Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Debt Investor Presentation (May 2025)
53 slides from Deutsche Pfandbriefbank's debt investor presentation, May 14, 2025
Slide 1: Debt Investor Update Results Q1/25
Debt Investor Update Results Q1/25 14 May 2025
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
KEY MESSAGES → Strategy 2027 starts to gain traction → Focus on profitability accretive REF new business as one key element of the path towards 2027 → REIS: Organisational prerequisites created, partner networks and deal pipeline established → Target Operating Model and a new IT infrastructure provi
Slide 4: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 4
Slide 5: Market Sentiment
MARKET SENTIMENT Europe and Germany stabilizing, USA volatile Macro Economics Real Estate Markets 0.2% 91.4 pts € 500 bn +17% -1.85 pts 65% GDP growth in Q1 25 Ifo Business Climate Index infrastructure package in CRE transactions in Q1 25 pbbIX bottoming out (Q1 25) expect growing new business (-0.3
Slide 6: Strategy 2027
STRATEGY 2027 Three key pillars and three key approaches RE FINANCE RE INVESTMENT NON- WHAT? SOLUTIONS SOLUTIONS CORE Diversification and increase in pbb invest and Originate & Value preserving run-down of profitability Cooperate Non-Core portfolio Flexible, international and efficient platform Flex
Slide 7: RE Finance Solutions (REFS)
RE Finance Solutions (REFS) Traction gained on profitability and portfolio diversification REF portfolio size RoTE (new business) → Stable portfolio size at targeted level for 2027 with development portfolio further de-risked → New business focus on profitability and Target volume ~9% diversificatio
Slide 8: RE Investment Solutions (REIS)
RE Investment Solutions (REIS) New division takes care of pbb’s entire off-balance sheet business Originate & Cooperate pbb invest Partner network Deal pipeline Investor network Product pipeline for Established >15 deals >40 with high Whole Loan & (03/25) interest Equity Fund → Organisational set up
Slide 9: Leaner Organisation
LEANER ORGANISATION Leaner organisation provides for higher process and cost efficiency → Cost trajectory remains on track for guided CIR of Senior Production ~50% for 2025, incl. additional savings potential management hub already identified as part of the Strategy 2027 Positions Madrid → Target op
Slide 10: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 10
Slide 11: Operating & Financial Overview: Focus on profitability
OPERATING & FINANCIAL OVERVIEW Focus on profitability REF new business → Selective new business with REF portfolio € bn (financing volume) → In line with Strategy 2027, € bn (commitments, incl. extensions > 1 yr.) strict focus on profitability target level of € ~29 bn → New business volume up by alr
Slide 12: Operating & Financial Overview: Transition into higher profitability
OPERATING & FINANCIAL OVERVIEW Transition into higher profitability Operating income € mn (IFRS) → Balance sheet management in General admin. Expenses € mn (IFRS) → After finalisation of IT 2024 resulting in lower portfolio transformation in 2024, GAE NII/NCI Realisation & other income Personnel Non
Slide 13: Risk costs minus 45% y-o-y – real estate markets bottoming out
OPERATING & FINANCIAL OVERVIEW Risk costs minus 45% y-o-y – real estate markets bottoming out Net income from risk provisioning € mn (IFRS) Stage 1&21 Stage 3 Other2 Stage 1&2 € mn (IFRS) Other Germany 1 Other 0 22 Germany -2 7 5 -10 -5 -9 -25 -31 -37 -63 -59 UK 12 UK 0 -30 -26 Q4/24 Q1/25 USA € -5
Slide 14: Loss allowances slightly up due to low usage
OPERATING & FINANCIAL OVERVIEW Loss allowances slightly up due to low usage Balance sheet loss allowances € mn Stage 1&2 € mn (IFRS) Stage 1 Stage 2 Stage 3 Other Other UK 10 Germany Germany 13 8 UK 30 8 30 543 564 39 43 93 81 12/24 03/25 € 132 mn € 124 mn 411 440 84 73 12/24 03/25 USA USA → Stages
Slide 15: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 15
Slide 16: REF Portfolio Performing
