Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — F. van Lanschot Bankiers — Debt Investor Presentation (September 2016)
63 slides from Kempen European High Dividend Fund N.V. N's debt investor presentation, September 2016
Slide 1: AB Pe ee pe ef
AB Pe ee pe ef eer ee ee
Slide 2: Disclaimer
This presentation (“Presentation”) is provided for information purposes only and does not constitute, or form part of, any offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of, or any solicitation of any offer to underwrite, subscribe for or otherwise acquire or dispos
Slide 3: Executive summary - Covered Bond Programme
Executive summary Executive summary - Covered Bond Programme Robust Programme Structure Dutch Law based, registration with Dutch Central Bank AAA / AAA rated by S&P and Fitch Significant de-linkage from rating of the Issuer Contractually committed minimum OC of 15% True sale of the assets with live
Slide 4: Van Lanschot at a glance
Van Lanschot at a glance Van Lanschot’s profile Clear choice for wealth management targeting institutional and private clients Strong brand names, reliable reputation, rich history Mutually reinforcing core activities with their own distinct culture and positioning as niche players Straightforward g
Slide 5: Highlights 2016 half-year results
Executivesummary Highlights 2016 half-year results : ; Setlammioitne ater (that Client assets €66.2 billion (+5%) €37.7 million in challenging Assets under management market €54.3 billion (+8%) Capital ratios continue to improve Good progress on Strategy 2020 Acquisition private banking CET I ratio:
Slide 6: 1. Van Lanschot
1. Van Lanschot
Slide 7: Van Lanschot builds on the experience of its core activities
Van Lanschot As a wealth manager Van Lanschot builds on the experience of its core activities tt | van tanschor * Including Evi ** As of 30 June 2016. AuM of Asset Management including €8.8 billion of AUM managed for Van Lanschot Private Banking i KEMPEN Asset Management Specialist European investme
Slide 8: Core activities have mutually reinforcing strengths
Van Lanschot Van Lanschot’s core activities have individual strengths which are mutually reinforcing Investment beliefs Asset allocation Manager selection Discretionary management Product development Asset Management Private Banking 4 oat Van Lanschot Structured products Order execution CLIENTS EMPL
Slide 9: Transforming from small universal bank to specialised wealth manager
Van Lanschot Transforming from small “universal” bank to specialised wealth manager Why wealth management? Building on our distinctive strengths Supported by demographics and economic fundamentals We can build on our inherent strengths in There is room for a high-quality, high-service, private and i
Slide 10: April 2016 next phase of wealth management strategy
Van Lanschot In April 2016 the next phase of our wealth management strategy was introduced Key themes for core activities: Private Banking * Enhance client experience through omni- channel servicing model * Foster AuM growth by enhancing front-line effectiveness Asset Management * Intensify distribu
Slide 11: Summary of 2016 half-year results
Van Lanschot Summary of 2016 half-year results Stable result in challenging markets Capital position further strengthened Strategy 2020 started Underlying net result stable at €37.7 million (H1 2015: €37.7 million) * Net result amounts to €31.5 million (H1 2015: €37.7 million) * Commission income un
Slide 12: 2016 half-year results by segment
Van Lanschot 2016 half-year results by segment Private Banking Asset Management Merchant Banking Saag profit improvement, assets under management stable Underlying net result increases to €16.8 million (H1 2015: €4.5 million) on the back of substantially lower loan loss provisioning and cost reducti
