Deutsche Pfandbriefbank Ag · XETR:PBB
Deutsche Pfandbriefbank — Q1 2022 Earnings Presentation
56 slides from Deutsche Pfandbriefbank's earnings presentation, May 11, 2022
Slide 1: Solid Q1/22 with PBT of € 42 mn
Solid Q1/22 with PBT of € 42 mn Results Q1/2022 Analyst Conference 11 May 2022 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 3
Slide 4: Highlights Q1/22
Highlights Q1/22 Solid start into 2022 with PBT of € 42 mn in Q1/22 – well on track to reach full-year PBT guidance of € 200-220 mn Financials Solid PBT of € 42 mn in Q1/22 (Q1/21: € 52 mn) reflects continued good operating performance Operating income up to € 149 mn (Q1/21: € 146 mn) with NII
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 42% Q2 40% 39% Q1 Q1 CIR4 Q1 9.1 482 502 219 204 7.4 127 3.3 126 59 68 3.0 124 126 48 49 2.0 1.6 1
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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 6
Slide 7: CRE Markets: investment volumes at pre-Covid level in Europe, all-time high in US
CRE Markets Investment volumes in Q1/22 are on pre-Covid-19 level again in Europe – at all-time high in the US European and US Investment volume1 European and US CRE investment volumes with strong performance in 2021 (€ bn) Preliminary investment figures for Q1 suggest a solid start in 2022 in E
Slide 8: Update: Ukraine/Russia – impact on global economy, CRE and pbb
Update: Ukraine/Russia – impact on global economy, CRE and pbb No direct exposure in/to Ukraine and Russia – but uncertainties on overall economic impacts Status quo Implications on pbb in Q1 Future challenges Markets Portfolio Markets Continued supply chain disruption and resource scarcity No d
Slide 9: 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 9
Slide 10: Financials: Solid operating performance continued
Financials Solid operating performance continued Income statement € mn Q1/21 Q4/21 Q1/22 Key drivers Q1/22 Operating Income 146 162 149 NII stable y-o-y – continued low refinancing costs (incl. Net interest income 123 125 122 pos. effect from TLTRO III) and increase in average REF financing volume
Slide 11: NII+NCI stable, net income from realisations down y-o-y
Financials NII+NCI stable, net income from realisations down y-o-y with positive impact on portfolio growth Income from lending business Key drivers Q1/22 € mn NII + NCI stable y-o-y Q1/21 Q4/21 Q1/22 Continued low refinancing costs (incl. positive effect from TLTRO III) and Net interest income
Slide 12: Risk provisioning up y-o-y due to model adjustments
Financials Risk provisioning up y-o-y – mainly impacted by model related adjustments due to deterioration of macroeconomic outlook Net income from risk provisioning Key drivers Q1/22 € mn Net income from risk provisioning of € -18 mn (Q1/21: Q1/21 Q4/21 Q1/22 € -10 mn) – mainly affected by model a
Slide 13: Operating costs under control
Financials Operating costs under control Key drivers Q1/22 GAE slightly up y-o-y € mn Q1/21 Q4/21 Q1/22 Personnel expenses up € 1 mn y-o-y due to vacation accruals – Q4/21 impacted from € 11 mn provision in General admin. expenses -51 -68 -53 connection with our efficiency initiatives Personnel
Slide 14: 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 14
Slide 15: REF new business volume of € 2.1 bn on solid level
New business REF new business volume of € 2.1 bn on solid level in further challenging environment REF New business REF new business € bn (commitments, incl. extensions >1 yr) Q1/21 FY21 Q1/22 27.0 27.6 28.0 Financing Total volume (€ bn) 2.1 9.0 2.1 volume thereof: 9.0 Extensions >1 year 0.5 2.6 0.4
Slide 16: 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 16
