Deutsche Pfandbriefbank AG · XETR:PBB
Deutsche Pfandbriefbank — Debt Investor Presentation (November 2022)
33 slides from Deutsche Pfandbriefbank's debt investor presentation, Nov 14, 2022
Slide 1: Debt Investor Update based on Q3/2022 results
pbb Deutsche Pfandbriefbank Debt Investor Update based on Q3/2022 results 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: Business Model & Strategy
Business Model & Strategy pbb is a leading commercial real estate lender with a complementary public investment finance business USPs Key figures1 (IFRS, 30/09/2022) Specialised on-balance sheet lender with extensive placement capabilities Strong franchise with long-standing client relationships
Slide 4: 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% 43% Q2 40% Q1 Q1 CIR4 Q1 9.1 482 502 219 204 7.4 127 3.3 6.6 126 362 59 68 157 3.0 2.3 124 117
Slide 5: The system works as designed
The system works as designed pbb well positioned to navigate current landscape Challenges Our response Interest rate positioning by design not part of pbb’s Low interest rate sensitivity while business model, setting stabilising floor in times of interest rates are rising declining interest rate
Slide 6: New Business
New Business REF new business up by € 0.9 bn y-o-y – deal pipeline supports solid new business with significant positive margin trend for Q4/22 REF New business REF new business € bn (commitments, incl. extensions >1 yr) 9M/21 FY21 9M/22 29.5 Financing 27.0 27.6 Total volume (€ bn) 5.7 9.0 6.6 volum
Slide 7: Portfolio
Portfolio Business approach reflected in stable risk parameters and low average LTV of 51%, which provides solid risk buffer – NPLs remain on low level REF Portfolio: Avg. weighted LTVs Non-performing loans % (commitments)1 € mn (EaD, Basel III) Workout2 64% Restructuring3 1.0% 1.0% 1.0% 1.1% 1.1% N
Slide 8: Financials: NPLs remain on low level
Financials NPLs remain on low level – solid loss allowances on balance sheet Non-performing loans – regions € mn (EaD, Basel III) Key drivers Q3/9M 2022 No. of 22 22 22 22 23 indiv. Restructuring loans slightly up at € 587 mn (06/22: € 577 cases mn) 589 580 578 591 601 Switzerland newly added €
Slide 9: Funding
Funding Strong funding in 9M/22 – focus on Pfandbriefe, asset matching currencies and Green refinancing New long-term funding1 Funding Q3/9M 2022 € bn Strong Pfandbrief funding year-to-date: US$ 750 mn Pfandbrief 9M/21: € 3.4 bn 9M/22: € 4.8 bn € 2.75 bn Pfandbrief Benchmarks (2 x € 750 mn in
Slide 10: Funding: retail deposits
Funding Strong increase in retail deposits to mitigate increased unsecured capital market spreads Development of pbb direkt volume Retail deposits Q3/9M 2022 € bn Retail deposit funding increased to counterbalance higher 4.1 4.1 capital market spreads – further increase intended 4.0 Steady incre
Slide 11: Own Funds and Eligible Liabilities exceed 8% TLOF
Funding Own Funds and Eligible Liabilities significantly exceed 8% TLOF (in € bn as of 30/09/2022)1) Composition of MREL2 Liabilities Rundown (30/09/2022) (30/09/2022) Buffer for Senior Preferred (SP) investors due to high volume of capital instruments and Senior Non-Preferred ~ 16.3 (SNP) liabili
Slide 12: Capital
Capital Capitalisation remains strong Basel III: RWA RWA development Q3/9M 2022 € bn (IFRS) RWA up mainly due to increase in REF portfolio and FX effects 17.3 only partly compensated by maturity, interest rate movements; 16.8 16.7 16.5 reclassification and syndication effects no material RWA
Slide 13: Summary & Outlook
Summary & Outlook System works as designed Solid PBT despite current geopolitical and economic developments Strong growth in REF portfolio, compensating decline in floor income and from TLTRO in the mid-term Best use of funding base – Pfandbrief remains stable source while expansion of our "pbb dire
Slide 14: Appendix
Appendix Results Q3/9M 2022 (IFRS, pbb Group, unaudited), 14 November 2022 14
Slide 15: 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 16: ESG – Set-up & Strategy (1/3)
ESG – Set-up & Strategy pbb’s ESG set-up and strategy provide for holistic approach (1/3) Overall governance framework with high standards applied Law-abiding conduct, responsible corporate governance and adherence to ethical principles considered essential prerequisites General governance fra
Slide 17: ESG – Set-up & Strategy (2/3)
ESG – Set-up & Strategy pbb’s ESG set-up and strategy provide for holistic approach (2/3) Sustainability defined as self-conception, that own actions Self- provide an essential contribution to securing long-term future and conception to consider the consequences for all stakeholders and the enviro
Slide 18: ESG – Set-up & Strategy (3/3)
