002 Tóth Illés Head of Capital markets E-mail: toth.illes@takarek.hu Telefon: +36 30 417 4356
Slide 48: Thank you for your attention!
THANK YOU FOR YOUR ATTENTION!
Slide 49: Disclaimer
Disclaimer This presentation contains forward-looking statements and information. There are many factors, which could cause actual results and process to differ materially from those expressed in this document. The forward-looking statements are based on the on the present legal and regulatory envir
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