Slide 17: Stable risk parameters and low average LTV of 51%
Portfolio Business approach reflected in stable risk parameters and low average LTV of 51%, which provides solid risk buffer REF Portfolio: Avg. weighted LTVs Total portfolio: Internal ratings (EL classes) % (commitments)1 € bn (EaD, Basel III) 12/21 03/22 Non-investment grade2 52% 52% 52% Investmen
Slide 18: NPLs remain on low level
Portfolio NPLs remain on low level Key drivers Q1/22 Non-performing loans € mn (EaD, Basel III) Non-performing loans (NPLs) remain on low level 0.9% 1.0% 1.0% 1.0% 0.9% NPL Restructuring loans stable at € 565 mn (12/21: € 566 mn) ratio 590 546 580 578 newly added € 34 mn ECA-guaranteed PIF loa
Slide 19: 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 19
Slide 20: Strong start into 2022 – continued focus on Green Bonds
Funding Strong start into 2022 – continued focus on Green Bonds New long-term funding1 Funding Q1/22 € bn Strong Pfandbrief funding year-to-date: US$ 750 mn Pfandbrief Q1/21: € 1.4 bn Q1/22: € 1.8 bn € 750 mn Pfandbrief € 200 mn Pfandbrief taps Spread 19 - 61 14 - 46 Additionally, pbb has ag
Slide 21: Secondary spread performance generally in line with broader market
Funding Secondary spread performance generally in line with broader market – current crisis with only moderate effect so far Spread development of pbb Senior Benchmarks vs iTraxx Bank Senior (Spread in bp vs. 6m Euribor) 2018 2019 2020 2021 2022 200 150 Green Senior Preferred Benchmark issued 01/12/
Slide 22: 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 22
Slide 23: Capital: Capitalisation remains strong
Capital Capitalisation remains strong Basel III: RWA RWA development Q1/22 € bn (IFRS) RWA down q-o-q mainly due to Maturity and syndication effects 18.3 Smaller opposite effect from increase in REF portfolio 16.8 16.7 No material RWA effect from individual rating deteriorations in the light
Slide 24: 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 Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 24
Slide 25: Initiatives – good progress achieved
Summary & Outlook Initiatives – good progress achieved Initiatives Key measures Status quo Q1/22 Product expansion All prerequisites for respective product lines in place; (Loan-on-loan, non-senior lending) origination started ~32* 28 Organic Strong origination focus on the US – new business 1 growt
Slide 26: Solid Q1 supports full-year PBT guidance of € 200-220 mn
Summary & Outlook Solid operative result in Q1/22 supports full-year PBT guidance of € 200-220 mn – uncertainties from Ukranian war Solid Q1 result with PBT of € 42 mn Conservative approach Focus on core Europe/US, prime locations, prime Continued solid income from lending business – clients and
Slide 27: Appendix
Appendix Results Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 27
Slide 28: Appendix
Appendix 1. Guidance 2022 and mid-term ambition 2. ESG 3. P&L / Balance Sheet 4. Portfolio Profile 5. Funding & Ratings Contact details Results Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 28
Slide 29: Guidance 2022 and mid-term ambition
Guidance 2022 and mid-term ambition Sustainable PBT level in 2022 despite income headwinds and investments to achieve growth ambition 2024/25 – uncertainties from geopolitical situation Financials (€ mn) 2020 2021 Guidance 2022 Ambition 2024/2025 PBT of € 200-220 mn in line with past 1 Organic growt
Slide 30: Appendix
Appendix 1. Guidance 2022 and mid-term ambition 2. ESG 3. P&L / Balance Sheet 4. Portfolio Profile 5. Funding & Ratings Contact details Results Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 30
Slide 31: Green Loan Criteria
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 32: Appendix