REF PORTFOLIO PERFORMING Bottoming out of Real Estate markets also reflects in pbb’s portfolio REF Portfolio € bn (EaD, Basel III, 2025: Basel IV) → REF portfolio de-risked/reduced y-o-y, especially US and German 55% 56% 56% 56% development portfolios 54% Avg. LTV1 -4% Valuation change -8% -6% → Ong
Slide 17: REF Portfolio Performing: Portfolio quality remains solid
REF PORTFOLIO PERFORMING Portfolio quality remains solid Performing Portfolio € bn (EaD, Basel III, 2025: Basel IV) → Performing REF portfolio reduced by € 0.4 bn • Repayments & others (€ 0.3 bn, incl. neg. USD-effect of € 0.2 bn) 31.3 • Transfer to NPL (€ 0.1 bn) 27.8 27.4 → Portfolio quality remai
Slide 18: REF Portfolio NPL
REF PORTFOLIO NPL NPL volume slightly down in Q1/25 NPL Portfolio € mn (EaD, Basel III, 2025: Basel IV) → Slight decrease of NPL portfolio of € -16 mn, mainly driven by active NPL management and FX changes +69 → Q1/25 with 1 addition and 4 reductions -536 1,903 1,887 855 +57 -33 -40 1,516 12 loans -
Slide 19: Focus: Development Portfolio
FOCUS: DEVELOPMENT PORTFOLIO No new NPL loan with NPL volume managed down Portfolio € bn Phase 31/03/2025 → Improved risk profile in development portfolio (EaD, Basel III, 2025: Basel IV) (commitments, Basel IV) • Portfolio reduced by € 0.2 bn Performing Non-performing • 5 loans repaid/transferred t
Slide 20: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 20
Slide 21: Funding and Liquidity
FUNDING AND LIQUIDITY Resilient and balanced funding strategy – focus on efficient funding Resilient and balanced funding Balanced Funding Retail Deposits → Pfandbriefe as dominant and highly resilient source of funding → Balanced proportion of wholesale unsecured funding and retail deposits → Broad
Slide 22: 50% of the funding plan 2025 already executed
FUNDING AND LIQUIDITY 50% of the funding plan 2025 already executed – secondary spreads tighter New long-term funding1 Private placements Benchmark issuances Diversified Funding Base € bn 31/03/2025: € bn, nominal values 2023: € 3.3 bn 2024: € 2.5 bn Q1/25: € 1.1 bn Mortgage Pfandbriefe Spread 39 20
Slide 23: Diversified funding base
FUNDING AND LIQUIDITY Diversified funding base Unsecured Funding Retail deposits – development and maturity profile3 € bn Wholesale Unsecured Retail Deposits Call money 1-3Y term 4-5Y term 6-10Y term WAL WAL WAL 3.7 yrs 3.7 yrs 40% 3.2 yrs 48% 49% 7.6 7.4 6.6 0.6 0.7 0.9 4.8 4.5 3.8 91% 60% term 52%
Slide 24: Own Funds and Eligible Liabilities exceed regulatory requirements
FUNDING Own Funds and Eligible Liabilities exceed regulatory requirements € bn SP5 SNP Other Subordinated Tier 1 CET 11 → Buffer for Senior Preferred (SP) investors due to high volume of capital instruments and Senior Non- MREL2 Composition of Rundown Preferred (SNP) liabilities (31/03/2025) Liabili
Slide 25: Mortgage Cover Pool
MORTGAGE COVER POOL Diversification by countries and property types Mortgage Cover Pool Spain 1.6% Switzerland 0.2% Key metrics Mortgage cover pool (nominal) 31/03/2025 Austria 1.1% Italy 0.4% Benelux Pfandbriefe outstanding € 15.4 bn 4% Other Nordic countries 7% Cover funds € 18.6 bn 23% Over-colla
Slide 26: Mandated Ratings
MANDATED RATINGS Bank ratings S&P Long-term BBB- Outlook Stable Short-term A-3 Stand-alone rating1 bb+ Long Term Debt Ratings “Preferred” senior unsecured Debt2 BBB- “Non-preferred” senior unsecured Debt3 BB- Subordinated Debt B+ Pfandbrief ratings Moody’s Mortgage Pfandbrief Aa1 Public Sector Pfand
Slide 27: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 27
Slide 28: Capital: Basel IV F-IRBA applied since 1st January 2025
CAPITAL Basel IV F-IRBA applied since 1st January 2025 Basel IV: capital and leverage ratios (IFRS) → Basel IV F-IRBA applied from 1st January 2025 with CET1 ratio having increased to 15.5% from 14.4% (F-IRBA standardised1) as per 12/24 Transitional • RWA reduction of € 2.7 bn period • EL shortfall
Slide 29: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 29
Slide 30: Summary