Slide 13: Capital & Funding
1. Van Lanschot Capital & Funding 12
Slide 14: Balance sheet shows strong capital and funding position
Balance sheet shows strong capital and funding position Significant capital buffer Total equity of €1.3 billion Common Equity Tier | ratio (phase-in) 17.3%* Leverage ratio (fully loaded) 6.4% Low-risk assets Loan book shows a decrease of €0.2 billion to €10.5 billion (compared with 31 December 2015)
Slide 15: Van Lanschot has various funding programmes
Van Lanschot Capital & Funding Van Lanschot has various funding programmes Unsecured programmes Debt Issuance Programme / Non-MTN / Specials * €5.0 billion programme * Euro and non-euro issues on stand-alone documentation * Used for public wholesale funding (senior unsecured and * Private placements
Slide 16: Well diversified funding profile
Well diversified funding profile Largely ‘self funded’ with a funding ratio of 94.0% at 30 June 2016 Van Lanschot Capital & Funding As a wealth manager, majority of funding consists of customer savings and deposits Funding mix is complemented by wholesale funding Comfortable funding diversification
Slide 17: 2. Covered Bond Programme
2. Covered Bond Programme 16
Slide 18: Programme Highlights (1/2)
Covered Bond Programme Programme Highlights (1/2) i | van tanschr Con nal Pass-Trough Covered Bond Programme Charact S naa ana Fite a Condtional Pas Trough Contractually committed minimum OC “ Max seyears Applicable law Dutch Law EUR 100,000 Programme Parties Overview F. Van Lanschot Bankiers N.V. (
Slide 19: Programme Highlights (2/2)
Programme Highlights (2/2) Covered Bond Programme Dual Recourse Regulatory Treatment Industry Compliance Key Benefits Y Obligation for Van Lanschot to redeem the bond at expected maturity date v Recourse to CBC in case of default of Van Lanschot UCITS compliant CRR Article 129 compliant Expected to
Slide 20: Conditional Pass-Through Mechanism (1/2)
Conditional Pass-Through Mechanism (1/2) Covered Bond Programme Conditional Pass-Through Covered Bond: Features Going-Concern Issuer Event of Default Under going-concern conditions, the Covered Bonds are bullet securities, i.e. Van Lanschot pays the coupon and principal payments The Asset Cover Test
Slide 21: Conditional Pass-Through Mechanism (2/2)
In case a Covered Bond becomes Pass- Through the maturity date of that bond is extended by 32 years from the Maturity Date The CBC will attempt to sell a randomly selected part of the cover pool at least every six months Under such a sale, the outcome of the Amortisation Test is not allowed to deter
Slide 22: Van Lanschot CPTCB Structure
Van Lanschot CPTCB Structure” A pool of Dutch prime residential mortgages is transferred to the CBC and subsequently pledged to the Security Trustee. Hence, the Cover Poolis segregated in the CBC Van Lanschot’s obligation of payments to investors on the bonds is backed by an irrevocable guarantee of
Slide 23: Overview of CPTCB Structures
Overview of CPTCB Structures Van Lanschot Legislative Yes Issuer ratings (Fitch/Moody’s/S&P) ASI IG EIS Programme ratings (Fitch/Moody’s/S&P) ‘AAA/NR/AAA Repayment Type Conditional Pass-Through Prime Dutch residential mortgages Extension Period Collateral type Max. 32 years Source: Van Lanschot, NIB
Slide 24: Van Lanschot Investor Reporting
Covered Bond Programme Van Lanschot Investor Reporting Investor Repo ry so co . ig for Covered Bonds Van Lanschot is a member of the Dutch Association of Covered Bond issuers (DACB). The objective of the DACB is to continuously improve the quality of the Dutch covered bond product offering (See also
Slide 25: 3. Mortgage portfolio
3. Mortgage portfolio 24
Slide 26: Strong portfolio with consistently low losses
