Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q3 2021 Earnings Presentation
49 slides from Deutsche Pfandbriefbank's earnings presentation, Nov 12, 2021
Slide 1: Results Q3/9M 2021 Analyst Conference
Strong PBT of € 186 mn in 9M/21 – full-year result 2021 expected at upper end or slightly above guidance of € 180-220 mn Results Q3/9M 2021 Analyst Conference 12 November 2021 Please think about the environment before printing!
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: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 3
Slide 4: pbb well on track – full-year result 2021 expected at upper end or slightly above guidance
Highlights Q3/9M 2021 pbb well on track – full-year result 2021 expected at upper end or slightly above guidance of € 180-220 mn Strong PBT of € 72 mn in Q3/21 (Q3/201: € 74 mn) results in € 186 mn in 9M/21 (9M/201: € 104 mn) and reflects good operating performance NII + NCI up >5% y-o-y (Q3/21:
Slide 5: 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 6: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 6
Slide 7: Overall positive trend is further emerging, investment volumes recover
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 8: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 8
Slide 9: Strong operating performance continued – risk provisioning remains on moderate level
Financials Strong operating performance continued – risk provisioning remains on moderate level Income statement € mn Q3/20 Q3/21 9M/20 9M/21 Key drivers Q3/9M 2021 Operating Income 140 142 372 429 NII up y-o-y, supported by continued low refinancing Net interest income 1 125 123 352 369 costs (in
Slide 10: NII+NCI up by >5% y-o-y, supported by continued low refinancing costs
Financials NII+NCI up by >5% y-o-y, supported by continued low refinancing costs and slight increase in avg. REF volume at increased portfolio margin Income from lending business Key drivers Q3/9M 2021 € mn NII + NCI up by >5% y-o-y, supported by Q3/20 Q3/21 9M/20 9M/21 continued low refinancing
Slide 11: 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 12: Operating costs under control – only moderate increase of GAE
Financials Operating costs under control – only moderate increase of GAE despite ongoing investments in strategic and regulatory projects Key drivers Q3/9M 2021 GAE up y-o-y as expected – only moderate increase despite ongoing investments which are largely financed by efficiency € mn Q3/20 Q3/21 9
Slide 13: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 13
Slide 14: Solid REF new business volume of € 5.7 bn
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 15: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 15
Slide 16: Business approach reflected in stable risk parameters and low average LTV of 52%
Portfolio Business approach reflected in stable risk parameters and low average LTV of 52%, which provides solid risk buffer REF Portfolio: Avg. weighted LTVs Total portfolio: Internal ratings (EL classes) % (commitments)1 € bn (EaD, Basel III) 06/21 09/21 Non-investment grade2 52% 52% 52% 52% Inves
Slide 17: NPLs remain on low level
Portfolio NPLs remain on low level Key drivers Q3/9M 2021 Non-performing loans € mn (EaD, Basel III) Non-performing loans (NPLs) up to € 590 mn (06/21: € 546 mn; 0.9% 1.0% 12/20: € 470 mn) 0.8% 0.9% NPL Restructuring loans up to € 576 mn (06/21: 532 mn; ratio 590 12/20: € 456 mn) 546 470 503 14
Slide 18: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 18
Slide 19: Solid funding activities focused on non-Euro Pfandbriefe and Green Senior Preferred
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 20: Secondary performance generally in line with broader market
Funding Secondary performance generally in line with broader market New long-term funding HyPfe ÖPfe Sen. Unsec. € bn1 1.4 1.2 0.9 0.9 0.6 0.5 0.8 0.3 0.7 Spread development of pbb Senior Benchmarks vs iTraxx Bank Senior 0.4 0.8 0.4 0.3 0.2 (Spread in bp vs. 6m Euribor) Q3/20 Q4/20 Q1/21 Q2/212 Q3/2
Slide 21: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 21
Slide 22: 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 18.1 17.7 18.0 partly compensated by maturity effects and technical adjustments no material RWA effect from i
Slide 23: Agenda
Agenda 1. Highlights 2. Markets 3. Financials 4. New Business 5. Portfolio Profile 6. Funding 7. Capital 8. Summary & Outlook Appendix Contact details Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 23
Slide 24: 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 25: Appendix
Appendix Results Q3/9M 2021 (IFRS, pbb Group, unaudited), 12 November 2021 25
Slide 26: ESG Program
ESG Program ESG Program provides for holistic approach in pbb’s bank management – all ESG dimensions covered with clearly assigned responsibilities Holistic approach in pbb’s bank management Management and Supervisory Board ESG Program Management Committees Communication / Disclosure Planning/ Portf