SUMMARY → Solid Q1/25 delivered → Transition into higher profitability started following balance sheet optimisation in 2024 → Real Estate markets bottoming out with risk costs having significantly decreased → Strategy 2027 starts to gain traction → Focus on profitability and diversification in RE Fi
Slide 31: Agenda
AGENDA 1. Strategy 2027 and Markets 2. Operating and Financial Overview 3. Portfolio Quality 4. Funding 5. Capital 6. Summary 7. Appendix Results Q1/25 (IFRS, pbb Group, unaudited) 14 May 2025 31
Slide 32: CMD Strategy Update: Key Performance Indicators for 2027
CMD STRATEGY UPDATE Key Performance Indicators for 2027 OPERATING INCOME FEE INCOME CIR € ~600 mn ~10% <45% RoTE1 CAPITAL DISTRIBUTION CET-1 RATIO3 ≥50% 8% >15.5% (incl. share buybacks)2 Note: 1) Return on Tangible Equity (before tax); RoTE excl. deferred taxes, goodwill & other intangible assets 2)
Slide 33: Guidance 2025
GUIDANCE 2025 New business (incl. extensions > 1 year) € 6.5-7.5 bn REF Portfolio Financing volume € ~29 bn Operating Income € 500-540 mn thereof: NII + NCI € 470-490 mn P&L LLP << 2024 CIR ~50% Pre- tax profit >> 2024 Profitability RoTE before taxes 3.5-4.5% Capitalisation CET 1 ratio (Basel IV F-I
Slide 34: Key Figures
KEY FIGURES pbb Group Income statement (€ mn) 2022 Q1/23 Q2/23 Q3/23 Q4/23 2023 Q1/24 Q2/24 Q3/24 Q4/24 2024 Q1/25 Net interest income 489 106 110 132 134 482 125 121 113 106 465 107 Net fee and commission income 8 1 1 1 0 3 1 2 0 2 5 2 Net income from fair value measurement 20 1 -1 2 -2 0 -3 -1 8 -
Slide 35: REF New Business
REF NEW BUSINESS Selective new business volume with margins on elevated level Volume of strategic REF portfolio in € bn → Strategic REF portfolio slightly down q-o-q, in line with Strategy 2027 financing volume → Avg. portfolio margin further up → New business volume of € 1.1 bn up by ~55% vs. Q1/24
Slide 36: REF New Business: Diversification supports management of the cycle
REF NEW BUSINESS Diversification supports management of the cycle As of 31/03/25 Regions Property types Mixed use/ other € 1.1 bn Other Germany Logistics/ 10% storage 30% 30% 11% New business Commitments, 49% Office incl. extensions > 1 year 6% 5% France Nordics 30% 15% 14% Retail CEE USA Mixed use/
Slide 37: Focus: USA Performing
FOCUS: USA PERFORMING Portfolio reduced by € 1.4 bn y-o-y Performing Portfolio € bn (EaD, Basel III, 2025: Basel IV) → Performing US portfolio reduced by € 0.1 bn in Q1/25 through FX-effects, no Transfer to NPL 4.6 → Full focus on risk mitigation in existing portfolio → 100% of the portfolio reviewe
Slide 38: Focus: USA NPL
FOCUS: USA NPL Stabilisation of US NPL portfolio Non-Performing Portfolio € mn (EaD, Basel III, 2025: Basel IV) → Focus on NPL management pays off • No new addition in Q1/25 • Volume decrease due to FX-effects -12 • Furthermore, the previously reported US loans (€ 190 mn, reduced by € 10 mn -353 mai
Slide 39: Focus: Germany Performing
FOCUS: GERMANY PERFORMING Well diversified, high quality portfolio Performing Portfolio € bn (EaD, Basel III, 2025: Basel IV) → Performing German portfolio reduced by € 0.1 bn in Q1/25 through transfer of 1 loan to NPL (1 German office loan € 57 mn) 13.6 → German CRE portfolio well diversified by re
Slide 40: Focus: Office Performing
FOCUS: OFFICE PERFORMING Office portfolio well diversified by regions with US share of 20% Performing Portfolio € bn (EaD, Basel III, 2025: Basel IV) → Performing Office portfolio reduced by € 0.2 bn through • Repayments & others (€ 0.1 bn, incl. neg. USD-effect of € 0.1 bn) 16.0 • Transfer to NPL (
Slide 41: Focus: Office NPL
FOCUS: OFFICE NPL Pressure on office NPL portfolio mainly from US loans Non-Performing Portfolio € mn (EaD, Basel III, 2025: Basel IV) → Slight decrease in Office NPL portfolio due to active NPL management → Q1/25 with 1 addition, 1 reduction and FX/EaD-effects -16 • Additions: 1 German office loan
Slide 42: NPL Portfolio
NPL PORTFOLIO Active restructuring/work-out ongoing Geographical breakdown € mn (EaD, Basel III, 2025: Basel IV) Breakdown by property type € mn (EaD, Basel III, 2025: Basel IV) 1,903 1,887 1,903 1,887 1,648 1,648 231 235 210 214 168 267 260 Others Others & Guaranteed 194 350 263 267 France 655 673