Strong portfolio with consistently low losses Private Banking + — Stable mortgage book. New mortgage business almost compensates for repayments and prepayments * Average loan to value 70% (2015: 71%) * — Other loans includes loans to wealthy private individuals to pay for second homes, for instance,
Slide 27: Healthy seasoned and geographically well distributed portfolio
68% of the total mortgages exposure relates to contracts older than eight years, and therefore are less affected by house price decline The mortgage portfolio is well distributed throughout The Netherlands The three regions with highest concentration rates are: * Gooi & Vechtstreek; * The Hague & Wa
Slide 28: LTVs indicate stabilisation of house prices
Mortgage portfolio LTV’s indicate stabilisation of house prices * Van Lanschot’s target client base has naturally led to a mortgage portfolio with a relatively high average balance of € 440,000 + Allmortgage loans are compliant with the Dutch Code of Conduct * 73.3% of the total exposure (by balance
Slide 29: Proportion of redemption type mortgages increases
Mortgage portfolio Proportion of redemption type mortgages increases * The proportion of interest only mortgage loans is trending down as a result of industry-led measures, clients’ focus on deleveraging and Repayment types in new mortgage production amended tax legislation As per 31-12-15 * Mortgag
Slide 30: Annex I - Cover pool
Annex | - Cover pool 29
Slide 31: Pool characteristics (I/II)
Pool characteristics (I/II) Key pool characte: 's as of 30 June 2016 Principal balance € 1,300,561,096 Value of savings amount* € 11,489,313 Net principal balance € 1,307,723,807 Construction deposits €7,162,711 Fixed rate €1,180,286,176 Floating rate € 127,437,632 Number of loans 3,227 Number of lo
Slide 32: Pool characteristics (II/III)
Cover Pool Pool characteristics (II/III) Current Loan to Original Market Value Geographical Distribution 25% 30% 20% 25% 7 15% 20% 15% 10% 10% 9 5% 1 ] [] 505 om — = — _ a = S © f© © © OE PB OP HY oO £C © C&C F& w& &€& oC S&F KX OS OO a a a a a a - < s Sec << s® os RS e & s RS xs a <! CNT Te & & & “
Slide 33: Pool characteristics (III/III)
Pool characteristics (III/III) Product type 1% 4% IN Annuity =Investment =InterestOnly Life mLineair = Savings Interest Rate (%) 35% 30% 25% 20% 15% 10% ~ gittnal 7 ie. fT 1 -151.5-22-2,52.5-33-3.53.5-44-4.54.5-55-5.55.5-66-6.565-7 Cover Pool Seasoning (in years) 50% 40% 30% 20% - |] i 0% Lt <5 <10
Slide 34: Annex II - Van Lanschot Mortgages
Annex Il —- Van Lanschot Mortgages
Slide 35: Van Lanschot: product offering
Van Lanschot Mortgages Van Lanschot: product offering + Advice on financial planning and wealth management + Focus on tailor-made advice and a high quality service level + Mortgage loans offered to clients as part of a full-service financial solution concept. Preferable on the basis of advice but al
Slide 36: Van Lanschot: underwriting (I/II)
Van Lanschot Mortgages Van Lanschot: underwriting (I/Il) Dutch Code of Conduct leading Governance om Ory Gen ef Gyn fia h . . * Mortgage underwriting criteria within Van Lanschot have evolved over time in line with the Dutch Code of Conduct, National Law and general market practice. The criteria bel
Slide 37: Van Lanschot: underwriting (II/II)
Van Lanschot Mortgages Van Lanschot: underwriting (II/II) + Various fraud checks done (BKR, SFH, VIS, EVA, employer’s certificate)* neue & + Continuous contact between banker and client neurance * Mandatory hazard insurance based on reconstruction value Requirements _. + Life insurance compulsory ab
Slide 38: Servicing during the life cycle of a mortgage loan
Servicing during the life cycle of a mortgage loan Application * Acceptance + Payment of loan to Notary Public through credit system Offering Processing in credit system Production of mortgage offer (and possible other credit offerings) Sending directly to client or banker Follow-up on progress Chan