Slide 27: Green Loan
Green Loan 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/- • “Gre
Slide 28: 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 450 458 111 1169 1259 1249 4769 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 Net i
Slide 29: Segment reporting
Segment reporting Segment performance reflects impact from COVID-19 pandemic REF PIF Value Portfolio Income statement (IFRS, € mn) Q3/20 Q3/21 9M/20 9M/21 Q3/20 Q3/21 9M/20 9M/21 Q3/20 Q3/21 9M/20 9M/21 Operating income 110 122 317 372 11 10 31 28 18 9 21 27 thereof: Net interest income 1 104 103 29
Slide 30: Key figures pbb Group 9M/20 vs. 9M/21
Key figures pbb Group 9M/20 vs. 9M/21 Income statement REF PIF VP C&A pbb Group (€ mn) 9M/21 9M/21 9M/21 9M/21 9M/20 9M/20 9M/20 9M/20 9M/20 9M/21 Net interest income 2921 311 29 28 28 28 3 2 3521 369 Net fee and commission income 4 6 - - - - - - 4 6 Net income from fair value -5 2 -1 - -6 1 - - -12
Slide 31: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (€ mn) 2018 20193 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 Q3/21 9M/21 Net interest income 372 388 93 954 1044 1044 3964 104 104 103 311 Net fee and commission income 6 7 2 1 1 2 6 2 3 1 6 Net income from fair value measurement -8 -8 -4 1 -2 -1
Slide 32: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (€ mn) 2018 20193 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 Q3/21 9M/21 Net interest income 34 37 9 10 10 9 38 9 9 10 28 Net fee and commission income 1 - - - - - - - - - - Net income from fair value measurement -2 -2 -1 - - - -1 - - - - Ne
Slide 33: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (€ mn) 2018 20193 Q1/20 Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 Q3/21 9M/21 Net interest income 39 29 8 10 10 10 38 9 10 9 28 Net fee and commission income -1 -1 - - - - - - - - - Net income from fair value measurement 1 3 -12 - 6 5 -1 1 - - 1 Net income
Slide 34: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet IFRS, € bn Assets 30/09/21 31/12/20 Liabilities & equity 30/09/21 31/12/20 Financial assets at fair value through P&L 1.4 1.4 Financial liabilities at fair value through P&L 0.6 0.6 thereof th
Slide 35: 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 36: 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 37: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Regions 31/12/2020 / Total: € 29.3 bn € bn (EaD, Basel III) 30/09/2021 / Total: € 29.1 bn 14.0 13.4 3.3 3.6 3.1 3.1 2.9 3.4 1.3 1.3 1.8 1.8 0.9 0.8 0.5 0.3 0.4 0.3 0.4 0.4 0.3 0.4 0.2 0.2 0.1 0.1 Germany France UK USA Poland Sweden Finland Austria Czech Spain Hung
Slide 38: 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 39: 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 40: 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 41: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) Regions 31/12/2020 / Total: € 6.5 bn € bn (EaD, Basel III) 30/09/2021 / Total: € 6.0 bn 3.4 3.3 1.3 1.1 0.9 0.7 0.3 0.3 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 France Germany Spain Austria UK Finland Other Europe Other Rest of World Borrower classification1 € bn (Ea
Slide 42: 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 43: Value Portfolio (VP)
Portfolio Value Portfolio (VP) Regions 31/12/2020 / Total: € 15.2 bn € bn (EaD, Basel III) 30/09/2021 / Total: € 14.0 bn 6.1 5.6 3.9 3.6 1.9 1.7 0.9 0.9 0.7 0.7 0.7 0.6 0.8 0.8 0.2 0.1 <0.1 <0.1 Austria Germany Italy Spain France Poland Finland Other Europe Rest of World Borrower classification1 € b
Slide 44: Consolidation & Adjustments (C&A)
Portfolio Consolidation & Adjustments (C&A) € bn (EaD, Basel III) Regions Borrower classification2 31/12/2020: € 7.0 bn 30/09/2021: € 8.3 bn 31/12/2020: € 7.0 bn 30/09/2021: € 8.3 bn USA <1% Financial Financial USA 1% Sweden <1% France 2% Sweden <1% Institution Institution France 1% Other Europe Oth
Slide 45: Ambition level for Own Funds and Eligible Liabilities of 8% TLOF significantly exceeded
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 46: Public benchmark issuances since 2018
Funding Public benchmark issuances since 2018 Types WKN Launch Date Maturity Date Size Spread1 Coupon Issue/Reoffer Price Senior Unsecured A2GSLC6 16.01.2018 23.02.2022 EUR 500 mn +40 bp 0.625% 99.956% Mortgage Pfandbrief (1 st Tap) A2E4ZE 24.01.2018 05.09.2022 EUR 250 mn -18 bp 0.05% 99.579% Mortga
Slide 47: 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 M
Slide 48: 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 49: Contact details
Contact details Walter Allwicher Head of Communications +49 (0)89 2880 28787 walter.allwicher@pfandbriefbank.com Michael Heuber Head of Investor Relations / Rating Agency Relations +49 (0)89 2880 28778 michael.heuber@pfandbriefbank.com Axel Leupold Investor Relations / Rating Agency Relations +49 (0
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