Slide 43: Portfolio: Real Estate Finance (REF)
PORTFOLIO Real Estate Finance (REF) Regions Property types Other 1% Other 2% Other Europe Other Europe Hotel 3% Mixed use 1% Hotel 2% Mixed use 1% Austria 1% Austria 1% Retail Retail Czech Republic 2% 10% Czech Republic 2% 10% Sweden 4% 10% 11% Sweden 4% Poland Poland 6% 6% 45% Germany 45% Germany R
Slide 44: REF Portfolio: LTV development reflects market environment
REF PORTFOLIO LTV development reflects market environment LTV – Regions LTV – Property types (€ bn, commitments, Basel III, 2025: Basel IV) 1 (€ bn, commitments, Basel III, 2025: Basel IV) 1 12/23 12/24 03/25 12/23 12/24 03/25 Avg. LTV Avg. LTV 12/23: 53% / 12/24: 56% / 03/25: 56% 12/23: 53% / 12/24
Slide 45: REF Portfolio – LTV Cluster
REF PORTFOLIO – LTV CLUSTER LTV development reflects market environment Total REF portfolio € mn, commitments, Basel III, 2025: Basel IV Office € mn, commitments, Basel III, 2025: Basel IV 12/23 12/24 03/25 Avg. LTV1: 12/23: 53% / 12/24: 56% / 03/25: 56% Avg. LTV1: 12/23: 56% / 12/24: 62% / 03/25: 6
Slide 46: REF Portfolio: Sub-segments (Office)
REF PORTFOLIO Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning → Office demand in Europe is stabilizing evidenced → Shift of demand towards modern, green, → Focus on good locations in main European and by mostly positive net absorption forecasts for centrally
Slide 47: REF Portfolio: Sub-segments (Logistics)
REF PORTFOLIO Sub-segments Property Regions Regions Evaluation Evaluationofofcurrent currentsituation situation Challenges Challenges Risk positioning Risk positioning → E-commerce, automation & AI and the need for → Monoline logistics centres depending on → Strategic approach; expert team since 201
Slide 48: REF Portfolio: Sub-segments (Retail)
REF PORTFOLIO Sub-segments Property Regions Regions Evaluation Evaluationofofcurrent currentsituation situation Challenges Challenges Risk positioning Risk positioning → Lower inflation and improving real earnings → Short Term: B-locations/older shopping centres → Selective approach with consequent
Slide 49: REF Portfolio: Sub-segments (Residential)
REF PORTFOLIO Sub-segments Property Regions Regions Evaluation Evaluationofofcurrent currentsituation situation Challenges Challenges Risk positioning Risk positioning → The market of owner-occupied properties is → Cash flow under pressure due to interest → Portfolio volume of € 4.9 bn with avg. LTV
Slide 50: REF Portfolio: Sub-segments (Hotel)
REF PORTFOLIO Sub-segments Property Regions Regions Evaluation Evaluationofofcurrent currentsituation situation Challenges Challenges Risk positioning Risk positioning → The travel recovery expected to continue in → Despite recovery many hotels due to → Selective approach and strict adherence to 202
Slide 51: Portfolio: Non-Core Unit (PIF & VP)
PORTFOLIO Non-Core Unit (PIF & VP) Regions Borrower classification1 UK 1% Other Rest of World 2% UK 1% Other Rest of World 1% Supranational 1% Corporation 1% Supranational 1% Corporation 1% Other Europe 3% Finland <1% Other Europe 3% Finland <1% Financial Institution 3% PSE (related) <1% Financial I
Slide 52: Pfandbrief Cover Pool: ISC and Mortgage Lending Value example
PFANDBRIEF COVER POOL ISC and the effect of the Mortgage Lending Value – very simplified example! Interest Service Cover Loan-to-Value Ratio (explanatory calculation for existing loans) Loan Valuation Refinancing MV € 100 mn Borrower’s Difference MV Equity e.g. 35% € 5.0 mn rent p.a. at 5% property
Slide 53: Contact Details
CONTACT DETAILS Goetz Michl Silvio Bardeschi Head of Funding & Debt Investor Relations Funding & Debt Investor Relations +49 (0)6196 9990 2931 +49 (0)6196 9990 2934 goetz.michl@pfandbriefbank.com silvio.bardeschi@pfandbriefbank.com Website www.pfandbriefbank.com/investor-relations.html © Deutsche Pf
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