Slide 39: Van Lanschot: arrears management
Van Lanschot Mortgages Van Lanschot: arrears management Arrears management / Timeline . Mortgage loans are considered in arrears if current account is overdrawn for more than one day and for an amount in excess of € 250 + Allaccounts which are overdrawn are monitored by a central desk at Service Cen
Slide 40: Van Lanschot: restructuring approach
Van Lanschot Mortgages Van Lanschot: restructuring approach Team Prevention & Early:. * All accounts of Personal Banking clients which are overdrawn for more than one day and for an amount in excess of €250 are monitored by the team Early. They focus on analyzing the situation of the client in order
Slide 41: Annex III - Covered Bond Programme
Annex Ill - Covered Bond Programme 40
Slide 42: Minimum Overcollateralisation
M Covered Bond Programme nimum Overcollateralisation Contractually committed minimum OC of 15% Adjusted Aggregate Asset jutstanding Bonds mum Regulatory Second Minimum Regulatory oc The nominal value of the cover assets excluding any defaulted receivables must always be at least equal to 115% of the
Slide 43: Default of Van Lanschot Pass-Through Mechanism
Default of Van Lanschot Covered Bond Programme Pass-Through Mechanism Repayment of the CB at the Maturity Date CBC needs to pay Covered Bond holders Every month Amortisation -——> Test (AT) passed No Next month Yes 1 No Maturity Date of upcoming CBC sufficient funds Yes toredeemCBand ~ Amortisation T
Slide 44: Priority of payments
Covered Bond Programme Priority of payments Available Funds tt | van tanso Van Lanschot Conditional Pass-Through Covered Bond Programme 43
Slide 45: Comparison of Dutch covered bond programmes
Covered Bond Programme Issuer on tansshot ankies Aegon Bank NV. NIBC Bank NV. ABN AMRO Bank N.V. ING Bank N.V. SNS Bank NV. Van Lanschot Covered Bond 8°" Gomelltenel ss IEE Ctlionel EES ABN AMRO Covered Bond __ ING Covered Bond SNS Covered Bond Guarantor pane Through Covered Bond Through Covered Bon
Slide 46: Annex IV - Dutch economy and housing market
Annex IV - Dutch economy and housing market 45
Slide 47: Employment and unemployment
• • • • • 9.200 9% 6% 8% 8.800 5% # of persons (thousands) 7% Swap interest rate 8.400 6% 4% 5% 8.000 3% 4% 7.600 3% 2% 2% 7.200 1% 1% 6.800 0% 0% 03 04 05 06 07 08 09 10 11 12 13 14 15 16 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Unemployment (r) Employment (l) Labour force (l)
Slide 48: Price development
• ‐ • • 6% 3% 350 Price development (1995 = 100) 4% 2% 2% 300 1% Year-on year change 0% 0% 250 -2% -1% -4% 200 -2% -6% -3% 150 -8% -10% -4% 100 -12% -5% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 03 04 05 06 07 08 09 10 11 12 13 14 15 16 all houses mid-terrace houses Quarter-o
Slide 49: Annual and quarterly transactions
• • ‐ • ‐ 250 x 60 250 Quarterly transactions (x1000) Annual transactions (x1000) 50 200 200 # Houses (x1000) 40 150 150 30 100 100 20 10 50 50 0 0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 09 10 11 12 13 14 15 16 Quarterly transactions (l) Annual transactions (r) Owned-occupied
Slide 50: Mortgage rate and total mortgage debt
• ‐ • • ‐ ‐ ‐ ‐ 700 Total mortgage debt (EUR bn) 600 6,0% Mortgage rate 500 4,5% 400 300 3,0% 200 1,5% 100 0 0,0% 06 07 08 09 10 11 12 13 14 15 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Financial institutions SPVs Pension funds Insurance companies Investors < 1 year 1 - 5 year 5 - 10 year > 10 year
Slide 51: Transactions and arrears
• • • • 4,0% 3.000 3,0% 3,5% 2.500 2,5% Proportion in arrears 3,0% 2.000 2,0% Transactions 2,5% 2,0% 1.500 1,5% 1,5% 1.000 1,0% 1,0% 500 0,5% 0,5% 0,0% 0 0,0% 05 06 07 08 09 10 11 12 13 14 15 16 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 12-months-total (l) as a percentage of all tr