Appendix 1. Guidance 2022 and mid-term ambition 2. ESG 3. P&L / Balance Sheet 4. Portfolio Profile 5. Funding & Ratings Contact details Results Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 32
Slide 33: Key figures pbb Group
Key figures pbb Group Income statement (€ mn) 2019 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Net interest income 458 4768 123 123 123 125 494 122 Net fee and commission income 6 6 2 3 1 2 8 2 Net income from fair value measurement -7 -8 2 - 1 7 10 9 Net income from realisations 48 26 21 17 17 26 81 5
Slide 34: Segment reporting
Segment reporting Segment performance reflects strong performance of strategic REF portfolio in Q1/22 REF PIF Value Portfolio Income statement (IFRS, € mn) Q1/21 Q4/21 Q1/22 Q1/21 Q4/21 Q1/22 Q1/21 Q4/21 Q1/22 Operating income 126 139 126 9 12 10 10 11 12 thereof: Net interest income 1 104 106 104 9
Slide 35: Key figures pbb Group Q1/21 vs. Q1/22
Key figures pbb Group Q1/21 vs. Q1/22 Income statement REF PIF VP C&A pbb Group (€ mn) Q1/21 Q1/21 Q1/21 Q1/21 Q1/22 Q1/22 Q1/22 Q1/22 Q1/21 Q1/22 Net interest income 104 104 9 8 9 9 1 1 123 122 Net fee and commission income 2 2 - - - - - - 2 2 Net income from fair value 1 6 - 1 1 2 - - 2 9 measurem
Slide 36: Key figures Real Estate Finance (REF)
Key figures Real Estate Finance (REF) Income statement (€ mn) 20193 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Net interest income 388 3964 104 104 103 106 417 104 Net fee and commission income 7 6 2 3 1 2 8 2 Net income from fair value measurement -8 -6 1 - 1 4 6 6 Net income from realisations 48 24 2
Slide 37: Key figures Public Investment Finance (PIF)
Key figures Public Investment Finance (PIF) Income statement (€ mn) 20193 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Net interest income 37 38 9 9 10 9 37 8 Net fee and commission income - - - - - - - - Net income from fair value measurement -2 -1 - - - 1 1 1 Net income from realisations 1 1 - - 1 1 2
Slide 38: Key figures Value Portfolio (VP)
Key figures Value Portfolio (VP) Income statement (€ mn) 20193 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Net interest income 29 38 9 10 9 10 38 9 Net fee and commission income -1 - - - - - - - Net income from fair value measurement 3 -1 1 - - 2 3 2 Net income from realisations -1 1 - - -1 -1 -2 - Net
Slide 39: Balance sheet
Balance sheet Specialist lender with attractive German Pfandbrief as major funding instrument Balance sheet IFRS, € bn Assets 31/03/22 31/12/21 Liabilities & equity 31/03/22 31/12/21 Financial assets at fair value through P&L 1.0 1.2 Financial liabilities at fair value through P&L 0.6 0.6 thereof th
Slide 40: Appendix
Appendix 1. Guidance 2022 and mid-term ambition 2. ESG 3. P&L / Balance Sheet 4. Portfolio Profile 5. Funding & Ratings Contact details Results Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 40
Slide 41: Portfolio: Total portfolio
Portfolio Total portfolio € bn (EaD, Basel III) Regions 31/12/2021 / Total: € 57.5 bn 31/03/2022 / Total: € 55.8 bn Hungary <1% Hungary <1% Finland 1% Other Europe 5% Finland 1% Other Europe 5% Czech Republic 1% Other Rest of World 2% Czech Republic 1% Other Rest of World 2% Sweden 2% 5% Sweden 2% 5
Slide 42: Portfolio: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) € bn (EaD, Basel III) Regions Property types 31/12/2021: € 29.7 bn 31/03/2022: € 30.1 bn 31/12/2021: € 29.7 bn 31/03/2022: € 30.1 bn Austria 1% Other Europe Mixed use 2% Other 2% Mixed use 2% Other 2% Austria 1% Other Europe Czech Republic 1% Hotel 4% Hotel 4% Cze
Slide 43: Portfolio: Real Estate Finance (REF)