ESG – Set-up & Strategy pbb’s ESG set-up and strategy provide for holistic approach (3/3) Given pbb’s business model, inter alia strong focus on Sustainable Finance and contribution to a more climate- efficient real estate sector – pbb aims to be a transformation partner for its clients Systemat
Slide 19: 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 20: ESG Ratings
ESG Ratings Continuous improvement reflected in ESG ratings – Upgrade from MSCI from “A“ to “AA“ pbb rating/score ISS ESG MSCI Moody‘s ESG Solutions Continuous improvement of ESG organisational set-up, LAST UPDATE: March 2022 LAST UPDATE: May 2022 LAST UPDATE: April 2022 governance, strategy and A
Slide 21: ECB stress test 2021
ECB stress test 2021 Stress test results demonstrate pbb’s resilience to crisis and capital strength Stress test result 2021 Max. CET 1 ratio depletion in adverse scenario (pp.) / Min. CET 1 ratio (%) ECB stress test result 2021 demonstrates pbb‘s resilience to crisis and capital strength In the
Slide 22: CRE Markets
CRE Markets Investment volumes still on solid level despite further decline in Q3/22, with expectations more subdued European and US Investment volume1 (€ bn) Despite further slowing volume growth US CRE investment volumes still 1,000 € with relatively solid performance in Q3/22 but, weak sentimen
Slide 23: Markets Sub segments
Markets Sub segments Property Regions Evaluation of current situation Challenges Risk positioning type Shopping centres: increased pressure, Short Term: threads to income Selective approach with foresighted fashion dominated shopping centres stability as well as decreasing reduction of retail
Slide 24: Markets Sub segments
Markets Sub segments Property Regions Evaluation of current situation Challenges Risk positioning type Slight rise in vacancies; but in most markets Financial difficulties of tenants / Focus on good locations still on comparatively low levels. insolvencies expected to increase due to Conserv
Slide 25: Portfolio: stable and well diversified
Portfolio Stable and well diversified portfolio with continued focus on European markets, particularly on Germany 30/09/2022 (EaD, Basel III) Real Estate Finance Public Investment Finance Value Portfolio Other Rest Austria 1% Other Europe Finland 1% Other Europe 3% Other of World Czech Republic 1% U
Slide 26: REF Portfolio: Shift in composition
REF Portfolio Shift in composition 31/12/2013 / Total: € 22.2 bn1 31/12/20152 / Total: € 25.8 bn1 31/12/2021 / Total: € 29.7 bn1 Regions Czech Republic 1% Other 6% Other 5% Other Europe Nordics Nordics Austria 2% 6% 7% Sweden 3% 10% France CEE 9% Poland 4% 8% Germany 47% Germany 47% Germany CEE 9% 5
Slide 27: Simplified description of CRE business models
Simplified description of CRE business models CRE Bank Lending Business compared to CRE Corporate’s business CRE Corporate CRE Bank Inhouse AM / PM / Admin / Staff Costs 3rd party servicers can be replaced if Debt Loan necessary Insolvency 55% LTV Interest payment No amortization* remote Bonds Loans
Slide 28: Cover Pools: ISCR and Mortgage Lending Value
Cover Pools ISCR and the effect of the Mortgage Lending Value – very simplified example! Interest Service Cover Ratio Loan - to - Value Ratio Loan Valuation Refinancing MV € 100 mn Borrower’s Difference Equity e.g. 35% € 45 mn € 4.0 mn rent p.a. at 4% property yield results in a market value of € 10
Slide 29: Mortgage Pfandbrief Cover Pool
Cover Pools Mortgage Pfandbrief Cover Pool Mortgage cover pool (nominal) 30/06/2022 30/09/2022 Pfandbriefe outstanding € 16.1 bn € 16.2 bn Cover funds € 18.6 bn € 18.5 bn Over-collateralisation (Nominal/NPV) 16.1% / 18.7% 18.1% / 21.7% No. of loans 1,567 1,567 No. of properties 2,940 2,940 Payments
Slide 30: Public Sector Pfandbrief Cover Pool
Cover Pools Public Sector Pfandbrief Cover Pool Public Sector cover pool (nominal) 30/06/2022 30/09/2022 Pfandbriefe outstanding € 9.8 bn € 9.7 bn Cover funds € 11.0 bn € 10.7 bn Over-collateralisation (Nominal/NPV) 12.3 % / 12.2 % 10.2 % / 10.4 % No. of loans 495 485 Payments ≥ 90 days overdue - -
Slide 31: 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 32: Key figures pbb Group
Key figures pbb Group Income statement (€ mn) 2019 2020 Q1/21 Q2/21 Q3/21 Q4/21 2021 Q1/22 Q2/22 Q3/22 9M/22 8 Net interest income 458 476 123 123 123 125 494 122 120 116 358 Net fee and commission income 6 6 2 3 1 2 8 2 1 1 4 Net income from fair value measurement -7 -8 2 - 1 7 10 9 5 7 21 Net inco
Slide 33: Contact details
Contact details Funding / Debt Investor Relations Götz Michl +49 (0)6196 9990 2931 Goetz.Michl@pfandbriefbank.com Silvio Bardeschi + 49 (0)6196 9990 2934 Silvio.Bardeschi@pfandbriefbank.com Funding Desk Funding@pfandbriefbank.com Webpage: www.pfandbriefbank.com/investors/debt-investors.html
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