Slide 52: Annex V - Van Lanschot
Annex V - Van Lanschot 51
Slide 53: Key figures 2016 half-year results
Key figures 2016 half-year results € million Commission income Interest income Other income Income from operating activities Operating expenses Gross result Loan loss provisioning Other impairments Operating profit before tax of non-strategic investments Operating profit before one-off gains / losse
Slide 54: Van Lanschot's solid profile is reflected in its creditworthiness
Van Lanschot’s solid profile is reflected in its creditworthiness Fitch * Long-term credit rating: BBB+ * Outlook long-term credit rating: Stable * Short-term credit rating: F2 * Latest press release: 09-09-2016 “Yan Lanschot's capital ratios are solid and improving due to deleveraging... The bank h
Slide 55: CET I ratio at 17.3% (16.9% fully loaded)
CET | ratio at 17.3 % (16.9% fully loaded) per 30 June 2016 Corporate bank run-off offers further upside potential (RWA H1 2016 = €1.6 bn) Impact Basel III tightening not known yet but RWA increase expected to be lower than decrease due to CB run-off Net profit (after one-off investment programme) w
Slide 56: Free float and liquidity have increased following secondary placement
Van Lanschot’s free float and liquidity have increased following the secondary placement in June 2016 Overview of principal shareholders = APG m Rabobank = Wellington = LDDM holding = Reggeborgh Invest = FMR m Invesco 9,8% ™ Henderson 3,3% 4,9% m Free float Share price and daily volume Share price a
Slide 57: Van Lanschot Capital & Funding issuance history
Van Lanschot Capital & Funding * Strong funding position based on a stable level of bond issuance and a regular presence in wholesale markets * Successful in raising funds in wholesale markets every year since 2010 Senior unsecured, Floored Floater, Senior unsecured, Senior unsecured, € 400m, 3 year
Slide 58: Rich history reaches back over 75 years
Van Lanschot Van Lanschot’s rich history reaches back over 275 years 1737 [| 1991 1999 2004 2007 2015 2016 Cornelis van Lanschot ay founds Van Lanschot ” Y @ in ‘s-Hertogenbosch . . Strategy Foundation Van Acquisition Strategic review update Lanschot Belgium Cen Bankiers Introduction 2020 il CenE BA
Slide 59: Supervisory Board
• Honorary Chairman of KBC Group • Former CEO of Monuta • Former CEO KBC Group • Former member Management Board Fortis Bank • Member board of directors Agfa-Gevaert and • Member of the supervisory board at Prorail Tigenix • Former CEO of ABN AMRO Private Banking • Former CFO of Aegon and FGH Bank Ne
Slide 60: Annex VI - Contact information
Annex VI - Contact information 59
Slide 61: Contact information
Contact information OnE Ralf van Betteraij Head of Term Funding rvanbetteraij@vanlanschot.com T +3120 348 97 13 Contact information o= Ingrid Rombouts Term Funding i.rombouts@vanlanschot.com T +3120 348 9714 Van Lanschot Conditional Pass-Through Covered Bond Programme 60
Slide 62: Annex VII - Glossary
Annex VII - Glossary CLTIMV CLTOMV CLTOFV CPR CPT CPTCB CRD DACB DNB DSA ECB ECBC EVA Asset Backed Securities Asset Cover Test Amortisation Test Bureau Krediet Registratie (Credit Registration Covered Bond Company Covered Bond Purchase Programme 3 Current Loan to Indexed Foreclosure Value Current Lo
Slide 63: Annex VII - Glossary
Annex VII - Glossary LCR LT LTFV LTV MTN NHG Nibud NTT ole PCS PwC RMBS SFH UCITS VIS High Net Worth Individuals Liquidity Coverage Ratio Long Term Loan to Foreclosure Value Loan To Value Medium Term Notes Nederlandse Hypotheek Garantie (National guarantee system for the Mortgage Market) Nationaal I
F. van Lanschot Bankiers — Debt Investor Presentation (September 2016) on 6ix