Portfolio Real Estate Finance (REF) Regions 31/12/2021 / Total: € 29.7 bn € bn (EaD, Basel III) 31/03/2022 / Total: € 30.1 bn 13.9 14.1 3.8 3.7 3.7 4.2 2.6 2.5 1.4 1.3 1.9 1.9 0.9 0.9 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.2 0.2 0.1 0.1 Germany France UK USA Poland Sweden Finland Austria Czech Spain Hung
Slide 44: Markets: Sub-segments
Markets Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning type In general retail property market Short Term: threads to income Selective approach with foresighted trading conditions remain challenging stability as well as decreasing reduction of retail p
Slide 45: Markets: Sub-segments
Markets Sub-segments Property Regions Evaluation of current situation Challenges Risk positioning type Despite the increase during the Financial difficulties of tenants / Focus on good locations pandemic, the vacancies are still on insolvencies expected to increase due Conservative risk posi
Slide 46: Portfolio: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) € bn (EaD, Basel III) Regions Borrower classification1 31/12/2021: € 5.7 bn 31/03/2022: € 5.4 bn 31/12/2021: € 5.7 bn 31/03/2022: € 5.4 bn Infrastructure Corporation 2% Infrastructure Finance 2% Other Europe 3% Finland 1% Other Europe 3% Corporation 2% Finan
Slide 47: Portfolio: Public Investment Finance (PIF)
Portfolio Public Investment Finance (PIF) Regions 31/12/2021 / Total: € 5.7 bn € bn (EaD, Basel III) 31/03/2022 / Total: € 5.4 bn 3.1 3.0 1.1 1.0 0.7 0.7 0.3 0.2 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 48: Portfolio: Value Portfolio (VP)
Portfolio Value Portfolio (VP) € bn (EaD, Basel III) Regions Borrower classification1 31/12/2021: € 13.8 bn 31/03/2022: € 12.9 bn 31/12/2021: € 13.8 bn 31/03/2022: € 12.9 bn Financial Financial Other Other Rest Other Other Rest Institution Supranational 4% Institution Supranational 4% Poland 1% Euro
Slide 49: Portfolio: Value Portfolio (VP)
Portfolio Value Portfolio (VP) Regions 31/12/2021 / Total: € 13.8 bn € bn (EaD, Basel III) 31/03/2022 / Total: € 12.9 bn 5.6 5.1 3.6 3.3 1.6 1.6 0.9 0.8 0.7 0.7 0.8 0.8 0.6 0.6 0.1 0.0 <0.1 <0.1 Austria Germany Italy Spain France Poland Finland Other Europe Rest of World Borrower classification1 € b
Slide 50: Portfolio: Consolidation & Adjustments (C&A)
Portfolio Consolidation & Adjustments (C&A) € bn (EaD, Basel III) Regions Borrower classification2 31/12/2021: € 8.3 bn 31/03/2022: € 7.5 bn 31/12/2021: € 8.3 bn 31/03/2022: € 7.5 bn UK <1% UK <1% Sweden <1% Financial Financial Sweden <1% Poland 1% Poland 1% Institution Institution Other Europe Othe
Slide 51: Appendix
Appendix 1. Guidance 2022 and mid-term ambition 2. ESG 3. P&L / Balance Sheet 4. Portfolio Profile 5. Funding & Ratings Contact details Results Q1/22 (IFRS, pbb Group, unaudited), 11 May 2022 51
Slide 52: Own Funds and Eligible Liabilities significantly exceed 8 % TLOF
Funding Own Funds and Eligible Liabilities significantly exceed 8 % TLOF (in € bn as of 31/03/2022)1) Composition of MREL2 Liabilities Rundown (31/03/2022) (31/03/2022) Buffer for Senior Preferred (SP) investors due to high volume of capital ~ 15.7 instruments and Senior Non-Preferred (SNP) liabil
Slide 53: 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 (1st Tap) A2E4ZE 24.01.2018 05.09.2022 EUR 250 mn -18 bp 0.05% 99.579% Mortgag
Slide 54: Mandated Ratings
Mandated Ratings Bank ratings S&P Long-term BBB+ Outlook/Trend Stable Short-term A-2 Stand-alone rating1 bbb Long Term Debt Ratings “Preferred” senior unsecured Debt2 BBB+ “Non-preferred” senior unsecured Debt3 BBB- Subordinated Debt BB+ Pfandbrief ratings Moody’s Public Sector Pfandbrief Aa1 Mortga
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 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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